Recently released annual report of the Department of Public Enterprises (PED) reveals that government is hoping to expedite the process of merging Lankaputhra Development Bank (LDB) with Regional Development Bank (RDB) and Sri Lanka Savings Bank (SLSB) with country’s largest savings bank National Savings Bank (NSB).

“Expedite the process of merging Lankaputhra Development Bank with Regional Development Bank and Sri Lanka Savings Bank with National Savings Bank” the PED notes under the performance of State Owned Business Enterprises (SPOBE) and remarks section of the annual review.

It further adds government is aiming to promote digital banking among state banks’ customers and restructuring process in the HDFC Bank will improve the performance in the medium term. The report also notes that loan portfolios of Bank of Ceylon (BOC), People’s Bank (PB) and NSB are highly dependent upon the exposure to the Government including State Owned Enterprises (SOEs), which hinder the ability to extend loan facilities to new developing sectors of the economy and diversification of the product portfolio.

According to PED with a view to strengthen the capital base to meet the Basel III provisions, capital of Rs. 5 billion each to Bank of Ceylon (BOC) and People’s Bank (PB), Rs. 2.5 Billion to Regional Development Bank (RDB) and Rs. 362 million to Sri Lanka Savings Bank (SLSB) was provided during 2017 under the PED allocation.

- Reporting by Devendra Francis