BEGINNING OF THE BANKING OF SRI LANKA

In 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 currency and it also became the custodian of the international reserves of the country.

 The objectives of the Central Bank as specified in the MLA in 1949 were;
     (a)  The stabilisation of domestic monetary values (maintenance of price stability).
     (b)  The preservation of the par value or the stability of the exchange rate of the SriLankan Rupee

     (c)  The promotion and maintenance of a high level of production, employment and real income in Sri Lanka.

     (d)  The encouragement and promotion of the full development of the productive resources of Sri Lanka
However, in keeping with the worldwide trends in central banking and the rapid changes in international financial markets, consequent to the economic liberalisation and the significant advancement in information technology, the Central Bank embarked on a modernisation programme in 2000 and the objectives were adjusted accordingly, bringing them down to two core objectives:
    (1) The maintaining of economic and price stability
    (2) The maintaining of financial system stability

 The first established bank of Sri Lanka is Bank of Ceylon (BOC). it was founded in 1939, with Sir Ernest de Silva as its first chairman. At the time, Ceylon was a British colony and the then governor Sir Andrew Caldecott ceremoniously opened the bank on 1 August. The English government introduced the banking arm for its government-oriented businesses. Two years later, in 1941, BoC started to expand beyond the city of Colombo. It opened its first branch in Kandy.

Comments

Post a Comment

Popular posts from this blog

HISTORY OF THE CURRENCY OF SRI LANKA

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...
Read more

EVALUATION OF PRODUCTS OF COMMERCIAL BANK PLC

Image
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...
Read more