A unique historical event was recorded in the region of Ruhuna on July 1st 1998. Ruhuna Development Bank was established under the Regional Development Bank Act No 06 of 1997. The Ruhuna Development Bank was the first development bank emerged with the acquisition of the assets and liabilities of the Galle, Matara and Hambantota Regional Rural Development banks act No 15 of 1985.

At commence of the bank the approved share capital is Rs.500M and the issued and paid up share capital is 150M. The founder share holders in the bank namely The Central Bank of Sri Lanka, The Employee Provident Fund, Peoples Bank, Bank of Ceylon and National Savings Bank.

The CBSL and the EPF had been transferred their Shareholding respectively in 2005 and 2007 in the General Treasury.