communications becoming more visual
A new non-voice, value-added service - 'General Packet Radio Services'
(GPRS) - allows users to send and receive information with instant
access through a mobile telephone network without calling the Internet
provider, said Dr. Hans Wijayasuriya CEO, Dialog GSM.
He was making
his presentation on "In search of location independence"
as guest speaker at the 26th AGM of the Association of Chartered
Certified Accountants, Sri Lanka (ACCA) held last week in Colombo.
He said GPRS
users receive full access to the Internet with the same features
as wire connection (Local Area Network (LAN). GPRS maximum data
transmission speed exceeds more than three times the speed of wire
communications and almost by 12 times GSM networks' data transmission.
As of now the speed of up to 33 Kbps is available. He said that
GPRS networks utilize the bandwidth only when they were in use.
said that due to speed and efficiency GPRS has become a favourable
way of data transfer. It enabled instant access and instant ability
to send and receive information and has new applications to Internet,
which is currently used on PCs. Other services include: file transfer
and access and control of home appliances.
receive a wide range of information, e.g. stock prices, flight schedules,
sports results, weather reports, horoscopes and services. These
information need not necessarily be in text form; but could be in
the form of maps, graphs or other types of visual information.
He said that
the new technology has facilities to send photos, images, postcards,
greeting cards and presentations via mobile networks just like the
fixed one. GPRS enables the transfer of an image from a digital
camera connected to a GPRS device directly to the web page.
He said that
over time mobile communications have become less textual and more
visual in their form and nature. The wireless industry went from
text messages, through icons and picture messages, photographs and
blueprints to video messages. Even movies could be watched using
a mobile network.
GPRS is the
favourite technology of wireless service providers for high-speed
data transmission networks. Most major wireless carriers in Europe
have already announced the GPRS service or started developing a
said that for the first time GPRS and other packet technologies
would allow operators to charge less for transmitting data than
for channelling voice traffic, while collecting greater revenues
from the very same network capacity. He said that packet-based systems
allow operators to maximize the efficient use of their networks
by letting multiple data subscribers share network channels.
chairman of Ceylon Hospitals Limited (Durdans Hospital) and Group
Financial Director, Tudawe Brothers Ltd, was elected ACCA President.
He said the future development of the accountancy profession would
be at a global level replacing national ones, adding that the ACCA
hopes to work closely with the Institute of Chartered Accountants
of Sri Lanka.
He said that
after Enron and WorldCom, government bodies and regulators, employers,
members of the public and shareholders would expect accountants
and auditors to update their skills and knowledge on a regular basis
throughout their working lives.
legislators around the world have introduced new rules and provisions
to shore up confidence in financial statements and the independence
of auditors. He said that they would build on ACCA's well-received
response to the Enron affair to provide continuing thought leadership
in the areas of corporate governance and accountability.
realities of savings deposits
By Suren Gnanaraj
With interest rates on savings deposits being lower than the official
rate of inflation the importance placed on domestic savings is a
matter of concern, despite the need to encourage savings in order
to spur economic growth.
the Colombo Consumers' Price Index, inflation for May was at six
percent (point to point) while the moving average was at 9.5 percent.
However, many banks are offering an interest rate on savings deposits
of 4-5 percent, which imposes a substantial negative benefit on
savings depositors. Interest on deposits also reduces with the decline
in inflation. Therefore, with inflation on the decline at present,
interest on deposits may begin to fall.
Dr. Dushni Weerakoon,
Research Fellow of the Institute of Policy Studies, admitted that
the present situation was unfavourable for those who aimed to earn
an income through savings deposits. She said that one of the reasons
why there was a sizeable gap between lending rates and deposit rates
was the high Non-Performing Loans (NPLs) of the two state banks.
This has created
a situation where such losses can only be recovered by increasing
the interest spread. “Since private banks are competing with
these state banks, they are able to maintain a similar interest
spread as the two state banks, which has resulted in them making
significant profits,” she said. She added that since lending
rates were being reduced by the Central Bank, commercial banks were
unlikely to increase interest rates on deposits, as it would only
reduce the interest spread and eat into their profits.
sector reforms have been aimed at improving state bank management
and reducing political involvement, in order to reduce the high
percentage of NPLs and administrative costs. Dr. Weerakoon said
that if such reforms were successful, it would lead to a reduction
of the interest spread in line with market forces, requiring both
private and state banks to offer more competitive interest rates
on deposits than that at present.
Managing Director of Sampath Bank, explained that the Central Bank
has purported to promote investment in line with government policy
by reducing lending rates, rather than increasing interest on savings.
He said that in addition to the Central Bank bringing down lending
rates, the Repo rate, the Reverse Repo rate and the inter-bank rate
have been decreased, in order to bring down the cost of lending.
have also declined due to the cut in defence expenditure, resulting
in interest rates on Treasury Bills dipping to eight percent from
nine percent. “Therefore, if we increase interest rates on
deposits, we would have a problem of excess liquidity. So at the
moment the avenues for investment are few, and the demand for deposits
is low," Amarasuriya said.
Assistant General Manager-Treasury of the Commercial Bank of Ceylon,
said that historically, the rate of interest payable on ordinary
savings accounts was always below the published rates of inflation
in the country. He explained that savings deposits were repayable
on demand, and generally were costly accounts to maintain, due to
the requirement of infrastructure such as a network of branches,
ATMs and holiday banking centres, which facilitate convenient withdrawals
by savings account holders. In addition, banks are also required
to maintain 10 percent of all deposits in the Central Bank as a
statutory reserve. “Thereby, the actual cost to the bank is
far higher than the mere interest cost,” he said.
that there was a substantial increase in the level of savings. He
said that depositors did not save purely for the purpose of receiving
interest. “When selecting a Savings Account, depositors tend
to look for benefits such as 24-hour access to funds, access to
other banking facilities such as loans, leasing and most importantly,
the safety of the deposit which depends on the capital strength
of the bank.”
the IPS had a similar view, in which she pointed out that several
studies had failed to prove that depositors invested their money
in savings deposits purely on the interest rates offered. However,
Dr. Weerakoon was of the view that 12-month Treasury Bills and other
government securities were the safest and most profitable investments,
which were more in line with inflation rates.
of the view that depositors seeking a higher rate of interest should
invest in alternative financial instruments such as Money Market
Accounts, Savings Certificates, and Medium Term Deposits. He observed
that there was a trend in which sophisticated customers with large
deposit bases assigned different amounts to different types of accounts
in order to spread their portfolio, and even-out any short term
declines in the rate of interest. He was confident that with the
increasing levels of financial literacy, depositors could manage
their funds better to earn the highest possible rate of interest.
however, said that even though there were many financial instruments
available in the market under which income from interest could be
obtained, practical problems such as lack of knowledge and lack
of access to such instruments remained. Another banking official
who declined to be identified added: "The savings habit has
been ingrained in Sri Lankans even though they do not get a sufficient
return on their deposits."
slams moves to woo foreign planners, architects
of Construction Industry of Sri Lanka (CCI) has slammed efforts
by government agencies to bring in mediocre foreign planning and
architectural firms to prepare a western region plan and also undertake
real estate development projects.
firms are hardly firms of international repute and in that context
certain Sri Lankan firms are better and more experienced than these
foreign firms," noted CCI President Surath Wickramasinghe in
a statement. He said Sri Lanka should get the best consultancy firms
in the world, not the second best.
said that the construction industry is slowly reviving after the
severe slump over the past 4-5 years with part of the southern highway
project started and several other projects in the pipeline that
are now moving towards implementation.
Wickramasinghe said the chamber is supportive of the development
plan for the western province along with the development of the
Wellawatte Mills site and a few other projects but raised concerns
over moves to bring in mediocre foreign experts to handle these
get the best or follow the practice in some countries where local
firms collaborate with foreign firms. Why cannot Sri Lanka follow
this practice?" he asked.
The CCI president noted that several major projects were initiated
in the cultural, residential, highway and urban development sector
by the previous government, where millions of dollars were paid
to consultants and contractors and these projects were subsequently
is extremely tragic and unfortunate since nobody seems to be held
accountable for this expenditure. The irony is that the mistakes
made by the previous government are being repeated by this government,"
he said. Referring to the Regaining Sri Lanka initiative, Wickramasinghe
said they were not made aware of any comprehensive plans besides
the sectorial assessments for the north and east.
He urged the
government to work in partnership with them to accelerate the decision-making
and implementation process of several projects in this initiative.
"Inability to act on time may reduce the construction industry
to a level of mere spectators watching our projects being hijacked
by foreign companies for no fault of ours."