Featured Product

    IMF Report on the Second Review Under the EFF with Sri Lanka

    August 10, 2017

    IMF published a report on completion of the second review of economic performance under the Extended Fund Facility (EFF) arrangement with Sri Lanka. Sri Lanka’s three-year extended arrangement was approved on June 03, 2016 in the amount of about USD 1.45 billion, or 185% of quota in the IMF at that time of approval of the arrangement. The government’s reform program, supported by the IMF, aims to reduce the fiscal deficit, rebuild foreign exchange reserves, and introduce a simpler, more equitable tax system to restore macroeconomic stability and promote inclusive growth.

    The staff report highlights that the country’s financial sector has remained sound and resilient amid challenging global and domestic conditions. The capital and liquidity levels of the banking sector were maintained well above statutory minimum requirements. The asset base of the banking system increased by 14.9% in May 2017, driven by expansion in loans and advances, in line with the growth in deposits, while its non-performing loans (NPLs) remained at a healthy level of 2.8%, by the end of May. The performance of the non-bank financial sector improved in terms of asset growth, capital position, profitability and branch network expansion. In the context of few financially distressed finance companies, the Central Bank has already established an enforcement unit to further strengthen the regulatory and supervisory framework.

     

    The report reveals that, commencing from July 01, 2017, licensed commercial banks will adopt Basel III capital standards to strengthen their resilience. This is based on the Direction issued by the Central Bank in late 2016 in line with the Basel III guidelines issued by the Bank for Resettlement (BIS), related to capital, leverage, and liquidity, to strengthen resilience of banks. Licensed banks will meet the increased Basel III minimum capital requirements against risk-weighted assets on a staggered basis, in line with the international timeline for full implementation by January 01, 2019. Going forward, the Central Bank envisages issuing guidelines to banks on Basel III leverage ratio and net funding ratio standards as well, in line with the international timelines. Several amendments are planned to be introduced to the Banking Act to streamline and strengthen the regulatory and supervisory framework for licensed banks in line with the best global standards and practices, taking note of potential business expansion, activities, and innovations in the banking industry.

     

    Related Link: Staff Report (PDF) 

    Keywords: Asia Pacific, Sri Lanka, Banking, Basel III, NPLs, Extended Fund Facility, IMF

    Featured Experts
    Related Articles
    News

    ESMA Updates Q&A on Credit Rating Agencies Regulation

    ESMA updated questions and answers (Q&A) document on the Credit Rating Agencies (CRA) Regulation.

    February 17, 2020 WebPage Regulatory News
    News

    EC Announces Funding for Sustainable Finance Project in France

    EC announced an investment for the latest projects, including a project on sustainable finance, under the LIFE program for the environment and climate action.

    February 17, 2020 WebPage Regulatory News
    News

    FDIC Releases Economic Scenarios for Stress Testing in 2020

    FDIC released the hypothetical economic scenarios for use in the upcoming stress tests for covered institutions with total consolidated assets of more than USD 250 billion.

    February 14, 2020 WebPage Regulatory News
    News

    EBA Acknowledges EC Adoption of Amended Supervisory Reporting Standard

    EBA acknowledged the adoption, by EC, of an Implementing Act with regard to the common reporting (COREP) and financial reporting (FINREP) changes, in accordance with the Capital Requirements Regulation or CRR.

    February 14, 2020 WebPage Regulatory News
    News

    APRA and ASIC Welcome Proposed Reforms for Superannuation Sector

    APRA and the Australian Securities and Investments Commission (ASIC) have jointly welcomed the proposed legislative reforms increasing the role of ASIC in the superannuation sector.

    February 14, 2020 WebPage Regulatory News
    News

    ESMA Responds to EC Consultation on Review of Benchmarks Regulation

    ESMA published its response to EC consultation on review of the Benchmarks Regulation in EU.

    February 14, 2020 WebPage Regulatory News
    News

    OSFI on Guide and Form for Replicating Portfolio Information Summary

    OSFI revised the instruction guide and form related to filing the Replicating Portfolio Information Summary.

    February 14, 2020 WebPage Regulatory News
    News

    ISDA Guide on Smart Contracts for Equity and Interest Rate Derivatives

    ISDA has published the fourth and fifth installments in a series of legal guidelines for smart derivatives contracts.

    February 13, 2020 WebPage Regulatory News
    News

    FED Paper Describes FLARE, A Top-Down Model for Stress Testing

    FED published a technical paper that describes the Forward-Looking Analysis of Risk Events (FLARE) model.

    February 13, 2020 WebPage Regulatory News
    News

    EC Rule Updates Data for Calculations Under Solvency II Reporting

    EC published the Implementing Regulation 2020/193, which lays down technical information for the calculation of technical provisions and basic own funds for reporting with reference dates from December 31, 2019 to March 30, 2020, in accordance with the Solvency II Directive (2009/138/EC).

    February 13, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4680