The Colombo branch was opened by Sri Lanka's central bank governor Nivard Cabraal, the banks said.
Axis Bank had 1,456 branches across India in 953 cities and towns.
"The bank's Sri Lanka business will focus on opportunities arising in small and medium enterprises, agriculture, retail banking, infrastructure projects and remittances," chairman Adarsh Kishore said in a statement.
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The bank could also play role in helping Sri Lankan businesses with international business as the bank also had branches in Singapore, Hong Kong, Dubai and representative offices in Shanghai and Abu Dhabi.