The establishment of a banking system is the essential foundation for the building of an economy. If ever there was anyone whose name has been synonymous with banking and entrepreneurship in this country it has been none other than NU Jayawardena. NU as he was popularly known was a firm believer that if this country was to achieve any measure of economic freedom, indigenous capital and enterprise had to be encouraged. He particularly wanted local trade and industry to receive adequate financial assistance and for this it had been his opinion that indigenous banks had to be established.

 In 1932 George E De Silva, the member for Kandy moved a motion in the State Council to have "A Commission appointed to go into the system of commerce, banking, and insurance in this island", when introducing the motion he stated ‘Unless we can give people of this country some encouragement to obtain money on easy terms it is almost impossible to carry on agriculture to the benefit of the people of the country". This motion was accepted after an amendment and it was decided to appoint a  commission "to inquire into and report upon the existing conditions of banking and credit and to consider the steps, if any that are feasible and desirable in respect of the provision of banking and credit facilities for (a) Agriculture (b) Industry (c) Trade; and also to make recommendations regarding the desirability of establishing a state–aided bank and sound local banks."  

 A three member commission headed by Sorabji Pochanwala was appointed with Professor Das Gupta of the University College Colombo as Secretary and NU as the Assistant Secretary.

At the time, large plantations managed invariably by British companies were well supported by British banks, but the native businessmen found it difficult to obtain credit from these banks. It was ALLEGED THAT THE BANKS DISCRIMINATED AGAINST THE LOCALS AND EVEN WHEN THEY GAVE CREDIT THE RATE OF INTEREST WAS HIGHER THAN THAT PAID BY FOREIGNERS. These foreign banks opposed the establishment of a national bank claiming that that there was not sufficient business for a new bank. Incidentally Ceylon was perhaps the only country in the world which deposited foreign funds with foreign banks without taking any security from them.  As for  small holders, who owned small extents of tea, rubber or coconut they had no local Bank to turn to, and were dependent on ‘Chettiars’ and Afghan money lenders . The village farmer who formed the backbone of the peasantry of this country and cultivated rice, and vegetables, indulged in chena cultivation, was wholly dependent on the local ‘mudalali’ and money lender for the financing of his cultivation. The mudalali sustained the farmer between sowing and harvest, and the farmer was compelled to sell his crop at a price decided on by the mudalali. The peasant was entirely at the mercy of the village mudalali and money lender. NUJ on his travels through the country, learned at first hand the situation that obtained in the countryside. Hence it was that he advocated rural banking and the establishment of the People’s Bank. However, rural banking was not as attractive as commercial banking and it was not until the advent of Phillip Gunawardena that rural banking, as a concept, was given consideration, giving NU much cause for satisfacction. Minister Phillip Gunawardena, who wanted land reform legislation to secure tenancy in the rice lands, sought to introduce a holistic package which included rural banks to support the cooperative movement, but unfortunately Minister Gunawardena left the government in 1959 and his initiatives never got off the ground leaving the peasant farmer at the mercy of the trader and the local money lender as he is even to this day. A word here about the  virtual killing of the cooperative movement and with it the paddy marketing structure would not be out of place. It came about when a particular government ended the Guaranteed Price Scheme for paddy merely because paddy store keepers were said to have been corrupt. A paddy store keeper in those times in the 1960s had a salary of Rs.350/- and was in charge of stocks worth lakhs of rupees – so was it small wonder that he made some money on the side with the help- of the cooperative manager whose salary was even less than that of the paddy store keeper?  

NU ‘s entry into banking, , had been in 1932 when he was appointed Asst. Secretary of the Pochanwala Commission.. The three member commission travelled extensively to all parts of the country and held hearings to elicit the needs of the community. The evidence recorded enabled Assistant Secretary NUJ to obtain a first hand knowledge of the economic conditions prevailing in the country.

Though the Commissions findings led to a Bill being passed in 1935 by the State Council for  the establishment of a state bank it was rejected by the Colonial Office no doubt at the instance of British banks operating in the country. The Bank of Ceylon was only established a few years later.

The establishment of a State Bank would have given NU much satisfaction as he had campaigned for it for some time. NU’s was a formidable personality, and his career an astounding one. NUJ might well have written a book "How to succeed despite obstacles" that would have inspired many of his countrymen. Born into relatively modest circumstances, he rose to be Governor of the Central Bank.   

Neville Ubeysinghe Jayawardena, was born on 25 February 1908, in Hambantota. His father (who was from Tangalle) worked there as the Rest house keeper. His mother was from the Gajawira family of Devundara. NU was first educated at St. Mary's School, Hambantota (1913-15), later St. Servatius' College, Matara (1915-20), and St. Aloysius' College, Galle (1920-25). Determined to succeed, he worked hard, excelled in his studies and passed the Senior Cambridge examination with three distinctions in 1924.  

The first place of his career began in government service in 1925, when he passed the Clerical Service Examination, and started work as a junior clerk. By 1931, he was the only government clerk holding a degree in Economics (B.Sc. (Econ.) London). He advanced rapidly in his career. In 1932, he assisted in setting up the Commercial Intelligence Unit in the Ministry of Labour, Commerce and Industry; and as we have seen by 1934, he was Assistant Secretary to the Ceylon Banking Commission, which led to the establishment of the Bank of Ceylon.  

In 1938, NU received a government scholarship to study Business Administration at the London School of Economics. After returning to Sri Lanka in 1939, NU served in a series of important posts during and after World War II, as the Controller of Finance and Supplies, Controller of Exchange, and Controller of Imports and Exports. He set up and headed the Exchange Control Department from 1948 to 1950, and assisted in the establishment of the Central Bank of Sri Lanka. NU was appointed as the Central Bank's first Deputy Governor in 1950, and in 1953 succeeded John Exter as Governor, becoming the first Sri Lankan Governor of the Bank. In 1957, he was appointed a Senator by the government of S.W.R.D. Bandaranaike, a position he held until 1961 when the Senate was abolished. 

The second phase of his career when took NU into the private sector in 1956, he was appointed Joint Managing Director of Vavasseur and Company – the first Sri Lankan to hold such a position in a British-owned firm. NU went on to establish a large business conglomerate, which included financing, leasing, tea-broking, stock-broking, shipping, logistics, tourism and travel.  In 1956 he took over the Wellawatte Spinning and Weaving Mills, which was the single largest factory complex in this country. He was also responsible for the establishment of Colombo Assurance about the same time.  The public companies he founded included Sampath Bank, National Enterprise Bank (now DFCC Vardhana Bank), Union Assurance, Mercantile Shipping, Mercantile Leasing, and Mercantile Credit. He was instrumental in opening up the financial-services and commodity-broking sectors – which had long been closed except to a few companies. In 1982, he became a founding member of the Colombo Securities Exchange, serving as its second Chairman from 1988 to 1989.  

During these years, NU served on an extraordinary number of government and private-sector committees and boards, contributing to the formulation of legislation and policy in many areas, including banking, finance, capital markets, and tourism. He was a prolific writer, with a clear and pungent style. His thoughts on a wide range of subjects are of lasting interest, and a volume of his essay is being prepared for publication.