However, overall, we have navigated ourselves and emerged in control of the situation. We are today a fully digitized bank with a comprehensive array of digital solutions for many services. At the heart of this transformation is recognizing our customers’ diverse needs. Today, the network is perfectly customer-ready. It’s a case of customers getting themselves more accustomed to digitized services. The customers’ response is highly admirable as our investment in digitizing pays off, especially in 2021 with a reported increase of 43 percent in the Bank’s digital transactions while the value of those transactions had increased by 58 percent. By the end of 2021, digital transactions had accounted for 38 percent of the Bank’s total transactions.
In the future, what will be the likely changes impacting the banking industry? Do you see any unique marketplace opportunities that you can take advantage of?
Considering the globally restrictive environment, substituting imports was a significant step that enabled innovation. Despite the limitations, it’s remarkable how the agriculture sector has spurred an improvement in the local production in certain areas. Innovation concerning import substitution, such as circumventing the shortage in cooking gas, the Bank has assisted entrepreneurs who have come out with innovations to overcome that issue. These entrepreneurs would not have survived if this import had been freely available. The question in the long-term is whether they can sustain themselves following the restoration of cooking gas supplies in the market. Or better still, if they could improve their product so that they stay competitive even after cooking gas supplies to the market are restored. Indeed, the current market conditions have helped such vendors. Even during the pandemic-driven lockdowns, some vendors went from house to house, triggering a new business model. That created a new value chain of delivering goods to the doorstep. As a result, many IT companies leveraged this new demand for deliveries at their height. It was not just for food but a range of commodities. People have come to trust even the garment they purchase online without the former experience of touch and feel that was so essential to customers. These innovations drove new businesses to help people navigate a new normal of living in a restricted situation, which is applicable even today.
With the current situation, we are undergoing, if you consider the person-hours we’re losing, even to draw people to the factories, for a patient to go to a hospital, be it services or manufacturing, we will inevitably see a downturn in economic activity. For the first quarter of 2022, BoC has maintained a profit of eight billion rupees. However, in the second quarter, we would see the impact on the entire economy due to these factors, for which we have introduced until 31 December a credit package, which is a bank-specific moratorium, pending Central Bank approval, which would phase out the problem.
I think the country has no future if we don’t believe in ourselves as a country and that we are going to bounce back to normalcy in the foreseeable future. We need to believe in ourselves. As we speak, several bilateral and multilateral discussions are taking place, leading in the same direction of resolving the current issues as we go along. Most of them may end up as bitter pills. Still, in the short term, let’s face those bitter pills so that we can come out of this and be a resilient and modern nation that will no longer live on handouts.
BoC has maintained a profit of eight billion rupees. However, in the second quarter, we would see the impact on the entire economy due to these factors, for which we have introduced until 31 December a credit package, which is
a bank-specific moratorium, pending Central Bank approval, which would phase out the problem.
You have a hope-filled message even at the lowest point of our country’s economic crisis, with scarcity on many fronts. What is the strength of the banking industry to weather this storm?
The biggest issue that we are facing today is energy provisioning. As we speak, we have received several proposals to make energy provisions. If we could sort out that issue, we can come out of this crisis. Also, it’s essential not to take this issue in isolation. We are facing a case in which we are not alone.
Globally there is an energy crisis ensuing. We know there will be a crisis in the supply of wheat very soon. A few weeks ago, we heard of the likelihood of Sri Lanka facing a rice shortage, which is not the case. We have enough stocks in this country as we used to have, but there will likely be a shortfall due to a lack of wheat, forcing supplementing through the locally produced paddy. That, in turn, will create a shortage of rice. That will be an outcome of several global scenarios. Recently India, the second-largest wheat producer, imposed a ban on its export to control rising domestic prices. At the same time, the WTO claimed that as a member, India could not export wheat at high prices from public stockholdings of subsidized grains. Ukraine is the fifth-largest wheat producer globally, and when taken out of the equation, it will also impact Sri Lanka. Russia is the number one exporter of wheat, and the impact of various sanctions and embargos following the Ukraine invasion will soon show. We will find a severe crisis in wheat, which we will have to supplement with rice, which may lead to a rice shortage. Therefore, given the global events, we should consider Sri Lanka’s situation with its impact.