NEW TECHNOLOGIES IN BANKING INDUSTRY

NEW TECHNOLOGIES IN BANKING INDUSTRY

There’s a new era of banking and financial services on the horizon. With the emergence of digital banking and fintech, the sector is facing a massive shift in the way people bank. Advancements in technology, including artificial intelligence and blockchain, has enabled banks and financial institutions to redefine what banking means to consumers today.

• Adopting blockchain

It is a system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-to-peer network. A major trend that took the financial and tech worlds by storm was cryptocurrency mining.

Blockchain technology can be used for money transfers, record keeping, and various other back-end functions. By creating a clear and tamper-proof digital ‘paper’ trail, the technology helps wipe out the need for a physical one. It serves as a kind of decentralised digital ledger, subsequently reducing the price of processing transactions drastically. And saving the bank billions in transaction costs as well as reducing the number of inefficiencies in the system.

• Artificial intelligence 

It has made it possible for people to hold meaningful and productive conversations with super-intelligent bots. Either through text or voice recognition interfaces. This, of course, opens up new channels of customer service and engagement Conversational banking is a result of the integration of smart bots with customer engagement.

Companies such as MasterCard and Google are already developing technology that will make it possible for people to conduct transactions with merely a voice command. Quite literally, customers can ‘converse’ with an AI bot either via text or by using voice recognition technology to keep track of and manage their financial assets.

• Upgraded ATMs

• Apple Store-Style Experience

• Automated Financial Services Employees

• Mobile and Digital Banking

• Partnerships

• Wearables

BASELS FOR BANKING SUPERVISION

BASELS FOR BANKING SUPERVISION 

What is Basel III?

The Basel Committee on Banking Supervision was established in 1974 to contain global banking risks by formulating guidelines and regulations relating to credit, capital, markets and operations. Its first accord, Basel I, was issued in 1988 and updated in 2004 with Basel II.

Basel III was issued in the aftermath of the global financial crisis in 2008, with tighter regulations and requirements around capital adequacy, leverage, liquidity and funding to ensure that banks maintain sufficient capital to meet financial obligations and absorb unexpected losses.

Sri Lanka is implementing capital adequacy requirements conforming to Basel III in June 2017, setting targets over the next two years.However, the process started much earlier.

How is Sri Lanka rolling out Basel III?

Basel III will be in effect from June 2017, but there aren’t any overnight changes. The Central Bank introduced the Internal Capital Adequacy Assessment Process in 2013, which facilitated the introduction of Basel III.

Standards such as Common Equity Tier I, Capital Conservation Buffer and Capital Surcharge for Domestic Systemically Important Banks will gradually come into effect between June 2017 and January 2019.

Common Equity Tier I is a minimum equity capital requirement, and the Capital Conservation Buffer will require banks to build additional equity capital to back lending growth. The Capital Surcharge for Domestic Systemically Important Banks results in further equity capital for large banks.

CHALLENGES AND OPPORTUNITIES IN BANKING INDUSTRY

Challenges

• Decreasing savings because of the incremental in cost of living of the peoples.
• Economic growth changes.
• Exchange rates are changing over the time period.
• Disruptive technology. It means go for digital platform.
• Political instability.
• Retaining employees.
• Rural market penetration.
• Bank risk in non-performing loans.
• High transaction cost.
• Intense competition.

Opportunities 

• Offering innovative products.
• Door to door service approach.
• Branch expansion.
• Assets reconstruction.
• Motivational HRM policies.
• Mergers and Acquisitions.
• TQM concept.
• Managerial excellence.
• Offering online services.(cyber services)

SAMPATH BANK

SAMPATH BANK

Public Limited Liability Company, incorporated in Sri Lanka on 10th March 1986.

Incorporated under Companies Act No. 17 of 1982 and listed on the Colombo Stock Exchange. Certificate to Commence business received on 2 April 1986.A licensed Commercial Bank under the Banking Act No.30 of 1988 and supervised by the Central Bank of Sri Lanka.

Vision:- 

"The growing force in Sri Lankan Financial Services."

Their Products:-

• Personal banking

           Credit cards

           Saving deposits 

           Loans

           Term deposits 

           Remittances

• Corporate banking

         Corporate credit 

         Commercial credit 

         Corporate Finance

         Development banking

         FCBU

• Electronic banking

        Internet banking

        Mobile banking

PERSONAL BANKING

Savings Account
Regular savings
01. Sampath double s

02.Sampath hit saver

Children's Accounts

01.Sampath Pubudu and Sapiri

Teenager Savings

01.Sampath X-Set

     
Ladies Savings
01.Ladies First

Senior Citizens Savings 
01.Sampath Sanhinda Saver Account

Money Market
01.Money Market Account

Loans
Housing Loans
Sevana Housing Loan
Sevana Dayada Housing Loans
Forign Currency Housing Loans

Business Loans
Sampath BUZCASH
Sampath Saviliya

Term Deposits
Regular Term Deposits 
Fixed deposits
Certificate of deposits
Sampath ODFD

Flexible Deposits
Sampath Kalin Cash
Easy FD

Senior Citizen FD
Sampath sanhinda FD

E-Remittence

That enables to receive money within few seconds that means immediately for customers and non-customers from any of agent in abroad.

CORPORATE BANKING

Corporate Credit Division

Sampath corporate credit division offers a range of financial product and services of both long term and short term.

They facilitate,

•  Term Lons
•  Leasing facilities
•  Money market loan
•  Overdraft
•  Trade finance facilities
•  Export related facilities

Commercial Credit Division

Sampath commercial credit division was instituted with objective to provide and innovative and cutting edge technology designed to credit valued and deliver financial solution by taking financial service to new heights.

They facilitate,

• Export financing 
• Import financing
• Working capital financing
• Leasing facilities
• Guarantee facilities
• Term loans

Corporate Finance Division

Bank offers a range of investment banking services tailor-made to suit individual client requirement, complemented by its large network and state of the art IT platform.

They facilitates,

• Debt financing-arranging and investing (Loan syndications, Securitization, debentures, commercial papers)
• Investments in corporate instruments
• Equity capital markets (Private placements, initial public offering, right issues, listed equity placement)
• Underwriting of share/ Debt issues
• Corporate advisory services (Merges and acquisitions, valuation of companies, corporate restructuring )
• Custodian services
• Escrow accounts
• New project development ( Project financing, project appraisal, feasibility studies )

Development Banking

The bank recognize the needs for focus resources allocation to service the MSME sector (Micro Small and Medium Enterprises)

• Start-up projects
• Expansion, Relocations and diversification
• Working capital financing
• Bridging finance
• Other facilities ( Trade financing, Leasing )

Foreign currency banking Unit (FCBU)

They provide a total banking solution to carryout transactions in designated foreign currencies for following entities.

•             Exchange houses
•      Offshores companies
•      Non-resident individuals

They facilitates,

• Deposit product (Current accounts, saving accounts, call deposit, fixed deposit )
• Financing solution
• Trade services
• Forex products
• Forex transaction
• Business solution 
• Complementary services

Five pillars – Capital, credibility, character, capability (monthly income), conditions (payment schedule, installment, time period, collaterals)

Crib reports- detect the unsettle loan than the 5000/=

ELECTRONIC BANKING

Internet Banking

Sampath Vishwa

Sampath Vishwa is the unique internet banking facility from Sampath Bank, which offers you a total online banking experience. Unlike regular internet banking, Sampath Vishwa is a complete online process that fits appropriately into your busy lifestyle.

Easy pay

Sampath PayEasy is a general payment system which enables payment of utility bills among others. This facility empowers any MasterCard or Visa card holder to make online payments ranging from utility bills, insurance, school fees, hospital bills and many more. Experience the unmatched benefits of Sampath Bank’s online payment solutions.

Mobile Banking 

ATM Banking

BANKING SECTOR IN SRI LANKA....

BANKING SECTOR IN SRI LANKA.... 

The banking sector continued to expand duting the recent years both glibally and domeatically. Banks paly a critical role within Sri Lankan financial system. They are engaged in provision of many services to entire economy.

The banking sector consists of 33 banks. Out of which 26 banks are Licensed Commercial Banks (LSBs) and it consist of 2 state banks, 11 domeatic private banks and 13 forign banks. Other part of banking sector is 7 Licensed special Banks (LCBs) and it consist of 6 state banks and 1 private bank.

Main distinctions of LCB and LSB are;

• Only LCBs are permitted to  provide current account facilities like cheque and overdraft facilities.
• LSBs are permitted to carry out only limited forign exchange transactions.

Licensed Commercial Banks (LSBs)

LSB is a banking institution issued witha license of Central Bank of Sri Lanka. They are permitted;

• To maintain current accounts for customers.
• To transfer money by cheque and withdrawn on demand
• Tomaintain saving accounts. 

The 26 licensed Commercial Banks which currently operate through a total of more than 6180 branches and over 4655 Automated Teller Machines (ATMs) in the country. The banks are regulated and supervised by the Central Bank of Sri Lanka under banking Act No. 30 of 1988, the Monetary Law Act No. 58 of 1949,the Companies Act No. 7 of 2007.

Licensed Special Banks (LCBs)

LCBs are financial institutions which are obtain license from Central Bank to conduct specialized banking business under the Banking Act.

• LSBs are not permitted to accept demand deposits from th public. 
• Not permitted to maintain current  accounts for customers.
• Not permitted to deal in forign currency.

But they are authorized to accept savings and time deposits. At  present there are 7 specialized banks operating with 696 banking outlets and 376 ATMs in the country.

The systemic importance of the LSB sector is relatively low in comparison to the LCBs, both in terms of size and their impact on the financial system, as it does not play a major intermediary role in the payment cycle.

 

Off balance sheet exposure is important when considering business expansion of the banking sector. It represented by the graph besides. Other business expansion areas from outreach, assets, liabilities. Among these aspects banking sector has expansioned its business.

This is the composition of total assets of the banking sector in June 2018 as per the area,business expansion.






Risks of banking sector

• Credit risk - risk weighted assets considered for credit risk in the capital adequacy computation increased during the year. It is due to the expansion of loan portfolios. Under that there are 3 aspects named; 

1. Market risk          
2. Equity prises             
3. Exchange rates

Non performing loans increasing is a main risk.

• Liquidity risk -  Despite the growth in credit during 2018, banking sector operated with an adequacy level of liquidity. LSBs and LCBs are required to maintain a minimum Statutory Liquid Assets Ratio of 20per cent.

Resources of the banking sector

• Profitability
• Capital

BEGINNING OF CURRENCY - SRI LANKA

BARTER SYSTEM..

What is a barter system?

A barter system is an old method of exchange. This system has been used for centuries and long before money was invented. Barter is a system under which goods and services are exchanged instead of currency, or the actual goods or services that are being exchanged and need not money.

Let's see what are the disadvatages of barter system..

• Lack of common measure of value.
• Difficulty in storing wealth.
• Indivisibility of goods.
• Lack of standard of deferred payment.
• Lack of double coincidence of wants.

CURRENCY'S HISTORY.. 

Sri Lanka is a country with a long history and a similarly long and rich economic history.    A study of that history will doubtlessly prove fruitful not only   for  economists but for everyone in the society. 

Coins used through different time periods of a country play an important role when studying the history of that country. Although small in size, a coin has the ability of giving a wealth of information about the economic and cultural history of the country where it was used, through signs that remain on them.

Sri Lanka’s currency-use can be divided into following periods. 
1. Anuradhapura Era 
Kahapana, swastika coins, maneless lion coins, lakshmi plaques, kahavanu or lankeshvara coins, forign coins.

   
Kahapana

Swasthika coins



2. Polonnaruwa to Kotte Era
Massa coins, Dambadeni coins/ coins of the middle ages, Lion coins, Cetu coins

Massa coin 1

Massa coin 2

Massa coin 3



3. Kandy Era

Agutu massa/ koku coins/ laarin, Dambadeni kasi, salli, Indian 'waragama', Tuttu, Panama, Tangama

Waragama coin




4. Colonial Era
Sri Lanka was colonized by the Portuguese, the Dutch and the English respectively.

Portuguese- Saint type coins (st.thome) gold,  Malakka silver, Ginimassa silver, panam (gold , silver), Tanga, Cruzado, Cakram, Laarins, Gold pagodi

Dutch- Rix Dollar, Coins from Zeeland, Coins from Utrecht, Coins from guilderland, Duits, Hollandaise coins, Coins from West Freaseland, Stuivers

Sri Lanka’s first series of banknotes was issued on the 10th of May, 1785.

                                                                                                                                                                      





British- Tharaka pagodi, British stuiver, Rix Dollar( silver coin-1825), Rupee(Indian Rupee), Duits, Farthing, Fanams, Half Rupee, Quarter Rupee

5. Post-Independence Period since Establishment of the Central Bank of Ceylon
One cent and Two cents (aluminium), Five cents and Ten cents (brass), Twenty-five cents and Fifty cents (Copper/Nickel),One rupee (Copper/Nickel)

Eleven series of currency notes issued by the Central Bank of Sri Lanka since 1950

CURRENT NOTES SERIES 

CURRENT COIN SERIES..

HISTORY OF BANKING- SRI LANKA

HISTORY OF BANKING IN SRI LANKA..

"To accommodate dynamic economic and financial system developments upon gaining independence in 1948, the post-independence Government of Ceylon established the Central Bank of Ceylon to maintain an active monetary policy regime and a dynamic financial sector to support and promote economic growth."

Prior to the establishment of the Central Bank, the Currency Board System set up under the Paper Currency Ordinance No.32 of 1884. It functioned as the country’s Monetary Authority, though very narrow in its capacity. This system was deemed inadequate for a developing country upon gaining political independence.  

To carry out this task, technical expertise to establish a central bank was sought from the USA in July 1948, with Mr. John Exter, an American economist from the Federal Reserve of USA being appointed. 

The Central Bank of Ceylon was established by the Monetary Law Act No.58 of 1949 and commenced operations on August 28, 1950. It was renamed the Central Bank of Sri Lanka in 1985.

💶The Central Bank was given wide powers to administer and regulate the entire money, banking and credit system of the country and also given the sole right and authority to issue currency.

The objectives of the Central Bank:-

• The maintenance of price stability.
• The maintenance of exchange rate stability.
• The promotion and maintenance of production, employment and real income.
• The encouragement and promotion of the full development of the productive resources.

Core objectives:-

    (1) The maintaining of economic and price stability.
    (2) The maintaining of financial system stability.

Founder governor:-

• Jhon exter 1950-1953 (founder governor)