SLT launches 100G Ultra Speed National Backbone Network
With Sri Lanka’s Non Bank Financial Institutions (NBFI) sector consolidation nearing completion, the time has come to consider a similar move in the insurance sector, Nivard Cabraal, Governor Central Bank (CB) says.
“Now that we have a good body of knowledge built with the experience in consolidating the NBFI sector, it’s a good time to consider consolidation in the insurance sector,” he told the Business Times in a recent interview. He said mandating the splitting of composite insurance companies separately to that of general insurance and life insurance firms by next year makes a strong case for this move.
“Sri Lanka is currently well entrenched in a ‘virtuous cycle’ and a conducive investment environment. The country was trapped in a ‘vicious’ cycle for more than five decades, but now it is currently experiencing a ‘virtuous’ cycle,” he said adding that indicators such as low inflation, low fiscal deficits, real interest rates, low debt levels, enhanced savings and regular pipeline of investments make a case for this.
“With the splitting, there’ll be a fair number of companies which will call for consolidation,” he said.
He added the bulk of the NBFI consolidation will be completed this year and there’re still a few more which will spill over to another three more months which will go into next year.
“We struck some good middle ground. Nobody sold at too high
Further progress was made by banks and finance and leasing companies (NBFIs) on the financial sector consolidation process last month, a CB media release said.
It said that the Bill to facilitate the proposed merger of the three banks, viz., DFCC Bank, National Development Bank PLC and the DFCC Vardhana Bank PLC, was passed in Parliament. "The proposed amalgamation of the Merchant Bank of Sri Lanka PLC, MCSL Financial Services Ltd or a low price,” he said, adding that he had chaired some 160 such meetings with companies gearing to buy or sell. “We managed to establish trust and confidence which was key to this process, where each aspect was dealt with by professionals. All letters (by firms with queries on consolidation) were responded within a day,” he said.
Mr. Cabraal said that the legalization to consolidate DFCC and NDB was passed in parliament recently and they are restarting the engine to consolidate CIFL (Central Investments and Finance Ltd).
He predicted FDI to reach 20 per cent of GDP by next year. Explaining the indicators of an emerging economy, Mr. Cabraal said that advertisements on restaurants, dining, tours and travels, vehicles, etc are growing exponentially. "When going through the weekend newspapers we can see this," he said, attributing this as one indicator of and MBSL Savings Bank Ltd has reached the final stage of completion. The necessary shareholder approvals were obtained and the merged entity will operate as a licensed finance company. The Central Bank with the concurrence of the Ministry of Finance and Planning issued Guidelines on the ascertainment of cost of acquisition/merger as a qualifying payment and on the claimability of any unabsorbed input credit in terms of the Inland Revenue Act and the Value Added Tax Act, respectively." The re- a growing economy which is growing by 7.5 per cent. “The past four years have been the only high growth and low inflation years since Sri Lanka gained independence. It took South Korea nearly 40 years after their war to increase their per capita income to around US$ 7,000 and Sri Lanka targets to reach that milestone by 2020 which is 11 years after its 30 year conflict,” he said.
Mr. Cabraal said now the challenge is to manage the macro-economic fundamentals in a manner to deliver sound targets, despite the tough global backdrop.
In two years the CB targets at least five banks with an asset base of over Rs. 1 trillion. “We also want large state banks to have regional or global presence while a few specialised banks to finance regional development activities,” Mr. Cabraal said. He said by this time in two years the smallest bank will be with an asset base of more than Rs. 100 billion, while finance companies which will be limited to 20 and the smallest finance firm will be with an asset base of Rs. 20 billion.
He said in six years the country aims to have a greater bias towards exporting services such as tourism, IT/BPO, Avocation, maritime and knowledge economy.
“We want to facilitate the private sector to become even more dynamic and enthusiastic,” Mr. Central said, adding that transparent mechanisms with better administrative processes and strong legal frameworks that provide swift recourse at times of disputes are high in the agenda in the regard. Strong public and private sector institutions and strong regulatory authorities with vibrant payments and settlement systems based on new technologies will also be facilities, he added.
He said that ensuring a continued flow of capital investments, both local and foreign will also be targeted “We want to aim at a steady investment to GDP ratio of around 36.5 per cent by 2020 while attempting to attract investments from both local and foreign sources during the next few years,” he said. Facilitating foreign funds from different channels such as FDI, capital inflows, portfolio and government securities, commercial borrowings, bilateral funding opportunities and investment treaties and investments with counterpart governments will also be promoted.
“We want to maintain the investment transmission channels at optimum levels to ensure smooth transmission and flow of funds into and out of Sri Lanka,” Mr. Cabraal said, noting reasonably low transaction costs will be facilitated ensuring secure payment gateways and facilitate the unhindered flow of funds while maintaining counter-party and legal risks at minimum levels will also be done.
Sri Lanka Telecom (SLT) has launched the country’s first ultra-speed National wide DWDM (Dense Wavelength Division Multiplexing) fibre optics backbone transmission Network (NBN).
Huawei, the strategic partner of SLT worked together with SLT to implement the NBN with new generation OTN-based 100G DWDM solution. The solution supports 8 Terabits (1 Terabits = 1000 Gigabits) per seconds transmission capability through fibre optics to cater to future explosive growth of Sri Lanka ICT, the local telecom firm said in a media announcement on Monday.
Covering all 329 divisional secretariats in Sri Lanka within a 5-year time window, the NBN aspires to deliver high speed uninterrupted access at all times, to every business and household in the country.
Commenting on the launch of 100G Ultra Speed NBN, Lalith De Silva, Group CEO of Sri Lanka Telecom said, “With the NBN rollout, the industry will be empowered to provide high speed broadband access at affordable and competitive prices”.
Fibre optics transmission infrastructure is fundamental to telecommunications. Within less than half a century, the optical transport industry has migrated from PDH, through SDH, WDM, to OTN-based 100G DWDM, boosting network speeds from megabit-level to terabit-level performance and progressing from pure manual network configuration and management to modest levels of automation, the statement said.
Huawei’s Chief Executive Officer, Daniel Sun noted that “NBN is a timely requirement for SLT, for which Huawei has been chosen to supply and implement this project. Such forward looking initiative in the event of initiative magnifies the uniqueness of the SLT. Every day we have more and more people connected through the Internet. It makes our corporation with telco operators much more significant and prominent”.
Chinese ambassador Wu Jianghao praised this project’s high-quality and efficient fulfilment as the example of cooperation between China and Sri Lanka. And he also conveyed that “with the fast economic development in Sri Lanka, more and more high- technical telecom requirements will be necessary in future. We all truly believe that Sri Lanka, the Pearl on the Maritime Silk Road, will be the hub not only for overseas shipment, but also for international telecommunication”.