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Banking & Finance

Branchless banking

It was recently reported that over 70% of the country’s population has no direct access to the mainstream banking structure. Economists and professional bankers are of the view that there is an urgent need to address this issue.

With over half of the population, mostly rural masses deprived of a basic need like banking how does one find the right method to reach them? How does one make banking hassle free for the ordinary man who is fighting against time to get about his or her day to day work? How does one bring the bank to the customer?

Thilaksha Kodithuwakku, a brand manager employed at reputed bank in Sri Lanka says that many have experimented with the idea of finding a viable method to reach the general public through technology, however for most parts it has proven unsuccessful as the correct platform hasn’t been used to connect the consumer and the bank.

“People want to save money and carry out transactions through banks. In rural areas the access to financial services is costly and very limited due to the unavailability of bank branches and lack of proper transportation. Hence people tend to save money in tills etc. and carry out transactions without maintaining bank accounts, which negatively impacts the country’s economy since most of these transactions are not routed through the formal banking system of the country, “points out Kodithuwakku.

Technology and telecommunication are developing rapidly; it is these two tools that will play a major role in making banking more convenient to the general public. Using these we should look at innovative ways of getting people to have bank accounts or do transactions through banks,” he said. It is this idea that pushed Kodithuwakku to come up with “branchless banking,” a concept he devised to bring banking to the customers’ finger tips.

How does the branchless banking concept work?

“This concept is simple and hassle free. It was formulated by taking mobile phone technology to another dimension. With the use of IVR (Interactive Voice Response) and then the gradual use of SMS we can make banking, convenient and most importantly mobile. I came up this concept after careful analysis and research and mainly based it on the phone reload system which most people are familiar with. Once we incorporate the correct technology which supports the banking system to the mobile and land phone, the customer can carry out a transaction as and when he pleases.”

“The branchless banking concept has three important contributors; the bank, merchant and the customer. For example if the customer wants to credit or debit money to the bank he can visit the nearest merchant (who is authorised to initiate banking transactions) and get the requirement done without visiting a bank branch. Subsequently the customer gets a confirmation message through a voice call and a SMS confirming that the transaction has been completed.

What can be done with Branchless Banking?

• Fund deposits to your accounts  • Fund deposits to children’s accounts • Fund deposits for other Accounts • Fund transfers • Withdrawals • Microfinance operations (Repayment of loans/Pawning/ delivering of small loans) • Payment for utility bills • Credit card payments  • Payments for goods and services etc.

“These transactions can be made through this innovative system which is secure, convenient, easy, hassle free, time saving and cost effective. This Branchless Banking model also allows banks to draw in a spectrum of people who are unfamiliar with the financial system via mobile phones/land phones  and it is capable of converting the retail merchants to mini banking branches where people could initiate their basic transactions easily,” explained Kodithuwakku.

The branchless banking concept is mainly targeted at the rural masses who have almost no or very limited access to banking and urban executives whose lives are a race against time.

Kodithuwakku says branchless banking is flexible, thus it can connect all telecom service providers and banks in one network which makes it accessible from anywhere in the  island with inter bank operatability, a plus point for customers.

The unique feature of this system is that the customer need not register with any of the telephone service providers. The service can be made available through any of the existing telecom service providers (mobile /fixed line).

This concept has been well received by many which include former banking professionals and school students who were given demonstrations on how this branchless banking concept works. Most were of the view that it is new age banking, a long felt need in uplifting the country’s banking sector, Kodithuwakku said.

He noted that this concept could promote the culture of savings and create a conducive atmosphere for people to transact with responsible and regulated institutions which will boost the economy by generating revenue for the government.

Kodithuwakku further mentioned that this 100% Sri Lankan product could be expanded to other developing countries such as Indonesia, Nepal, Vietnam, Maldives etc. Kodithuwakku hopes to take the Branchless Banking concept to the masses and develop their financial literacy.

“This concept can be implemented in any area of the country and the government can invest in this project where the infrastructure facilities are limited including areas that have been recently liberated from the LTTE. This could spur fast paced development in these areas,” said Kodithuwakku.

Pan Asia Bank posts impressive first quarter

Pan Asia Bank has posted an impressive 42% growth in profit before taxes and VAT for the first quarter ended March 31, 2009 when compared to the same period last year. The bank has recorded a profit before tax of Rs. 205 mn and profit after tax of Rs. 92 mn, a growth of 39%.

Growth in income, both nett interest income and other income and sustainable cost control measures have contributed to the impressive bottom line. Results would have been even better if not for increased provision mainly on account of the bank’s credit card portfolio, which resulted in an increase NPA Ratio to 12.74% as at March 2009, for which the management has taken steps including introducing more controls, segregation of duties, automation, strengthening the recovery unit etc. a press release stated.

Pan Asia Bank grew its customer deposits by 15% and advances by 18% when compared with the quarter ended March 31, ’08. Kalutara was added to its growing branch network of 33. The bank’s plan during the year is to add three to five new branches to the network and look to re locate several existing branches to upgrade the facilities and, to provide a more modern, customised and professional service.

Liquidity which is considered a paramount requirement for banks and capital adequacy ratios remain comfortably above minimum Central Bank liquidity ratios and Basel requirements. Liquidity Ratio was at 22.03% against a requirement of 20%, Tier I and Tier II Capital Ratio stood at 12.83% and 13.58% respectively against required ratios of 5% and 10%. Advances to Deposit Ratio (ADR), which the Pan Asia Bank monitors internally remains within the target level of 85%.

CEO, Pan Asia Bank, Kimarli Fernando said “Hard decisions taken and changes made during the second half of last year are showing results as the figures reveal. Profits have grown, efficiencies have improved and better controls are in place. It is an ongoing continuous improvement process. We expect the growth momentum to continue despite the uncertain and difficult business environment due to the global economic downturn, and expect to achieve sound results by year end. The expected peace in the north and east will also give us new opportunities for which we are gearing up. ”

Seylan teams ‘most knowledgeable’

Emphasizing the high calibre of knowledge and talent prevalent within Seylan Bank, teams participating at the Interbank Quiz 2009 and Trade Finance Quiz 2009 triumphed once again this year, a feat accomplished consecutively in the past as well.

The Interbank Quiz 2009 organised by the Association of Chartered Bankers of Sri Lanka Trust is the premier annual quiz competition for Sri Lanka’s banking industry and had the participation of 34 teams this year battling on questions pertaining to banking law, trade finance, general knowledge and current affairs.

 Seylan entered two teams, ‘A’ Team taking the trophy and ‘B’ Team being second runner-up. The Seylan Team also emerged champions for the second consecutive year at the Trade Finance Quiz 2009, organised by the Trade Finance Association of Bankers.

The continuing winning streak displayed in 2009 comes from last year’s triumph of securing Best Team in the Corporate Sector at the Wisdom 2008 Quiz under the aegis of the Management Club and Overall Champions in the Future Waves Brain Teaser 2008 in addition to winning the Trade Finance Quiz 2008. 

Congratulating the champions and runners-up at a felicitation ceremony attended by Executive Director R. Nadarajah and General Manager/Chief Executive Ajitha Pasqual, Seylan Bank Chairman Eastman Narangoda said that the winning streak displayed by the Seylan teams proved the fact that Seylan is a winning bank and able to stand tall amid challenging circumstances.

 He further said, “This is not just isolated to the quizzes but to the overall working of the bank where I have seen how the entire Seylan team displays team spirit and camaraderie within a knowledge gaining culture to ensure that the bank is aligned to meeting its goals, mission and vision.”

Commercial Bank opens another branch in Matara

The Commercial Bank of Ceylon has enhanced its presence in the southern part of the island by opening its third customer service point in Matara, the Matara City Office, to supplement the services provided by the existing Commercial Bank branch at Station Road and the Minicom situated in the Cargills Food City.

The first branch in Matara was opened 36 years ago as the fifth branch of Commercial Bank, bringing personalised services to the public and traders of Matara. With the rapid expansion of business, trading and industrial activities in the area, there was a continuous increase in the inflow of customers, leading to the opening of the first MiniCom Centre in the entire Southern Province in 2007.

“However, even this was not adequate to meet the constantly increasing customer demands, requiring us to open this new branch named, Matara City Office at No. 11, Beach Road, Matara,” a bank spokesman said. “The new location will offer tremendous convenience to the public as well as traders because it is located very close to the main trading area and the main bus stand.”

The new branch will be the 171st branch of the bank and will be open from 9 a.m. to 3  p.m. providing all types of banking transactions. The new branch is linked to all other Commercial Bank branches and the Supermarket Banking counters islandwide permitting online real-time banking. It is also equipped with an ATM linked to 335 ATMs of Commercial Bank, over 1,000 other ATMs locally and over one million ATMs belonging to the Cirrus and Visa networks islandwide.

Resilient performance from ntb

In the interim financials released to the Colombo Stock Exchange last week, Nations Trust Bank PLC reported that the group has achieved an operating profit before income tax and Value Added Tax of Rs. 404.579 mn for the three months ended March 31, 2009 against Rs. 288.405 mn reported for the comparable period last year, reflecting a 40% growth.

Profit after taxes grew by 25% to Rs. 180.137 mn for the period compared to Rs. 144.208 mn. Corresponding to the growth in total assets of 9% and a significant increase in non-fund based income, gross income of the bank grew by 22%. Increased forex volumes and active market participation contributed to a 65% growth in foreign exchange income while trading gains on government securities by capitalising on declining interest rates, credit cards and commissions boosted the other operating income by 55%.

“In the wake of a significant slowdown in the local banking industry, according to the Central Bank of Sri Lanka, deposits growth has stabilised to 3.8% while loans and advances have decreased by 0.4% during the first three months of the year. In comparison, we have been able to grow our deposits by 6% and loans and advances have also shown a marginal growth in the backdrop of a stringent credit policy being adopted due to unfavorable market conditions,” noted Director / Chief Executive Officer, Nations Trust Bank, Zulfiqar Zavahir. 

“Our investment in the customer service centers and related delivery channels in the latter part of 2008 in line with our business strategy has contributed to an increase in operating expenses by 32% compared to the first quarter of 2008. However, during the first quarter of 2009, the bank managed to keep the growth in operating expenses at a lower rate than the growth in net income which was 44%, thereby improving the operating efficiency and bringing the Cost : Income ratio down from 61% to 56% compared to the 2008 first quarter.”

 Specific provisions however increased to Rs. 258.587 mn for the period from Rs. 96.116 mn which includes certain prudential provisions made on exposures over and above the provisioning policy of the bank, which is more stringent than the guidelines of the Central Bank.

While the Gross NPL ratio deteriorated from 6% to 7.6%, the increase in the NPL portfolio was relatively lower than the industry, where NPLs increased by 23.4% according to figures released by the Central Bank of Sri Lanka.

“In the backdrop of challenging market conditions, our performance has been resilient. Continuing to be focused on asset quality, risk management and cost control has paid rich dividends under difficult circumstances. Having made the prudential provisions in the first quarter, the bank is in a strong position to face the rest of the year with greater confidence,” Zavahir added.

In July last year, Fitch Ratings Lanka Ltd. reaffirmed the rating assigned to the bank of A(lka) which denotes a strong credit risk relative to other issuers or issues in the country.

Nations Trust Bank has grown rapidly over the last 10 years through a strategy of organic growth and acquisitions. These included the tie up with American Express credit cards and the merger with Mercantile Leasing Ltd. In keeping with the vision of the bank “Making life simple by being the benchmark of convenience,” Nations Trust Bank provides customer convenience through pioneering concepts such as ‘365 Day Banking,’ mini branches, Personal Banking Centres, ‘Bank At Your Doorstep’ and extended banking hours which have helped to win over and maintain a strong customer base.

Pan Asia Bank ties up with Amana Takaful Insurance for Bancatakaful

Pan Asia Bank and Amana Takaful Insurance have collaborated to offer Bancatakaful, under which, Takaful life policies will be offered to all Pan Asia Bank customers through the Pan Asia Bank branch network. This is yet another first from Amana Takaful Insurance and Pan Asia Bank.

Takaful is an insurance system through which the participants donate part of their contribution, which is used to pay claims for damages suffered by some of the participants while the balance goes into an investment fund. Amana Takaful’s role is to manage the insurance operations and invest insurance contributions in line with Islamic principles.

Takaful is a novel way of insurance that is based firmly on values of taking care of each other through trust, equality and ethics. Takaful solutions are on par with conventional insurance solutions but differ fundamentally on the operation of the funds. 

When you obtain a Takaful Policy, part of your contributions (premiums) are pooled into a fund known as Participants Tabarru (Donation) Funds (PTF) and the balance to a Participants Investment Fund (PIF). PTF is invested in accordance with Shariah and is used to pay claims. PIF is solely for the participants’ savings and investment; PIF funds are invested on principles of Al Mudarabah, which is a commercial profit sharing contract between providers of funds and the entrepreneur who actually conducts the business.

After a specific period if the participant needs financial assistance he or she could withdraw a considerable percentage of the PIF. Policy holder has the privilege in cancelling the policy at any given time and is entitled to withdraw the PIF along with the profit, subject to cancellation fee.

In Takaful the risk fund i.e. PTF is owned by the participants to the fund who are entitled to the surplus, while conventional insurance it is owned by shareholders who are entitled to the surplus.

Takaful operations are also governed not only by the regulator but also by a council of scholars (Sharia Board) who review and confirm the transparent nature of operations and conformity with the concept.

Amana Takaful Life products offer financial plans to ease the burden of life’s unexpected

events. No matter the stage in life individuals have commitments to keep and duties to perform.

With Bancatakaful, Takaful life insurance solutions will be available at all Pan Asia Bank counters, thus enabling Pan Asia Bank customers to enjoy benefits such as customised basic covers  — death and permanent total disablement, with a list of supplementary covers to choose from to suit the individual needs, including a comprehensive hospitalisation cover and surplus refund at the end of the policy period.

Special leasing package

HNB recently joined hands with Sterling Automobiles Lanka (Pvt) Ltd. to offer a special leasing package for Chinese manufactured FAW trucks.

The HNB offer will include free motor insurance cover and registration, an attractive tent, an HNB credit card, and a life insurance cover worth Rs. 1.2 million at no extra charge.

Imf loan is needed to kick-start the economy — Ajitha Pasqual

“I think the most important thing that everybody is looking at is the International Monetary Fund (IMF) package of US$ 1.9 billion coming into the economy. For one thing, it will boost our reserves and I feel it will stabilise the dollar and help bring interest rates down. But there is a lot of speculation as to what sort of leverage the IMF will impose on the country. I think they will bring in certain elements of control. But we need to get this funding to kick-start the economy,” General Manager and CEO, Seylan Bank Ajitha Pasqual told BENCHMARK last week, discussing the ground situation, vis-à-vis the state of the financial-services industry.

Commenting on the level of national debt and the much needed development and reconstruction aid, Pasqual noted: “I think we have been getting a lot of funding from China in the last few years – they have been very supportive and there have been a lot of projects. Iran has come in and we have been talking to Libya… there are a lot of funding lines available, especially for developing the north-east; maybe even the south.

“We need to ensure that we negotiate these funding lines and also that we utilise the funds that come in – that’s one of the most important things. We find that funds are often underutilised.”

Discussing the recent fiascos in the financial-services industry and the importance of transparency and corporate governance, he told the show’s Special Correspondent Savithri Rodrigo that it was very important to follow corporate governance guidelines.

“We have to be held accountable, because we cannot say, ‘we did this because of something else.’ Accountability, corporate governance and also responsibility to your stakeholders are all important. You have a huge responsibility to your staff and your customers. Of course, there have been lapses, which are obvious. But we need to learn from them and move on,” he added.

Touching on the silence on the part of the business community with regard to certain high-priority issues that confront us as a nation, Pasqual maintained that to develop the nation, “we need to look at transparency in a lot of dealings that go through… But whether they have a means to ensure that transparency comes through is a worry. There are people who have spoken out but most people prefer to remain silent and do their own business,” he conceded.

The widely-watched business TV programme is presented by LMD and produced by the Wrap Factory.

HNB’s fourth safe drinking water and sanitation project at Norochcholai

HNB’s safe drinking water and sanitation programme was extended to Norochcholai, a village in the Kalpitiya Pradeshiya Sabha in Puttalam District. About 600 people from 100 families living around the Norochcholai Economic Centre lacked access to a safe source of water. The only water available was salty and metallic.

The plight of these villagers was brought to the notice of the bank by the HNB Puttalam team and the project was undertaken as part of HNB’s community development initiatives.

With the support of the local authorities HNB was able to identify a safe water source. A new tank was constructed with a pump and pipes were laid out to supply water right upto the village. To increase the convenience of collecting water 40 taps have been set up approx 50 meters apart in the village. The tank was formally handed over to the villagers on April 29 at a function held at the Norachcholai Economic Centre.

The Puttalam project was the fourth in a series of initiatives by HNB following the United Nations Millennium Development Goal of providing safe drinking water. The first three projects under this scheme were launched in Siruthopu (a village in Mannar District), Araly (a village in Jaffna District) and Gonewa (a village in Anuradapura District).

The HNB Safe Drinking Water and Sanitation Project is initiated with the guidance of Deputy General Manager - HR and Administration, J.R. P.M. Paiva who is heading the CSR initiative of the bank to provide safe drinking water. Hatton National Bank plans to initiate similar projects in Vakarai and Kataragama in the near future.

When the world stops to salute all mothers

A child is carried in a mother’s womb for nine months before he/she is blessed with the light of the world. To every child his/her mother is the most perfect creature on earth, the loveliest and the most infallible.

It is not all easy to be a role model mother. There are no hard and fast written rules to be the ideal mother or the ideal parent. The most important tip would be to understand the responsibility of instilling the best values in her child’s mind and bring the child up to be a confident, happy and good human being.

An ideal mother is one who inculcates the best of family values in her children. She also has tonnes of patience to put up with the childish tantrums and makes the child feel satisfied and happy without being over-indulgent.

She is usually a mixture of the toughness of granite and softness of blossoms, the sharpness of razor and the coolness of mountain streams, the calmness of still water and the purity of untrodden snow. She is the child’s best friend. She is there for the child through thick and thin. In one word, she is the light of her child’s life. All mothers should aspire to be the role model mother to your child.

Marriage, motherhood, maternal instinct, mothering, maternal responses are all associated very closely with the entity called mother. The way a mother feels for her child is instinctive, with a number of hormonal and psychological factors involved. There are certain well-defined and clear-cut ways in which mothers react to their responsibility of child bearing, child rearing and home making.

Most women go through the phase of experiencing the fantasies of the motherhood myth and many other myths associated with it, for example, myth of “instant bonding” and of “ideal mother.” This fantasy actually prepares the mother in her to undergo the entire painfully pleasurable experience of mothering a child.

The myths of instant bonding and ideal mother make the whole concept of motherhood seem so rosy, stimulating, meaningful and enriching. They actually encourage every woman to cherish the feeling of being a mother to a child and also the desire of mothering the child in the most perfect manner possible.

In today’s economic environment many Sri Lankan mothers have the difficult task of balancing work and looking after the children. Today the working mother is a superwoman with the extraordinary flair for balancing her family responsibilities and her responsibilities as an employee. As the saying goes, she has to have her cake and also eat it.

With a motto to balance work and life — a working woman is striving to excel in both. The exponentially rising number of working women in organisations is proof of that.

The toughest part is to strike the right balance so that the family members do not feel neglected on account of her career and at the same time she should not be left far behind when it comes to fulfilling her job responsibilities. Instead of looking for sympathy and consideration from her employee and colleagues, she should try and succeed in not giving anybody a chance to differentiate her from her full-time devoted women co-workers without family responsibilities.

The role is tough and challenging. One needs plenty of emotional strength and a steely determination. The successful, role model mothers have proved that the idea of working mother and impact on child is not that scary anymore. The fact that, even single mothers can set excellent standards and above par examples when it comes to raising children, is now a proven fact. Society is now more considerate, supportive and receptive to this new genre of working mothers abounding in almost every field.

So on this Mother’s Day let all mothers young and old, working and non-working take a bow, for this is your day.

A tribute to Mother’s Day from Mother’s Touch Vocational Academy

The month of May brings to us the wonderful opportunity to celebrate the unique occasion called Mother’s Day. For each of us, this is the time to pay  tribute to the special person whose soft hands nurtures us and who has made it possible for us to see the light of the world. This is the time to acknowledge your mother’s contribution in your life.

This is a  special day during the month of May, honoring all mothers, celebrated in many countries such as Denmark, Finland, Italy, Turkey, Australia, Belgium and around the world (also known as the month of Our Lady/Our Mother).

It is impossible to pay back even a fraction of the affection and care that we get from our mothers but we can show our love and affection for her on this special day. Mother’s Day is a symbol of the deep love of every human being for his/her mother and  is a day set aside only for the mother — one of the most beautiful persons in our lives.

Amidst the demanding schedules that modern day life has tied us down with, it is the most opportune moment to tell her what she is in your life and what she means to you. But the major question that arises on everyone’s lips is – how to celebrate Mother’s Day and how to give dear mum a grand tribute. 

It is often done with flowers, gifts, cards, breakfast in bed, dining out, just to give a few examples. However, we cannot forget the fact that it complements Father’s Day, the celebration honoring fathers.

In the concept of Mother’s Day, it would be significant to correlate the occasion with Mother’s Touch International Vocational Academy, at No. 6, Walter Gunasekera Mawatha, Nawala, Sri Lanka. It is the brain child of Geetha Kaduwela, who returned from Australia, armed with her training and qualification.

Geetha opened up her Teaching Academy with relevant (NVQ) Diploma courses such as Childcare Management, Early Childhood Development & Education and the Montessori Method of Education, which are conducted by her and she is ably assisted by Janaki Fernando. The latest addition to Mother’s Touch Academy is the International Vocational Qualification (IVQ) of Children’s Care, Learning & Development of City & Guilds UK.

 As highlighted in many previous articles by Mother’s Touch Academy, early childhood is the most crucial period of life. Children who experience the joy of early learning are happy, confident and fulfilled individuals.  In essence, early childhood education helps bring forth the giftedness of each child.

The mother is the first caregiver and teacher who should be well aware of the needs of the child, and shower him with love and care and also make the child familiar with his home and care giving environment.  The mother should have a special place to teach her children, and this is known as “school at mother’s knee.”

At Mother’s Touch Academy, the Director Geetha Kaduwela, herself a mother of five children, is a mother who has the invisible current to generate and illuminate the lives of all her students — mother’s to be, young mothers, mothers and grand mothers! In conclusion, Mother’s Touch Academy wishes each and every mother in Sri Lanka and the world over, a very happy Mother’s Day 2009.

Mother’s Touch International Vocational Academy can be reached at 011 2805047.

Ninewellskids — the children’s boutique

If you have recently discovered that you are expecting a baby, then you are probably going to go through a mix of emotions. At first, there will be the sheer joy and excitement of knowing that you are bringing another life into this world. Nothing can top the feeling you got the moment you learned the great news.

However, once you start to consider the practical side of impending parenthood, you might begin worrying about the financial burden you are likely to incur. It is simply a matter of fact that it can be costly to take care of a newborn child. These feelings are absolutely normal, as lots of young parents go through the exact same thing.

Fortunately, there is some relief for people in your position. The best place for you to shop for cute baby items is at Ninewellskids at Ninewells Care Mother & Baby Hospital (Pvt) Ltd. There you can conveniently find everything  at very competitive prices for babies. Representing the best brands in the industry the items are all carefully selected.

Especially for all expectant parents, there is nothing more fun and exciting than buying layette items, a crib, toys and other stuff for their soon to be born babies. This is particularly true if the child is a first-born.

Whether you are just setting up a nursery or looking for newborn outfits, nursery, furniture and decorations, bathing supplies, toys and activity baby products like walkers and play centers, this shop can provide you with all your needs. A great selection of baby products coupled with the convenience and competitive pricing makes the Ninewellskids shop the greatest way for you and your newborn child to enjoy.

Ninewellskids presents gift ideas to those who want to share some love with their nephews, nieces, granddaughters or grandsons. These are often in baby gift basket form that contain various essential mother and baby items.

The next time you want to pick up something for your baby or toddler, walk over to Ninewellskids – you’ll be happily surprised with the collection, the display and the prices.