Annual Report 2008 - Ministry of Finance and Planning

3. Performance of Public Enterprises
147
Chart 3.7 Chart 3.8
All state owned banks have been rated by Fitch Rating Sri
Lanka as per Table 3.5.
Bank
Table 3.5
Ratings of State banks
Rating
National Savings Bank
AAA
Bank of Ceylon
AA
People’s Bank A -
SMIB Bank A -
HDFC Bank BBB +
Rajarata Dev. Bank BBB +
Ruhuna Dev. Bank BBB +
Wayamba Dev. Bank BBB +
Uva Dev. Bank
BBB
Kandurata Dev. Bank
BBB
Sabaragamuwa De. Bank BBB -
loans to government and state owned enterprises, providing
free banking services to the government and government
departments, extending various development loans such
as project loans, New Comprehensive Rural Credit Scheme,
Krushi Novodaya Credit Scheme etc. are some major
functions carried out by state owned banks in line with
government policies. The banks bear an opportunity cost
of resources employed to implement government policies.
This opportunity cost should be reflected in bank’s books
in order to make informed policy decisions. In 2008, several
important developments took place in the arena of state
banking sector. Pradeshiya Sanvardhana Bank Act No. 41 of
2008 was passed by the Parliament in order to amalgamate
six Regional Development Banks into one bank to form a
strong regional development bank.
Source: - Fitch Rating Sri Lanka
While competing in the market, State Owned Banks play
a key role through their participation in implementation
of the Government policies and decisions in respect of
finance sector. Extending property and housing loans to
public servants at concessionary rates, granting direct
Ministry of Finance and Planning Sri Lanka
Annual Report 2008