Innovation Of banking

History of banking To accommodate dynamic economic and financial system developments upon gaining independence in 1948, the post-independence Government of Ceylon (as Sri Lanka was then known) established the Central Bank of Ceylon to maintain an active monetary policy regime and a dynamic financial sector to support and promote economic growth. Prior to the establishment of the Central Bank, the Currency Board System set up under the Paper Currency Ordinance No.32 of 1884 functioned as the country’s Monetary Authority, though very narrow in its capacity.  The Central Bank was given wide powers to administer and regulate the entire money, banking and credit system of the country. The objectives of the Central Bank as specified in the MLA in 1949 were; The stabilization  of domestic monetary values (maintenance of price stability). The preservation of the par value or the stability of the exchange rate of the              ...

FINANCIAL  INTER MEDIATION Financial inter-mediation is a productive activity in which an institutional unit incurs liabilities on its own account for the purpose of acquiring financial assets by engaging in financial transactions on the market; the role of financial intermediaries is to channel funds from lenders to borrowers by inter-mediating between them. F inancial intermediaries move funds from parties with excess capital to parties needing funds . SME Banking I n Sri Lanka, too, SMEs have been recognized as an important sector of the economy due to their significant contribution to national income, employment, inclusive private sector development, bridging regional growth disparities and poverty reduction. Since independence, successive governments have introduced various support programmers to facilitate the growth and expansion of SMEs in different sub-sectors of the economy. However, as the SME White Paper (2002) argued, there has...