Sharp increase in banking outlets

by Uditha KUMARASINGHE

The total number of banking outlets in the country stood at 5,987 at the end of June last year, further expanding access to finance.

According to the Report "The Recent Economic Developments" by the Central Bank, there were 22 Licensed Commercial Banks (LCBs) and nine Licensed Specialised Banks (LSBs). Eighty-six new outlets including branches and extension offices (EOs) were opened during the first half of 2011.

Of these, 62 branches and EOs were set up outside the Western Province, which included 32 branches and EOs in Northern and Eastern provinces.

The deposits mobilised by the banking sector had increased by Rs.200 billion or 8 percent in the first six months of 2011 compared to a growth of 4 percent in the corresponding period of 2010.

The total deposits stood at Rs.2,785 billion as at end June 2011. The credit to deposit ratio rose to 80 percent, indicating that banks have a stable source of funding in the near term, the report stated.

Borrowings have also increased by Rs.80 billion or 16 percent in the first half of 2011 compared to a growth of 12 percent in the corresponding period of 2010.

In addition, loans and advances have increased by Rs.234 billion or 12 percent during the first half of last year compared to a growth of 8 percent in the corresponding period of 2010.

Total loans outstanding stood at Rs.2,209 billion at end June 2011. Credit to most sectors such as manufacturing (17 percent), agriculture (15 percent), consumption (14 percent), trading (10 percent) and construction (9 percent) increased, the report said.