Piggy Bank

Feb. 28 (LBO) – Sri Lanka is set to launch a new development bank in April to promote future reconstruction and development work, a top official said Tuesday. Known as the ‘Lanka Putra’, the government-owned specialised bank plans to raise deposits locally and overseas to fund small and medium scale entrepreneurs in Sri Lanka.

“The Central Bank has given us (Lanka Putra) provisional approval, treasury will bring in the capital and we will start operations in April,” the bank’s Chief Executive, Tuly Cooray told LBO.

Being a specialised bank, the treasury has promised to infuse Rs.1.5 billion (US$15 million) as seed capital by end 2007, but half of the funds are due by end this year.

Once in operation, Lanka Putra will also be the second bank in the country to carry a sovereign guarantee, after state-run National Savings Bank.

A sovereign guarantee comes into effect if the bank is unable to meet its obligations.

“The guarantee will help us to mobilize funds from abroad through very attractive savings products,” Cooray said.

President Mahinda Rajapakse, who is also the island’s finance minister, had mentioned the bank in his budget