Central Bank to extend branchless banking:
Common ATM, mobile payment switch soon
The Central Bank will set up a common ATM, mobile switch and a card
switch which will be extended as a common payment switch for the first
time in Sri Lanka shortly. Central Bank’s Assistant Governor Janaki
Mampitiya making a presentation on “Mobile Payments Initiatives in Sri
Lanka” at the National Information Technology Conference 2011 in Colombo
recently said the mobile switch will have the facility to directly
connect to mobile switches used by individual banks which will enable
inter bank settlements through the accounts maintained at the CBSL.
The Central Bank is identifying the need to cater to the new payment
instruments and payment channels.It has initiated the establishment of
legal and regulatory systems for anticipated growth areas and there will
be a tremendous demand for further modernization of mobile payments
systems in the country very soon.
“With the introduction of new electronic payment mechanisms, there is
a visible move towards the use of branchless banking methods from the
traditional branch based banking systems and these payment methods have
provided an opportunity for banks to reach customers who cannot be
reached profitably with traditional branch based banking systems,” she
Mampitiya said Sri Lanka has observed a remarkable growth in mobile
phone penetration within the country in the recent past and the number
of phones in use has now surpassed the population.
“Sri Lanka has a well-established bank network consisting of 1981
bank branches as at June 2011 spread throughout the country.
In addition several banks have established branches in the North and
East to increase banking activities to cater to the anticipated rapid
economic growth and to reach the unbanked population,” she said.
There are two basic models on mobile banking, namely bank led model
and non-bank led model. The bank led model involves extending banking
facilities to its consumers using the mobile channel.
“However, any other model operating anywhere is a variation of these
“The bank led model involves extending banking facilities to its
customers using the mobile channel. The agents are appointed by the
banks and are directly under their supervision which reduces the e-money
risk significantly,” Mampitiya said.