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Friday June 21st, 2024

BOC: Fostering Opportunities in International Trade, Finance and Investment

G. A. Jayashantha – Deputy General Manager for International, Treasury and Investment of BOC

G.A. Jayashantha, Deputy General Manager for International, Treasury and Investment at Sri Lanka’s largest bank, the Bank of Ceylon (BOC), reflects on the economic revival and the bank’s continuing efforts to place the country on a sustainable footing. 

As DGM – International, Treasury & Investment at BOC, how do you view the division’s role in facilitating economic activity?

My division covers a broad scope, including Treasury, International, Investment, and Overseas Branch Operations, managing branches in Seychelles, Maldives, and Chennai.

A dedicated Dealing Room, staffed by experienced professionals, manages local and international transactions, ensuring liquidity across key financial markets. Operating in key financial markets like the money market, FX, derivatives, and capital markets, they handle a diverse range of financial products and oversee the bank’s core operations.

The Asset and Liability Management unit optimizes balance sheet management, aligning funding sources with end users, maximizing income, and minimizing risk in line with market conditions and regulatory requirements, ensuring competitiveness.

 The Investment Banking Division oversees the bank’s investment transactions, structures debenture issues for capital requirements, and manages customer assets and securities through Portfolio Management Services (PMS) and Custodian Services. We offer investment plans and supervise internal investments.

The Overseas Branches unit oversees our global operations, including a fully-owned subsidiary in London, UK, governed by a separate Board chaired by the BOC Chairman. Staffed by a blend of local and foreign employees, key roles are appointed from our Colombo Head Office.

As the largest and primary recipient of inward remittances, we supply foreign exchange for vital commodity imports like Petroleum, LP Gas, and Coal. During the economic crisis, we played a crucial role by assisting the health sector to procure COVID-19 vaccines for immunization.

Our presence in the FX market significantly influences the management of exchange and interest rates of the country, fostering market stability and sustaining liquidity in both foreign and local currencies. Despite the sovereign downgrade in 2022, we swiftly reclaimed a higher position by honouring obligations, averting defaults, and managing short-term borrowings effectively. This resilience and strategic approach have positioned us as a key player in the national economy, acknowledged by the Central Bank as a systemically important bank.

Could you share details of recent initiatives or products that helped the bank’s clients during the challenging period?

We launched the “Foreign Circle” to cater to the needs of foreign expatriates, offering quick access to BOC for various services like account opening and transactions. This central hub, staffed with specialized personnel and three dedicated lines, ensures efficient service for expatriate customers.

In 2022 and 2023, our Smart Remit System underwent significant upgrades, allowing instant receipt of remittances from any location worldwide. These enhancements resulted in a year-on-year increase in both the volume and value of remittances in 2023. This growth is attributed to the user-friendly system and extensive support from the Foreign Circle. This single point of contact has significantly boosted our remittance base and sustained our market position.

Furthermore, we pioneered INR transactions in Sri Lanka, in collaboration with our Chennai Branch, to facilitate trade and financial exchanges with India. This initiative has resulted in a significant uptick in transactions and benefits for importers and exporters.

The multi-currency travel card (MCTC) with sophisticated features played a key role in meeting customers’ foreign currency needs. Capable of holding up to five currencies, the MCTC  prioritizes safety and convenience. During the challenging period, when carrying physical currency was an issue, the MCTC provided a seamless solution on par with international banks.

We provide pre-departure loans to individuals seeking foreign employment, addressing their financial challenges. With increased loan amounts and reduced interest rates, migrant workers find it easier to cover initial overseas expenses. As a market leader in this service, loans are available for various countries. Through collaboration with the Sri Lanka Bureau of Foreign Employment, the bank has disbursed numerous pre-departure loans, fulfilling a national duty.

What is your outlook for the economy in terms of the banking subjects you focus on, and how is the bank positioned to unlock new opportunities for the bank, its clients, and the economy?

Presently, the economy is rebounding after six quarters of negative GDP growth, signalling optimism. BOC acknowledges the challenges confronting our SME and corporate clients. In response, we’re focusing on revitalizing businesses with greater potential and viability in the economy. This involves providing financial support and implementing restructuring/rescheduling strategies instead of resorting to strict recovery/legal measures. So far, we’re seeing positive outcomes from these efforts and are closely monitoring their progress for sustainable advancement.

Our proactive stance led the financial industry to adopt a similar supportive framework for the entire banking sector, fostering a unified effort towards economic recovery. BOC was pivotal in shaping this new segment, and it’s encouraging to witness the collective banking community embracing these revival initiatives.

The ongoing journey towards economic stabilization involves restructuring both domestic and external debt. We were successful in the domestic debt restructuring process which covered SLDBs and FCBU loans while ensuring the stability of the market and the well-being of the bank. With the impending restructuring process, we believe the bank can continue to do its best for the economy while maintaining a sound financial position going forward. We anticipate reshaping our banking business to capitalize on the positive outcomes of debt restructuring. This includes enhancing the bank’s international ratings and improving our foreign presence by establishing and strengthening relationships with correspondent partners. As the restructuring progresses, we anticipate increased Foreign Direct Investments (FDIs), facilitating large-scale capital projects, and positioning the Bank to capitalize on remittance growth and business opportunities.

We aim to strategically expand our focus on private sector businesses while serving financially and competitively viable State-Owned Enterprises (SOEs). Through gradual restructuring, we anticipate a boost in the bank’s capital, enhancing our business capacity and enabling us to expand our strategic objectives.

As such, the bank is in the process of implementing its IT infrastructure and improving the digital frontline in the branch network.  We’re also equipping our workforce with the knowledge, skills, and professionalism to leverage economic and technological advancements.

This positive outlook positions BOC as a catalyst for economic recovery, unlocking new opportunities. Through strategic engagement and innovative financial solutions, we aim to significantly contribute to the nation’s revival, benefiting clients and the broader economy.