Business
Indian Banks turn cautious on Sri Lanka exposures
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
Business
Wing Commander (Retd.) D. Pradeep S. Kannangara elected president, Industrial Security Foundation
The Industrial Security Foundation (ISF) which acts as the sole organization in Sri Lanka to represent the Private Security industry having incorporated by an Act passed in the Parliament, Act No. 51 of 1999, elected Wing Commander (Retd.) Pradeep Kannangara as its President for the years 2022/2023 at its 30th annual General Meeting which was held at the PIM Auditorium in Borella. Wing Commander Pradeep Kannangara was appointed President while 14 other members were appointed to the Executive Committee, strengthening the ISF in order to drive and uplift the standards of the private security industry in Sri Lanka.
He has served on the ExCo consecutively since 2012 under four different presidents where he held the positions of Senior Vice President during the last three consecutive years. He has also been a committed member of the ISF and was awarded prestigious coveted FISF title due to his many valuable contributions to the organization and the Private Security Industry in Sri Lanka in 2012.
Wing Commander Kannangara’s journey into private security began after a successful career in the Sri Lanka Air Force for over 24 years where he served in many capacities finally being the Officer Commanding of the Special Air Borne Force. A recipient of the Ranasura Padakkama (RSP) Gallantry award for his bravery, sacrifices and service to the nation by the President of the Socialist Republic of Sri Lanka in 1990. He holds a Master’s in business management from the Edith Cowan University, Perth, Australia too and serves as a Board Director in AB Securitas (Private) Limited in Sri Lanka and AB Securitas Bangladesh Limited.
Kitchen & Bedroom, a name synonymous in the interior designing and furniture sector in the country recently celebrated its long-standing partnership with Häfele Sri Lanka during the latter’s 12th year anniversary celebratory event, reaffirming its ambitious plans to further strengthen and explore the numerous opportunities available here.
Häfele Sri Lanka, part of Häfele India which is a wholly owned subsidiary of the Hafele Global network, is a technology partner for various projects and initiatives of Kitchen & Bedroom. Both the companies operate in the interior design space, sharing their cumulative knowledge and expertise to provide extensive and personalized solutions catering to domestic requirements.
‘We take great pride in our association with Häfele Sri Lanka having exchanged and collaborated on many projects both commercial and household. We share similar values such as providing high quality, sustainable, functional and customized solutions to our customers, and most importantly to guide them through every aspect and step of the project and how best we could bring out their desired design,’ said Dr. Sacquaff, Kitchen & Bedroom Group CEO.
Amid the prevailing economic hardships faced by Sri Lanka, Sri Lanka’s premier footwear brand DSI recently expanded its islandwide presence in the country with the opening of three new showrooms in Kahawatta, Akuressa, and Chavakachcheri, with the aim of offering greater access to its diversified product range to a wider customer base.
Gracing the special occasion, the showrooms were declared open by D. Samson & Sons (Pvt.) Ltd. Managing Director Thusitha Rajapaksa, in the presence of Director Asanka Rajapaksa, General Manager Pradeep Samarathunga, National Sales Manager – Retail Sales Naleen Weerawardana, invitees, and well-wishers.
Speaking at the opening ceremony, Thusitha Rajapaksa stated: “We are excited about expanding DSI wings to three new locations. Despite the ongoing economic conditions of the country, we took a call to take a proactive measure to expand our islandwide presence. While it has been a challenge, the commitment and hard work of our team has made it possible to serve our loyal customers better, and we are confident that we will be able to continue these efforts in the future as well.”
DSI is renowned for its well-trained staff who offer exceptional customer service. The three new DSI showrooms prioritize providing a unique service and customer support to make purchasing further convenient for the customer.
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