Sri Lanka (At that time called as Ceylon) was ruled under various colonies before independence. 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 establishment of a National Bank in Ceylon based on the recommendations of the Banking Commission, which has been appointed in 1934 by the Governor.