SL banks weak in long-term financing- IMF official

14 December 2012 02:39 am - 0 - {{hitsCtrl.values.hits}}

A A A

The Sri Lankan banking sector, which has an asset base of over Rs.5,000 billion and accounts for 55% of the total assets of the financial sector, is lagging behind in providing loans and advances over five years, against regional and non-regional counterparts, said a top official of the International Monitory Fund (IMF), urging the sector to address the relative lack of long-term finance in the market.

“Based on the 2010 data, loans and advances over five years and above as a percentage of the total asset base of the banking sector is a paltry 0.2 percent and I do not think it is a good indication.

In the higher end of the spectrum, countries such as Philippines, Czech Republic and Poland maintain this ratio at 1.8%, 1.4% and 0.7%, respectively,” said IMF Resident Representative for Sri Lanka and the Maldives, Dr. Koshy Mathai.

Addressing a packed house of company directors and CEOs in Colombo at the fifth Bank Directors’ Symposium, he attributed this to rather a regional phenomenon and cited countries such as India, Bangladesh, Pakistan and Indonesia, which stand below Sri Lanka.

“The problem has aggravated predominantly due to the undeveloped state of the corporate bond market and the stock market, which has a market capitalization of 20 percent of the GDP and the average daily turnover of just below 1 percent of the market capitalization. This demonstrates the very low volumes traded,” he remarked.

Based on the 2009 data, Sri Lanka’s corporate bonds issuance as a percentage of the GDP is negligible (1%), while countries such as India (5%), Mexico (18%), Thailand (21%), Chile (22%), China (23%) and Brazil (26%) demonstrating relatively larger markets and the highest of 50% by Malaysia. Ironically, Philippines too shares the same club as Sri Lanka in this sphere with a just above 1 percent.

“The problem is Sri Lanka has neither,” he amused.

Budget 2013 proposed to exempt the withholding tax on interest income earned from investing in bonds and debentures listed on the Colombo Stock Exchange, with effect from January 1, with the objective of developing the corporate debt market.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 0

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

SL banks weak in long-term financing- IMF official

Comments - 0

Add comment

RECOMMENDED

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Western purple-faced langurs see blue!

Most Viewed in News

April 15 declared a government holiday

New Visa procedure implemented

A US “Kaputa”, a Lankan “Nariya” and a Presidential “Feast”

Street food vendor arrested for verbally harassing foreigner

Complaint lodged over Piumi Hansamali's possession of Gota’s Range Rover

Confusion remains if April 15 is a bank holiday

MIRROR CRICKET

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

Mendis, Mathews move up in ICC Test Rankings

Chamodi, Dewmi spins Sri Lanka U19 Women to big win

TODAY'S HEADLINES

Wild elephants pull down 16 telephone poles

Middleman arrested for price gouging at Kalutara eatery

Bondholders’ agreement delay won’t hinder IMF third tranche payout: Dr. Coomaraswamy

Party leaders to shoot down MPs request for concessionary duty free vehicle permits

Hardik fined Rs 12 lakh for violating IPL code of conduct after win over Punjab Kings

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

Mendis, Mathews move up in ICC Test Rankings