A Journey Into the Heart of Banking – S. Renganathan

Sivakrishnarajah Renganathan knew he’d found what he wanted to do for the rest of his life within the first month of working at the Commercial Bank of Ceylon PLC. S. Renganathan, the Managing Director / Chief Executive Officer at the Commercial Bank of Ceylon PLC, had served the Bank throughout the entirety of his career for more than 39 years and had held several key positions in the Bank. He led the team to acquire the Banking operations of Credit Agricole Indosuez in Bangladesh and had established the Bank’s operations in a successful manner with high rating during his first five years tenure.

Renganathan, a Fellow of the Chartered Institute of Management Accountants, UK (FCMA), Chartered Global Management Accountant (CGMA), Fellow of the London Institute of Banking & Finance, UK (FLIBF) and a Fellow of the Institute of Bankers Sri Lanka (FIB), had received extensive Leadership, Management and Banking training in the USA, London, Japan, Thailand, Abu Dhabi, India and many other countries.

In July 2003, he was appointed as the first Country Manager of the Bank’s Bangladesh operations which was the first-ever overseas operation of the Bank. On his return to the country, he was appointed as the Bank’s first Chief Risk Officer (CRO) and was responsible for preparing and establishing the Bank’s Integrated Risk Management Division and Policies. In April 2011, he was appointed as the Deputy General Manager – Personal Banking Division, with overall responsibility to manage the Bank’s entire branch network. Later, in July 2014, he was appointed as the Chief Operating Officer and an Executive Director of the Bank Board. Ultimately, in July 2018, he was appointed to the pivotal role of MD/ CEO of the Bank which has an asset base of above LKR 1.5 trillion and gross revenue of approximately LKR 150 Billion.

In addition, Renganathan serves as the MD and a Board Member of the Commercial Development Company PLC (Listed in CSE), and Commercial Bank of Maldives Private Limited as the Deputy Chairman. He is a Director of the Lanka Financial Services Bureau Limited and the Sri Lanka Banks’ Association (Guarantee) Limited.

He is also a Vice Chairman of the International Chamber of Commerce Sri Lanka, Executive Member of The Ceylon Chamber of Commerce, Executive Member of The Council for Business with Britain, Member of the Sri Lanka Institute of Directors, Member of the Council of Employers Federation of Ceylon  and the Treasurer of the Sri Lanka India Society and a Consultant to the District Governor of Lions Club International – District 306 B1.

Renganathan has served among others, as a Member of the General Council of the Institute of Bankers of Bangladesh, Founder President of the Sri Lanka Bangladesh Chamber of Commerce and Industry, Executive Member of the Foreign Investors Chamber of Commerce and Industry in Bangladesh, Past Secretary of the Executives Association of the Bank, Cabinet Treasurer of the Lions Clubs International – District 306 B1 for three years and a member of the Cabinet for the past 5 years.

In recognition of his social service, he was appointed by the Ministry of Justice as a whole island Justice of Peace.

Speaking about the challenges Renganathan had faced as the Bank’s first Chief Risk Officer, he stated five major challenges. “The first challenge was securing balanced minded officers to manage the three major risks of the Bank. The second challenge was to identify the key risk indicators under the credit, operational and market risk faced by the Bank. Another challenge was creating awareness among the internal staff about the importance of risk management. “I, also, had to manage the teething issues in implementing the credit risk assessment procedures without affecting customer service levels. The major challenge was to build a strong and effective risk assessment culture within the Bank,” Renganathan said.

There was a sluggish economic growth in 2019 due to Easter attacks, volatile political situation leading up to an election, and unfortunately, what promised to be a year of economic revival, 2020, brought the COVID-19 global pandemic to Sri Lanka, affecting many sectors of the country, however, Renganathan as the MD/ CEO had steered the Bank well even during such a problematic period. “The Bank went beyond the industry norms and the regulations and directions issued by the Central Bank of Sri Lanka (CBSL) to assist customers of the Bank to manage their finances and repayment of loans during the COVID period. Relief schemes offered by the Bank have been designed to cater to the needs of all types of customers of the Bank, excluding none of the segments. Corporates, SME customers, individuals, credit cardholders and even non-performing borrowers are offered with different relief schemes to ensure that they get breathing space when repaying their borrowings.”

As a relief measure to the businesses affected by the pandemic, the Bank had introduced the ‘Arunella’ financial support scheme. The Bank had also helped entrepreneurs through a scheme introduced by the CBSL, to provide working capital loans at a concessionary interest rate of 4% p.a.

“Just after the pandemic situation, Commercial Bank was the first bank to secure USD 50 Million funding from a Development Financial Institution, IFC, to support SME entrepreneurs affected by COVID-19,” Renganathan added.

Some of the other initiatives implemented by the Bank during the period, under the directives of the MD/ CEO, include special COVID support loan schemes for micro entrepreneurs and SMEs which were provided at low interest rates. Further, normal lending rates were also reduced in addition to providing concessions for credit cardholders, fee waivers and offering digital services free of charge etc.

During the lockdown period, the Commercial Bank assisted the public by providing the ‘Mobile Cash’ facility with 11 vehicles, which not only benefited customers of the Commercial Bank. These vehicles were operated in pre-announced routes to allow customers who run short of cash to make withdrawals from their bank accounts.

Describing how the role of digital marketing has evolved in the Banking sector, the Senior Banker explained, “The negative impacts of the COVID-19 are far reaching and longer lasting than anyone could predict. Naturally, the Banking sector is also feeling the pressure of the global negative impacts. The demand for digital services grew exponentially during the lockdown period and with the help of easing of the Know Your Customer (KYC) regulations, we were able to cater to this demand, though the conditions were certainly challenging. I feel the entire sector faced that challenge pretty well.”

He further continued: “It is encouraging to see the growth momentum continuing. The Commercial Bank saw growth in all areas of digital touch points such as Flash Digital Banking account, ComBank Digital Banking App, Paymaster corporate payment portal and also other merchant based payment systems. The Bank deployed extra resources with teams working through the days to facilitate services during lockdown period. It is interesting to note that this was an opportunity to tap into some hitherto unexplored and untapped customer profiles, such as more mature segments, used to visiting branches frequently. Customer onboarding for digital services will continue in line with our strategic road map for digital services.”

Adding more to the topic of Digital Transformation, the MD/ CEO stated that future expansions of the Bank will be mostly based on the digital front and virtual platform.

“Banks are the backbone of an economy,” responded Renganathan when asked to explain how the Banking sector affects the economy of the country. Moving on to elaborate, he imparted, “The Banking sector plays a crucial role in the economy of the country since it provides liquidity to the economy through accepting deposits and lending it out to businesses, by facilitating internal, international trade and commerce. Banks also provide financial advisory services to businesses and the retail customers.”

“It is so unfortunate that our country has been going through two major economic blows during the last 2 years. The COVID pandemic affected almost all our borrowers. Hence, we are the only Bank in Sri Lanka which came up with a variety of Payment Relief Schemes considering difficult scenarios of our customers and including ‘Rebates’ for early settlements etc. Even non-performing borrowers were provided with upto 50% interest waivers when satisfactory repayment amounts were agreed. We have extended moratorium facilities above the government schemes and our teams are advised to identify the exact situation of the borrowers and agree on a realistic repayment programme. We feel that this approach will assist early revival of affected businesses and individuals.”

According to Renganathan, the uniqueness of the Commercial Bank is its pioneering products and services, especially in the sphere of Digital Banking, and the steps taken by the Bank to provide customized solutions to all customer segments by identifying their needs.

Emphasizing the Bank’s involvement in Corporate Social Responsibility projects, Renganathan stated that the Commercial Bank is amongst the few private sector enterprises in the country that has a special CSR unit dedicated to research, identify, assess, short-list and submit proposals on opportunities for the Bank to meaningfully impact lives and the country. The Bank is heavily involved in promoting technology education to the future generations of the country through a sustainable and well set up action plan, that started with donation of IT laboratories to schools and gradually evolved into national level initiatives of online learning and technological education.”

In conclusion, MD/ CEO Renganathan claimed, “The environment is still very much uncertain with no permanent solution for the pandemic in sight globally. This means that main sectors of our economy will take a longer time to recover and to resume operations in their optimum capacity. The drop in the Gross Domestic Production and the additional pressure on the sector due to additional costs incurred and the interruptions in recovery efforts will negatively affect the balance sheets and two major ratios that dictate the health of the Banking sector, namely capital adequacy and liquid asset ratios. The banks will be required to maintain more than adequate capital to meet unforeseen circumstances. We are glad that we were able to attract a private placement of USD 50 Million equity from IFC amidst various challenges including country rating downgrade.

“The Banking sector will have to keep making many adjustments of its operations, guidelines and processes to suit the prevailing conditions as they change by the day. The parameters that apply to determine the credit quality, classification of customers, some of the operational guidelines have changed and are still changing. Also, the sector has to deploy a substantial amount of manpower into constant servicing and rehabilitating the affected facilities. The sector will have to operate in a very different environment and everything from credit evaluations, risk appetites and to accounting standards will have to undergo adjustments in the medium term, provided that the pandemic situation will not spiral out of proportions again globally.”

“The only certain thing during this period seem to be uncertain socio-economic conditions and as a sector that has faced many challenging situations before, we are confident of rising above this challenge as well,” he concludes confidently.

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