The Commercial Bank of Ceylon has announced that it has opened an Indian Rupee denominated Nostro Account at the 116-year-old Indian Bank – Mumbai, to facilitate trade transactions between Sri Lanka and India.
The Bank said this decision follows the Central Bank of Sri Lanka (CBSL) classifying the Indian Rupee as a designated foreign currency to promote trade and tourism in the SAARC region. By establishing a Nostro Account in Indian Rupees, the Bank supports efforts to enable Sri Lankan and Indian importers and exporters to carry out trade transactions in Indian rupees, in a manner that is beneficial to both parties.
Commenting on this initiative, Commercial Bank Managing Director/CEO Sanath Manatunge said: “In the backdrop of the challenges confronting the Sri Lankan economy, the ability to conveniently use Indian Rupees for trade will result in a timely increase in trading volumes between the two countries and advance regional cooperation. As one of the biggest facilitators of Sri Lanka’s exports and imports, Commercial Bank is well positioned to make a significant contribution via this Nostro Account.”
In 2021, India was the third largest export destination for Sri Lanka. Both countries enjoy a dynamic economic and commercial partnership that has expanded over the years. The India-Sri Lanka Free Trade Agreement (ISFTA) in 2000 contributed significantly towards the expansion of trade between the two countries. According to the Sri Lanka Export Development Board (EDB), exports to India increased by 12.61% between January and October 2022 compared to 2021 and reached US$ 725.85 million. In 2021, the total export value from Sri Lanka to India was US$ 815.11 million and the total import value from India to Sri Lanka was US$ 4,418.14 million.
Commercial Bank currently maintains Nostro accounts in 15 currencies with 30 correspondent banks in 20 countries, offering a geographically wide platform to facilitate international trade for the Bank’s corporate clients.
Sri Lanka’s first 100% carbon neutral bank, the first Sri Lankan bank to be listed among the Top 1000 Banks of the World and the only Sri Lankan bank to be so listed for 12 years consecutively, Commercial Bank operates a network of 269 branches and 943 automated machines in Sri Lanka. Commercial Bank is the largest lender to Sri Lanka’s SME sector and is a leader in digital innovation in the country’s Banking sector. The Bank’s overseas operations encompass Bangladesh, where the Bank operates 19 outlets; Myanmar, where it has a Microfinance company in Nay Pyi Taw; and the Maldives, where the Bank has a fully-fledged Tier I Bank with a majority stake.