Financial Times

Banking institutions are carrying on with their operations in the North and the East, despite the ongoing tensions but have no plans to continue expanding in the region because of the acute drop in business.

“The lending has reduced in the northern peninsula significantly since the troubles began,” Richard Rodrigo, Head of Marketing, Commercial Bank told The Sunday Times FT.

Market analysts said that the industry in the peninsula was booming after the ceasefire agreement, but banks are holding onto their planned investments.

Hatton National Bank (HNB) sources said that there is a big drop in business in the peninsula and all banks function only till 1.30 pm. “When the staff doesn’t turn up, the workflow stops and with the heightened tensions the operations are very haphazard,” a HNB source said. The HNB expanded rapidly to Chunnakam, Manipai and Nelliady together with a second branch in Jaffna. Meanwhile the Commercial Bank recently opened a branch in Chavakachcheri and introduced ‘Holiday Banking’ service to its Ampara branch.

“The Bank's branch at Ampara will be open everyday including all holidays from 9.00 am to 3.00 pm,” Rodrigo said, adding that the business however is slow. “We operated branches in Jaffna, Trincomalee and Vavuniya even during the height of war and opened a second branch in Jaffna to cater to the demand after the peace negotiations started. We went on to open branches in Chunnakam, Nelliady and Batticaloa,” Rodrigo said. However he said that the bank does not have immediate plans to open new branches in the region and that none of the branches will close despite the tensions.