Lanka's savings rate extremely low - NSB chief

Sri Lanka's savings rate had a minus growth rate during the past five years and currently is at around 23 percent is abysmally low compared to many countries in the region, National Savings Bank (NSB) Chairman Aswin de Silva told guests at the launch of 'NSB Reach', a Point of Saving (POS) machine to promote savings.

He said Sri Lanka should take a cue from Singapore which has a savings rate of 53 percent. Malaysia has a rate of 33 percent, Thailand 31 and India around 31 percent. If Sri Lanka targets a 30 percent savings rate by 2020, it will need to increase the savings rate by two percent, amounting to Rs. 500 billion each year. "There is a co-relation between economic growth and savings. When the country's savings are high it has the capacity to boost economic growth. The NSB will be in the forefront of enhancing savings in the country to stimulate economic growth," de Silva said.

He said research reveals that customers look for safety of deposits, a satisfactory return and convenience in banking. NSB fulfills all these requirements as a catalyst for savings in the country.

NSB currently operating 250 branches across the country provides a range of tailor made banking solutions. "The NSB Reach' will promote the savings habit through convenient banking. We have launched 350 POS machines linking post offices across the country. The number of machines will be increased as times goes on," de Silva said.

The product facilitates the collection of cash from households and takes care of the payment of its utility bills.

"We have launched a program to promote children's 'Hapan Savings' account among schoolchildren. Discussions in this regard were held among heads of schools in the Kurunegala district last week," De Silva said. The bank recorded a Profit After Tax (PAT) of Rs. 4.78 billion during the first half of this year, a 24 percent increase compared to the corresponding period last year. "The bank achieved this feat despite a tough business environment. Our assets reached Rs. 875 billion and the lending portfolio increased by 10.6 percent in the first half of this year," an official of the bank said.

The bank added five branches to its branch network this year and lowered its Non Performing Loan (NPL) ratio to two percent this year from around 3.5 percent last year.

- LF