Challenges & Opportunites in Banking Industry

 

Opportunities

 

Using Data and AI for Personalization at Scale

When it comes to personalization, consumers are pretty clear what they want. They want recommendations that they wouldn’t have thought of themselves, and a clear direction about what they should buy when they are shopping for a product or service. In other words, financial institutions should show consumers that they have been listening and learning from their activities.

People also want their banking providers to know them, look out for them, and reward them no matter what channel they use or what time of the day or night it is. This includes letting them know their overall financial status on demand. Finally, banks and credit unions must continuously show the value they provide for the insight consumers let them collect.
 

With artificial intelligence (AI), there is the potential to transform customer experiences and establish entirely new business models in banking. To achieve the highest level of results, there needs to be a collaboration between humans and machines that will provide a humanized experience that is different for each customer.

Open Banking

While the largest tech firms Google, Apple, Facebook, Amazon (GAFA) are leading the charge towards implementing open API platforms, the model they use may not be the one most banking organizations should follow. Not only do most financial institutions lack the technical expertise or the financial wherewithal to implement these models and support a vast developer community, the ability to acquire new customers to replicate their success is unlikely.

That said, an open banking platform future is within sight for financial organizations of all sizes. For instance, account aggregation is becoming much more commonplace, with firms like Citibank developing completely new digital-only products with this capability. Similarly, traditional banking functions like taking deposits or making payments could become integrated within non-traditional organizations (Starbucks, Amazon, etc.). In the end, key managers in virtually all financial organizations should already be meeting to determine what their organization may look like in the future and how services will be created, marketed and distributed.

Digital-Only Banks

Creating a digital-only banking proposition involves aligning new technologies and solutions with the legacy bank’s existing design, brand value and business model. There must be the involvement of leaders who are tech-savvy, building technology with a customer-centric approach. Financial institutions can also leverage the technical capabilities of fin-tech startups to assist in the development of digital-only banks.

Having a digital-only proposition may become increasingly important as more non-traditional banking choices are available to consumers today, enticing them to switch banks for better-customized services and value propositions.

Cybersecurity

There is no doubt that the increased use of technology and digital channels have made the banking industry more susceptible to cyber-attacks and have forced banks and credit unions to be in the unenviable position of playing ‘catch up’. New open banking regulations that require banks to share customer information with third-party providers make the industry even more vulnerable.

Now more than ever, banks must become proactive in their handling of data protection and managing cybersecurity risks. Unfortunately, consumers want the best of both worlds — ease of use and increased protection of data and identity. This will require the banking industry to implement multi-factor authentication, secure applications, digital signatures, and other forms of security such as biometrics.

Cloud-Based Solutions

According to the American Bankers Association, banks are generally receptive to cloud-based core banking, with 29% saying they would consider it, 50% saying they were unsure and 21% saying they would not consider it. Many experts think cloud-based core banking will soon become more mainstream, with many believing that the majority of new core banking projects launched by 2020 will be in the cloud.

Much of the momentum around cloud-based solutions is because any financial institution relying on a legacy infrastructure cannot compete against faster and more innovative digital competitors. Implementing cloud technology automates operations and workflows, resulting in increased efficiency, security and cost savings.

Whether banks go with a public or private cloud, security of data, identities, etc. is essential. And while cloud-based core banking may not be the biggest trend right now, banks and credit unions should consider this one of the most important technology trends in the future.

Challenges

 

Not making enough money.

Despite all of the headlines about banking profitability, banks and financial institutions still are not making enough return on investment, or the return on equity, that shareholders require.

Consumer expectations. 

These days it’s all about the customer experience, and many banks are feeling pressure because they are not delivering the level of service that consumers are demanding, especially in regards to technology. 

Increasing competition from financial technology companies. 

Financial technology (FinTech) companies are usually start-up companies based on using software to provide financial services. The increasing popularity of FinTech companies is disrupting the way traditional banking has been done. This creates a big challenge for traditional banks because they are not able to adjust quickly to the changes, not just in technology, but also in operations, culture, and other facets of the industry. 

Regulatory pressure. 

Regulatory requirements continue to increase, and banks need to spend a large part of their discretionary budget on being compliant, and on building systems and processes to keep up with the escalating requirements. 

These challenges continue to escalate, so traditional banks need to constantly evaluate and improve their operations in order to keep up with the fast pace of change in the banking and financial industry today. 

 

SME Banking

SME finance is the funding of small and medium-sized enterprises and represents a major function of the general business finance market – in which capital for different types of firms are supplied, acquired, and cost or priced. Capital is supplied through the business finance market in the form of bank loans and overdrafts; leasing and hire-purchase arrangements; equity/corporate bond issues; venture capital or private equity; asset-based finance such as factoring and invoice discounting, and government funding in the form of grants or loans.

SME in Sri Lanka

In Sri Lanka, there is no clear definition for SMEs. Different government agencies use different criteria to identify SMEs. Among these criteria are the number of employees, the size of fixed investment, and the nature of the business and the sector, i.e. formal or informal, in which the industry operates. There are deferent terms used in different documents to identify this sector. Small and Medium Industries or Enterprises, Micro Enterprises, Rural Enterprises, Small and Medium activities, Cottage and Small Scale Industry,etc., are some of the terms.

SMEs have been identified to play a crucial role in the economic development process by developed as well as developing countries. It is said to be the backbone of the economies in developing as well as developed nations. It is even more important to developing countries as poverty and unemployment are burning problems in those economies.

SMEs perform a strategic role in Sri Lanka. It accounts for a very high percentage of the total number of industrial and business establishments as in other developing countries.SMEs promote economic growth by import substitution as well as through direct exports, and they mostly supply goods and services to large directly exporting ventures and thereby contribute towards alleviating balance of payments difficulties.  

According to the industrial census conducted by the Department of Census and Statistics in 1983, there were a total of 102,721 registered and informal industrial units in the country producing various types of products and employing 639256 persons. The survey findings indicated that industrial establishments below 5 employees accounted for 84% of total establishments and 28% of total employment, but accounted for only 7.5% of the total output and 7.0% of the value added in the industrial sector. Enterprises having over 5 employees represented less than 15.7% of all establishments but accounted for 92.5% of the output and 71.6% of total employment.

Importance of SME 

The economic and banking importance of the small and medium enterprise (SME) sector is well recognized in academic and policy literature. It is also acknowledged that these actors in the economy may be under-served, especially in terms of finance. This has led to a significant debate on the best methods to serve this sector. 

Although there have been numerous schemes and programs in different economic environments, there are a number of distinctive recurring approaches to SME finance. 

• Collateral based lending offered by traditional banks and finance companies is usually made up of a combination of asset-based lending, contribution based finance, invoice discounting and factoring based finance, using reliable debtors or contracts.
• Information based lending usually incorporates financial statement lending, credit scoring, and relationship lending. 
• Viability-based financing is especially associated with venture capital.
• Reliable for all the small ticket loan.
• The entity type not depending on the value of the business.

Problems associated with SME.

A major problem in the SME sector is the shortage of capital due to a number of reasons such as lack of access to bank facilities, lack of knowledge of bank procedures, long delays and inability to provide guarantees. Although there are some loan schemes available, the high rate of interest makes the venture unattractive.

The sector has a weak institutional base due to lack of management skills. Management skills are the critical success factors in all of the businesses thus Small Business has no exception. Small business does not mean that they are scaled down version of big business. It has to deal with all most all the functions that large businesses have to deal with. So, lack of managerial skills of owner/manager may hamper the progress of the business 

The use of obsolete or inappropriate technology results in low productivity, low quality of products, and a high rate of rejection of products, resulting in higher costs to the producer and a reduction in market competitiveness. Again, this is also due to the weak financial base and lack of managerial skills. The weak financial position may hamper the upgrading of technology; expansion of production capacity, production efficiency, and does not allow the firm to go for new and sophisticated technology and spending on training and development of its workforce to increase the productivity. In some cases, although the fund is available, the management does not utilize them in areas such as training and development as the management do not understand the positive impact of training on business success.  

The lack of SME policies and institutional support to protect and encourage SMEs are also hampers the progress of this sector. Especially, small businesses are vulnerable to changes in the environment. Due to the inherent nature of smallness, it will not be able to compete with big businesses. For example, with the introduction of open economic policies in 1977, a large number of handloom textile enterprises had to be abandoned by owners. So, the lack of clear policies, incentives, and institutional support will reduce the survival rate and progress of ventures in this sector.

 

Evaluation of Banking produts: Hatton National Bank

Personal Banking products

Savings :  

• General savings
• Regular savings
• Capital savings
• HNB Adhishtana 

unique savings account that will allow senders of remittances from the Middle East and Gulf Region and receivers in Sri Lanka

• Higher interest rates based on the account balances
• Free Internet banking for the first year
• Free mobile banking for one year
• Free HNB Visa International Debit Card
• Immediate loan facilities of up to 90% of your account balance
• Money market savings accounts 

A Money Market Savings Account can come in handy for an individual, a corporation or an institution if you make a minimum initial deposit of Rs.500,000/-. based on the inter-bank call money market rate

• Capital transaction rupee  account (CTRM)

All existing Non- Resident Rupee Accounts (NRRAs), Non- Resident Blocked Accounts (NRBAs) and Migrant Blocked Accounts (MBAs) have now merged and re-designated as Capital Transactions Rupee Accounts (CTRAs).

• Minor Savings

• Singithi Kirikatiyo below 5yrs
• Singithi Lama Newborn to 12 yrs
• Singithi Surakum foreign Currency
• Singithi Surakum is a special account for your child in foreign currency.
• Diridaru Scholarship Scheme

HNB Diri Daru Scholarships for Grade five, O/L, A/L & for special achievements.

• Minor Savings Visa
• HNB Wally-E
• Pre-Paid Visa Cards for Teens and Parents

• Youth Savings
• HNB Teen Accounts
• HNB You

• HNB Salary SMART

Route your salary and get your HNB Shopping Debit Card that gives you the equivalent of 3 times your salary. Get more from your pay, to live the life you want. 

• HNB FIT Account

• Senior Citizens
• Senior Citizens Scheme

If you are 55 or above you are eligible to obtain a HNB senior Citizens’ savings or term account that comes with three special schemes as well as a special privileges card with benefits

• Sathkara for Gov.Servents

enjoy these exceptional benefits in savings accounts, fixed deposits, and personal loans, is to deposit your pension in an HNB Sathkara account.

• Term Deposits

• Fixed deposits
• Call Deposits

• Foreign Currency Accounts
• Personal Foreign Currency Accounts
• Business Foreign Currency Accounts
• Diplomatic Foreign Currency Accounts
• Foreign Currency Accounts Advantage Accounts
• Inward investment accounts
• Outward investment Accounts
• Senior foreign national special accounts

Loans:

• Personal Loans
• Shanthi home loans

To buy your first home, move to a new residence, investing in property or looking to switch to a better deal. HNB Shanthi Home Loans have many options available

• Loans for professionals

Housing and Educational loans at lower rate

• Cards
• International debit card
• HNB Credit cards
• HNB Travel card
• HNB Affinity credit cards

• Remittance
• Current Account
• Shareline current accounts
• Current accounts

Leasing:

Pawning:


New products:

• SOLO

Payment platform through a mobile app using QR codes. A cardless payment system

• AFFY

A mobile app that can customize their own website with personal products 

Corporate banking products

• Trade Services

• Issuance of Bank Guarantees

HNB, with its worldwide network of correspondent banks is one of the foremost issuer of bid bonds, Performance bonds, advance Payments Guarantees, Retention bonds and letters of Guarantee for projects and tenders in Sri Lanka

• International Trade Services

As a premier trade bank in Sri Lanka, HNB has long established correspondent banking relationships worldwide with reputed international banks.

• Services in Imports

• Structuring Letters of Credit.
• Arranging LC Confirmations through our Correspondent banks worldwide at very competitive rates.
• Structuring import facilities in line with trading patterns.
• Issuing of Special Forms of Letters of Credit.
• Handling of Import Bills on Collection.
• Issue of Shipping Guarantees.
• Endorsement of Documents Received-in-Advance.
• Avalization of Collection Bills.
• Financing Imports.
• Facilitation of Entrepot Trade Business.
• Handling Entrepot Trade Transactions.
• Processing of Advance Payment/Open Account Transactions.
• Arranging Marine Insurance facilities for the movement of cargo across International boundaries

• Services in Exports

• Advising of Letters of Credit.
• Handling Transferable Letters of Credit.
• Confirmation of Letters of Credit.
• Negotiation of Export Documents Under LC.
• Handling Export Bills on Collections.
• Purchase / Discount of Export bills.
• Pre-shipment Facilities.
• Assistance in Preparation of Export documents.

• Treasury Services

Spot transactions are simple contracts to buy or sell currency at spot exchange rates for spot delivery normally within 2 working days.

• Islamic Banking Services

• Murabaha Import Revolving Facility.
• Murabaha Local Trading Revolving Facility.
• Diminishing Musharakah – Personal Housing Finance Facility.
• Diminishing Musharakah – Commercial Property Finance Facility.
• Diminishing Musharakah – Working Capital Finance Facility.
• Diminishing Musharakah – Vehicle/Machinery Finance Facility.
• Diminishing Musharakah – Project Finance Facility.
• Wakala Financing.
• Ijara – Vehicle Leasing Facility ( Will be introduced shortly).

• Shipping/Bank Guarantee/Letter of Guarantee Facilities.

• Letter of Credit – Import Facilities.
• Document Handling and Collection Facilities.

• Debit Card Facilities.
• Internet Banking Facilities. 
• SMS and Mobile Banking Facilities. 
• Extended Banking Facilities. 
• Premier Banking Services

. 

 General Corporate services

 

Project Financing solutions focus on assisting entrepreneurs based upon overall project viability after evaluating the project prospects in following sectors.

• Food & Beverage
• Garments
• Health Services
• Leisure – Local, Overseas
• Manufacturing
• Condominium Apartment Projects
• Power & Energy
• Real Estate
• Tea & Rubber
• Infrastructure Development

And provides following facilities,

• Term Loans
• Working Capital Loans
• Bridging Finances
• Overdraft facilities, Letter of Credit, Import Loans, Packing Credit, Guarantees etc. related to the project

(Available in Sri Lankan Rupees and/or a prescribed Foreign Currency)
 
SME Banking Facilities:

• SME lending

offer a comprehensive range of products and services to our SME clientele such as Term Loans, Working Capital Financing, Project funding, Import & Export Loan facilities and Distributor Financing.

• Development Banking

The Development Banking Division provides services to the Agro finance and Micro finance sectors.

Under Agro Finance following services are provided

• Development Credit Scheme

 This scheme offers financial assistance for perennial crop cultivation, farm machinery, fisheries, animal husbandry and other income generating agro based development activities. The loan amount and repayment period can be arranged to suit the cash flow of the project, with an attractive fixed or floating interest rate.

• New Comprehensive Rural Credit Scheme (NCRCS)

This scheme provides financial assistance of up to Rs.540,000 for the cultivation of short term crops such as paddy, chillies, onions and upcountry vegetables and up to Rs.500,000 at the rate of 7% per annum for nurseries.

• Kapruka Ayojana Credit Scheme (Coconut Development)

Under this scheme, up to Rs. 2 million can be provided as loans at the rate of 9% per annum for coconut plantations, intercropping, replanting, nursery development and purchase of farm equipment.

• Commercial Scale Dairy Development Loan Scheme (CSDDL)

For financing dairy and dairy related activities such as purchase of cows, construction of cattle sheds, purchase of dairy processing equipment and storage facilities up to a value of Rs. 25 million, at an interest rate 6% per annum.

• Short Term Crop Purchase Loans 

To purchase agricultural produce (paddy and other grains). The loan amount can be arranged to suit the cash flow of the project.

• Saubagya Loan Scheme

To purchase machinery and equipment for manufacturing, services and agro based industries. Financing up to Rs. 25 million at an interest rate of 9% per annum.

Central Bank Sri Lanka

A central bank is a financial institution given privileged control over the creation and distribution of money and credit for a nation or a group of nations. In modern economies, the central bank is usually responsible for the formulation of monetary policy and the regulation of member banks. The Central Bank of Sri Lanka (CBSL) is the monetary authority of Sri Lanka. CBSL is administered by a five-member Monetary Board, comprising the Governor as chairman, the Secretary to the Ministry of Finance and Planning, and three members appointed by the President of Sri Lanka on the recommendation of the Minister of Finance with the concurrence of the Constitutional Council.

 

Development of Central Bank of Sri Lanka

• Before the establishment of the Central Bank, the Currency Board System established under the Paper Currency Ordinance No.32 of 1884 and functioned as the country’s Monetary Authority.
• But it had a very narrow in its capacity. As this system was insufficient for a developing country upon gaining political independence.
   
• With the assistance of American economist Mr. John Exter, the Central Bank of Ceylon was established by the Monetary Law Act (MLA) No.58 of 1949 and commenced operations on August 28, 1950.
• Renamed as the Central Bank of Sri Lanka (CBSL) later in 1985.
• By a modernization program, CBSL reshaped its objectives in 2000.

Mr.Indrajith Coomaraswamy (current governor)

 

John Exter (1st governor)

 

 

 

 

 

 

 

 

 

The Regulatory Responsibilities of Central Bank of Sri Lanka

 

The scope of the Central Bank of Sri Lanka mainly spread through the monetary system and the financial system of the country. Central Bank of Sri Lanka is responsible for conducting monetary policy in Sri Lanka, which mainly involves setting the policy interest rates and managing the liquidity in the economy. The monetary operations of the Central Bank influences interest rates in the economy, affecting the behavior of borrowers and lenders, economic activity and ultimately the rate of inflation. Therefore, the Central Bank uses monetary policy to control inflation and keep it within a desired path.

Financial System Stability is one of the main objectives of the Central Bank. A stable financial system is capable of gathering savings and allocating them to productive investments, managing risks and settling payments, without materially affecting economic growth and welfare of the people even during economic shocks and stressful situations. This helps to create a positive environment for efficient financial intermediation to promote investment and economic growth

Overall Key roles of Central bank of Sri Lanka.

 

Main Roles

• The conductor of Monetary Policy
• The conductor of the Exchange Rate Policy
• Manager of the Official International Reserves
• Monitor of the Financial System
• Licensing, Regulating and Supervising of Banks and Selected Non-Bank Financial Institutions
• Provision of Settlement Facilities and the Regulation of the Payment System
• Issuer and Distributor of the National Currency
• Banker to the Government and its agencies, and provision of current account facilities to LCBs and non-commercial bank Primary Dealers for Government Securities

Agency Roles

• Manager of the Public Debt
• Manager of Foreign Exchange
• Fund Manager and Custodian of the Employees’ Provident Fund
• Facilitating Financial Inclusion
• Financial Intelligence services to prevent, detect, investigate and prosecute Money Laundering and Terrorist Financing

In order to perform those regulatory functions the legislative of the country has given the empowerments through following Acts, to the Central Bank

 

• Monetary Law Act, No. 58 of 1949 (Incorporating Amendments up to 30th June 2014)

An Act to establish the monetary system of Sri Lanka and the Central Bank to administer and regulate the system and to give and impose upon the Monetary Board of the Central Bank powers, functions, and responsibilities necessary for the purpose of such administration and regulation, and to provide for connected matters. This reprint which incorporates all amendments made to that Act up to 30th June 2014 is, however, not a statutory reprint. It is only issued for purposes of convenience. 

 

• Banking Act, No. 30 of 1988

An Act to provide for the introduction and operation of a procedure for the licensing of persons carrying on banking business.

• Finance Business Act, No. 42 of 2011 & Finance Leasing Act, No.56 of 2000

An Act to provide for control and supervision of finance companies and to financial leasing businesses.

 

• Micro finance Act, No. 6 of 2016
• Foreign Exchange Act No. 12 of 2017
• Employees Provident Fund (Amendment) Act, No 2 of 2012
• Local Treasury Bills Ordinance No. 8 of 1923

 

Central Bank and the Non-banking Financial businesses.

The Supervision of Non-Bank Finance and Leasing Sector is managed through Examinations, Continuous monitoring, Giving regulatory approvals, Issuance of directions and prudential requirements, Reviewing into companies carrying on finance business and accepting deposits without authority and investigating into public complaints. The directions, regulations, and rules issued under the provisions of the Finance Business Act  No. 42 of 2011 mainly cover minimum capital adequacy, liquidity requirements, provisioning for bad and doubtful debts, single borrower limits, limits on equity investments, etc. In the event of any non-compliance with the prudential requirements, the Financial Business Act empowers the Monetary Board and Director of Supervision of Non-Bank Financial Institutions (SNBFI) to take necessary corrective actions such as penalty, business restrictions, license cancellation and further investigation of books etc.

Non-Banking financial businesses regulating by the Central Bank of Sri Lanka.

 

• Licensed Finance Companies (LFCs)    

A finance company is an organization that makes loans to individuals and businesses. Unlike a bank, a finance company does not receive cash deposits from clients, nor does it provide overdraft and current account services common to banks, such as checking accounts. Finance companies make a profit from the interest rates they charge on their loans, which are normally higher than the interest rates that banks charge their clients. The regulation and supervision of LFCs are governed by the Financial Business Act No. 42 of 2011 which was enacted on 09.11.2011.

• Specialized Leasing Companies (SLCs)

Specialized Leasing Companies are not permitted to accept money from the public as deposits. However, they may borrow money by issuing debt instruments such as promissory notes, commercial paper and debentures, etc. with the prior approval of the Director of Supervision of Non-Bank Financial Institutions. In terms of Finance Leasing Act, No 56 of 2000 (FLA), a certificate of registration issued by the Director of Supervision of Non-Bank Financial Institutions is necessary to conduct finance leasing business having prescribed amount of capital.

• Primary Dealers

A primary dealer is a pre-approved bank, broker-dealer, or other financial institution that is able to make business deals with the Central bank of Sri Lanka, such as underwriting new government debt. These dealers must meet certain liquidity and quality requirements. The regulatory and supervisory framework for Primary Dealers (PDs) in government securities is specified by the regulations issued under the Local Treasury Bills Ordinance and the Registered Stocks and Securities Ordinance. The Central Bank is authorized to regulate and supervise Primary Dealers, which involves the appointment of Authorized Primary Dealers, issuing of prudential directions and determinations under the laws, examinations and continuous surveillance of Primary Dealers, enforcement of regulatory actions and suspension and cancellation of the appointment of Primary Dealers for non-compliance with the laws.

• Authorized Money Brokers

A money broker is an intermediary who arranges short-term loans usually in large amounts for borrowers. Authorized Money Brokers (AMBs) are regulated under the Money Broking Regulations No. 1 of 2013 issued under Section 10 (c) of the MLA, No. 58 of 1949. There are two supervisory methods for this purpose. One is the off-site surveillance where Authorized Money Brokers are supervised through information obtained through online and offline methods. The second method is on-site surveillance where CBSL staff visit the premises of Authorized Money Brokers to check whether they comply with the regulations in force.

 

 

History of money in Sri Lanka

Sri Lanka is a country with a long history and a similarly long and strong economic history. Coins used through different time periods of a country play an important role when studying the history of our country. Although small in size, a coin has the ability to give a lot of information about the economic and cultural history of the country where it was used, through signs that remain on them.

 

Kahapana 

 

The earliest unit of currency known in the island is referred to as a Kahapana. They are called Puranas in Sanskrit and eldings in English. They are commonly known as punch-marked coins, due to the marks or symbols that had been struck either on one side or both sides of the coin. Kahapanas are reckoned to have been produced by cutting strips of metal from hammered sheets. The known coins have been of many shapes, such as round, square, rectangular or oblong. Their weight had been adjusted by clipping the corners. The metal of the Kahapana has been found mostly to be silver.

Swastika Coin 

 

Apart from the ‘Kahapana’ coin with its many markings, other types of coins were also used during the Anuradhapura era. The tusker and swastika coin is one such type. It is a small Copper coin. A chosen few markings that occasionally appeared on the ‘Kahapana’ were added in the making of this particular coin.

Lakshmi Plaques

Coins with a female figure carved into the face were first circulated in Sri Lanka as early as 3 B.C - 8 A.D. It is believed that the woman on the coin is the goddess Lakshmi. Because of this, the coin is known as the ‘Lakshmi Thahadu (metal sheet)’. These coins were produced in two ways: the coins were either plated or engraved pieces of Copper. They also came in different sizes. The plated kinds were 1 ¼ inch in length and ½ inch in width. The coins are a mixture of approximately 60 percent Lead and 15 percent Copper.

Kahavanu

A Sinhalese gold coinage known as the 'Kahavanu" had been in circulation in the island from about the 7th to 8th centuries AD. These coins were either gold or gold-plated. They were distinguishable in terms of value as ‘Kahawanu’, ‘Ada Kahawanu’, ‘De Aka’ and ‘Aka’. On the face of the coin, there is a human figure standing on a lotus stem. The figure appears to be clad in something similar to a ‘Dhothi’. The figure’s upturned left hand is holding an object against his tilted face. Some believe that the figure is ‘Kuwera’ the God of Wealth. There is a conch and Lotus flower on the flipside of the coin.

Massa Coins 

 

King Vijayabahu I who was responsible for toppling of the Chola dynasty, uniting the country and the inception of the Polonnaruwa Kingdom; also produced ‘Kahawanu’. He added his name to the face of the coin. Thus he is the first Sinhalese King to have had his name engraved on coins that were issued during his reign. This coin was known as ‘Massa’.

 

Duits

 

The coin that was most commonly used in transactions of the Dutch period is the Duit. This is a type of very small Copper coin. Due to its size, it was very inconvenient to count large numbers of Duits during transactions. To lessen the inconvenience, in 1737, numbers of Duits were joined together to form strings or chains of Duits. For instance, when 8, 16 or 24 Duits were strung together they represented the values of 2,4, and 6 Thuttu respectively. 

Rupee &  Cents

 

In the time of British – Sri Lanka, currencies such as Farthing, British Thuttu, Pathaga (Silver Coin), Panam, Indian Rupee, ½ Rupee and ¼ Rupee were in use. The cent, two -cent, five cents, ten cents, twenty-five –cent and fifty –cent coins were also used as units that had values less than the Rupee.