No one bank can claim to be the glue holding an entire financial system together, but in Sri Lanka, People’s Bank came remarkably close.
Over the last 12 months, soaring inflation, food shortages and eroded currency reserves ended Gotabaya Rajapaksa’s presidency. It also sent Colombo to the IMF for its 17th bailout since the 1960s, this time for $3 billion.
People’s Bank stepped up to support key state-owned enterprises (SOEs) such as the Ceylon Petroleum Corporation, Lanka Coal, Ceylon Electricity Board, State Pharmaceutical Corporation, and Ceylon Fertilizer Company. The bank financed more than $35 million for vital medicine, $102.3 million for fuel, $29 million for electricity, $193 million for coal imports covering the entire seasonal requirement, and $10 million for fertilizer.
It also backstopped the central government and several business sectors to help the economy weather a variety of storms. As 2022 progressed, that meant supporting major contractors involved in vital infrastructure, including the nation’s Water Board, Road Development Authority, Urban Development Authority, and other large-scale entities to ensure the country's economy wasn’t derailed completely.
It became clear that the challenges facing People’s Bank were a microcosm of those facing the country.