National Savings Bank, the Premier Savings Bank in the country, by its statute is required to invest 60% of its assets in gilt-edged Government Securities such as Treasury Bills, Treasury Bonds and other government instruments. Investments in government securities are handled by the Asset Management Division of the Bank.
The Bank deploys the rest of its funds in 3 other main areas namely,
- Direct lending to financial institutions
- Loan syndication
- Project lending
A Project Finance Division has been set up by the Bank to handle these activities mainly loan syndication.
Though we prefer infrastructure projects, we do undertake any type of project at any stage of the process. i.e. start-up, expansion, on-going projects etc.,
We follow evaluation criteria that are flexible and our rates are negotiable and very competitive.
We also facilitate the processing of the loan and the related documentation within a short time for Project Finance Loans. The processing fee will be nominal.
Prospective clients can write/meet our Senior Management to discuss the facility.
Main functions
- Direct lending to Banking Institutions and their subsidiaries
- National Savings Bank as the premier savings institution in the country deploys its funds in various forms in diverse range of product.
They are mainly,
Government Securities
By statute it is mandated for NSB to deploy a minimum of 60% of its assets in guilt edged securities such as treasury bills, treasury bonds and other government papers which justifies and warrants a government guarantee for deposits.
Project Finance
The second largest deployment is by way of funding various projects. Mainly NSB lends to long-term development projects of the country. It has become the motto of the bank to fund developmental projects, mostly infrastructure, where most of other banks are not in a position to accommodate.
To comply with regulatory requirements most of these loans are by way of syndications. So long as the limits and restrictions are within the regulatory requirements NSB makes wholesale lending to other banks and financial institution in the country.
Arranging syndications
Our project finance division arranges facilities by way of syndications to potential candidates for viable projects.
Acting as agents
NSB plays the role of agent for syndicated facilities who coordinates the settlement and transactions between the lenders and the borrower/s
Structuring financial facilities
In addition to funding depending on the clients requirements and nature and viability of the project NSB structures facility suit the requirements of the client. i.e. debentures, asset backed notes, mortgaged backed notes etc.,
- Derivative products
We assist clients to hedge their market risk through entering into interest rate swaps agreements.
- Security
Though security provides a safety valve to lenders our main criteria in lending for projects is not security but the strength of the project. Often the security includes the following
- A guarantee
- Mortgage of immovable assets
- Mortgage over project assets
- Lien over receivables
- Direct remittance of the project
What type of projects?
Though our apatite is for infrastructure projects we do consider any type of project at any stage of the process. i.e. start-up, expansion, on-going projects etc.,
Criteria for evaluation
- Compliance with regulatory requirements
- Profile of the management
- Project profile
- Security
How can a facility be obtained?
For the purpose of the project financing NSB does not consider partnership or sole proprietorship entities.
There is no prescribed loan application form since every project is different from each other and so is the required information.
Nevertheless, any prospective client can write to us or meet our senior management to discuss about the facility.
What are the prospective rates?
The terms for facilities are negotiable and agreed upon on mutually acceptable basis.
It is notable that our rates are very competitive.
In general the terms for facilities are,
- Priced on a variable rate.
- Generally a margin over an index rate re-priced quarterly, bi-annually etc.,
- To mitigate impacts of extreme scenarios we impose a ceiling and a floor rate for facilities.
- Margin is based on the risk profile of the project and promoters.
- Generally the loan carries a grace period to allow generate positive cash-flows to repay the capital. Capital is re-paid mostly on a quarterly basis or as per scheme that matches with that of cash-flow of the project.
How long does it take to approve a facility?
Generally our approving process is very fast as we have a centralized processing system. If all the required information is available and regulatory approvals are in place the maximum period required for an approval is 3 to 4 weeks.
What information is required?
The required information differs depending on the proposal. In general we need the following information to approve a facility
- Proof of credibility and competency of the promoters
- Company profile
- The project proposal with all the information that includes the product, process, market, people, cost, forecasts, modes of funding, forecasts etc.
- All necessary approvals (internal and external)
- Proof of confirmed orders, guarantees, sales agreements etc.,
Documentation
Documentation matters are attended to by in-house legal officers. External legal advice & consultancy services are obtained depending on the nature of the facility.
What other costs are involved?
Other than the statutory levies if applicable, a very nominal processing fee will be charged.
Who should be contacted?
Ms. Devika Silva
Deputy General Manager
Tel: 011-4940261
Fax: 011-2370310
E-Mail : dgm.cfi@nsb.lk