Business

Indian Banks turn cautious on Sri Lanka exposures

Published

4 years ago

2022/01/10

Mumbai: As Sri Lanka grapples with a severe foreign exchange crunch, high street banks in India have turned cautious and selective about their exposures to the island nation.

Several institutions have reduced discounting letters of credit (LC) – the basic instrument for financing trade – issued by many Lanka lenders while others are giving credit to exporters based on the standing of the party, amount, the tenor of the credit, and standing of the bank issuing LCs.

Given the long trade relations, Sri Lanka’s dependence on imports and expectations of credit lines (from India and other countries), and possible currency arrangements, bankers hope that the country would be able to tide over the crisis in the medium term.

At the beginning of December, Sri Lanka’s forex reserves were just enough for a month of imports.

“We have not put a complete embargo on discounting export bills to Sri Lanka. It’s done on the basis of limits available with LC issuing banks,” said a senior official of the State Bank of India, the country’s largest lender.

Among other large banks, HDFC Bank was going slow on handling LCs for exports to Sri Lanka, Axis that has financed many Indian companies with exports to Sri Lanka is being selective, while ICICI Bank has cut limits for Sri Lanka along with some of the other smaller countries for quite some time now. IndusInd, said an official of the bank, is closely monitoring the developments and has been selective in the transactions undertaken.

“There is nothing wrong with banks in Sri Lanka. But when the payment falls due, there may not be enough dollars available in the forex market there,” said a banker.

India’s total exports to Sri Lanka was $3.2 billion in 2020. Oil, ships, boats, pharmaceutical products, sugar, iron and steel, cotton and machinery are among the top export items.

Under the normal trade finance arrangement, an exporter is paid by its bank which discounts the bill after documents like shipping bills, commercial invoices, and bills of lading are submitted to the bank. The bank is paid after a certain time – the credit period which could be up to six months (or a year or more for capital goods) – by the importer’s (here, the Sri Lankan buyer’s) bank.

Banks discounting bills have turned edgy as Sri Lanka is starved of dollars and the Sri Lankan central bank may not be in a position to supply dollars when importers’ banks have to make payments to exporters’ banks in India.

Payments against sight bills, where (under normal circumstances) funds are transferred within five working days, are taking more than a month, said an official with a leading export promotion organisation. Some exporters, said an official of a consumer goods company, are giving 6 to 7-month lines of credit to distributors who undertake exports to Sri Lanka.

Though large MNC banks like HSBC, Citi, and Standard Chartered, which have a long presence in Sri Lanka, continue to extend trade finance with certain precautions, they have the comfort of dealing with their respective Lanka office as the counterparty.

“Some banks are simply not giving any credit, but are simply operating on a collection basis. They are releasing money only after receiving it from the bank in Sri Lanka,” said a mid-sized exporter.

-Economic Times

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Business

SEC Sri Lanka eases Minimum Public Holding Rules for listings via introductions to boost market flexibility

Published

15 hours ago

2026/01/1

Thilina Walpola

The Securities and Exchange Commission of Sri Lanka (SEC) has approved amendments to the Colombo Stock Exchange (CSE) Listing Rules to provide greater flexibility regarding the Minimum Public Holding (MPH) requirement for companies listing through the Introduction method.

These revisions were proposed and deliberated under Project 6 – New Listings (Public and Private), one of 12 key strategic initiatives launched by the SEC to strengthen Sri Lanka’s capital market framework. Project 6 aims to drive national capital formation, promote listings by highlighting benefits and opportunities for listed entities, and attract large-scale corporates to enhance market depth, liquidity, and investor confidence.

The amendments reflect a joint effort by the SEC and CSE, underscoring strong collaboration between the regulator and the Exchange to address evolving market needs while maintaining market integrity, transparency, and investor protection.

The salient features of the amendments to the CSE listing Rules are as follows;

Entities seeking listing by way of an Introduction on the Main Board or Diri Savi Board that are unable to meet the MPH requirement at the time of submitting the initial listing application, may now be granted a listing, subject to certain conditions on compliance.

Non-public shareholders who have held their shares for a minimum period of eighteen months prior to the date of the initial listing application may divest up to a maximum 2% of their shares each month during the six months commencing from the date of listing, and simultaneously, be subject to a lock-in requirement of 30% of their respective shareholdings as at the date of listing, until MPH compliance or 18 months from the date of listing, whichever occurs first.

A phased MPH compliance framework has been introduced requiring a minimum 50% compliance with MPH requirement within 12 months and full compliance within 18 months from the date of listing.

Entities should include clear disclosures in the Introductory Document confirming their obligation to meet MPH requirements within the prescribed timelines.

In the event of non-compliance with the MPH requirement, certain enforcement actions have also been introduced.

The revised framework is expected to encourage more companies to consider listing via Introduction, thereby broadening market participation, improving liquidity, and contributing to the overall development of Sri Lanka’s capital market. Issuers, investors, and market intermediaries will benefit from a more enabling yet well-regulated listing environment.

Business

Manufacturing counters propel share market to positive territory

Published

15 hours ago

2026/01/1

Thilina Walpola

Stock market activities were positive yesterday, mainly driven by manufacturing sector counters, especially Sierra Cables, Royal Ceramics and ACL Cables. Further, there was some investor confidence in construction sector counters as well.

Amid those developments both indices moved upwards. The All Share Price Index went up by 150.54 points, while the S and P SL20 rose by 41.5 points. Turnover stood at Rs 4.65 billion with six crossings.

Those crossings were reported in Royal Ceramics which crossed 3.8 million shares to the tune of Rs 174.3 million; its share s traded at Rs 45.20, VallibelOne 1.4 million shares crossed to the tune of Rs 138.6 million; its shares traded at Rs 99, Melstacorp 500,000 shares crossed for Rs 87.24 million; its shares traded at Rs 174.50, Sierra Cables two million shares crossed for Rs 68.2 million, its shares sold at Rs 34.30, Kingsbury 1.5 million shares crossed for Rs 31.8 million; its shares traded at Rs 21.20.

In the retail market companies that mainly contributed to the turnover were; Sierra Cables Rs 418 million (20 million shares traded), Royal Ceramics Rs 363 million (eight million shares traded), Colombo Dockyards Rs 323 million (1.7 million shares traded), ACL Rs 311 million (3.5 million shares traded), Renuka Agri Rs 149 million (12.3 million shares traded), Sampath Bank Rs 94.7 million (648,000 shares traded) and Bogala Graphite Rs 86.4 million (529,000 shares traded). During the day 122.8 million shares volumes changed hands in 34453 transactions.

Yesterday the rupee opened at Rs 310.00/25 to the US dollar in the spot market, weaker from Rs 310.00/310.20 the previous day, dealers said, while bond yields were broadly steady.

By Hiran H Senewiratne

Business

Atlas ‘Paata Lowak Dinana Hetak’ celebrates emerging artists nationwide

Published

15 hours ago

2026/01/1

Thilina Walpola

Atlas, Sri Lanka’s leading learning brand, reaffirmed its purpose of making learning fun and enjoyable through the Atlas All-Island Art Competition 2025, which concluded with a gifting ceremony held recently at Arcade Independence Square under the theme ‘Atlas paata lowak dinana hetak’. Students from Preschool to Grade 11 showcased their talents across five categories, with all island winners receiving cash prizes, certificates, and gift packs. Additionally, merit winners in each category were also recognized. The event brought together students, parents, and educators, highlighting Sri Lanka’s cultural diversity, nurturing young talent, and reinforcing Atlas’s long-standing commitment to education, creativity, and building confidence among schoolchildren. The event concluded with the ‘Atlas Art Carnival’, which brought children and parents together through games and creative art activities in a fun and lively atmosphere.