Dr Sarath Obeysekera

1. Don’t abandon banks—but be selective

Licensed commercial banks supervised by theCentral Bank of Sri Lanka are  still far safer than most finance companies.

That said, don’t treat all banks as equal:

• Prefer systemically important banks (large balance sheets, strong capital)
• Look at published financials (capital adequacy, NPL ratios)
• Avoid chasing unusually high deposit rates—it’s often a red flagged
• Spread your risk (this is the single most important step)

Instead of asking which institution is safest,” assume none are risk-free.

• Split deposits across 2–3 strong banks
• Keep each deposit within the insured limit underSri Lanka Deposit Insurance and Liquidity Support Scheme
• (currently LKR 1.1 million per depositor per institution)

This way, even if one fails, you’re not wiped out.

Be cautious with finance companies—don’t treat them like banks

Licensed finance companies are regulated, but:

• They take higher risks
• Governance has historically been weaker

If you must invest:

• Stick only to CBSL-licensed finance companies
• Limit exposure to a small percentage of your portfolio
• Avoid long lock-in periods

Consider government securities

For capital safety:

• Treasury bills and bonds issued by the Government of Sri Lanka are still considered low risk locally
• These can be accessed through banks or primary dealers

Returns may be lower—but stability matters more at your stage.

 On digitisation—your point is valid, but incomplete

You’re correct: real-time monitoring and red-flag systems should catch fraud early.

But the reality:

• Systems exist, but human override, collusion, or weak governance can bypass them
• Digitisation doesn’t replace accountability and enforcement

The real failure is not just technology—it’s lack of consequences at senior levels

A practical allocation strategy (simple and conservative)

Given your concerns and experience:

• 50–60% → Strong licensed banks (spread across 2–3)
• 20–30% → Government securities
• 10–20% → Liquid cash / savings Gold coins 
• Minimal or zero → finance companies unless carefully selected

Regards

Dr Sarath Obeysekera