People’s Bank: The first responder bank
State-owned People’s Bank acted fast early in the lockdown and introduced its own credit relief schemes to support struggling businesses.
State-owned People’s Bank was among the first banks to respond to the economic crisis caused by the coronavirus outbreak. While disbursing government-initiated credit relief to COVID-hit businesses, the bank introduced several new loans schemes targeting small businesses and women entrepreneurs, says Ranjith Kodituwakku, Chief Executive Officer and General Manager at People’s Bank.
Excerpts of the interview are as follows:
How did People’s Bank respond to the unprecedented COVID-19 challenge?
Kodituwakku: People’s Bank will celebrate its diamond jubilee next year and there was never a time the bank closed its doors in the past 59 years. During the unprecedented COVID-19 crisis, we demonstrated our ethos as bankers to the people. Critical functions of the bank including over 70% of our branches and all our self-banking units were fully operational. This we owe to our dedicated teams of highly motivated people at People’s Bank who were at the frontlines of keeping the economy alive.
We kept the customer service support hotlines fully functional, while the mobile banking units covered over 400 locations islandwide. This helped people in some of the remotest corners of the country access much-needed cash. Our mobile units disbursed over Rs200 million to customers during the lockdown.
The health and wellbeing of staff and customers being of paramount importance to us, we took every measure to keep them safe. The bank also ensured there was no interruption in domestic or international payment flows. Even during the height of the lockdown, we carried out all inward, outward, and domestic transactions.
We also ramped up our online brand visibility and strengthened social media engagement with customers.
While the government announced several relief measures, People’s Bank introduced its own schemes. Can you elaborate on these?
Kodituwakku: The Board of Directors of the bank felt that People’s Bank had a duty to do more. We had to go beyond participating in the government-introduced relief schemes. The bank took the initiative to provide credit solutions to those industries affected by the coronavirus. COVID-19 was an unexpected threat.
Unchecked, the outbreak could have been disastrous in terms of lives lost. The entire country was in lockdown for two months to contain the spread of the deadly virus. This came at the expense of the economy. As a result, micro, small and medium-scale businesses were negatively affected. They need help to stay above water so that they could continue to provide jobs and drive economic growth.
As a bank dedicated to the wellbeing and upliftment of the people of this country, it was necessary to extend our fullest support. The Board of Directors together with the management decided to introduce new loan schemes. We offered single-digit interest rates on these. For instance, we introduced a special loans scheme with an interest rate of 6% and allocated Rs15 billion for this purpose. This is in parallel with the ‘Saubagya COVID-19 Renaissance Facility’ of the Central Bank of Sri Lanka.
We are targeting businesses in agriculture, IT, logistics, manufacturing, tea, and tourism, including small industries with this loan scheme offering up to Rs10 million for three years. We will disburse these loans through our islandwide network of 737 branches. We also expanded our product portfolio during this period. We relaunched the ‘Aswenna’ loan scheme aimed at making the agriculture, fisheries, and animal husbandry value chain self-sufficient.
We also introduced ‘Sarusara’, a comprehensive rural credit scheme, and ‘Vanitha Saviya’ a loan scheme for micro and small-scale women entrepreneurs. With the new normal involving working or even schooling from home, People’s Bank initiated several schemes in technology facilitation for teachers, undergraduates of the medical, engineering and IT faculties and law and accountancy firms. Acknowledging the significant contribution made to the economy by migrant workers, People’s Bank launched a special deposit account under regulatory guidelines with an attractive interest rate to encourage inward remittances and higher levels of retention.
How has People’s Bank contributed towards stabilising and reviving the economy in these difficult times?
Kodituwakku: The Coronavirus and the complete closure of the economy brought unprecedented challenges, uncertainty, and fear of financial distress. We stepped up to the challenge because it is a trait that has always remained at the heart of People’s Bank and its unrelenting drive to serve the nation in any circumstances.
With COVID-19 came financial distress. We acted quickly. People’s Bank was among the first banks to offer credit relief to more than 400,000 retail customers. We approved over 4,000 applications for working capital loans to small and medium business owners amounting to Rs6.1 billion under the Central Bank’s credit relief scheme. We established a dedicated customer care unit to answer queries on the Central Bank’s relief programmes and was amongst the first to accept customer requests via SMS, WhatsApp and even Viber given the lockdowns and difficult circumstances.
We also stopped loan deductions and refunded most instalments deducted for March 2020. We deferred pawning auctions, and penalties across products were fully waived during the lockdown period and halved credit card minimum payment dues. As a state bank, we have a responsibility to assist segments of the economy in dire straits and extended Rs150 billion in loans of which Rs140 billion was to state agencies. In this context, during the first three months of 2020, People’s Bank recorded a credit growth of 10.9% as compared with 5.0% reported by the industry during the same period.