Management Discussion and Analysis

Business Partner Capital

Since our inception, we have established long-term, interdependent relationships with multilateral and bilateral institutions that share similar goals and values.

Multilateral and bilateral institutions

  • The World Bank
  • European Investment Bank (EIB)
  • Asian Development Bank (ADB)
  • Kreditanstalt fur Wiederaufbau (KfW) – Germany
  • Deutsche Investitions-und Entwicklungsgesellschaft (DEG), a subsidiary of KfW – Germany
  • Nederlandse Financierings – Maatschappij voor Ontwikkelingslanden N.V. (FMO) – The Netherlands
  • Proparco, a subsidiary of Agence Française de Développement (AFD) – France
  • RAKBANK, also known as the National Bank of Ras Al Khaimah – United Arab Emirates
  • BlueOrchard Microfinance Fund – Luxemburg
  • Commerzbank Aktiengesellschaft
  • Commerzbank Finance & Covered Bond S.A.

Our primarily role in these partnerships includes serving as an effective credit institution for on-lending funds to end users, acting as the project manager in implementing credit programmes, administering grant funds, and paving the path for market development and capacity building.

In 2019, we negotiated a medium-term loan of USD 75 Mn through Commerzbank Dubai. This facility was for General banking business purposes in order to support balance sheet growth.

The Bank continued to be among the 10 Participating Financial Institutions (PFI) selected by the Government of Sri Lanka (GoSL) and the Asia Development Bank (ADB) to on-lend ADB’s funds to the Small and Medium Enterprise (SME) sector and for Rooftop Solar Power Generation projects.

With the Small and Medium Enterprises (SME) sector being a vital part of the Sri Lankan economy, being a PFI of this credit line has helped the Bank continue its on-going mission to nurture small and medium businesses to scale up at a crucial time in the country’s economic growth. Further, being a PFI of the Rooftop Solar Power Generation loan scheme also helped DFCC to continue its contribution to the renewable energy generation efforts in Sri Lanka.

The Resource Mobilisation Unit continues to build upon the relationships the Bank has established over time by actively engaging with partner institutions to secure potential funding lines to support the Bank’s rapid growth.

Correspondent banks

The Bank maintains relations with over 250 global correspondent banks which also comprise some of the world’s largest financial institutions. The Bank entered into new relationships with the following banks in 2019 to facilitate customer transactions:

  • Commercial Bank of PLC in Bangladesh
  • Tamilnad Mercantile Bank Ltd. in India
  • Alliance Bank Malaysia Berhad in Malaysia

DFCC Bank was honoured internationally by HSBC USA on recognition of “US Dollar Straight Through Processing Excellence Award” 2018 for Bank’s contribution based on strict selection criteria, evaluating many of their correspondent banks. This award signifies to its customers and correspondent banks that DFCC Bank’s payment processing capabilities are on par with international standards. 

The entities listed below act as the Bank’s nostro agents in the respective countries:

Bank Currency Country
Bank of Ceylon (UK) Limited GBP UK
Bank of Ceylon ACU $ India
Bank of Ceylon ACU $ Maldives
Bank of China CNY China
Bank of New Zealand NZD New Zealand
Commerzbank AG CAD Germany
Commerzbank AG EUR Germany
Deutsche Bank Trust Company Americas USD USA
HDFC Bank ACU $ India
Kookmin Bank USD South Korea
Mashreq bank PSC ACU $ India
Mashreq bank PSC AED UAE
Mashreq bank PSC USD USA
Standard Chartered Bank (Pakistan) Limited ACU $ Pakistan
Standard Chartered Bank ACU $ Bangladesh
Standard Chartered Bank ACU $ India
Standard Chartered Bank AUD Singapore
Standard Chartered Bank EUR Germany
Standard Chartered Bank GBP UK
Standard Chartered Bank SGD Singapore
Standard Chartered Bank USD USA
Sumitomo Mitsui Banking Corporation JPY Japan
Uni Credit Bank AG EUR Germany
ZurcherKantonal Bank CHF Switzerland

The supply chain management and procurement policy

We have a fair, transparent, and stringent procurement policy in place which clearly defines how goods and services are procured by authorised employees, whilst ensuring that the selection of suppliers and the acquisition of goods and services are done in a non-discriminatory and economically sound manner.

A Procurement Committee (PC) led by an Executive Vice-President acts as a control measure for the procurement function of the Bank. Major IT-related procurements are submitted to an IT Steering Committee (ITSC) and referred for PC approval upon the recommendation of the ITSC. Other general procurements are either submitted to the PC for approval or to higher approving authorities upon the recommendation of the PC. Independent parties may review large value and/or specialised procurements, if required.

Suppliers of goods and services are required to register themselves with the approval of the PC, and registered suppliers are subject to review once in every two years. Suppliers undergo a rigorous evaluation process to determine quality, delivery time, pricing, after sales support, technical proficiency, and references. The Bank prefers to source its requirements from local suppliers as part of its commitment to helping local communities and businesses flourish. Suppliers may also opt to receive financial advice and assistance from the Bank.

Partners for service delivery

DFCC Bank partners with a variety of reputable vendors for various services such as:

  • Cash collection, counting, storage, delivery, and transport of security goods
  • Printing services including printing of account and credit card statements, cheque books, etc.
  • Processing of payroll, and other reimbursements
  • Personalisation, and delivery of chip-based credit cards
  • Internal audit functions
  • IT support
  • Help desk problem management

The Bank also partners with over 1,500 merchants who are a part of the DFCC Virtual Wallet network.

Strategic alliances

DFCC Bank is diversified into several entities; the DFCC Group provides a range of services to the financial sector through the following subsidiaries:

  • DFCC Consulting (Pvt) Limited
  • Lanka Industrial Estates Limited
  • Synapsys Limited
  • Acuity Partners (Pvt) Limited (Joint venture)
  • National Asset Management Limited (Associate company)

DFCC Consulting (Pvt) Limited

DFCC Consulting (Pvt) Limited was established in 2004 and is a fully-owned subsidiary that engages in project consultancy and related fields. Through a shared resources model, DFCC Consulting draws upon a resource pool of nearly 600 executive staff from DFCC Bank and a pool of reputed external experts from various fields.

The Company supports DFCC Bank through its expertise in the fields of environment, engineering, and renewable energy and carries out international consultancy assignments, sometimes in partnership with overseas consulting firms.

Currently, the Company has set up and is engaged in administering the Project Implementation Unit designated to support an ADB funded rooftop solar line of credit.

Lanka Industrial Estates Limited

Lanka Industrial Estates Limited (LINDEL) occupies a strategic location in Sapugaskanda on 125 acres of land, near the Colombo Harbour and Bandaranaike International Airport. The industrial estate offers land and buildings for lease, and the infrastructure for setting up industries. 95% of the leasable land has been let to industries, with 20 production facilities currently operating at the premises, six of which are owned by Fortune 500 Companies.

Synapsys Limited

Synapsys Limited was established in 2006 and is a fully-owned subsidiary of DFCC Bank that provides software development, MIS solutions, and IT support to DFCC Bank and other customers. With an array of innovative products and services that include two flagship and NBQSA award-winning platforms, the Company supports banks, capital markets, insurance, and retail payments across Asia and the Pacific region.

We have developed a number of interdependent business relationships with partners who share our values. We deliver sustainable value to our partners through trust, transparency, and responsible behaviour.

Memberships in industry associations

DFCC Bank has acquired membership and established alliances with various industry associations and organisations that enable networking opportunities and contribution to industry standards. Associations include:

  • American Chamber of Commerce in Sri Lanka
  • Association of Board/Company Secretaries of Banks
  • Association of Compliance Officers of Banks Sri Lanka
  • Association of Development Financing Institutions in Asia and the Pacific
  • Association of Professional Bankers – Sri Lanka
  • Banks’ CIO Forum
  • BNI Inspire Charter-Colombo Sri Lanka
  • Central Bank of Sri Lanka
  • Chamber of Construction Industry Sri Lanka
  • Chartered Institute of Management Accountants
  • Colombo Stock Exchange
  • Fitch Ratings Lanka Ltd.
  • Genesis Software (Pvt) Ltd.
  • Lanka Clear (Pvt) Ltd.
  • Lanka Fruit and Vegetable Producers, Processors, and Exporters Association
  • Lanka Swift User Group
  • Leasing Council of Bankers of Sri Lanka
  • Mary Martin Book Sellers Pte Ltd.
  • Payment Card Industry Association of Sri Lanka
  • Reed Business Information Ltd.
  • Securities and Exchange Commission of Sri Lanka
  • Sri Lanka Forex Association
  • The Association of Banking Sector Risk Professionals of Sri Lanka
  • The Ceylon Chamber of Commerce
  • The Ceylon National Chamber of Industries
  • The Employers’ Federation of Ceylon
  • The European Chamber of Commerce of Sri Lanka
  • The Financial Ombudsman Sri Lanka (Guarantee) Limited
  • The Institute of Bankers of Sri Lanka
  • The Institute of Chartered Accountants of Sri Lanka
  • The Mercantile Service Provident Society
  • The National Chamber of Commerce of Sri Lanka
  • The Sri Lanka Banks’ Association (Guarantee) Limited