Sri Lanka’s banks see light at the end of the tunnel
Sri Lanka has just navigated a once-in-a-lifetime economic crisis. Sanath Manatunge, chief executive of Commercial Bank of Ceylon, and Jonathan Alles, CEO of HNB, talk to Asiamoney about what challenges remain for the country’s embattled banking sector.
When Sanath Manatunge took over as chief executive of Commercial Bank of Ceylon, Sri Lanka’s biggest bank, a year ago, he did not envisage that transporting petrol around the island would be part of the job description.
But that is what happened when Sri Lanka was plunged into the worst economic crisis in its history. The country’s foreign reserves, worth between $8 billion and $10 billion in 2020, had evaporated to just $20 million in usable funds by May 2022, thanks to years of bad government.
Sri Lanka lacked the money to import basic staples – food, medicines and fuel for cooking, heating, power generation and, crucially, transport – for its 22 million people.
Queues at empty petrol stations snaked for several kilometres, a more telling, miserable leitmotif of the crisis for most Sri Lankans than the images seen abroad of furious anti-government protesters storming the politicians’ official residences and frolicking in the now deposed president’s swimming pool.
The acute shortage of fuel posed problems for Manatunge and bankers like him. At the central bank’s urging, Manatunge decided it was vital to keep all of the bank’s 270 branches and roughly 1,000 cash machines open and well stocked with cash.
We were struggling with day-to-day operations, [so] we hired the tanker and we distributed fuel for our operation
If bank customers were denied access to their money in such volatile times, he knew that bank runs would inevitably follow and that could be a disaster – not just for CBC but for Sri Lanka’s wider financial system.