Success Story after merging six Provincial Development Banks as one National Level Regional Development Bank
“Within Six years after merging in May 2010, RDB has more than doubled the previous Provincial Development Banks’ achievements made during Twenty-Four years from 1985 through 2009.” Studies show that results achieved by the Rajarata, Ruhuna, Wayamba, Kandurata, Uva and Sabaragamuwa Provincial Development Banks during the twenty-four year period spanning from 1985 to 2009, have drastically improved during the Six years’ period (2010-2016) after establishing Regional Development Bank (RDB).
During April 2010 to April 2016, the total deposits of RDB have increased by Rs. 58 billion from Rs. 32, 350 million to Rs.90, 041 million, while the total loans and advances have increased by Rs. 62 Billion from Rs. 30, 311 Million to Rs.92, 467 Million. During the same time frame, the bank’s total asset has increased by Rs. 72 Billion from Rs. 41, 018 Million to Rs.113, 317 Million and the total equity has has increased by Rs. 03 Billion from Rs. 3, 148 Million to Rs.6, 531 Million.
Chief Finance Officer of RDBMr. Chandrasiri Kalupahana, has been spearheading the remarkable success the bank has achieved during the six years of its existence. Prior to joining RDB, has held sen- ior positions at both local and overseas companies serving at a number of key positions, including Head of Finance, Head of Audit, Assistant General Manager, Senior Deputy General Manager and General Manager in the fields of Banking, Finance, Insurance and other different fields. He has obtained true international exposure having worked in British, Irish, American companies for several years in Tanzania, Saudi Arabia and Angola/UK, in addition to several companies in Sri Lanka. He is a Fellow member of the Institute of Chartered Accountants of Sri Lanka.
He has been instrumental in initiating the establishment of the Treasury Division for RDB within the Finance Division after obtaining necessary approvals from rele- vant authorities. Thanks to his initiative, the bank started to invest excess funds in risk free Government Securities through, licensed Commercial Banks and Primary Dealers appointed by CBSL and also invest in FDs with licensed Commercial Banks having stable credit rating, resulting in additional income to the bank. Accordingly, RDB is now in a position to meet their corporate customers’ requirements accepting deposits matching the market rate.
The total income of the Bank has increased by 12%, compared to the previous year. In the year 2015, operating profit increased to Rs. 1,963 million, which is 40% over the operating profit of Rs. 1,400 million, recorded in 2014. ROA before Tax of the Bank has increased by 1.5% that stood at 1% in 2014.
The deposit base of the bank increased to Rs: 86 billion and it represents a 19% growth over the previous year. Bank was able to increase the savings deposit by Rs 4.3 billion during the year 2015.
During 2015, special attention was given by the Bank to reduce its non-performing loan (NPL) portfolio, which was around 7.6% of the total portfolio at the end of 2014 especially because NPL on Pawning. As a result of the special efforts made, this ratio was brought down to 4% by end of 2015.
While the bank complies with Central Bank Regulatory Requirements, it should be noted that RDB has exceeded the regulatory requirement for Equity Balance of Rs. 5 Billion by achieving Rs. 6.4 Billion of Equity Balance as at 30/04/2016. RDB also exceeded the regulatory requirement for Total Asset Balance of Rs. 100 Billion by achieving Rs. 113 Billion of Total Asset Balance as at 30/04/2016.
As a financial institution dedicated to the development of finance, Regional Development Bank continues to play a vital role in the uplifting of social and economic development activities in the country. The Bank has been in the forefront of almost all the development programs in the island, taking a significant role as a financier. RDB’s key asset is their customer base of over six million spread throughout the country, including North and East. Development of the country and its people is the main focus of the Bank. Hence, the Bank is committed to empowering them and thereby developing the nation through its 268 service centers in the islandwide network.
Deposit Mobilization Improving of saving habits among the underprivileged communities is the base to develop their living conditions. Therefore, the Bank aggressively works towards inculcating the saving habit among the vulnerable people in the financial environment. In order to arrest such adverse situations and increase savings, the Bank launched special savings mobilization programs such as “Ithurum Wasana”, “Janahamu Dasadahasak”, “Liya Saviya” and “Divineguma” programs. These programs cover all segments of society, ranging from a child to senior citizens. The bank annually holds deposit campaigns all over the regions to achieve deposit balance. With the dawn of New Year January first, 1st day campaign was held branch level very successfully. Most of our customers gathered and representing all segments and starts their New Year transaction with their bank.
Sri Lankan women form a large part of the clientele at RDB and the bank takes numerous actions and programs to empower them. The International women’s day is one key event that the bank commemorates every year. A special savings promotion scheme was introduced to uplift women’s savings based on women’s day.
Also there is a significant contribution for minor savings accounts every year with parallel to Children’s day celebrated in 1st of October. The bank took another step to expand its children’s day program up to the national and school level through RDB Sith Roo Rata art completion. There was a significant participation representing all segments like preschools, schools and it contributes a vast portion to the present year savings portfolio.
Currently, the bank has more than 6 Million customers’ accounts and has been serving customers through branch network of 265 branches and 3 extension centres, 10 District Offices and 7 province offices spread across all parts of the country. RDB has more than 2,300 permanent employees and more than 3500 employees with contract, trainees, Deposit collectors, Rural Leaders, etc.
Considering the above achievements ICRA Lanka Limited has assigned RDB Credit Rating ‘[SL] A (Stable)’, the adequate credit-quality rating with a stable outlook.
The bank has taken various measures to increase its fee based income in and to provide better service to its customers. Hence, the bank offers the customers the opportunity to collect money transferred via Western Union through all branches of the RDB which are widely located in rural and semi urban areas. Lanka Money Transfer remits money directly and instantly to customer bank account with no downtime. The service has a wide international network consisting of over 275 locations and this service available at 268 RDB branches island wide.
Furthermore, online bill payment service with Mobitel M Cash facilitates customers to pay utility bills and Reloads, and update online instantly. The bank now also offers ATM and LankaPay ATM facilities so that the customers are able to withdraw their money at any one of over 3000 ATMs islandwide. Around twenty thousand ATM card have been issued to customers at present.
Yet another facility offered by the bank is the Dorin Dora Deposit Collection / Door to Door Service. RDB has assigned Door to Door Agents to visit customers and provide service to do all banking needs of the customers including collecting daily deposits, loan repayments, open new accounts etc. During 2015, RDB introduced a new android based smart solution for its Dorin Dora savings agents who visit door steps of potential customers to collect their day to day savings and repayments ensuring the customer satisfaction and trust. As a feature of this solution, the RDB Dorin Dora agent will issue a receipt to the depositor while, a SMS message will be sent to the depositor’s mobile phone confirming his/her savings account update. This helps the entrepreneurs to do their banking needs without any disturbance to their daily business. And also it is useful to protect customers against informal financial market activities conducted at a higher cost.
The bank has conducted several programs specially to empower rural masses. Under the Small Group Methodology, special programs are operated islandwide to develop their economic activities through establishing economic literacy through community leaders who link rural masses to the bank. They are engaged with establishing facilitating and monitoring small group of people ranging from five to eight members and clusters of such groups. The small groups organised with over 90% women’s participation and the bank targeting lower income families under this program and take them to banking practices. Further to facilitate rural masses, the bank uses people’s companies/ “Janatha Samagam” These entities are using even their savings as capital under the people’s companies established under Centre, Development Associations and District levels are carrying out a massive task to empower the lower income people. It is being operated in Matara, Puttalam and Kandy districts very strongly and successfully for 15 years.
Furthermore, the bank has a product geared towards the senior citizens of the country. The Regional Development Bank offers competitive higher interest rates in the market for both Fixed Deposits and Savings deposits of Senior Citizens.
In 2015, RDB celebrated its 30th anniversary. Being the RDB- a national level Government owned development bank, the objectives of the Bank shall be to facilitate the overall regional economic development of Sri Lanka by promoting the development activities such as agriculture, industry, trade, commerce, livestock, fisheries and empowerment of women mainly by granting financial assistance to Micro Financial Institutions and small and
medium scale enterprises.
Deposit Mobilization Improving of saving habits among the under-privileged communities is the base to develop their living conditions. Therefore, the Bank aggressively works towards inculcating the saving habit among the vulnerable people in the financial environment. In order to arrest such adverse situations and increase savings, the Bank launched special savings mobilization programs such as “Ithurum Wasana”, “Janahamu Dasadahasak”, “Liya Saviya” and “Divineguma” programs.