The monopoly position was held by foreigners with regard to trade, commerce and industry and the local people had been victimized by the traders and money lenders. Therefore the necessity arose to establish a national bank to cater the requirement of the local entrepreneurs and to provide financing on a progressive scale to diversify the economy. The State Council of Ceylon has approved for the es
tablishment of a National Bank in Ceylon based on the recommendations of the Banking Commission, which has been appointed in 1934 by the Governor. Accordingly, Bank of Ceylon (BOC) was ceremoniously opened by Sir Andrew Caldecott, then Governor of Ceylon, on the 1st August 1939 at the City office premises located in Fort Colombo. BOC, as a domestic bank began to grow despite severe competition from exchange bank and informal money-lenders. It opened its first branch in 1941 at Kandy and subsequently in outstation towns, such as Galle, Jaffna and Trincomalee. Bank of Ceylon opened its first overseas branch in 1949 in London. The Bank was nationalized in 1961 to facilitate the national development efforts. In keeping with the prevailing state policies, the Bank had to fulfill the aspirations of the nation. Under the Agricultural Productivity Law which was enacted in 1972 Agrarian Service Centres were set up island wide. As a result, the branch network expanded tremendously covering most of the rural areas of the Island. The introduction of the open economic policies ushered in the new era in commercial banking in Sri Lanka. The bank pioneered the introduction of information technology to the commercial banking sector of Sri Lanka. The first Foreign Currency Banking Unit (FCBU) in Sri Lanka was set up by the Bank in 1979 consequent to the liberalization of exchange control regulations. The functions of the Bank were developed under four regional offices. Thus by late 70’s the Bank grew to new heights with island-wide coverage, increased business volumes and strength and also increased the number of overseas branches. In addition to commercial banking activities, the Bank of Ceylon began to enter into other business areas through subsidiary and associate companies. The Merchant Bank of Sri Lanka Limited, the first Merchant Bank in Sri Lanka was set up by Bank of Ceylon in 1982. With the establishment of the Property Development Limited, a 32 storied new Head Office was constructed in 1987 to house all administrative offices, International Division and two separate branches for the benefit of corporate and personal customers. In 1981 Bank opened a branch in Malé, Republic of Maldives. Also Bank opened its second overseas branch in Chennai, India in 1995. In collaboration with VISA International, the Bank of Ceylon introduced Ceybank Visa Credit Cards in 1989 for the first time in Sri Lanka and is now geared to introduce many innovative facilities in the new millennium. In 2005, Bank of Ceylon has taken turnaround initiative to bring its branch network to single online system and it was a successful historical move for the bank to complete the project in 2009. For the first time in the history in 2008, Bank raised funds from general public amounting to Rs. 4.2 billion via a subordinated rupee debenture of 5 years that has been listed in the Colombo Stock Exchange. In 2010,BoC diversified its operations in the United Kingdom by upgrading its London branch to a fully fledged bank operating as a subsidiary of BOC that will be used as a platform for global banking and to attract more foreign investment to the country. Bank established its third overseas branch in Seychelles in 2014. Bank always make adjustments to innovative focus, service differentiation, diversification, cross- selling ability, governance and risk control. Further to take off with the country in its development process, Bank has launched products/units such as an Islamic Banking Unit, which operates through Island wide network and Investment Banking Unit aiming to diversify its portfolio in non-core banking. Bank successfully raised Rs.5 billion in the second public issue of unsecured subordinated redeemable five-year debentures. Also BOC acted as the Bankers to the issue, Managers, sponsors and registrars for the Urban Development Authority's Rs.10 Billion Debenture issue.
