The Central Bank of Sri Lanka in conjunction with the relevant transportation authorities expects to begin the rollout and implementation of a transport payment card from next month. The payment card will be issued on the currently operational National Card Scheme. Accordingly, users will be able to use the payment card for retail payments and transportation with their JCB/Lankapay branded cards.
CBSL Director Payments and Settlements Dharmasri Kumaratunge noted that the long-delayed implementation of digital payments for transportation would begin next month. Kumaratunge made these observations yesterday at the 37th Asian Bankers Association Conference.
Kumaratunge noted that the CBSL was concerned with the high Merchant Discount Rate that was hampering the uptake of digital payment methods in the economy. The National Card Scheme was to reduce the outflow of foreign exchange due to the usage of foreign payment service providers. The CBSL also plans to create a unified transacting platform between existing mobile money platforms (Dialog’s Ez Cash and Mobitel’s M-Cash) and the banking sector. Kumaratunge said, “Mobile cash should be exchangeable with cash in savings and current accounts.”
The CBSL is going to continue a welcoming stance towards financial innovation. A Shared Know Your Customer database will be implemented soon that will use blockchain technology to create a unified system for the maintenance of customer information. The shared KYC forms are expected to bring up a higher uptake in digital financial products.
Sri Lanka also expects to be one of the first countries in the region to issue a Central Bank-backed Digital Currency. Sri Lankan banks have maintained regulatory capital requirements in line with BASEL standards during the pandemic. Kumaratunge noted that Sri Lanka in contrast to other countries within the Asian Bankers Association showed an actual rise in credit growth with growth reaching 16.2% in July 2021. The NPL ratio of the sector was high at 5%. Kumaratunge noted that credit growth has been across a diverse range of sectors across the entire economy.
Kumaratunge noted that pressure had been put on the banking sector to look past CRIB records in their lending decisions. He noted that regulations were put in place to limit any penal interest rates. The CBSL has put in place long moratorium periods to help borrowers. Regional panellists noted that their countries were putting in measures to ensure that the Micro and Small and Medium Enterprises were not cut off from the financial sector during the pandemic.
They also noted that problems were apparent regionally in the liquidity of foreign currency that was required for the settlement in international trade.
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