"Sometimes in some branches in the North NPAs are zero percent. You can't find this kind of thing around the country.

"They have some kind of belief that what they borrow they pay. Even the East was 1.1 percent last year. I do not know the exact number this year."

A 30-year civil war in the north and east ended in 2009 with the crushing of Tamil Tiger separatists.

Bank of Ceylon and other state-run banks including People's Bank and National Savings Bank and Rural Banks were operating during the war even in Tamil Tiger controlled territories.

Wickramasinghe said the bank had operated banking outlets in refugee camps to cater to their customers.

Since then close to 140 billion rupees had been loaned, he said. The money had funded large number of small businesses, farmers and fishermen.

"These are not just big hotels. In Kilinocchi, Mullativu and even Jaffna rejuvenated after the war," Wickramasinghe said.

Wickramasinghe said the bank had encouraged organic agriculture.

Bank of Ceylon had been in the North for 63 years.

"Before the war, after the war and during the war we had been in the north," he said.

Banks operated from make-shift buildings and bank managers sometimes had to flee with the books to safer locations as fighting erupted flared from place to place during three decades of war.

Wickramasinghe said Bank of Ceylon had given permanent employment to a number of workers who had run branches during war time though their contracts said otherwise.

There had been some internal concerns about the issue but they had operated the branches during the war, he said.

"They had been working for 7 or 8 years. Under our rules we were not expected to recruit them full-time," Wickramasinghe said.

"But they had served the bank well. So it was done with transparency and good intentions."

Update II