RDB, LDB to merge into Lanka Enterprise Development Bank

Preliminary procedures are now underway in creating a much stronger and larger state bank to cater to the needs of small and medium scale enterprises by merging Regional Development Bank ( RDB) with Lankaputhra Development Bank ( LDB), Chair man of RDB Prasanna Premaratne told the Business Times.

The Cabinet sub-committee has given clearance to establish the “Lanka Enterprise Development Bank” by merging the two banks soon on a budget proposal made in 2016, he disclosed.

RDB is the only development bank functioning in the island, he said adding that its merger with LDB will pave the way towards achieving rapid inclusive and sustainable growth in the country, Mr. Premaratne revealed.

The country's six regional development banks were merged into a single RDB in 2010, as a measure to empower and uplift the lives of all Sri Lankans with a special focus on the SME sector.

The six regional banks, which were amalgamated, were, Rajarata, Ruhuna, Wayamba, Uva, Kandurata and Sabaragamuwa Development Banks. The new entity has an island- wide network of 268 branches, he said adding that the RDB maintains 2 to 3 per cent growth at present.

The Government has signed a loan agreement with the Asian Development Bank ( ADB) to borrow US$100 million to implement a small and medium enterprise credit line project, Treasury sources revealed.

“The project aims to increase the employment opportunities by strengthening the SME’s access to finance,” the Finance Ministry said in a statement.

The project agreements of the SME credit line was signed with the ADB and 10 local financial institutions: People's Bank, Bank of Ceylon, Commercial Bank, Sampath Bank, Hatton National Bank, DFFC, Re g i o n a l Development Bank, National Development Bank, Nations Trust Bank and the Seylan Bank.

The ADB is now conducting due diligence to extend assistance to RDB to implement this scheme aimed to strengthen the enabling business environment for SMEs, catalyse investment by improving access to finance through commercial channels, and enhance the capacity of the Sri Lankan business development services sector to efficiently and effectively deliver services to SMEs.

Generating more than Rs. 100 billion in assets for the Sri Lankan economy, the bank has achieved massive progress while uplifting the lifestyles of the people, its officials say.

With over 3000 employees, the RDB caters to a clientele that exceeds over six million, they pointed out.