A Guide To Sri Lanka’s 8 Bank Varieties

1
THE STALINIST STATE BANK
Indefatigably dedicated to the daily task of proving that Soviet era customer care and service are not yet dead, the Bank of Ceylon moves like a living dinosaur, protected by its monopolistic size, and its status as most favoured government piggy bank. It is the island’s largest bank and one of the largest businesses on the island, with an asset base of more than three trillion rupees. With over six hundred branches, an online service that would defeat Bill Gates, an unshakable faith in formfilling, paper-circulation, closing early, and doggedly following the right course of action, however wrong, it is also a useful tool for many a Finance Minister, and has, so far, and not unsurprisingly, successfully resisted all calls for the sort of privatization that its future salvation most needs.

2
OTHER STATE CONTROLLED LOCAL BANKS
The Sri Lankan government owns or has a fully controlling interest in five other local banks. The first of these, the People’s Bank was founded in 1961 and now has 739 branches. It has had several moments of public shame, the most notable being when, in 2019, corruption and mismanagement led to a loss in excess of 2 billion rupees. Close on its heals is the National Savings Bank, with two hundred and two branches and a cozy relationship with the sclerotic Sri Lanka Post and its 3,412 sub-post offices. Because it is bound by law to invest a minimum of sixty percent of its deposits in government issued and guaranteed securities, its deposit base has made it a piggy bank for the state finances. Struggling to stand out is the Regional Development Bank (Pradheshiya Sanwardhana Bank), founded in 2010 and with a modest asset based scattered across a retiring branch network. Two other banks are focused on housing. Founded in 1984, the Housing Development Finance Corporation Bank Of Sri Lanka is a small building society that became a bank. Small too is the State Mortgage and Investment Bank, set up in 1931, and struggling to break free of its home base in housing and agriculture in order to debut into the richer world of consumer banking.

3
SEMI STATE BANKS
Two banks stand out for inhabiting something of a no-man’s land, their ownership shared between the state and a raft of non-government companies. Their modest asset base and branch network are almost mirror images of each other. The DFCC, set up in 1955, has moved, like Mata Hari, into the public sector with a spaghetti like rostrum of shareholders and a cosy, if complicated, relationship with government. The National Development Bank opened much later (1979).

4
THE TOP SRI LANKAN PUBLICLY OWNED BANKS
Two banks stand out like giraffes against all the rest, being Sri Lankan owned, with publicly held shares and a reputation for global standards of efficiency and customer focus. The first of these, the Hatton National Bank, began life in 1888 amongst the hill station’s tea planters and plantation workers. It has a formidable asset and branch base and a deserving trophy cabinet of awards for its service levels. Its main rival is the much larger, Commercial Bank, the largest private bank in the country, and a child of various mergers and takeovers that traces its history back to 1920. Asset rich and professional, it has a strong global reputation and has been ranked on numerous occasions as one of the world’s top 1000 Banks.

5
OTHER SRI LANKAN PUBLICLY OWNED BANKS
Six other banks across the island are publicly listed organizations free of all but the most egregious state control. The two leading ones, both founded in 1987, are the Sampath Bank, and the Seylan Bank. Hot on their heels is the Pan Asian Bank owned by Sri Lanka’s principal billionaire, Dhammika Perera, followed by three smaller companies: the Nations Trust Bank, founded in 1999, the Union Bank Of Colombo, which opened for business four years earlier; and Cargills Bank, a sibling of the famous supermarket chain which set up its banking business in 2014. To complicate matters, a seventh bank, Sanasa Development Bank, also operates across the country – though is owned co-operatively by its customers and not by the state or large public companies.

6
WESTERN OWNED BANKS
Four banks, with their roots firmly in the economics of the west also operate in Sri Lanka as locally licenced businesses. The most notable of these is Standard Chartered Bank, a child of the Victorian era, its Sri Lankan offshoot expressed through a handful of branches in the better parts of Colombo. Larger in every conceivable way is the Hong Kong & Shanghai Banking Corporation (HSBC), a bank founded in Hong Kong on the opium trade, but which opened up its local branch here way bask in 1892, the year Arthur Conan Doyle's first Sherlock Holmes story appeared. Beneath them, barely visible are two others, Citibank and Deutsche Bank.

7
SOUTH ASIAN BANKS
Five banks are licenced in Sri Lanka from the Indian sub-continent. The State Bank Of India is India’s largest bank, but its five Colombo branches are a sentimental throwback to the days when coffee powered the Sri Lankan economy. It now modestly pursues the usual activities of a bank no longer fuelled by the boom years that gave it birth. The Indian Overseas Bank has a single branch in Colombo. “Been here few times,” wrote one Mohamed A in a sorrowful online testimonial, “Silent and doesn't feel like a bank at all.” Marginally more prominent is the Indian Bank, which dates back to 1906 Madras and has two branches in Colombo and Jaffna. Two more come from Pakistan, both with modest assets bases and slim to almost invisible branch networks: the 1951, Habib Bank and the 1994 Shariah compliant MCB Bank.

8
OTHER FOREIGN BANKS
Three banks complete the list of licensed banks in Sri Lanka, the largest being the Bank of China which has but one branch here and was probably set up to better service China’s much gossiped about financial interests in the country. As with many Chinese state corporations, its balance sheet is not much easier to decipher than perpendicular Lushi poetry written to the literary standards of Han Dynasty Yuefu verse. Two smaller enterprises include the Saudi owned Sharia compliant Amana Bank and the Malaysian Public Bank Berhad.