Banking System - BM/2015/195

COMMERCIAL BANK PLC Product of the bank,          1.        Savings Accounts A.      Main Accounts                             I.            Regular Savings Accounts If you are a resident of Sri Lanka, over the age of 18 years, you can open this as an individual account or a joint account. The interest rate of this account is 3.50% P.A.                           II.            Super Saver Accounts You can open an account with a minimum deposit of Rs 50,000/-. Higher interest rates as your deposit value increases.  A Loan facility up to 90...

Financial intermediary is the organisation which acts as a link between the investor and the borrower, to meet the financial objectives of both the parties. These can be seen as business entities who accept deposits and  investments  from the depositors or investors (lenders) by providing them low interest on their sum; and further lends this amount to the individuals and firms (borrowers) at a comparatively high rate of interest to make their margin. The two of the significant roles played by the financial intermediary in the economy are the creation of funds and governing the payments system. Types of Financial Intermediaries There are a number of financial intermediaries formed to serve the different aims and objectives of the customers or members or lenders and borrowers. These entities are explained in detail below, Banks : The central and commercial banks are the most well known financial intermediaries simplifying the lending and borr...

The Central Bank of Sri Lanka (CBSL) is the apex institution in the financial sector in Sri Lanka. It was established in 1950 under the Monetary Law Act No. 58 of 1949 (MLA) as a semi-autonomous body and is governed by a five member Monetary Board.In the 1st post I have posted about the History of the Central Bank of the Sri Lanka.(  Beginning of the Banking of Sri Lanka  ) The CBSL seeks to achieve and maintain two core objectives to maintain a healthy and stable economic and financial system while maximising resource utilisation effectively. These objectives are: 1. The maintaining of economics and price stability 2. The maintaining of financial system Stability    The MLA has also granted the CBSL sole authority to issue currency notes and coins to the public. Therefore, the Bank is responsible for currency issuance and management . The CBSL is advisor on economic affairs and Banker to the Government of Sri Lanka (GoSL). As agent to GOSL the CBSL is t...

Beginning of the Currency... Barter System  A barter system is an old method of exchange. This system has been used for centuries and long before money was invented. People exchanged services and goods for other services and goods in return. The necessity of the currency was mainly occurred due to the disadvantages of this barter system.  Disadvantages of Barter System Double Coincidence of Wants Absence of Common Measure of Value Lack of Divisibility The Problem of Storing Wealth Difficulty of Deferred Payments Problem of Transportation Due to these reasons people who were live in the past had to find a alternative to overcome this advantages. As a result, Currency was introduced to the world. Let's see the Currency-used in Sri Lanka...  Sri Lanka is a country that has a long history as well as its History of the currency also very long history. So Sri Lanka’s currency-used can be divided into following periods. 1.      Anuradhapur...

I n 1948, the post-independence Government of Ceylon (as Sri Lanka was then known) established the Central Bank of Ceylon to maintain an active monetary policy regime and a dynamic financial sector to support and promote economic growth.  Prior to the establishment of the Central Bank, the Currency Board System set up under the Paper Currency Ordinance No.32 of 1884 functioned as the country’s Monetary Authority, though very narrow in its capacity. This system was deemed inadequate for a developing country upon gaining political independence.  Technical expertise to establish a central bank was sought from the United States of America (USA) in July 1948, with Mr. John Exter, an American economist from the Federal Reserve of USA being appointed to carry out this task.  The Central Bank was given wide powers to administer and regulate the entire money, banking and credit system of the country. The Central Bank was also given the sole right and authority to issue...