People’s Bank is Revolutionising Sri Lanka’s Banking Industry

Ranjith Kodituwakku

People’s Bank is a state-owned commercial bank that was established in 1961 in Colombo, Sri Lanka. It offers retail and corporate banking services with the aim of contributing to quality of life, enterprise development and the national economy. Ranjith Kodituwakku, a veteran banker who joined People’s Bank in 1982, has held the position of CEO and General Manager since 2020.

Ranjith recently spoke with Wanda Rich, editor of Global Banking & Finance Review, about the bank’s venture into investment banking, how it has addressed the challenges of the past two years, and how its customer base is benefiting from its significant investment into digitalisation.

Can you tell us about People’s Bank and how it ventured into investment banking?

In July 2021, People’s Bank celebrated its 60th anniversary. For over 60 years, the bank has held a strong reputation for its digital supremacy, robust performance, leadership and sustainable growth. It has made great efforts to understand its customers and has revolutionised Sri Lanka’s banking industry by deploying new technology and innovative products. This approach has gained the bank a customer base of over 14 million, the largest in the country.

People’s Bank Investment Banking Unit (PBIBU) was established as a part of the bank’s treasury in 2011, to focus on the rapidly growing economy of the country and its capital markets, both debt and equity. Since the inception we have successfully completed 30 debenture issues, in which we have managed to generate more than Rs. 150 billion to the issuers.

What are the services the investment banking unit provides?

Our services are expansive and include financing and advisory services, initial public offerings, debt structuring, fixed income security trading, loan syndications, custodian services, trustee services and securitisation. With our group synergies and the strength of the bank, PBIBU was able to establish its name in the capital market as one of the best and most innovative solution providers within a short time span.

Are there any notable transactions that you are particularly proud of?

Yes – 2021 was a remarkable year for PBIBU, during which it was able to achieve several key milestones in the investment banking industry. One such feat was structuring the largest ever non-banking listed debenture issue for LOLC Holdings PLC, for LKR 10,000 million. Also, PBIBU managed the largest ever state-owned entity listed debenture issue in Sri Lanka for Ceylon Electricity Board – LKR 20,000 – and the largest ever non-banking financial institution listed debenture issue for People’s Leasing & Finance PLC – LKR 10,000 million.

The past year has been full of challenges for markets and the
economy. How has People’s Bank managed operational risk during this period?

The pandemic and the resulting lockdowns and restrictions during both 2020 and 2021 had a massive impact on both local and global economies. It dealt a severe blow to key foreign exchange earning sectors, resulting in a drastic decline in foreign exchange inflows to the country, undermined the stability of the exchange rate, and further hurt investor and lender confidence.

The combination of these circumstances put the bank and its employees under tremendous pressure. It put our commitment, our digital capabilities, our customer centricity and our overall ability to deliver to the ultimate test. Nevertheless, we continued to serve, keeping more than 70% of our branches open, even during the height of lockdown, and providing over Rs. 800 billion in funding during the pandemic-stricken twenty-four-month period.

How has People’s Bank’s investment in digital channels supported
customers’ banking experience during this time?

Over the last few years, People’s Bank has established the country’s largest customer base of over 14 million and has built up a digital network which has penetrated deep into the rural areas. In 2021, the registered user base for retail internet banking and mobile banking appliances exceeded 1 million. The development of self-banking units (SBUs), consisting of ATMs, CDMs and kiosks, allowed customers to bank 24 hours a day, 7 days a week, 365 days a year. During 2021, our island-wide network of ATMs, CDMs and self-banking kiosks facilitated 82.6 million transactions worth over Rs. 1.2 trillion.

People’s Wiz, the bank’s paperless digital solution for opening an account, has recorded onboarding of 1.7 million customers. This is more than triple the number in 2020. People’s Wave, the bank’s mobile banking app, has become the country’s most downloaded banking app with over one million active users. People’s Wyn, the mobile app for businesses, registered 7,220 customers, more than three times the number in 2020.

The bank’s digital loan processing facility, People’s Wiz Retail Loan Originating System (RLOS), revolutionised the process of granting loans and allowed the bank to disburse personal loans within 24 hours with minimal documentation.

During the year, the bank introduced several innovative products and features. One of these was the People’s Pay Wallet app, a payment solution combined with lifestyle features. The bank also incorporated features such as anti-money-laundering technology into the process of digital account opening and real-time gross settlement into its corporate internet banking. People’s Bank also became the first and only bank in Sri Lanka to be accredited with the ISO/IEC 27001:2013 certification, the highest international accreditation for information protection and security.

How do you see the way forward in the year ahead?

We expect 2022 to be another challenging year. We will continue to focus on our strengths, our strong financial performance, our digital drive and our quality of service. However, due to the problems and issues in the larger economy, we can foresee a variety of challenges. With our focus, commitment and product portfolio we are ready to meet – and, as we most often do, exceed – customer expectations. People‘s Bank will also concentrate on providing a portfolio of investment banking products and services.

Notwithstanding the macroeconomic volatilities, we expect to continue our journey in 2022 with optimism, ambition and vigour, with our sights set on achieving higher goals and targets.