The incidence of post-dated cheques in Sri Lanka is quite high, according to Central Bank Deputy Governor Priyantha Fernando. Elaborating, he noted that these were commonly used by "lower" segments of the business community even though insufficient funds were available in bank accounts and, as such, often led to cheques having "bounced". A situation which also negatively affected relationships with banks.
So, according to Mr. Fernando, post-dated cheques should be eliminated. He also suggested that a mobile payment platform would soon be introduced which would allow bank transfers within the same day, this would also enable making payments to be "as easy as making a phone call". Further, he also implied a common electronic payment system would become available in the local market by 2012.
Mr. Fernando made these remarks at the first working session on the second day of the bi-annual Asian Micro finance Forum which was concluded this week in Colombo. It was also noted at Tuesday's inaugural session of this forum series, which was launched four years ago in Beijing and followed by a forum in Hanoi, that financial inclusion, or the possessing of bank accounts, has a positive correlation with regards to the improvement of livelihoods and that Sri Lanka had 59% financial inclusion.
He said that Sri Lanka's secured Transaction Act and Micro Finance Act would also come into effect soon and so provide better access to finances for micro businesses, which he considered to be the biggest hurdle faced by these entrepreneurs. The Secured ransaction Act would provide a registry of moveable assets which banks could use to provide credit for micro businesses, while the Micro Finance Act would replace the inadequate regulatory framework currently in existence in the industry. In fact, he noted a Request for Proposals (RFP) for the secured transactions infrastructure would soon be forthcoming.
He also suggested the local Credit Information Bureau (CRIB) was in the process of including financial services companies and utility companies to its roster that currently comprised banks, all with the intention improving the quality of information offered.