Northern Banking

Jan 21, 2010, JAFFNA (LBO) – A bank specializing in lending to Sri Lanka’s war torn north of the island will be set up Central Bank governor Nivard Cabraal told a forum in the island’s Jaffna peninsular.

This week Cabraal also opened a branch of DFCC Bank in Jaffna, also a ‘development bank’ at one time, which now has a commercial banking license.

Sanasa, a bank representing the co-operative movement, also opened a branch in the peninsular this week.

Privately owned banks are rushing the under banked Jaffna peninsula. During a 30-year war in the areas only state-run only Bank of Ceylon, National Savings Bank and Peoples Bank had a strong presence in the area.

Since the end of the war in May 2009 the Central Bank has approved new bank 45 branches to be setup in the Northern peninsula. Already 11 banks have commenced operations, a central bank official said.

Officials say non-performing loans in Jaffna has traditionally been very low. The north is a lucrative market for banks, Cabraal said.

“We give loans of 50,000 rupees which can be increased to 250,000 rupees guaranteed by a group of four people,” A. Nagenthiran, Jaffna branch manager of Sanasa Development Bank said.