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Credit expansion gathers pace, CB Governor says, ‘No Overheating’

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Central Bank Governor Dr. Nandalal Weerasinghe

Sri Lanka’s private sector credit is expanding, but Central Bank Governor Dr. Nandalal Weerasinghe firmly dismissed concerns that the growth could be overheating, stating, “No, not at all.”

Speaking at the press briefing for the 2025 Financial Stability Review (FSR), the Governor directly addressed a key warning in the report. The FSR, which confirmed improved financial sector resilience, also noted that a ‘widening private sector Credit-to-GDP Gap’ suggests a need for continuous monitoring of any build-up of systemic risk.

When questioned by a journalist on this potential risk, Dr. Weerasinghe provided a detailed context, arguing that the headline figure, when analysed, is not a cause for alarm.

He explained that other key indicators remain subdued. ‘Financial intermediation is still well below the level we had earlier,’ the Governor said, adding that “private sector credit as a share of GDP is still below pre-pandemic levels.”

Confidently, the Governor characterised the trend as a healthy and necessary rebalancing rather than a dangerous boom. He pointed out that as public sector credit is coming down, more private sector credit can be accommodated in the system.

“When you take overall credit expansion, what we see is more of a shift of public sector credit to the private,” Dr. Weerasinghe stated. “The other factor is that economic recovery means private sector credit also needs to grow in line with the recovery that we see… That is why we think it is not a major concern.”

The FSR itself provides insight into where this growth is concentrated. The report noted a particularly strong credit expansion within the Finance Companies (FCs) sector. This surge, it said, was largely driven by an increase in vehicle and gold-backed facilities, following the recent removal of vehicle import restrictions and the prevalence of lower market interest rates.

Overall, the FSR concluded that the financial sector’s resilience improved in the first half of 2025. This was supported by better profitability in both banks and FCs, driven by higher net interest income.

However, the report also urged vigilance in several areas. It pointed out that while declining, the banking sector’s Stage 3 Loans ratio (an indicator similar to Non-Performing Loans) remained elevated.

Furthermore, the FSR noted that the spread between lending and deposit rates also remained elevated compared to its pre-crisis average, highlighting an area for further improvement.

Looking ahead, the Central Bank expects the momentum in the macroeconomic recovery to continue supporting financial stability. However, it warned of downside risks, particularly from global uncertainties to which the country is susceptible.

By Sanath Nanayakkare ✍️



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Indian business leader urges SL entrepreneurs to tap into India’s rapidly expanding consumer market

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T. Krishnakumar, Chief Executive Officer of Reliance Consumer Products Ltd (RCPL)

By Sanath Nanayakkare

Speaking at the Sri Lanka Economic and Investment Summit 2026, T. Krishnakumar, Chief Executive Officer of Reliance Consumer Products Ltd (RCPL), emphasised that local enterprises can unlock substantial economic benefits by strategically aligning with India’s booming consumer base.

Addressing business leaders and policymakers at the Shangri-La Hotel in Colombo, Krishnakumar highlighted that geographical proximity and rich cultural ties provide a natural foundation for deeper commercial collaboration.

He noted that instead of viewing bilateral trade narrowly, regional partnerships should act as conduits to build robust, scalable enterprises capable of plugging into wide-reaching regional value chains.

“For Sri Lankan exporters dealing in traditional staples as well as value-added goods, accessing India’s rising middle class presents a phenomenal growth window,” he said.

Drawing insights from Reliance Consumer Products’ rapid expansion – which scaled efficiently to thousands of employees and multi-billion-dollar metrics – Krishnakumar stressed that modern corporate success relies on disciplined execution, localised consumer understanding, and smart technology integration.

Furthermore, he underscored that while rapid growth is critical, businesses must consistently anchor their models in affordability and consumer trust.

Concluding his address at the summit, the RCPL chief noted that pairing regional trade integration with resilient business practices and predictable regulatory frameworks will be vital as Sri Lanka transitions firmly toward accelerated economic development.

Addressing the Summit during a subsequent fireside chat, President Anura Kumara Dissanayake underscored that a core concern currently being targeted by the government is developing a critical mass of local entrepreneurs equipped to engage with international enterprise counterparts.

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SriLankan Airlines wins prestigious SATA 2026 Visitors’ Choice Award for Leading International Airline

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SriLankan Airlines has once again been honoured with the prestigious Visitors’ Choice Award for Leading International Airline at the South Asian Travel Awards (SATA) 2026, reaffirming its continued recognition in the regional travel and tourism industry. The airline, which has received this award in previous years, was the only international airline to be recognised in this category at this year’s event. The 10th anniversary edition of the awards ceremony was held earlier this month at Hotel Barcelo Nasandhura in Male, Maldives.

Recognised as one of the key events on the Maldivian tourism and travel industry calendar, SATA celebrated its 10th anniversary on a grand scale, bringing together prominent industry stakeholders, including Government Ministers, distinguished dignitaries, diplomats and senior representatives from leading airlines and their respective head offices.

Commenting on the achievement, Dimuthu Tennakoon, Head of Commercial, SriLankan Airlines, stated, “We are honoured to receive this recognition at the South Asian Travel Awards 2026. Being named the Leading International Airline in the Visitors’ Choice Awards once again is a meaningful acknowledgement of our commitment to serving our passengers and strengthening our presence in the region. This award inspires us to continue enhancing the travel experience we offer and to build stronger connections with the markets and communities we serve.”

Complementing its commitment to service excellence, SriLankan Airlines offers an extensive flight network with convenient connections to destinations across the globe. In South Asia, the airline operates nearly 130 flights each week to 15 destinations across India, Pakistan, the Maldives, Nepal, and Bangladesh. With schedules thoughtfully designed to suit the needs of travellers, SriLankan Airlines provides seamless connectivity for those visiting Colombo for business or leisure, as well as passengers travelling onwards to destinations worldwide.

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JXG enters LMD’s Most Respected Entities in Sri Lanka 2026 for the first time, securing a place among the first 50

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Gamika de Silva, Group Chief Marketing Officer at JXG

JXG (Janashakthi Group), Sri Lanka’s leading financial conglomerate, has been ranked 44th in LMD’s Most Respected Entities in Sri Lanka 2026, marking the Group’s first appearance in the prestigious listing. The recognition places JXG among Sri Lanka’s most respected companies and marks an important milestone in the Group’s master-brand journey.

As the holding company, JXG was also recognised across key attributes including Aspirational Workplace, Business Expansion, Business Innovation, Corporate Culture, Corporate Dynamism, Crisis Management, Employee Wellbeing, Honesty and Integrity, and Leadership Profile. The recognition reflects the growing strength of the JXG brand and the collective contribution of its businesses and people in building trust and confidence among its stakeholders.

JXG’s subsidiaries, including Janashakthi Life and First Capital, have also been recognised in the main table of LMD’s Most Respected Entities 2026 rankings, while Janashakthi Finance has been recognised under the Business Expansion attribute, reflecting the strength of the Group’s individual businesses alongside its growing master brand.

Conceptualised and commissioned by LMD and conducted by PepperCube Research Consultants, the Most Respected Entities special edition recognises companies based on an independent survey of Sri Lanka’s business community.

Commenting on the recognition, Gamika de Silva, Group Chief Marketing Officer at JXG, said, “This is a proud moment for all of us at JXG. We set out to build a Group brand that is not just seen but lived by our people and reflected in everything we do. Ultimately, the true testament to any brand lies in its people, and the credit for this recognition goes to everyone across JXG who brings our values to life every day. This recognition is an encouraging milestone for us, while also reminding us to keep raising the bar and earning the respect of our stakeholders through what we do.”

JXG’s approach to building trust is anchored in its core values of Integrity, Collaboration, Respect, Performance Driven and Innovation. These values guide how its businesses operate, how its people engage with one another and how the Group serves its customers and wider stakeholders.

As JXG continues to expand its businesses, the Group remains focused on strengthening its market presence, creating long-term value and contributing to the growth of Sri Lanka’s financial services sector, guided by its purpose, Breaking Barriers, Forging Futures.

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