Funday Times - Heritage

A bank for the people is established
Gaveshaka looks at significant events in July

People's Bank – one of the two largest state banks (the other being Bank of Ceylon) is nearing its golden jubilee. It was 47 years ago – on July 1, 1961 – that the People's Bank was established with its first branch at Duke Street, Colombo Fort.

The concept of the People's Bank was mooted by Philip Gunawardena, the Minister of Agriculture who was keen to strengthen the cooperative sector and the rural farmer. Having reformed the
village cooperative societies by establishing Multi-Purpose Cooperative Societies to function as buying and distribution centres, he wanted to ensure their financial viability.

People's Bank Head Office

The new People's Bank he proposed was going to act as the apex bank of the cooperative movement.

The vested interests and the right wing of the coalition government did not want the cooperative movement strengthened since they would then lose their grip on the rural folk. They opposed the move ultimately resulting in Philip Gunawardena resigning and moving out of the government.

After Sirimavo Bandaranaike became Prime Minister in July 1960, Trade Minister T. B. Ilangaratne revived the idea and got the People's Bank Act passed by Parliament. With the inauguration of the Bank on July 1, 1961, a well-known person who had made a name for himself for uplifting the cooperative movement, Vincent Subasinghe from Sandalankawa was appointed Chairman. The Cooperative Federal Bank which was servicing the cooperative sector was absorbed by the new bank.

During 1961 the Bank opened eight branches in the outstations at Polonnaruwa, Hingurakgoda, Hambantota, Anuradhapura, Puttalam, Matale and Kandy thereby showing its interest in going to the rural farmer. The Foreign Branch was also opened in Colombo the same year.

By the end of the first year, there were 169 employees. In the second year, 17 more branches were opened and gradually the Bank began to expand its activities. A pawning service was started and the Cooperative Rural Banking Scheme was inaugurated in 1964.

What was to become the pioneer lending scheme to the small farmer was started in 1967 in the form of a new Agriculture Credit Scheme. The 100th branch was opened in 1971.


The Bank headquarters moved to the present location at Sir Chittampalam Gardiner Mawatha in 1977 by which time the Bank's 200th branch had been opened and the number of employees had topped 5,000. By 1982, the number increased to 10,000 and the Bank's services reached the people through 300 branches.

Interaction with customers

'Ganu denu' at the auspicious time during Sinhala New Year when the Bank was kept opened for a limited number of hours was started in 1973. Most banks do it today. Since 1984 the People's Merchant Bank is in operation as a subsidiary of the Bank.

Over the years the Bank has introduced several deposit mobilization schemes and continues its policy of designing new products covering numerous categories including school children, youth and self-employed persons. The PET card has become a convenient tool for customers to conduct transactions through the automated teller machines.

Today, People's Bank boasts of the widest network of 638 branches and service centres. It has a wide range of deposit and loan schemes to individuals as well as large and small enterprises. Trade finance and foreign currency services are also provided.

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