Since the end of the war in May 2009, many banks have opened new branches in the country’s former war zones in the northern and eastern provinces. However, many of these are local banks. Very few foreign banks have sought approval for new branches in the North and East, according to the Central Bank of Sri Lanka.
HSBC was the first international bank to open an office in Jaffna in February of this year. Commenting on the opening, CEO of HSBC Sri Lanka and Maldives Nick Nicolaou spoke about the reasons behind the decision to start business in Jaffna.
“We are excited to return to Jaffna and consider this an important milestone,” Nicolaou said. “Considering all aspects, we see tremendous potential and intend to play a key role within the financial services sector to ensure growth and development in Jaffna – particularly in the infrastructure space.”
Among the other foreign banks that began operations in the conflict-affected regions are the Indian Bank, which also has a new branch in the northern peninsula, and the Habib Bank with a branch in the Eastern Province.
Fifty-nine new bank branches have opened in these regions since the end of hostilities. The Central Bank said it has granted approval to a total of 136 bank branches. Of the total approved number of branches, 64 are to be located in the East while 72 of the branches will be opened in the North.
Meanwhile, the Central Bank recently also reported that commercial banks in the country are recording profits with a 20 percent increase in new loans and a decline in bad loans.