State Banks Taboo

Doing business with state agencies is taboo to the ADB.  It’s ADB’s policy to stay away from the public sector and to do business only with the private sector, ADB’s Country Director in Sri Lanka Ms. Rita O’ Sullivan told reporters in Colombo on Wednesday. “ADB is moving away from doing business with government and focusing more and more in engaging with the private sector in such business activities,” she said. The occasion was the release of a US$ ($) 15 million commercial loan to a private bank for refinancing of mortage/housing loans to a specifically targeted range of consumers here.
Previously such moneys used to be channelled through state controlled Central Bank of Sri Lanka.
When this reporter questioned O’ Sullivan why this “practice” was not observed this time, she said that this was because those moneys then used to be rechannelled through the state banks.
Asked why the ADB specifically picked up DFCC Vardhana Bank (DVB) for this project, Sullivan said that this was because they have been doing business with DFCC for a period of some 30-40 years.
DVB’s parent DFCC Bank was formerly a government owned development bank called DFCC.Meanwhile this loan specifically targets those living in the tsunami and conflict affected areas of the Northern and Eastern provinces with a special focus on women. DVB CEO Laksman Silva said that the cost of such loans to the beneficiaries would be less than the usual housing loans costs due to the low rates that such were procured at.