NSB sets ambitious goals

by Surekha Galagoda

The National Savings Bank (NSB), the premier state savings bank in the country will focus on technology and cost reduction delivery channels this year to be on par or ahead of all other banks in the country.

Among the strategies we adopt this year, technology adoption will be one key area, said NSB General Manager S. H. Piyasiri.

He said that private banks are using new delivery channels such as mobile technology as mobile penetration is very much higher in Sri Lanka compared to other countries in the region.

The method of building brick and mortar branches is reducing and instead they are adopting new technologies. In African countries where there is no electricity they also use mobile banking as people today find it difficult to find time to visit amidst their busy lifestyle.

Banks incur high costs to maintain a branch. With new technology the NSB staff will have to adopt a lot to keep abreast.

He said even to purchase a piece of equipment they have to follow the tender procedure, which increases the gap between the NSB and the private banks, but by the end of this year we will be on par or ahead of all banks as we will have SMS banking, internet banking, bill payment facility and passbook updating facility from any branch. This facility will be launched in February.

We want to ensure that we are on par or ahead of the industry in technology and channel optimisation.

He said that they will expand the branch network by opening kiosk type branches which will be manned by 2-3 persons. This is a very cost effective exercise. There will be around 20-25 centralised branches managed by the head office. These will be set up in the rural areas to serve them.

The NSB will expand the ATM network to 135 by March and then we will connect to a local network which will bring the amount of ATMs to 400. Thereafter we will tie up with VISA and Master card and as the final step is with a bank in India so that pilgrims who go to India will not have problems encashing their money.

He said that last year they opened regional centres in Ja-ela and Kandy and this year plans are afoot to open centres in Yakkala, Kirulapana and Kalutara.

He said that being a newcomer to the NRFC RFC market the bank recorded tremendous growth last year. In addition the bank will connect to the postal networks of Korea, Japan, Germany and Italy this year so that remitting money from these countries to Sri Lanka will be very quick and easy. "The bank is connected to SWIFT and EURO JAIRO which gives us a tremendous edge over the other banks in the country", said Piyasiri.

Speaking of the Core banking solution which is implemented, he said "it is our own software. Therefore we don't pay a huge cost or a licence fee to a foreign country and our philosophy is to enhance the present system without spending a huge sum of money thereby giving the benefit to our valued customers".

Piyasiri said that the NSB which caters to all segments of society will start a pension product next month for people who don't have pensions so that they also can spend their retirement happily.

When we look at the market in January last year, the rates were 13% and within 12 months it went up to 20%. As there was competition the banks had to increase the rates to be on par with the treasury bill rates. Large depositors look at interest rates. Last year the funds were moving and there was competition even among the state banks.

"This year the situation has changed and I am expecting the market rates to stabilise at around 15-16% while the inflation rate too will stabilise by mid 2008. Therefore especially in a falling market, the strategies we adopt as a bank will be completely different from the strategies what we adopted when markets were rising", he said.

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