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

    EBA Single Rulebook Q&A: Second Update for November 2019

    EBA updated the Single Rulebook question and answer (Q&A) tool with answers to eight questions that relate to the Bank Resolution and Recovery Directive (BRRD) and the Capital Requirements Regulation and Directive (CRR and CRD).

    November 15, 2019 WebPage Regulatory News
    News

    FASB Delays Effective Dates for CECL, Leases, and Hedging Standards

    FASB issued two Accounting Standards Updates finalizing the delays in effective dates for standards on current expected credit losses (CECL), leases, hedging, and long-duration insurance contracts.

    November 15, 2019 WebPage Regulatory News
    News

    ESMA Updates Q&A on Securitization Regulation in November 2019

    ESMA updated questions and answers (Q&A) on the Securitization Regulation (Regulation 2017/2402).

    November 15, 2019 WebPage Regulatory News
    News

    HKMA Announces Finalization of Banking Liquidity Amendment Rules 2019

    HKMA issued a letter informing all authorized institutions that negative vetting of the Banking (Liquidity) (Amendment) Rules 2019 (BLAR) has now expired. Thus, the BLAR will now come into operation from January 01, 2020.

    November 15, 2019 WebPage Regulatory News
    News

    BCBS Consults on Revised Disclosures for Market Risk Framework

    BCBS launched a consultation on the revised disclosure requirements for the market risk framework for banks.

    November 14, 2019 WebPage Regulatory News
    News

    BCBS Consults on Disclosure Templates of Sovereign Exposures of Banks

    BCBS published a consultation on the voluntary disclosure templates related to sovereign exposures of banks.

    November 14, 2019 WebPage Regulatory News
    News

    PRA Publishes Final Policy on Maintenance of TMTP Under Solvency II

    PRA published the policy statement (PS25/19) that contains the final supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTPs) under Solvency II.

    November 14, 2019 WebPage Regulatory News
    News

    FSB Examines Implementation of Resolution Regimes in Financial Sector

    FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions and sets out plans for further work.

    November 14, 2019 WebPage Regulatory News
    News

    IAIS Adopts ComFrame, ICS, and Holistic Framework for Systemic Risk

    IAIS adopted a comprehensive set of reforms—Common Framework (ComFrame), Insurance Capital Standard (ICS) Version 2.0, and Holistic Framework for Systemic Risk—that will enable effective cross-border supervision of insurance groups and contribute to global financial stability.

    November 14, 2019 WebPage Regulatory News
    News

    PRA Publishes Templates for Statistical Disclosures Under Solvency II

    PRA published templates for statistical disclosures, as required under Article 31(2) of the Solvency II Directive.

    November 14, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4157