Letters of credit (L/Cs) in Sri Lanka may become easier to access as the country sets up a new export-import bank (EXIM Bank).

Sri Lanka's EXIM Bank is being set up by the Central Bank and according to its governor, Nivard Cabraal, it is one of several initiatives aiming to fast-track the country's international trade as the country recovers from more than twenty-five years of civil conflict.

Products and services

The precise activities of the new EXIM Bank have yet to be revealed, but Cabraal is indicating that it will be set up along the lines of similar EXIM banks across the world.

Cabraal has publicly noted that services provided by such banks include L/C services as well as credit facilities for exporters and foreign buyers of exports and export credit insurance.

Growth prospects

The establishment of Sri Lanka's EXIM Bank is one of several initiatives considered for 2010 to strengthen institutional and market infrastructure in the wake of last year's defeat of the secessionist Liberation Tigers of Tamil Eelam (LTTE - Tamil Tigers) group.

"Sri Lanka is currently well positioned to fast-track its economic growth, to improve the economic welfare and elevate the living standards of the population as a result of peace after the defeat of the LTTE," Cabraal said earlier this month.

"There will be re-unification of the Northern and Eastern provinces with the rest of the country, political stability, improved foreign investor confidence, low inflation, moderate interest rates and the prospect of recovery in the global economy," he added.

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