The advantages of the banking sector are many. The banking sector is fast developing in Sri Lanka. Let us see how the banks in Sri Lanka are affecting the economy and helping small businesses grow.
All about Banking:
A bank is an institution dealing in the financial sector. Commercial banks are the backbone of the economy, especially the financial sector. The banks play a key role in the growth and development of a country’s economy. They are strictly regulated institutions. The banking sector in Sri Lanka is growing at an incredible pace. All the banks in Sri Lanka follow the capital requirement norms as per the Basel Accords to maintain the bank’s liquidity. The Central Bank of Sri Lanka governs the banking sector. Banks in Sri Lanka offer many services like opening accounts, providing debit and credit cards, providing loans, cheque facilities, etc.
Working of Small Businesses:
Small businesses are very much dependent on banks in a number of ways. First, they need a lot of guidance in the early stages of working. Small businesses need financial institutions’ support to keep a check on their accounts and keep their finances organized. However, banks may charge a fee for all the services provided to these business owners. Banks in Sri Lanka offer numerous types of services and facilities to attract small business customers.
What can banks offer?
- Most small businesses need basic services like opening savings and current accounts, issuing credit cards, taking the benefit of payroll services, and getting easy loans. The banks in Sri Lanka have streamlined all these processes and offer core banking services to these small business owners.
- The banks also make profits by providing easy loans to these small business accounts. Small businesses have basic banking needs and are always on the lookout for working capital. Therefore, providing easy loans for working capital helps to strengthen the client relationship and positively impacts the bank’s reputation.
- The general problem small business owners face is the complicated banking processes for obtaining loans and credit. The interest rates are also high for unsecured loans, and banks follow a lengthy process to vet the customers before the issuance of loans to small businesses. They feel all these administrative headaches and responsibilities hamper the business’s daily operations. Banks in Sri Lanka have revolutionized the process and made it quite simple for small business owners.
How has banking changed?
Why Are Some Banks More Attractive than Others?
Some banks have made it easier for small businesses by lowering the fees and loan interest rates. The minimum balance requirements and transaction limits have been re-defined to simplify banking for small business owners. Some larger banks are consistently working towards innovating products for small businesses. Better technology has also helped the banks to develop long-term relationships with these business owners. Improved customer service has resulted in better retention and loyal relationships.
Conclusion:
Many Sri Lankan banks offer incentives for opening a business account and promote small businesses by offering customized products. Customers use technology to simplify their banking transactions. Debit and credit cards offer cashback and rewards, and the loans are available at a much lower rate. Banking now is for the benefit of both the customer and the bank.
