Business
Rupee liquidity in banks ‘different from normal’: Central Bank
By Sanath Nanayakkare
With the spike in policy interest rates, rupee liquidity in the banks is different from what is normal, Yvette Fernando, deputy governor of the Central Bank said at a webinar hosted by the Centre for Banking Studies of the Central Bank.
“According to the reports we have received, the current rupee liquidity in the banks has not caused any distress to their daily transactions. However, in an increased rate environment, sometimes customers switch banks to get higher rates and some even opt to use their deposits to purchase Treasury Bills that earn them higher yields. This is normal when there’s a significant change in interest rates. You know that banks take deposits from customers and invest these funds in various ways to help the growth of the economy, while assuring security and reward to depositors. However, when such significant changes are made to the exchange rate policy and interest rates, banks feel the impacts of these policy decisions on their investment decisions.”
She made these remarks in response to a question from the audience whether the lifting of the fixed exchange rate regime and eye-popping numbers in interest rates could destabilize the banking system.
Elaborating on this particular concern among the public, she said, “Even before the most recent interest rate hike and flexible exchange rate policy, banks encountered stress due to lack of foreign currency in the past 12-18 months. Their foreign remittances base declined and their foreign inflows dropped after Sri Lanka’s credit ratings were downgraded by international ratings agencies. Under such circumstances, the banks had to make loan repayments. New loans couldn’t be taken and existing loans could not be renewed. Some banks were inconvenienced in inter-bank settlements as their foreign inflows were inadequate. The Bank of Ceylon and People’s Bank that provide substantial funds to finance the import of fuel, LP gas, medicines and other essential commodities also felt a significant impact as a result of these developments. That situation led the two state banks to collaborate with other banks to facilitate the critical shipments where the Central Bank also intervened when necessary.”
“Now, the most recent interest rate hike and exchange rate policy have had an even more significant impact on the banks’ assets and responsibilities. However, the capital and liquidity buffers of the banks are at optimal levels and have helped them to operate resiliently despite the impact on their rupee liquidity.”
The deputy governor went on to say that if the need arises to support the banking system with rupee liquidity, the Central Bank can do so within the regulatory provisions made available to it.
“We have the ability to intervene and provide that facilitation within that lawful framework. We are always prepared to do that. Even the Monetary Board of the Central Bank is aware of this situation,” she said.
“We recently allowed the banks to operate within a new space of facilitated prudential requirements in line with their assets and responsibilities. I believe that within a short period of time, the adjustments in the macroeconomic framework and measures taken by the government and the central bank will help boost foreign reserves and significantly ease these inconveniences. Thus the banks will be able to operate just as in normal conditions. This will take about a month or two to materialize. Of course, to achieve that, confidence in the Sri Lankan economy needs to be restored. A program with the IMF will help restore that confidence which in turn should revive the foreign exchange market, creating a more comfortable situation for banks to operate,” she said.
Meanwhile, Prime Minister Ranil Wickramasinghe said on Tuesday that Sri Lanka doesn’t have any rupee income, and by the end of the year the rupee crisis would be solved with the introduction of taxes.
Business
‘ComBank ends Q1 as first private sector banking group on the cusp of Rs 3 Tn. assets milestone’
The Commercial Bank of Ceylon Group has made a characteristically strong start to 2025, recording healthy profit and balance sheet growth in the first quarter of the year.
Comprising of Sri Lanka’s largest private sector bank, its subsidiaries and an associate, the Group reported in a filing with the Colombo Stock Exchange (CSE) that assets reached Rs 2.999 trillion as at 31st March 2025.
Gross income for the quarter grew by 9.85% to Rs 88.10 billion, while interest income improved by 3.14% to Rs 72.60 billion. Interest expenses reduced by 10.09% to Rs 38.38 billion as a result of repricing of liabilities amidst the lower rates regime that prevailed, generating a 23.53% growth in net interest income, which amounted to Rs 34.21 billion for the three months reviewed.
Total operating income grew by 33.40% to Rs 46.62 billion, but the Group’s provision for impairment charges and other losses was increased by 110.44% to Rs 7.23 billion with additional provisions made on a prudential basis for individually-significant customers, which resulted in an improvement in the Bank’s impaired loans (Stage 3) ratio.
Building on the momentum of its groundbreaking “Women in Tourism” initiative, Intrepid Travel Colombo, in collaboration with the Market Development Facility (MDF) and the Sri Lanka Tourism Development Authority (SLTDA), successfully conducted another impactful workshop—this time focusing on women business owners in the tourism sector.
Held in Kandy on Saturday, 5th April, the session brought together 15 dynamic female business owners from the Central Province with a shared passion for responsible tourism and sustainable business. The workshop forms part of Intrepid’s ongoing commitment to advancing gender equality and empowering women across the tourism value chain in Sri Lanka and follows the inaugural training program held in September last year which targeted aspiring female tour leaders.
This insightful session was tailored to uplift and support women who are already leading or managing businesses within the tourism ecosystem, and hailing from the Central Province.
“This was an impactful day of learning, sharing, and growing together,” said Poornaka Delpachitra, Country GM of Intrepid. “Our focus this time was on women business owners—those who are already shaping Sri Lanka’s tourism industry in meaningful ways but often face unique challenges in accessing resources, networks, and recognition. By creating a space for peer connection, leadership development, and shared learning, we’re investing in a stronger, more inclusive tourism sector.”
The training session was designed to strengthen key leadership and entrepreneurial skills such as business strategy, confidence-building, marketing, and innovation in sustainable tourism. It also provided participants with valuable networking opportunities and a sense of solidarity, reinforcing the message that women are not alone in their journeys.
Colombo Coffee Company, the largest total coffee solutions provider in Sri Lanka’s and a fully-owned subsidiary of the world’s largest Ceylon Tea exporter Akbar Brothers, has appointed Kushan Samararatne as the Chief Executive Officer.
With a career marked by strategic foresight, operational excellence, and transformational leadership, Kushan brings a wealth of experience and innovation to his new role. As General Manager, he led Colombo Coffee Company to unprecedented heights during his tenure.
Kushan’s impact at Colombo Coffee Company extended far beyond financial metrics. Under his dynamic leadership, the company successfully established its first in-house production unit, developed many local coffee blends, and launched roasting operations, making significant strides toward vertical integration and value creation. His deep commitment to quality was further evidenced by the company aligning its operations with Lavazza’s international standards – reinforcing Colombo Coffee Company’s reputation for excellence in every aspect of its operations.
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