S. Bridget Leena - Indian banks are being roped in to provide a fillip to rebuild economic activity in strife-prone parts of northern Sri Lanka. Indian Bank may be the first to re-open its branch in Jaffna to serve the Tamil community. Indian Overseas Bank, which has a branch in Colombo, has plans to open more branches in the Island nation.
Mr T.M Bhasin, Chairman and Managing Director, Indian Bank, told Business Line that the bank is considering opening branches in areas with Tamil-centric population such as Jaffna and Kandy. The bank is studying various options on the capital requirement and other parameters of business growth, he said.
“We are yet to identify potential locations which would serve the Tamil population but are certainly looking at the option of setting up branches in Sri Lanka,” said Mr S.A. Bhat, Chairman and Managing Director, Indian Overseas Bank.
He said that there was a request from the government for banks to expand their network in Sri Lanka.
Indian Bank has two centres in Colombo, one handling domestic business while the other focussing on foreign exchange business. Domestic deposits for the bank in Lanka grew by 21.2 per cent to Rs 72.8 crore while advances reported a growth of 32 per cent to Rs 44.2 crore in 2009-10. Net profits were about Rs 7.2 crore in 2009-10. Although business operations of the bank in the Island nation are small when compared its Indian operations, now with the end of war, there are certainly signs of economic revival and growth, said Mr Bhasin.
It is interesting note that Indian Bank opened its first overseas operation in Sri Lanka as early as 1932. It served the ethnic Tamil community but had to shut its operations in Jaffna with the start of ethnic conflict during the early 1980s.
The actual implementation in terms of setting up branches may take a while, as regulators in both countries have to give their approval and other factors such as viability and capital requirement will have to be considered, said Mr Bhat.
© The Hindu Business Line
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