Directions, Determinations, and Circulars issued to Licensed Specialised Banks  281
Ref. : 02  / 17 / 900 / 0001  / 004
Bank Supervision Department
11 October 2013
To : CEOs of all Licensed Commercial Banks and
       Licensed Specialised Banks
Dear Sir / Madam,
ADDITIONAL QUARTERLY DISCLOSURE
IN THE PRESS AND ON THE WEBSITES
Reference our Circulars dated 11 February 2013 and 17 September 2013 on Public Disclosure
by Publication of Quarterly Financial Statements of Banks in the Press and Publication of Financial
Statements and Other Disclosures on the Websites, respectively.
Every bank shall ensure additional disclosures on the following items in their quarterly publications
in the press and on their respective websites, from 3rd quarter of 2013 as given in Annex.
1. Loans and receivables to other customers
2. Loans and receivables to other customers – By product
3. Movements in individual and collective impairment during the period for loans and receivables
to other customers
4. Dues to other customers – By product
Accordingly, you are requested to take necessary measures to comply with the above.
Yours faithfully,
(Mrs.) T M J Y P Fernando
Director of Bank Supervision
Encl.


282 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Annex
ADDITIONAL QUARTERLY DISCLOSURES IN THE PRESS AND
ON THE WEBSITES
1) Loans and Receivables to Other Customers
In Rupees Thousand
Bank Group
Current
PeriodPrevious
PeriodCurrent
PeriodPrevious
Period
As at
DD/MM/YYAs at
DD/MM/YYAs at
DD/MM/YYAs at
DD/MM/YY
Gross loans and receivables
(Less ):  Individual impairment
Collective impairment
Net loans and receivables including those
designated at fair value through profit or loss
(Less): Loans and receivables designated at fair
value through profit or loss
Net loans and receivables
2) Loans and Receivables to Other Customers – By product
In Rupees Thousand
Bank Group
Current
PeriodPrevious
PeriodCurrent
PeriodPrevious
Period
As at
DD/MM/YYAs at
DD/MM/YYAs at
DD/MM/YYAs at
DD/MM/YY
By product-Domestic Currency
Overdrafts
Term loans
Lease rentals receivable
Credit cards
Pawning
Other loans (Please specify)
Sub total
By product-Foreign Currency
Overdrafts
Term loans
Other loans (Please specify)
Sub total
Total


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  283
3) Movements in Individual and Collective Impairment during the period for
Loans and Receivables to Other Customers
In Rupees Thousand
Bank Group
Current
PeriodPrevious
PeriodCurrent
PeriodPrevious
Period
As at
DD/MM/YYAs at
DD/MM/YYAs at
DD/MM/YYAs at
DD/MM/YY
Individual impairment
Opening balance at DD/MM/YY
Charge/(Write back) to income statement
Write-off during the year
Other movements
Closing balance at DD/MM/YY
Collective impairment
Opening balance at DD/MM/YY
Charge/(Write back) to income statement
Other movements
Closing balance at DD/MM/YY
Total impairment
4) Due to Other Customers – By product
In Rupees Thousand
Bank Group
Current
PeriodPrevious
PeriodCurrent
PeriodPrevious
Period
As at
DD/MM/YYAs at
DD/MM/YYAs at
DD/MM/YYAs at
DD/MM/YY
By product-Domestic Currency
Demand deposits (current accounts)
Savings deposits
Fixed deposits
Other deposits (Please specify)
Sub total
By product- Foreign Currency
Demand deposits (current accounts)
Savings deposits
Fixed deposits
Other deposits (Please specify)
Sub total
Total


284 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Ref. No. : 02/04/004/0002/001
Bank Supervision Department
8th Floor, Renuka Building
41, Janadhipathi Mawatha
Colombo 01.
15th December 1999
To : All Licensed Specialised Banks
Dear Sir,
PRESCRIBED ACCOUNTING FORMAT FOR THE PUBLICATIONS OF
ANNUAL AUDITED ACCOUNTS OF LICENSED SPECIALISED BANKS
We enclose herewith the Prescribed Accounting Format specified by the Monetary Board, in
terms of Section 38(3) of the Banking Act, No.30 of 1988 as amended by Section 76(H) of the Banking
(Amendment) Act, No.33 of 1995, for the publication of annual audited accounts of Licensed Specialised
Banks (LSBs).
All LSBs are required to publish their annual audited accounts for the accounting periods ending
on or after 31.12.1999 in the enclosed Prescribed Accounting Format.
Yours faithfully,
Sgd. Ms. C. I. Fernando
Director of Bank Supervision
(Formats referred to in the Circular are replaced with Circular No. 02/17/900/0001/04 dated 11.02.2013)


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  285
Ref. No. : 02  / 17 / 900 / 0001  / 04
Bank Supervision Department
11 February, 2013
To : CEOs of all Licensed Commercial Banks and
       Licensed Specialised Banks
Dear Sir / Madam,
PREPARATION, PRESENTATION AND PUBLICATION OF
ANNUAL AUDITED ACCOUNTS OF BANKS
We refer to our previous correspondence and discussions on the above and enclose the new format
for the preparation, presentation and publication of annual audited accounts of licenced commercial
banks and licensed specialised banks effective from the financial reporting periods beginning on or after
1 January 2012.
Accordingly, formats referred to in the Circulars dated 02 June 1998 and 15 December 1999 on
preparation of annual audited accounts of licensed commercial banks and licensed specialised banks,
respectively, are replaced with the format in Annex.
Yours faithfully,
(Mrs.) T M J Y P Fernando
Director of Bank Supervision
Encl.
Copy to :  The Secretary-General, Sri Lanka Banks’  Association (Gurantee) Ltd.
 Panel of Auditors


286 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
SPECIFIED FORMAT FOR THE PREPARATION OF
ANNUAL FINANCIAL STATEMENTS OF
LICENSED COMMERCIAL BANKS
AND
LICENSED SPECIALISED BANKS
 Annex


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  287
Financial Statements
Table of Contents
Financial Statements
 Income Statement
 Statement of Comprehensive Income
 Statement of Financial Position
 Statement of Changes in Equity
 Statement of Cash Flows
Notes to the Financial Statements
 1. Corporate Information
 2. Accounting Policies
 3. Segment Information
Income Statement
 4. Net Interest Income
 5. Net Fee and Commission Income
 6. Net Gain/(Loss) from Trading
 7. Net Gain/(Loss) from Financial Instruments Designated at Fair Value through Profit or Loss
 8. Net Gain/(Loss) from Financial Investments
 9. Other Operating Income (net)
10. Impairment for Loans and Other Losses
11. Personnel Expenses
12. Other Expenses
13. T ax Expenses
14. Earnings Per Share
Statement of Financial Position: Assets
15. Analysis of Financial Instruments by Measurement Basis
16. Cash and Cash Equivalents
17. Balances with Central Banks
18. Placements with Banks
19. Derivative Financial Instruments
20. Other Financial Assets at Fair Value through Profit or Loss
21. Loans and Receivables to Banks
22. Loans and Receivables to Other Customers
23. Financial Investments - Available-for-Sale
24. Financial Investments - Held-to-Maturity
25. Investments in Subsidiaries
26. Investments in Associates and Joint Ventures
27. Property , Plant and Equipment
28. Investment Properties
29. Goodwill and Intangible Assets
30. Deferred Tax Assets/Liabilities
31. Other Assets


288 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Statement of Financial Position: Liabilities
32. Due to Banks
33. Derivative Financial Instruments
34. Other Financial Liabilities at Fair Value through Profit or Loss
35. Due to Other Customers
36. Other Borrowings
37. Debt Securities Issued
38. Other Provisions
39. Other Liabilities
40. Due to Subsidiaries
41. Subordinated T erm Debts
Statement of Financial Position: Capital and Reserves
42. Stated Capital/Assigned Capital
43. Statutory Reserve Fund
44. Retained Earnings
45. Other Reserves
46. Non-controlling Interests

Off-Balance Sheet Information
47. Contingent Liabilities and Commitments
Other Disclosures
48. Related Party Disclosures
49. Net Assets Value per Ordinary Share
Statement of Cash Flows
50. Non-Cash items included in Profit Before Tax
51. Changes in Operating Assets
52. Changes in Operating Liabilities
Other Disclosure Requirements
1. Information about the significance of financial instruments for financial position and performance
2. Information about the nature and extent of risks arising from financial instruments
3. Other disclosures


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  289
INCOME STATEMENT
FOR THE YEAR ENDED  DD MM YYYY
In Rupees Million
NoteBank Group
20XX 20XX 20XX 20XX
Interest income
Interest expenses
Net interest income 04
Fee and commission income
Fee and commission expenses
Net fee and commission income 05
Net gain / (loss) from trading 06
Net gain / (loss) from financial instruments
designated at fair value through profit or loss07
Net gain / (loss) from financial investments 08
Other operating income (net) 09
Total operating income
Impairment for loans and other losses 10
Net operating income
Personnel expenses 11
Other expenses 12
Operating profit/(loss) before value added tax (V AT)
Value added tax (V AT) on financial services
Operating profit/(loss) after value added tax (V AT)
Share of profits of associates and joint ventures
Profit / (loss) before tax
Tax expenses 13
Profit / (loss) for the year
Profit attributable to:
Owners of the parent
Non-controlling interests
Earnings per share on profit 14
Basic earnings per ordinary share
Diluted earnings per ordinary share


290 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED  DD MM YYYY
In Rupees Million
NoteBank Group
20XX 20XX 20XX 20XX
Profit / (loss) for the year
Other comprehensive income, net of tax
Changes in revaluation surplus
Actuarial gains and losses on defined benefit plans
Gains and losses (arising from translating
 the financial statements of a foreign operation)
Gains and losses on re-measuring
 available-for -sale financial assets
Gains and losses on cash flow hedges
Others
Share of profits of associates and joint ventures
Less:  T ax expense/(income) relating to components
of other comprehensive income
Other comprehensive income for the year, net of
taxes
Total comprehensive income for the year
Attributable to:
Owners of the parent
Non-controlling interests


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  291
STATEMENT OF FINANCIAL POSITION
AS AT  DD MM YYYY
In Rupees Million
NoteBank Group
20XX 20XX 20XX 20XX
Assets
Cash and cash equivalents 16
Balances with central banks 17
Placements with banks 18
Derivative financial instruments 19
Other financial assets held-for-trading 20
Financial assets designated at fair value
 through profit or loss20
Loans and receivables to banks 21
Loans and receivables to other customers 22
Financial investments – Available-for-sale 23
Financial investments – Held-to-maturity 24
Investments in subsidiaries 25
Investments in associates and joint ventures 26
Property, plant and equipment 27
Investment properties 28
Goodwill and intangible assets 29
Deferred tax assets 30
Other assets 31
Total assets
Liabilities
Due to banks 32
Derivative financial instruments 33
Other financial liabilities held-for-trading 34
Financial liabilities designated at fair value
 through profit or loss34
Due to other customers 35
Other borrowings 36
Debt securities issued 37
Current tax liabilities
Deferred tax liabilities 30
Other provisions 38
Other liabilities 39
Due to subsidiaries 40
Subordinated term debts 41
Total liabilities
Equity
Stated capital/Assigned capital 42
Statutory reserve fund 43
Retained earnings 44
Other reserves 45
Total equity  of the owners of the parent
 Non-controlling interests46
Total equity
Total equity and liabilities
Contingent liabilities and commitments 47


292 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED  DD MM YYYY
BANK / GROUP
In Rupees Million
Stated capital/
Assigned
capitalReserves
Total
Non-controlling interest
Total equityOrdinary
voting shares
Ordinary
non-voting shares
Assigned capital
Reserve fund
Revaluation reserve
Retained earnings
Other reserves
Balance as at DD/MM/YY (Opening balance)
Total comprehensive income for the year
Profit/(loss) for the year
Other comprehensive income (net of tax)
Total comprehensive income for the year
Transactions with equity holders, recognised
directly in equity
Share issue/increase of assigned capital
Share options exercised
Bonus issue
Rights issue
Transfers to reserves during the period
Dividends to equity holders
Profit transferred to head office
Gain/(loss) on revaluation of Property, Plant and
Equipment (if cost method is adopted)
Others (Please specify)
Total transactions with equity holders
Balance as at DD/MM/YY (Closing balance)


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  293
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED  DD MM YYYY
In Rupees Million
NoteBank Group
20XX 20XX 20XX 20XX
Cash	flows	from	operating 	activities
Profit before tax
Adjustment for :
Non-cash items included in profits before tax 50
Change in operating assets 51
Change in operating liabilities 52
Net gains from investing activities
Share of profits in associates and joint ventures
Dividend income from subsidiaries and associates
Interest expense on subordinated debt
Others (please specify)
Contribution paid to defined benefit plans
Tax paid
Net cash generated from operating activities
Cash	flows	from	investing 	activities
Purchase of property, plant and equipment
Proceeds from the sale of property, plant and equipment
Purchase of financial investments
Proceeds from the sale and maturity of
 financial investments
Net purchase of intangible assets
Net cash flow from acquisition of investment
 in subsidiaries and associates
Net cash flow from disposal of subsidiaries
Proceeds from disposal of associates and joint ventures
Dividends received from investment
 in subsidiaries and associates
Others (please specify)
Net cash (used in)/from investing activities
Cash	flows	from	financing 	activities
Net proceeds from the issue of ordinary share capital
Net proceeds from the issue of other equity instruments
Net proceeds from the issue of subordinated debt
Repayment of subordinated debt
Interest paid on subordinated debt
Dividend paid to non-controlling interest
Dividend paid to the owners of the parent company
Dividend paid to holders of other equity instruments
Others (please specify)
Net	cash	from	financing 	activates
Net increase/(decrease) in cash & cash equivalents
Cash and cash equivalents at the beginning of the year
Exchange difference in respect of cash & cash equivalent
Cash and cash equivalents at the end of the year


Cash and cash equivalents at the end of the year
Note:  Banks have the option to use one of the two methods specified in LKAS 7
for the preparation of the statement of cash flows


294 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED  DD MM YYYY

1. Corporate information
2. Accounting policies
2.1 Basis of preparation
2.1.1  Statement of compliance
2.1.2  Presentation of financial statements
2.2 Basis of consolidation
2.3 Significant accounting judgments and estimates
2.3.1  Fair value of financial instruments
2.3.2  Impairment losses on loans and receivables
2.3.3  Impairment of available-for -sale investments
2.3.4  Deferred tax assets
2.3.5  Pensions obligation
2.3.6  Others
2.4 Changes in accounting policy and disclosures
2.5 Summary of significant accounting policies
2.5.1  Foreign currency translation
2.5.2  Financial instruments - initial recognition and subsequent measurement
2.5.3  Impairment of financial assets and subsequent measurement of financial liabilities
2.5.4  Impairment of non-financial assets
2.5.5  Repurchase and reverse repurchase agreements
2.5.6  Securities lending and borrowing
2.5.7  Determination of fair value
2.5.8  Hedge accounting
2.5.9  Of f-setting financial instruments
2.5.10  Leasing
2.5.11  Recognition of income and expenses
2.5.12  Cash and cash equivalents
2.5.13  Property , plant and equipment
2.5.14  Business combination and goodwill
2.5.15  Intangible assets
2.5.16  Financial guarantees
2.5.17  Pension benefits
2.5.18  Provisions
2.5.19  Share based payment transactions
2.5.20  Taxes
2.5.21  Dividends
2.5.22  Reserves
2.5.23  Segment reporting
2.5.24  Others


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  295
3. Segment information (as per  SLFRS 8)
4. Net Inter est Income
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Interest income
Cash and cash equivalents
Placements with banks
Derivative financial instruments
Other financial assets held-for-trading
Financial assets designated at fair value through profit or loss
Loans and receivables to banks
Loans and receivables to other customers
Financial investments – Held-to-maturity
Financial investments – Available-for-sale
Others (Please specify)
Total interest income
Interest expenses
Due to banks
Derivative financial instruments
Other financial liabilities at fair value through profit or loss
Due to other customers
Other borrowings
Debt securities issued
Others (Please specify)
Total interest expenses
Net interest income
a.  Net Interest Income from Sri Lanka Government Securities
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Interest income
Less : Interest expenses
Net interest income
5. Net Fee and Commission Income
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Fee and commission income
Fee and commission expenses
Net fee and commission income


296 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Comprising
Loans
Cards
Trade and remittances
Investment banking
Deposits
Guarantees
Others (Please specify)
Net fee and commission income
6. Net Gain / (Loss) fr om Trading
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Foreign exchange
 From banks
 From others customers
Interest rates
Equities
Others (Please specify)
Total
7.	 Net	Gain	/	(Loss)	from	Financial 	Instruments 	Designated 	at	Fair	Value	through	Profit	or	Loss
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Gains on financial assets designated at fair value
through profit or loss
Losses on financial assets designated at fair value
through profit or loss
Gains on financial liabilities designated at fair value
through profit or loss
Losses on financial liabilities designated at fair value
through profit or loss
Total
8. Net Gain / (Loss) fr om Financial Investments
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Assets available-for-sale
 Debt securities
 Equities
 Others (Please specify)
Others (Please specify)
Total


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  297
9. Other  Operating Income (net)
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Gain / (Loss) on investment properties
Gain / (Loss) on sale of property, plant and equipment
Gain / (Loss) on revaluation of foreign exchange
Recovery of loans written-off
Others (Please specify)
Other Operating Income (net)
10. Impairment for  Loans and Other Losses
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Loans and receivables
 T o banks [Note 21(b)]
 T o other customers [Note 22(c)]
Financial investments
 A vailable-for-sale [Note 23(a)]
 Held-to-maturity [Note 24(a)]
Investment in subsidiaries [Note 25(a)]
Investments in associates and joint ventures [Note 26(a)]
Property, plant and equipment [Note 27(c)]
Investment properties [Note 28(b)]
Off-balance sheet exposures [Note 39]
Others (Please specify)
Total
11. Personnel Expenses
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Salary and bonus
Contributions to defined contribution / benefit plans
Share based expenses
Others
Total


298 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
12. Other  Expenses
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Directors’ emoluments
Auditors’ remunerations
Non-audit fees to auditors
Professional and legal expenses
Depreciation of property, plant and equipment
Amortisation of leasedhold property
Amortisation of intangible assets
Operating lease expenses
Office administration and establishment expenses
Others (Please specify)
Total
13. T ax Expenses
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Current tax expense
 Current year
 Prior years’  provision
Deferred tax expense
 Ef fect of change in tax rates
 T emporary differences
 Prior years’  provision
Total
a.  Reconciliation of tax expenses
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Profit	/	(loss)	before	tax
Income tax for the period
(Accounting profit @ applicable tax rate)
Adjustment in respect of current income tax of
prior periods
Add :  T ax effect of expenses that are
not deductible for tax purposes
Less :  T ax effect of expenses that are
deductible for tax purposes
Tax expense for the period


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  299
b.  The deferred tax (credit) / charge in the income statement comprise of the following:
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Deferred tax assets
Deferred tax liabilities
Other temporary differences
Deferred tax (credit) / charge to income statement
14. Earnings Per  Share
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Net profit attributable to ordinary equity holders
Adjust :
 Interest on preference shares
 Interest on convertible bonds
Net profit attributable to ordinary equity holders adjusted for the ef fect of dilution
Weighted average number of ordinary shares for basic earnings per share
Effect of dilution
 Convertible bonds
 Convertible preference shares
 Others
Weighted average number of ordinary shares adjusted for the effect of dilution
Basic earnings per ordinary share
Diluted earnings per ordinary share
15. Analysis of Financial Instruments by Measur ement Basis
In Rupees Million
a. Bank – Curr ent year (20XX)
HFTDesignated
at fair valueHTMAmortised
costAFS Hedging Total
ASSETS
Cash and cash equivalents
Balances with central banks
Placements with banks
Derivative financial instruments
Other financial assets at
 fair value through profit or loss
Loans and receivables to banks
Loans and receivables to other
 customers
Financial investments
Total financial assets


300 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
HFTDesignated
at fair valueAmortised
costHedging Total
LIABILITIES
Due to banks
Derivative financial instruments
Other financial liabilities at
 fair value through profit or loss
Due to other customers
Debt securities issued
Other borrowings
Total financial liabilities
HFT  –  Held for trading
Designated at fair value  –  Designated at fair value through profit or loss
Amortised cost  –  Loans and receivables/deposits at amortised cost
HTM  –  Held-to-maturity
AFS  –  Available-for-sale
Hedging  –  Instruments of fair value and cash flow hedging
In Rupees Million
b. Bank – Pr evious year (20XX)
HFTDesignated
at fair valueHTMAmortised
costAFS Hedging Total
ASSETS
Cash and cash equivalents
Balances with central banks
Placements with banks
Derivative financial instruments
Other financial assets at
 fair value through profit or loss
Loans and receivables to banks
Loans and receivables to other
 customers
Financial investments
Total financial assets
HFTDesignated
at fair valueAmortised
costHedging Total
LIABILITIES
Due to banks
Derivative financial instruments
Other financial liabilities at
 fair value through profit or loss
Due to other customers
Debt securities issued
Other borrowings
Total financial liabilities


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  301
c. Gr oup – Current year (20XX) [as per 15(a) above]

d. Gr oup – Previous year (20XX) [as per 15(b) above]
16. Cash and Cash Equivalents
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Cash in hand
Balances with banks
Money at call and short notice
Total
17. Balances with Central Banks
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Statutory balances with central banks
 Central bank of Sri Lanka
 Other Central banks
Non-statutory balances with central banks
 Central bank of Sri Lanka
 Other central banks
Total balances with central banks
18. Placements with Banks
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Total


302 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
19. Derivative Financial Instruments
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Interest rate derivatives
 Interest rate swaps
 Interest rate futures
 Interest rate options
 Others (Please specify)
Foreign currency derivatives
 Currency swaps
 Forward foreign exchange contracts
 Others(Please specify)
Others (Please specify)
Total
20.	Other 	Financial 	Assets	at	Fair	Value	through	Profit	or	Loss
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Held for trading
 Sri Lanka Government Securities
  (separately by instrument-wise)
 Equity securities
 Debt securities
 Others (Please specify)
Sub Total
Designated at fair value through profit or loss
 Sri Lanka Government Securities
  (separately by instrument-wise)
 Debt securities
 Equity securities
 Loans and receivables to banks (Note 21)
 Loans and receivables to other customers (Note 22)
 Others (Please specify)
Sub Total
Total
a. Financial Assets Held for Trading
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Financial assets held for trading pledged as collateral
Other financial assets held for trading
Total


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  303
21. Loans and Receivables to Banks
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Gross loans and receivables
Less : Individual impairment
Of which : Loans and receivables designated at fair value
     through profit or loss (Note 20)
Net loans and receivables
a.  Analysis
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
By product
Loans and advances
 Overdrafts
 Short-term loans
 Long-term loans
 Securities purchased under resale agreements
 Others (Please specify)
Others
 Sri Lanka Government Securities
  (separately by instrument-wise)
 Others (Please specify)
Gross total
By currency
 Sri Lankan Rupee
 United States Dollar
 Great Britain Pound
 Others (Please specify)
Gross total
b. Movements in Individual Impairment during the year
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Individual impairment
 Opening balance at DD MM YY
 Char ge / (Write back) to income statement
 W rite-off during the year
 Other movements
Closing balance at DD MM YY


304 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
22. Loans and Receivables to Other  Customers
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Gross loans and receivables
Less : Individual impairment
    Collective impairment
Of which : Loans and receivables designated at fair value
     through profit or loss (Note 20)
Net loans and receivables
a.  Analysis
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
By product
 Loans and advances
  Overdrafts
  T rade finance
  Lease rentals receivable
  Credit cards
  Pawning
  Staff loans
  T erm loans
   Short-term
   Long-term
  Securities purchased under resale agreements
  Others (Please specify)
Others
 Sri Lanka Government Securities (separately by instrument-wise)
 Others (Please specify)
Gross total
By currency
 Sri Lankan Rupee
 United States Dollar
 Great Britain Pound
 Others (Please specify)
Gross total
By industry
 Agriculture and fishing
 Manufacturing
 Tourism
 Transport
 Construction
 Traders
 New economy
 Others
Gross total


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  305
b. Lease r entals receivable (Disclose as per LKAS 17)
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Please specify
Total
c. Movements in Individual and Collective Impairment during the year
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Individual impairment
 Opening balance at DD MM YY
 Char ge / (Write back) to income statement
 W rite-off during the year
 Other movements
Closing balance at DD MM YY
Collective impairment
 Opening balance at DD MM YY
 Char ge / (Write back) to income statement
 Other movements
Closing balance at DD MM YY
Total
23. Financial Investments – Available-for-Sale
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Sri Lanka Government Securities (separately by instrument-wise)
Equity securities
Debt securities
Others
Less : Impairment
Net Available-for-sale Investments
a.  Movements in Impairment during the year
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Opening balance at DD MM YY
Charge / (Write back) to income statement
Write-off during the year
Other movements
Closing balance at DD MM YY


306 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
b.  Financial Investments – Available-for-Sale
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Financial investments – Available-for-sale pledged as collateral
Other financial investments – Available-for-sale
Total
24. Financial Investments – Held-to-Maturity
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Sri Lanka Government Securities (separately by instrument-wise)
Debt securities
Others
Less : Impairment
Net Total
Of which : Held-to-Maturity investments designated at fair value
     through profit or loss (Note 20)
Net Held-to-Maturity Investments
a.  Movements in Impairment during the year
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Opening balance at DD MM YY
Charge / (Write back) to income statement
Write-off during the year
Other movements
Closing balance at DD MM YY
25. Investments in Subsidiaries
In Rupees Million
Bank
20XX 20XX
Quoted equity share
Unquoted equity share
Less : Impairment
Net Total
Note : Please provide details of subsidiaries, separately.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  307
a.  Movements in Impairment during the year
In Rupees Million
Bank
20XX 20XX
Opening balance at DD MM YY
Charge / (Write back) to income statement
Net Write-off during the year
Other movements
Closing balance at DD MM YY
26. Investments in Associates and Joint Ventures
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Associates
Unquoted equity share
Quoted equity share
Less : Impairment
Sub Total
Joint Ventures
Unquoted equity share
Quoted equity share
Less : Impairment
Sub Total
Total
Note : Please provide details of associates and joint ventures separately.
a.  Movements in Impairment during the year
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Associates
Opening balance at DD MM YY
Charge / (Write back) to income statement
Net Write-off during the year
Other movements
Closing balance at DD MM YY
Joint Ventures
Opening balance at DD MM YY
Charge / (Write back) to income statement
Net Write-off during the year
Other movements
Closing balance at DD MM YY


308 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
27. Pr operty, Plant and Equipment
a. Pr operty, Plant and Equipment – Bank
In Rupees Million
Bank 20XXLand
and Buildings
Leasehold
properties
Computer
Hardware
Computer
Software
Office
Equipment,
furniture and
	fittings
Others
Total
20XX (Current year)
Cost / fair value
Opening balance at DD MM YY
Additions
Disposals
Exchange rate variance
Adjustments
Closing balance at DD MM YY
Less : Accumulated depreciation
Opening balance at DD MM YY
Charge for the year
Additions
Disposals
Exchange rate variance
Adjustments
Closing balance at DD MM YY
Less : Impairment
Net book value at DD MM YY
Market value at DD MM YY
20XX (Previous year)
Cost / fair value
Opening balance at DD MM YY
Additions
Disposals
Exchange rate variance
Adjustments
Closing balance at DD MM YY
Less : Accumulated depreciation
Opening balance at DD MM YY
Charge for the year
Additions
Disposals
Exchange rate variance
Adjustments
Closing balance at DD MM YY
Less : Impairment
Net book value at DD MM YY
Market value at DD MM YY


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  309
b.  Property, Plant and Equipment – Group [as per 27(a) above]
c.  Movements in Impairment during the year
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Opening balance at DD MM YY
Charge / (Write back) to income statement
Net Write-off during the year
Exchange rate variance and other adjustments
Closing balance at DD MM YY
28. Investment Pr operties
a.  Investment Properties as Cost / fair value
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Cost / fair value
Opening balance at DD MM YY
Additions
Disposals
Exchange rate variance
Adjustments
Closing balance at DD MM YY
Less : Accumulated depreciation
Opening balance at DD MM YY
Charge for the year
Additions
Disposals
Exchange rate variance
Adjustments
Closing balance at DD MM YY
Less : Impairment
Net book value at DD MM YY
Market value at DD MM YY
b.  Movements in Impairment during the year
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Opening balance at DD MM YY
Charge / (Write back) to income statement
Net Write-off during the year
Exchange rate variance and other adjustments
Closing balance at DD MM YY


310 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
29. Goodwill and Intangible Assets
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Goodwill
Opening balance at DD MM YY
Adjustments
Less : Impairment
Sub-total (closing balance at DD MM YY
Other Intangible Assets
Opening balance at DD MM YY
Adjustments
Sub-total (closing balance at DD MM YY
Total
30. Deferr ed Tax Assets / Liabilities
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Deferred tax assets
Deferred tax liabilities
Income statement
Net Total
31. Other  Assets
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Cost
Receivables
Deposits and prepayments
Sundry debtors
Others (Please specify)
Total
32. Due to Banks
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Borrowings
Securities sold under repurchase (repo) agreements
Others (Please specify)
Total


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  311
33. Derivative Financial Instruments
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Interest rate derivatives
 Interest rate swaps
 Interest rate futures
 Interest rate options
 Others (Please specify)
Foreign exchange derivatives
 Currency swaps
 Forward foreign exchange contracts
 Others (Please specify)
Others (Please specify)
Total
34.	Other 	Financial 	Liabilities 	at	Fair	Value	through	Profit	or	Loss
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Held for trading
 Other debt securities
 Due to non-bank customers
 Other financial liabilities
Sub Total
Fair value designated
 Other debt securities
 Due to non-bank customers
 Other financial liabilities
Sub Total
Total
35. Due to Other  Customers
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Total amount due to other customers
Less : Designated at fair value through profit or loss (Note 34)
Total


312 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
a.  Analysis
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
By product
 Demand deposits (current accounts)
 Savings deposits
 Fixed deposits
 Other deposits (Please specify)
Total
By currency
 Sri Lanka rupee
 United State dollar
 Great Britain pound
 Others (Please specify)
Total
36. Other  Borrowings
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Securities sold under repurchase (repo) agreements
Others (Please specify)
Total
37. Debt Securities Issued
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Issued by the bank (Note 32)
Issued by other subsidiaries (Note 40)
Total
Due within 1 year
Due after 1 year
Total


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  313
a. Details of Debt Securities Issued
TypeFace
Value
(Rupees
Millions)Interest
Rate and
Repayment
TermsIssue
DateMaturity
DateBank Group
20XX 20XX 20XX 20XX
Issued by the bank
 (i)
(ii)
Sub Total
Issued by other subsidiaries
 (i)
(ii)
Sub Total
Total
38. Other  Provisions
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Please specify
Total
39. Other  Liabilities
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Sundry creditors
Interest payable
Impairment in respect of off-balance sheet credit exposures (Note 10)
Other payables
Total
40. Due to Subsidiaries
In Rupees Million
Bank
20XX 20XX
Please specify
Total


314 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
41. Subordinated Term Debts
TypeFace
Value
(Rupees
Millions)Interest
Rate and
Repayment
TermsIssue
DateMaturity
DateBank Group
20XX 20XX 20XX 20XX
Issued by the bank
 (i)
(ii)
Sub Total
Issued by other subsidiaries
 (i)
(ii)
Sub Total
Total
Due within 1 year
Due after 1 year
Total
42. Stated Capital / Assigned Capital
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Please specify
Total
43. Statutory Reserve Fund
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Opening balance at  DD MM YY
Transfer during the period
Closing balance at DD MM YY
44. Retained Earnings
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Opening balance at  DD MM YY
Profit for the year
Transfers to other reserves
Dividend
Closing balance at DD MM YY


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  315
45. Other  Reserves
a.  Bank – Current year (20XX)
In Rupees Million
Opening balance
at DD MM YYMovement /
transfersClosing balance
at DD MM YY
General reserve
Revaluation reserve
Available-for-sale reserve
Cash flow hedge reserve
Foreign currency translation reserve
Others (please specify)
Total
b.  Bank – Previous year (20XX)
In Rupees Million
Opening balance
at DD MM YYMovement /
transfersClosing balance
at DD MM YY
General reserve
Revaluation reserve
Available-for-sale reserve
Cash flow hedge reserve
Foreign currency translation reserve
Others (please specify)
Total
c.  Group – Current year (20XX)  [as per 43(a) above]
d.  Group – Previous year (20XX)  [as per 43(b) above]
46. Non-contr olling Interests
In Rupees Million
Group
20XX 20XX
Please specify
Total
47. Contingent Liabilities and Commitments
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Guarantees
Performance bonds
Letters of credit
Other contingent items
Undrawn loan commitments
Other commitments
Total


316 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
48. Related Party Disclosur es
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Please specify
Total
49. Net Assets Value per Ordinary Share
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Please specify
Total
50.	Non-Cash 	items	included	in	Profit	Before	Tax
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Depreciation of property, plant and equipment
Amortisation of leasehold property
Amortisation of intangible assets
Impairment losses on loans and advances
Other impairment
Accretion of discounts and amortisation of premiums of investment securities
Charge for defined benefit plans
Share based payment expense
Others (please specify)
Total
51. Change in Operating Assets
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Change in derivative financial instruments
Net increase in debt securities, treasury bills & bonds and
 equity shares held at fair value through profit or loss
Net increase in loans and advances to banks
Net increase in loans and advances to customers
Change in balances with Central Banks
Change in pre-payments and accrued income
Change in other assets (please specify)
Total


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  317
52. Change in Operating Liabilities
In Rupees Million
Bank Group
20XX 20XX 20XX 20XX
Change in derivative financial instruments
Change in deposits from banks, customers and
debt securities issued
Change in debt securities
Change in financial liabilities designated at
fair value through profit or loss
Change in accruals and deferred income
Change in other liabilities (Please specify)
Total
Other Disclosure Requirements
While complying with the disclosure requirements of all applicable Sri Lanka Accounting
Standards, the following minimum disclosure requirements are applicable for all licensed banks
on	standalone 	basis	and	on	consolidated 	basis	for	the	financial	reporting	periods	beginning 	on	or
after	01.01.2012 	and	shall	be	disclosed 	either	on	the	face	of	financial	statements 	or	on	the	notes.
1.	 Information 	about	the	significance 	of	financial	instruments 	for	financial	position	and
performance
1.1 Statement of Financial Position
1.1.1  Disclosures on categories of financial assets and financial liabilities (refer notes to the financial
statements).
1.1.2  Other disclosures
 (i) Special disclosures about financial assets and financial liabilities designated to be measured
at fair value through profit or loss, including disclosures about credit risk and market risk,
changes in fair values attributable to these risks and the methods of measurement.
 (ii) Reclassifications of financial instruments from one category to another .
 (iii) Information about financial assets pledged as collateral and about financial or non-financial
assets held as collateral.
 (iv) Reconciliation of the allowance account for credit losses by class of financial assets.
 (v) Information about compound financial instruments with multiple embedded derivatives.
 (vi) Breaches of terms of loan agreements.
1.2 Statement of Compr ehensive Income


(vi) Breaches of terms of loan agreements.
1.2 Statement of Compr ehensive Income
1.2.1  Disclosures on items of income, expense, gains and losses (refer notes to the financial statements).
1.2.2  Other disclosures:
 (i) T otal interest income and total interest expense for those financial instruments that are not
measured at fair value through profit and loss.
 (ii) Fee income and expense.


318 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
 (iii) Amount of impairment losses by class of financial assets.
 (iv) Interest income on impaired financial assets.
1.3 Other  disclosures
1.3.1  Accounting policies for financial instruments
1.3.2  Information on hedge accounting
1.3.3  Information about the fair values of each class of financial asset and financial liability, along with:
 (i) Comparable carrying amounts.
 (ii) Description of how fair value was determined.
 (iii) The level of inputs used in determining fair value.
 (iv) Reconciliations of movements between levels of fair value measurement hierarchy,
additional disclosures for financial instruments that fair value is determined using level 3
inputs.
 (v) Information if fair value cannot be reliably measured.
2.	 Information 	about	the	nature	and	extent	of	risks	arising	from	financial	instruments
2.1 Qualitative disclosur es
2.1.1  Risk exposures for each type of financial instrument
2.1.2  Management’ s objectives, policies, and processes for managing those risks
2.1.3  Changes from the prior period
2.2 Quantitative disclosur es
2.2.1  Summary of quantitative data about exposure to each risk at the reporting date.
2.2.2  Disclosures about credit risk, liquidity risk, market risk, operational risk, interest rate risk and
how these risks are managed.
 (i) Credit Risk
(a) Maximum amount of exposure (before deducting the value of collateral), description
of collateral, information about credit quality of financial assets that are neither past
due nor impaired and information about credit quality of financial assets.
(b) For financial assets that are past due or impaired, disclosures on age, factors considered
in determining as impaired and the description of collateral on each class of financial
asset.
(c) Information about collateral or other credit enhancements obtained or called.


asset.
(c) Information about collateral or other credit enhancements obtained or called.
(d) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk
Management Framework for Licensed Banks (Section H).
 (ii) Liquidity Risk
(a) A  maturity analysis of financial liabilities.
(b) Description of approach to risk management.
(c) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk
Management Framework for Licensed Banks (Section H).
 (iii) Market Risk
(a) A  sensitivity analysis of each type of market risk to which the entity is exposed.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  319
(b) Additional information, if the sensitivity analysis is not representative of the entity's
risk exposure.
(c) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk
Management Framework for Licensed Banks (Section H).
 (iv) Operational Risk
  Refer Banking Act, Direction No. 7 of 2011 on Integrated Risk Management Framework
for Licensed Banks (Section H).
 (v) Equity risk in the banking book
(a) Qualitative disclosures
• Dif ferentiation between holdings on which capital gains are expected and those
taken under other objectives including for relationship and strategic reasons.
• Discussion of important policies covering the valuation and accounting of equity
holdings in the banking book.
(b) Quantitative disclosures
• V alue disclosed in the statement of financial position of investments, as well as
the fair value of those investments; for quoted securities, a comparison to publicly
quoted share values where the share price is materially different from fair value.
• The types and nature of investments
• The cumulative realised gains/(losses) arising from sales and liquidations in the
reporting period.
 (vi) Interest rate risk in the banking book
(a) Qualitative disclosures
 Nature of interest rate risk in the banking book (IRRBB) and key assumptions
(b) Quantitative disclosures
 The increase / (decline) in earnings or economic value (or relevant measure used
by management) for upward and downward rate shocks according to management’s
method for measuring IRRBB, broken down by currency (as relevant).
2.2.3  Information on concentrations of risk
3. Other  disclosures
3.1 Capital
3.1.1  Capital structure
 (i) Qualitative disclosures
  Summary information on the terms and conditions of the main features of all capital
instruments, especially in the case of innovative, complex or hybrid capital instruments.
 (ii) Quantitative disclosures


(ii) Quantitative disclosures
(a) The amount of Tier 1 capital, with separate disclosure of:
• Paid-up share capital / common stock
• Reserves
• Non-controlling interests in the equity of subsidiaries
• Innovative instruments
• Other capital instruments
• Deductions from Tier 1 capital


320 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
(b) The total amount of Tier 2 and Tier 3 capital
(c) Other deductions from capital
(d) T otal eligible capital
3.1.2  Capital adequacy
 (i) Qualitative disclosures
A summary discussion of the bank’s approach to assessing the adequacy of its capital to
support current and future activities.
 (ii) Quantitative disclosures
(a) Capital requirements for credit risk, market risk and operational risk
(b) T otal and Tier 1 capital ratio


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  321
Ref. Nos. :  02 / 04 / 002 / 0105  / 001
    &
 02 / 04 / 002 / 0151  / 001
Bank Supervision Department
8th Floor, Renuka Building
41, Janadhipathi Mawatha
Colombo 1.
20th March, 2001
To :  All Licensed Commer cial Banks and
 Licensed Sepcialised Banks
Dear Sir,
PUBLICATION OF CAPITAL ADEQUACY STATEMENT
IN THE ANNUAL REPORT
 You may be aware that the CBSL guidelines permit consolidation of subsidiaries for the
purpose of computing capital adequacy ratios of banks but have not specified the nature of subsidiaries
to be consolidated. The CBSL is presently reviewing the policy on consolidation of subsidiaries by
banks for capital adequacy purposes.
 It  is observed that there had been no uniformity among banks in presenting the capital
adequacy statement in their Annual Reports. While few banks publish the statement on a ‘solo’ basis
others present it on a ‘consolidated’ basis.
 W ith a view to giving a true picture to the readers, it is recommended that the basis of
computation of the capital adequacy and the inclusion of non banking and non-financial subsidiaries
in the computation of the capital adequacy ratio, be disclosed as a footnote to the capital adequacy
statement, if published in the Annual Report of the bank.
Yours faithfully,
Sgd, P.T. Sirisena
Director of Bank Supervision


322 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Ref. Nos. :  02 / 17 / 800 / 0002  / 002
Bank Supervision Department
17 September, 2013
To :  CEOs of All Licensed Commercial Banks and
 Licensed Sepcialised Banks
Dear Sir/Madam,
PUBLICATION OF FINANCIAL STATEMENTS AND
 OTHER DISCLOSURES ON THE WEBSITES
 As intimated at the Chief Executive Officers meeting held on 28 August 2013, uniform and
adequate disclosure practices are important for improving market efficiency and promoting healthy
competition. In view of same and to further enhance transparency of banking operations and market
discipline, every bank shall ensure the following publication requirements on their respective websites.
Frequency Disclosure requirement
Annually   (i) Annual Audited Report/Financial Statements and/or reports based on the
requirements specified in,
(a) Circulars dated 02 June 1998 and 11 February 2013 issued on preparation
of annual audited accounts.
(b) Direction No. 3(8): “Disclosures” of the Banking Act, Directions No. 11
and 12 of 2007 on Corporate Governance.
(ii) In respect of branches of foreign banks, item (i)(b) above shall be in accordance
with the requirements specified in the Circular dated 03 January 201 1.
Bi-annually (i) Qualitative disclosures of the bank’s risk management as required under Direction
1.5 of Item H on Disclosure Requirements of the Guidelines issued under the
Banking Act, Directions No. 7 of 2011 on the Integrated Risk Management
Framework. Such publication in the website will be considered as compliance
with the respective requirements under the Banking Act, Directions No. 7 of
2011.
(ii) Banks may effect appropriate changes to the above requirements in accordance
with the Sri Lanka Financial Reporting Standards (SLFRS) and Sri Lanka
Accounting Standards (LKAS).
Quarterly Quarterly Financial Statements based on the requirements specified in Circulars


Quarterly Quarterly Financial Statements based on the requirements specified in Circulars
dated 30 September 2005, 26 January 2006, 21 February 2006 and 1 1 February 2013
issued on publication on quarterly financial statements in the press.
Accordingly, you are required to take necessary measures to comply with the above.
Yours faithfully
(Mrs.) T M J Y P Fernando
Director of Bank Supervision


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  323
Ref. No. : BS/38/90
Dept. of Bank Supervision
8th Floor, Renuka Building
41, Janadhipathi Mawatha
Colombo 1.
20 May 1998
To : All appr oved External Auditors of
 Licensed Specialised Bank s
Dear Sir,
 As you are aware, the Central Bank of Sri Lanka, as the supervisory authority for licensed
commercial banks and specialised banks in Sri Lanka, is charged with the responsibility of ensuring that
there is a great degree of consistency of bank audits and standard procedures which can be followed by
approved auditors. Accordingly, we enclose herewith a set of “Guidelines for External Auditors relating
to their statutory duties under Section 39 of the Banking Act, No.30 of 1988, as amended by Banking
Act, No.33 of 1995”.
 Since your Firm is on the panel of approved auditors of the Central Bank, you are required to
ensure that the audit of licensed commercial banks/licensed specialised banks, are in conformity with
these guidelines, with effect from the financial year 1998.
 Please note that wherever the expression “licensed commercial banks” appears in the guidelines,
it would also include “licensed specialised banks”.
 Please acknowledge receipt of this letter and the enclosures.
Yours faithfully,
Sgd. Y. A. Piyatissa
Director of Bank Supervision


324 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
GUIDELINES FOR EXTERNAL AUDITORS RELATING TO THEIR STATUTORY DUTIES
UNDER SECTION 39 OF THE BANKING ACT NO. 30 OF 1988
AS AMENDED BY BANKING ACT NO. 33 OF 1995
1. In terms of Section 39 of the Banking Act, the Central Bank of Sri Lanka, as the supervisory authority
for licensed commercial banks in Sri Lanka, is charged with the responsibility of ensuring that the
audits of banks are conducted satisfactorily. Accordingly, External Auditors of licensed commercial
banks in Sri Lanka are informed of the following guidelines which have been formulated in
recognition of the fact that Auditors are specially qualified to undertake :–
(a) The verification of prudential returns;
(b) The evaluation of control systems;
(c) The expression of opinions on provisioning policies; and
(d) The monitoring of the fiduciary activities of Banks.
2. The auditing guidelines envisaged by the Central Bank for the audit of licensed commercial banks
in Sri Lanka do not seek to provide an exhaustive listing of the procedures and practices to be used
in an audit. Rather, they seek to stress special audit considerations for instance concerning related
party transactions, or the risks they assume resulting from the use of electronic data processing and
electronic fund transfer systems connected to the specific characteristics of Banks. These guidelines
acknowledge the audit objectives which are of particular importance in relation to the typical items
in a Bank’s financial statement and encourage substantive audit procedures for the evaluation of loan
loss provisions, income recognition, etc . It is hoped that these guidelines will encourage a greater
degree of consistency in Bank audits and set standard procedures which can be followed by Auditors
in Sri Lanka.
3. W ith a view to ensuring that the interests of depositors are not at risk because of adverse changes in


the financial position or in the management or other resources of an institution, External Auditors,
in performing their statutory duties under the Banking Act and in recognizing the dependence of the
Central Bank on prudential returns and other information submitted by licensed commercial banks,
shall ensure :–
 (a) that the institution has not breached, or is in the process of currently breaching, or is likely to
breach, the capital ratio set by the Central Bank;
 (b) that the institution has not breached by a material amount for a significant period, or has been
frequently breaching by any amount, the liquidity ratio laid down by the Central Bank;
 (c) that the institution holds adequate provisions for bad and doubtful debts, expected losses on
contingents and tax liabilities, in accordance with accepted accounting standards;
 (d) that the accounting and other records and systems of control of the institution are commensurate
with the size and nature of business, or the way in which the business is structured, organized
and managed;
 (e) that the business, or a significant component of the business, is not effectively being directed or
has been directed for any period of time, by only one individual;
 (f) that there is evidence which calls into question the appropriateness of actions or decisions taken
by the management which are significant for prudential purposes.
4. In formulating these guidelines the Central Bank has recognized that in an industry environment
of high dependence on information technology, auditors should devote sufficient resources to
assess the soundness of the EDP processes which are vital to the institution’s operations and to the
effectiveness of internal EDP controls. External Auditors should accordingly, refer in their annual


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  325
management letters to any shortcomings and imperfections which have come to their attention in the
course of their examination of this specified field. The Central Bank recognizes that the risks which
characterize an EDP environment and the security and control procedures it requires are :–
(a) Improper disclosure of information;
(b) Error;
(c) Fraud;
(d) Interruption of business due to hardware or software failure;
(e) Inef fective planning and risks associated with end-user computing operations.
5. The Central Bank of Sri Lanka would also require auditors, under certain conditions, to discuss
with the supervisory authorities the activities of their banking clients. In doing so, the Central Bank
recognises that it is important that Auditors act in a manner that will preserve their professional
relationship with their client at all times. They would be therefore expected to draw the attention of
the Bank’s management immediately in certain situations, reference to which shall be contained in
their annual Management Letter. The situations envisaged in this regard are :–
 (a) Where it has come to the Auditor’s attention that there is an extreme situation, such as evidence
of imminent financial collapse;
 (b) Where the Auditor has evidence of an occurrence which has led or is likely to lead to a material
diminution of the institution’s assets;
 (c) W hen there appears to the Auditor to be a material contravention of one or more of the
provisions of the Banking Act or of the regulations, directives, or guidelines issued to licensed
commercial banks by the Central Bank;
 (d) When the Auditor forms the opinion that the management has reported financial information
to the Supervisor which is misleading or when he becomes aware that management has failed,
does not intend to, report something and such failure to report is, or would be, materially
misleading; or


misleading; or
 (e) When the Auditor forms the opinion that there has been a significant failure of, or that there
is significant weakness in, the accounting and other records or internal control systems of the
institution.
6. The Central Bank believes that these guidelines would require Auditors to enlarge the scope of their
audit work. The Central Bank expects that only when Auditors become aware in the ordinary course
of their audit work of such an occurrence that they would expect them to make detailed enquiries
with the statutory provisions/directives/regulations/guidelines specifically in mind. These guidelines
do not cast an obligation on Auditors to seek out ground for making a report nor do they place an
obligation on them to conduct their work in such a way that there is reasonable certainty that they
will discover a breach of the criteria set out in these guidelines.
 Detailed operational guidelines to auditors are annexed.


326 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
OPERATIONAL GUIDELINES TO EXTERNAL AUDITORS RELATING
TO THEIR STATUTORY DUTIES UNDER SECTION 39 OF THE BANKING ACT NO. 30 OF 1988
AS AMENDED BY BANKING ACT NO. 33 OF 1995
1. These auditing guidelines on Bank audits are intended to assist the Auditors of Licensed commercial
banks in Sri Lanka to comply with generally accepted auditing standards when carrying out their
audit work and in preparing their report on the financial statements of Banks. These guidelines
are supplementary to and should be read in conjunction with the Sri Lanka Accounting Standards
Nos. 23 and 30 and any other relevant Standards referred to therein on the audit of licensed
commercial banks in Sri Lanka.
2. It is particularly important that Auditors of a Bank undertake an audit engagement only after
considering their own competence and the adequacy of their resources (including relevant experience)
to carry out their duties. In assessing their competence and, resources the Auditors should bear in
mind the type and range of the Banks activities and the nature of its systems. For example highly
specialized computer systems will require different skills from those necessary to evaluate manual
systems.
3. These guidelines have been drawn up in recognition of the fact that the maintenance of adequate
records and systems in a licensed commercial bank is of paramount importance and that an institution
cannot be regarded as conducting its business in a prudent manner unless it maintains adequate
accounting and other records as well as adequate systems of control of its business and records to
enable the business of the institution to be prudently managed and to comply with the duties imposed
on it by or under the statutes relevant to its operations.
4. These guidelines do not attempt to describe in detail the manner, in which a particular institution


should maintain its accounting and other records and internal control systems. Rather it emphasizes
the need to ensure that the scope and nature of the financial information which the accounting and
other records must be designed to capture, contain the required information.
Planning and Audit
5. When planning the audit of a Bank, Auditors are required to consider the following :–
 (a) The overall financial environment in which the Bank operates and its type of business;
 (b) The extent of computer systems and the reliance placed on these systems by the Bank;
 (c) The legal framework in which the Bank operates;
 (d) The audit risk involved, the assessment of which is crucial and should be undertaken very
carefully, particularly where the circumstances and management of the Bank indicate that the
engagement is likely to be high risk;
 (e) Key audit areas, in particular, individual areas where there is a high risk of material misstatement.
These should be identified at an early stage of audit to ensure that work is concentrated on this
area;
 (f) The adequacy and scope of the internal audit or inspection function;
 (g) The timing and nature of the audit work to be carried out;
 (h) The use of staf f with adequate training and experience.
6. Auditors should also consider the following additional matters when planning the audit :–
 (a) Compliance with the requirements of any guidelines issued by the CBSL;
 (b) Any formal communications between the CBSL and the Bank, including all correspondence,
minutes or notes of meetings relevant to the examination of the accounting and other records,
internal control systems and CBSL returns used for prudential purposes.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  327
Scope of Audit – Accounts and Other Records
7. The scope and nature of the accounting and other records which are required for the business of a
Bank to be conducted in a prudent manner should be commensurate with the manner in which the
business is structured, organized and managed, as well as the volume, nature and complexity of its
transactions and commitments. Auditors are thus required to ensure that the accounting and other
records of a Bank meet the following general requirements :–
 (a) capture and record on a timely basis and in an orderly fashion every transaction and commitment
which the institution enters into with sufficient information to explain :–
 (i)  its nature and purpose;
 (ii) any asset and/or liability, actual and contingent, which respectively arises or may arise
from it; and
 (iii) any income and/or expenditure, current and/or deferred which arises from it;
 (b) provide details, as appropriate, for each transaction and commitment, showing :–
 (i) the parties, including, in the case of a loan, advance or other credit exposure, whether
it is sub-participated and if so to whom it is sub-participated;
 (ii) the amount and currency;
 (iii) the contract, rollover , value and settlement or repayment dates;
 (iv) the contracted interest rates of an interest rate transaction or commitment;
 (v) the contracted exchange rate of a foreign exchange transaction or commitment;
 (vi) the contract ed commission or fees payable or receivable together with any other related
payment or receipt;
 (vii) the nature and current estimated value of any security for a loan or other exposure; the
physical location and documentary evidence of such security; and
 (viii) in the case of any borrowing, whether it is subordinated; if secured, the nature and book
value of any asset upon which it is secured;


value of any asset upon which it is secured;
 (c) m aintain the accounting and other records in such a manner that financial and business
information can be extracted promptly to enable management to :–
 (i) monitor the quality of the institution’s assets and safeguard them, including those held
as custodian;
 (ii) identify , quantify, control and manage its exposures by related counter-parties across
all products;
 (iii) i dentify, quantify, control and manage its exposures to liquidity risk and foreign
exchange and other market risks across all products;
 (iv) monitor the performance of all aspects of its business on an up-to-date basis; and
 (v) make timely and informed decisions;
 (d) c ontain details of exposure limits authorized by management which are appropriate to the
type, nature and volume of business undertaken. These limits should, where relevant, include
counterparty, industry sector, country, settlement liquidity, interest rate mismatch and securities
position limits as well as limits on the level of intra-day and overnight trading positions in
foreign exchange, futures, options, future (or forward) rate agreements (FRAs) and swaps;
provide information which can be summarized in such a way as to enable actual exposures to
be readily, accurately and regularly measured against these limits;
 (e) contain details of the factors considered, the analysis undertaken and the authorization or
rejection by management of a loan, advance or other credit exposure; and


328 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
 (f) provide on a memo randum basis details of every transaction entered into in the name of or
on behalf of another party on an agency or fiduciary (trustee) basis where it is agreed that the
institution itself is not legally or contractually bound by the transaction.
Internal Control Systems
8. A  system of internal controls in a Bank is deemed to be;
‘the whole system of controls, financial and otherwise, established by management in order to
carry on the business of the enterprise in an orderly and efficient manner, ensure adherence
to management policies, safeguard the assets and secure as far as possible the completeness
and accuracy of the records.’
9. In evaluati ng the adequacy of internal control systems in a bank, auditors are required to assess
the internal control systems only to the extent that they wish to place reliance on those systems in
arriving at their opinion as to whether the financial statements give a true and fair view. A careful
evaluation of these systems would include computer based accounting and information systems and
their relationship with the risk of material misstatement in the financial statements will be essential.
If the Auditors conclude that they can rely on the system of controls they may be able to limit the
level of substantive tests required to form their opinion on the financial statements.
10. For the purpose of identifying relevant controls, the principal activities of banks may be classified as
follows :–
 (a) loans, advances, trade finance and related income and expense;
 (b) customer accounts, cash, transfer of funds, nostro accounts and related income and expense;
 (c) inter bank deposits and related income and expense;
 (d) d ealing in foreign exchange, futures, options, commodities, bullion and related income,
expense, gains and losses;


expense, gains and losses;
 (e) investments, dealing securities and related income, expense, gains and losses; and
 (f) trustee and advisory activities (including portfolio management) and related income and
expense.
11. The overall audit objective should always be to ensure that the financial statements give a true and
fair view of the state of the Bank’s affairs at a given date and of the results for the year ended, and
comply with statutory and other relevant requirements.
12. Audit steps likely to be required to satisfy this overall objective, can be identified as follows :–
 (a) to determine the reliability of the bank’ s systems of internal control;
 (b) to ensure that all material balances exist, are complete, and are fairly stated at the balance sheet
date;
 (c) to ensure that all income and expenditure, gains and losses are properly accounted for;
 (d) to ascertain the recoverability and hence the realizability at the balance sheet date, of any loans,
investments and other related credit exposures;
 (e) in relation to trustee activities, to ascertain whether controls exist to give reasonable assurance
that the bank has fulfilled its fiduciary duties; and
 (f) to ensure that all material commitments and liabilities, contingent or otherwise, are identified,
provided for, or adequately disclosed in the financial statements.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  329
Automation
13. As a result of the large number of transactions undertaken and records held by banks and the need
for swift and accurate information processing and retrieval, many banking functions are often highly
automated, including : funds transfer systems, the accounting function, the processing and recording
of retail customer transactions, the dealing room and the supply of dealing and management
information.
14. The Auditors should assess the extent, nature and impact of automation within the bank and plan and
perform their work accordingly.
 (a) the required level of technical computer knowledge and skills is likely to be extensive and may
require the auditor to obtain advice and assistance from staff with specialist skills;
 (b) bank audits are particularly suitable for the use of audit software and other types of Computer
Assisted Audit Techniques; and
 (c) reliance on internal controls for audit purposes is likely to require the evaluation and testing
of general controls relating to the environment within which computer based systems are
developed, maintained and operated.
Branches
15. Many branches operate a network of branches. The Auditors’ approach to such branches will
principally be determined by the degree of Head Office control over the business and accounting
functions at each branch and by the scope and effectiveness of the bank’s inspection and/or internal
audit visits. The extent and impact of visits from regulators should also be considered. Where
branches maintain separate accounting records, the extent of audit visits and work on each branch
will also be dependent on the materiality of, and risks associated with, the operations of each branch
and the extent to which controls over branches are exercised centrally. Where the branch accounting
records are centralized, the auditors should obtain reasonable assurance that the systems of control


over branches are operating satisfactorily either by visiting branches, or by ensuring that an adequate
system of branch inspection by internal auditors exists. Particular attention should be paid both to the
difficulties of exercising Head Office control and to the differences in nature and degree of risk that
may arise in overseas branches. In the case of smaller branches, attention should focussed upon the
exceptions to a bank’s normal control procedures caused by staffing levels (e.g., the greater difficulty
of ensuring adequate segregation of duties) and to the consequent need for an increased level of
control from outside the branch.
Review of Financial Statements
16. When reviewing the financial statements of the Bank the Auditor should carry out such a review of
the financial statements as is sufficient, in conjunction with the conclusions drawn from the other
audit evidence obtained, to give him a reasonable basis for his opinion on the financial statements.
Such a review should include :–
 (a) Lar ge deposits or loan repayments received shortly before the year end which are repaid or
re-advanced shortly afterwards. This will require a good deal of judgement to identify any
window-dressing transactions;
 (b) T ransfers between the trading security and investment security portfolios which take advantage
of different valuation policies;
 (c) The reclassification of hedging and trading transaction/positions to take advantage of different
timing of profit and loss recognition;
 (d) The reclassification of assets within liquidity profiles or under balance sheets headings.


330 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
17. Auditors should consider whether the accounts comply with all relevant statutory requirements, and
whether the accounting policies adopted will enable them to express an unqualified opinion on the
financial statement, in respect of the following:–
 (a) loans, advances and trade finance;
 (b) customer accounts, cash, transfer of funds and NOSTRO accounts;
 (c) market deposits;
 (d) foreign exchange, futures, options and commodities dealings;
 (e) investments and dealing securities.
18. Auditors should ensure that the following controls are compliance tested :–
 (a) Segregation of duties wherever these controls are deemed necessary;
 (b) Physical controls wherever they are deemed necessary;
 (c) Authorization and approval wherever they are deemed necessary;
 (d) Arithmetical and accounting accuracy and controls where they are deemed necessary;
 (e) Supervision controls where they are deemed necessary;
 (f) Substantive tests to prove the adequacy of these controls.
19. Application and general control over the computer environment would entail :–
 (a) The or ganization of the relevant Bank departments.
 (b) Management review of activities.
 (c) Recompute processing of the transactions.
 (d) Input and processing of transactions by computer .
 (e) Maintenance of computer files of transactions and balances.
 (f) Post processing actions on output and computer systems.
 (g) Reconciliation of computerized records with related assets.
20. The general controls relating to the development, maintenance and operation of computer systems
that are designed to control the following risks :–
 (a) Risks arising in the development and enhancement of new computer systems;
 (b) Risks or errors during data processing, development and amendment to programmes;
 (c) Risks of loss including being unable to continue operation or recover from a breakdown or
disaster - business interruption;


disaster - business interruption;
 (d) Risks relating to unauthorized access to the computer system, its application and data files.
21. Other controls which af fect a number of areas :–
 (a) controls over the authorization and correct recording of :
 (i) nostro transactions; and
 (ii) transactions using funds transfer systems.
 (b) Control over financial planning and budgeting.
 (c) Controls governing the provision of adequate management accounting information.
 (d) Controls over the documentation and communication of :
 (i) accounting policies ; and
 (ii) operational procedures and controls.
 (e) controls over ef fective personnel selection routines.
 (f) Controls over establishing, monitoring and reporting risk.
 (g) Controls over management review of systems, e.g. internal audit.
 (h) Controls over communication with the CBSL  and other regulatory authorities.
 (i) Computer controls.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  331
Bank Supervision Department
27 April 2004
To :  All Approved External Auditors

Dear Sir,
GUIDELINES FOR EXTERNAL AUDITORS RELATING TO
THEIR STATUTORY DUTIES IN TERMS OF SECTION 39 OF THE BANKING ACT,
NO. 30 OF 1988 AS AMENDED BY THE BANKING ACT, NO. 33 OF 1995
 The Central Bank of Sri Lanka as the Supervisory and regulatory authority of banking institutions
strives continually to mitigate and manage the attendant risks in the banking sector in Sri Lanka.
The CBSL recognizes the important role played by the External Audit firms in this regard and is working
towards improving the quality and the integrity of bank audits.
 Significant developments and changes have taken place in the global financial architecture
since the introduction of the first guidelines to External Auditors by the CBSL. As you are aware, the
Sarbanes-Oxley Act of the US has attempted to address some of these issues. Accordingly, the Monetary
Board of the Central Bank of Sri Lanka has approved the attached Addendum to the Guidelines issued
on 20 May 1998. The CBSL believes that these additional guidelines will address some of these concerns
and contribute towards the improvement of bank audits in Sri Lanka.
 Si nce your Firm is on the panel of approved auditors of the Central Bank, you are required to ensure
that your firm is in compliance with these guidelines, which are operative with immediate ef fect.
 Please acknowledge receipt of this letter .
Yours faithfully,
Director of Bank Supervision
Encl.


332 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Annex I
GUIDELINES FOR EXTERNAL AUDITORS RELATING TO THEIR STATUTORY DUTIES
IN TERMS OF SECTION 39 OF THE BANKING ACT NO. 30 OF 1988
AS AMENDED BY THE BANKING ACT NO. 33 OF 1995
ADDENDUM
Non-Audit Services
1. Qualified External Auditors shall not undertake any consultancy or other non-audit services with a
bank contemporaneously with the external audit. The restricted non-audit services are:
• Book keeping or other services related to the accounting records or financial statements of the audit
client;
• Financial information systems design and implementation;
• Appraisal or valuation services, fairness options, or contribution-in-kind reports;
• Actuarial services;
• Internal audit outsourcing services;
• Management functions, human resources and payroll services;
• Broker or dealer , investment adviser, or investment banking services; and
• Legal services and expert services related to the audit.
This restriction also applies to services provided by entities where a partner of an Audit Firm is a
Director or has a significant share holding.
Management Letter
2. External Audit firms are requested to submit the Management Letter, which is a non-statutory report by
the Auditor to the management of the Bank, together with the published audited accounts to the Banks
they audit, within five months of the end of the financial year. If the auditors are unable to finalize the
Management Letter, they should submit an interim report with their major findings within the said
period. This will enable the Banks and the Regulator to identify significant and systemically important
risks in a timely manner.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  333
Bank Supervision Department
28 July 2006
To : CEOs of all Licensed Specialised Banks (except RDBs)
Dear Sirs,
IMPLEMENTATION OF THE NEW WEB BASED
OFF-SITE SURVEILLANCE SYSTEM
Further to our circular dated 17 March 2006 and the discussions at the meeting of the CEOs of
licensed banks held on 04.07.2006 and 22.06.2006, on the above subject, all licensed banks are hereby
informed that the submission of periodical returns in manual form will be discontinued from the reporting
period ending June 2006. The new ‘web-based returns’ will be implemented from the reporting period
commencing July 01, 2006. The lists of web-based returns are given in the Annex 1. Existing returns that
are not replaced with the web-based returns should continue to be submitted in manual form.
Banks are further informed that statement of certification relating to returns submitted on a weekly/
monthly, quarterly and annual basis should be submitted as specified in Annex 2, Annex 3, Annex 4 and
Annex 5, respectively, within 3 days from the end of the reporting period.
Yours faithfully,
Sgd, Director of Bank Supervision


334 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Annex 1
The List of Returns implemented under New Web-based Off-site Surveillance System
Licensed Specialised Banks
Existing Manual Return New web-based Return to replace the Manual Return
Weekly Returns
Interest Rates BSD-WF-13-IR – Interest Rates (“Bank Only” Totals)
Monthly Returns
Assets and Liabilities BSD-MF-01-BD – Balance Sheet (DBU and Bank Only Operations)
Income/Expenditure & Distribution of
Profits (Note)BSD-MF-02-PD – Profit & Loss (DBU and Bank Only Operations)
Liquid Assets BSD-MF-04-LD – Statutory Liquid Asset Ratio
Commercial Paper/Promissory Notes BSD-MF-16-CP – Commercial Papers/Promissory Notes
– BSD-MF-03-CD – Classification of Loans & Advances ( New)
– BSD-MF-15-GE – Government Exposure (“Bank Only” Totals) ( New)
Quarterly Returns
Large Accommodation ( Note) BSD-QF-05-LN – Large Exposures (Performing & Non Performing –
“Bank Only” Totals)
Accommodation granted to a Director or
a close RelationBSD-QF-06- RC  – Related Party Exposures (Accommodation Granted
by the Bank to Directors or/and Close Relatives – “Bank Only” Totals)
Accommodation granted to concerns
where the Director has a substantial
interestBSD-QF-06-RS – Related Party Exposures (Accommodations Granted
by the Bank to Concerns where a Director of the Bank has a Substantial
Interest – “Bank Only” Totals)
Investment in Equity
(Public Companies)BSD-QF-07-IE – Investment in Equity (“Bank Only” Totals)Investment in Equity
(Private Companies)
Capital Adequacy – Solo BSD-QF-11-C1-C4  – Capital Adequacy (“Bank Only” Solo Basis
Totals)
Capital Adequacy – Consolidated BSD-QF-11-C5-C8 – Capital Adequacy (Consolidated Totals)
Interest Spread BSD-QF-14-SP – Interest Spread
– BSD-QF-08-FE – Foreign Currency Exposures – If applicable  (New)
– BSD-QF-09-GA – Maturity Gap Analysis (“Bank Only” Totals) ( New)
– BSD-QF-10-IS – Interest Rate Sensitivity (“Bank Only” Totals) ( New)


– BSD-QF-10-IS – Interest Rate Sensitivity (“Bank Only” Totals) ( New)
– BSD-QF-12-SC – Sector Wise Credit Exposures (“Bank Only” Totals)
(New)
Annual Returns
Assets and Liabilities BSD-AF-01-BD – Balance Sheet (DBU and Bank Only Operations)
Income and Expenditure BSD-AF-02-PD – Profit & Loss (DBU and Bank Only Operations)
Capital Adequacy - Solo BSD-AF-11-C1-C4  – Capital Adequacy (“Bank Only” Solo Basis
Totals)
Capital Adequacy - Consolidated BSD-AF-11-C5 – C8  – Capital Adequacy (Consolidated Totals)
Note: Frequency has been changed form quarterly to monthly.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  335
Annex 2
Statement 	of	Certification 	of	Weekly/Monthly 	Returns	Approved/Submitted

Monthly Returns
BSD-MF-01-BD  – Balance Sheet - Domestic Banking
Unit Operations (DBU) and Bank15/MM/YY
BSD-MF-02-PD – Profit & Loss - Domestic Banking Unit
Operations (DBU) and Bank15/MM/YY
BSD-MF-03-CD – Classification of Loans & Advances 15/MM/YY
BSD-MF-04-LD – Statutory Liquid Asset Ratio - Domestic
Banking Unit Operations (DBU)15/MM/YY
BSD-MF-16-CP – Commercial Papers/Promissory Notes 15/MM/YY
BSD-MF-15-GE – Government Exposure ( New) 15/MM/YY
BSD-WF-13-IR – Interest Rates – 1st Week DD/MM/YY
BSD-WF-13-IR – Interest Rates – 2nd Week DD/MM/YY
BSD-WF-13-IR – Interest Rates – 3rd Week DD/MM/YY
BSD-WF-13-IR – Interest Rates – 4th Week DD/MM/YY
BSD-WF-13-IR – Interest Rates – 5th Week DD/MM/YY
We certify that the information contained in the above returns has been extracted from and is in
accordance with the books of accounts of the bank.
 (Name ) (Name )
 ……………………….  ………………………………………….
 (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator
 Date: DD/MM/YY  Date: DD/MM/YYReturn Due DateSubmitted Approved
Date Yes No


336 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Annex 3
Statement 	of	Certification 	of	Quarterly 	Returns	Approved/Submitted
Quarterly Returns
BSD-QF-05-LN – Large Exposures (New) 21/MM/YY
BSD-QF-06-RC – Related Party Exposures -
Accommodation granted by the Bank to Directors and/
or Close Relatives 21/MM/YY
BSD-QF-06-RS – Related Party Exposures -
Accommodation Granted by the Bank to Concerns
where a Director of the Bank has a Substantial Interest21/MM/YY
BSD-QF-07-IE – Investment in Equity 21/MM/YY
BSD-QF-08-FE – Foreign Currency Exposures (New) 21/MM/YY
BSD-QF-09-GA – Maturity Gap Analysis (New) 21/MM/YY
BSD-QF-10-IS – Interest Rate Sensitivity ( New) 21/MM/YY
BSD-QF-12-SC – Sector Wise Credit Exposures ( New) 21/MM/YY
BSD-QF-14-SP – Interest Spread 21/MM/YY

We certify that the information contained in the above returns has been extracted from and is in
accordance with the books of accounts of the bank.
 (Name ) (Name )
 ……………………….  ………………………………………….
 (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator
 Date: DD/MM/YY  Date: DD/MM/YYReturn Due DateSubmitted Approved
Date Yes No


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  337
Return Due DateSubmitted Approved
Date Yes NoAnnex 4
Statement 	of	Certification 	of	Annual	Returns	Approved/Submitted

Annual Returns
BSD-AF-01-BD – Balance Sheet
(DBU and Bank Only Operations)30/MM/YY
BSD-AF-02-PD – Profit & Loss
(DBU and Bank Only Operations)30/MM/YY
We certify that the information contained in the above returns has been extracted from and is in
accordance with the books of accounts of the bank.
 (Name ) (Name )
 ……………………….  ………………………………………….
 (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator
 Date: DD/MM/YY  Date: DD/MM/YY
Annex 5
Statement 	of	Certification 	of	Quarterly/Annual 	Returns	Approved/Submitted
(Only for Capital Adequacy)

Quarterly Returns
BSD-QF-11-C – Capital Adequacy – Bank Only
(SOLO basis)30/MM/YY
BSD-QF-11-C – Capital Adequacy – Consolidated 30/MM/YY
We certify that –
(1) The information submitted in the above return is, to the best of our knowledge and belief, correct;
(2) The capital adequacy ratio was, at any time during the quarter/year under review, not less than the
ratio determined by the Monetary Board, in terms of section 76J(1) of the Banking Act, No.30 of
1988 as amended by Banking Act, No.33 of 1995 and Act, No.2 of 2005.
 ……………………………………….  ……………………………..
 Chief Accountant/Authorised Officer  Chief Executive
 ……………………………………….  ……………………………..
 Name   Name
 Date:………………………….  Date:………………………….Return Due DateSubmitted Approved
Date Yes No


338 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Bank Supervision Department
17 March 2006
To : CEOs of all Licensed Commercial Banks and
        Licensed Specialised Banks
Dear Sirs,
NEW WEB-BASED OFF-SITE SURVEILLANCE SYSTEM
We refer to the discussion at the Bank Managers’ Meeting held on 26 January 2006 and the previous
correspondence on the above subject and write to inform you that the testing of, and familiarization with,
the above system with the use of information submitted by the banks for the month of September 2005,
through the web-based application, has been completed. The next step is to go “live” with the above
system and this exercise will start in parallel with the existing manual system till June 2006. Once the
system is fully tested, the existing manual returns submission system will be discontinued.
Therefore, we shall be thankful if you will make arrangements to forward the information in the
new returns, from January 2006 onwords, through the above web-based system, in addition to the present
system of “manual returns submission” to this Department. Your co-operation in this regard will be much
appreciated.
Yours faithfully,
Sgd, Director of Bank Supervision


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  339
Ref. No. : 02  / 04 / 004 / 0010  / 001
Bank Supervision Department
18 February 2005
To : The CEOs of all Licensed Commercial Banks and
 Licensed Specialised Banks
Dear Sirs,
SUBMISSION OF THE MONTHLY & QUARTERLY COMPLIANCE REPORTS
I refer to the BSD Circular dated 26 October 2001 and the discussion on the above subject at the
meeting of the CEOs of Licensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs)
held on 17.02.2005.
As agreed, all banks are hereby informed that the CEO of the respective bank should sign the
Compliance Reports submitted to this Department on a monthly and quarterly basis.
This will be effective for the Compliance Reports to be submitted for the month of February 2005
onwards.
Yours faithfully,
Sgd, Director of Bank Supervision
cc – Secretary-General/SLBA


340 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Ref. No. : 02  / 03 /004 / 0006  / 001
Bank Supervision Department
15 October, 2012
To :  The CEOs of all Licensed Banks
SUBMISSION OF STATUTORY RETURNS
A review of the submission of Statutory Returns to the Bank Supervision Department has revealed
that several banks continue submission of some Statutory Returns in manual form which have already
been discontinued due to the following.
(a) Implementation of the web based off-site surveillance system from the reporting period
ending June 2009.
(b) Withdrawal of certain Circulars.
2. As intimated to you by our letter dated 28.03.2006, banks were requested only to
continue submission of Returns that are not replaced with web based Returns, in manual form.
However, it is noted that few banks do not follow these instructions and continue submitting
the same Returns both manually and as web based Returns.
3. Accordingly, we request you to ensure that only the Returns enumerated in Annex are sent in
manual form with effect from 01.11.2012 and to advise the respective officers accordingly.
Yours faithfully,
(Mrs.) T M J Y P Fernando
Director of Bank Supervision
Encl.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  341
Annex
Returns to be submitted manually
Return Reference Reporting
Period
1.Report of abandoned property -
settlements during the period
(Only  for LCBs)Banking Act Direction No. 05 of
2009 dated 02.09.2009Weekly
2.Cheque returns statement
(Only  for LCBs) Monthly
3.Donations received by Government,
Non-Government Organisations
(NGOs) and Others (Non-NGOs) –
Table 102/19/40110072/001 dated
07.03.2006Monthly
4.Donations received by NGOs –
Table 202/19/40110072/001 dated
07.03.2006Monthly
5.Utilization of investment fund account02/17/800/0014/02 dated
31.10.2011Monthly
(by e-mail)
6.Statements of certification of weekly,
monthly, quarterly and annual reports
approved/submitted Guidelines on Implementation
of the new web based off-
site surveillance system dated
28.07.2006Monthly,
quarterly and
annually
7.Information on shareholdings
(Only for domestically incorporated
private banks)  BD/CB/P dated 21.06.1996 Monthly
8.Statement of exposure to the stock
marketBanking Act Direction No. 05 &
06 of 2011 dated 26.08.2011Quarterly
(by e-mail)
9.Information on operation of banking
outlet 02/03/004/0200/002 dated
18.01.2012Quarterly
(by e-mail)
10. Report of internal loss events in banksExposure Draft on implementation
of the Standardised Approach
for calculating capital charge for
Operational Risk dated 22.06.2011Quarterly
11.Business operations that are/to be
outsourced
as at/during the yearBanking Act Direction No. 7 & 8
of 2010 dated 02.11.2010Annually
12.Report of abandoned property –
additions during the periodBanking Act Direction No. 05 of
2009 dated 02.09.2009 Annually *
13.Report of abandoned property –
settlements during the periodBanking Act Direction No. 05 of
2009 dated 02.09.2009Annually *
14.Return on depositor wise details of
eligible deposits Circular No. 02/2010 dated
09.12.2010Quarterly
15.Sri Lanka deposit insurance scheme –


09.12.2010Quarterly
15.Sri Lanka deposit insurance scheme –
payment of premium Circular No. 01/2010 dated
15.10.2010Quarterly
* Only for Lic ensed Commercial Banks which are unable to upload data to the web based returns
BSD-AF-18-AP – Report of Abandoned Property-Additions during the period and BSD-AF-18-AS –
Report of Abandoned Property-Settlements during the period are required to submit manually.


342 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
BANKING ACT, NO. 88 OF 1988
AS AMENDED BY BANKING (AMENDMENT) ACT, NO.33 OF 1995
Amendment to Direction dated 7th May 1998 issued by the Monetary Board of the Central Bank
of Sri Lanka, under Section 76 j(1) of the Banking Act, No.30 of 1988 as amended by the Banking
(Amendment) Act, No.33 of 1995 in respect of deposits.
Sgd. Sunil Mendis
Governor
Colombo
03 January 2005.
AMENDMENT TO LICENSED SPECIALISED BANKS (DEPOSITS)
DIRECTIONS
Sub section (b) of Section 4 of the above Direction is repealed with immediate effect.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  343
BANKING ACT NO. 30 OF 1988
AS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995
Directions issued by the Monetary Board of the Central Bank of Sri Lanka, under Section 76 j(1)
of the Banking Act, No.30 of 1988 as last amended by the Banking (Amendment) Act, No.33 of 1995 in
respect of deposits.
Sgd. A. S. Jayawardena
Governor
Colombo
7th May 1998
LICENSED SPECIALISED BANKS (DEPOSITS)
DIRECTIONS
1. Every Lice nsed Specialised Bank shall, in opening an account for a depositor,
require the depositor to sign a mandate form and a signature card in such form as
may be approved by the Board of Directors of the Bank.
2. The terms and conditions under which any deposit may be accepted by a Licensed
Specialised Bank from a depositor shall, among other matters, state –
 (a) whether interest on such deposit is paid or credited on a daily balance or
otherwise;
 (b) the minimum balance, if any , that is required to be maintained in such
account;
 (c) the terms and conditions relating to deposit and withdrawal of money at any
of its branches or automated teller machines in and from an account.
3. Every Licensed Specialised Bank shall issue to a depositor if such depositor
requests
 (a) i n respect of a savings account, a pass book or such other document,
recording the operations of the account;
 (b) in respect of other deposit accounts, a receipt or a certificate specifying the
amount deposited and the manner of its withdrawal.
4. Interest shall not be paid to a depositor or be credited to a depositor ’s account–
 (a) on any deposit of money in such account, other than a savings account, if
the deposit is withdrawn before 7 days from the date of deposit;
 (b) on the sum in deposit in a savings account in respect of any month in any
year, where there have been more than 4 withdrawals from that account in
that month.


year, where there have been more than 4 withdrawals from that account in
that month.
5. Every Licensed Specialised Bank s hall, before opening a deposit account for
a depositor, communicate in writing to the depositor the terms and conditions
specified in paragraph 2 and receive an acknowledgement in writing from such
depositor that the depositor has received and has agreed to accept such terms and
conditions.
6. These Directions shall not apply to any deposits made by a Licensed Commercial
Bank or a Licensed Specialised Bank.Opening of
Deposit Accounts.
Terms and
Conditions.
Pass Books &
receipts and
certificates.
Interest when not
payable.
Communication
of terms and
conditions to
depositors.
Non-application of
Directions.


344 Directions, Determinations, and Circulars issued to Licensed Specialised Banks
Ref. No. : BS/31/90 V ol. III
Bank Supervision Department
8th Floor, Renuka Building
41, Janadhipathi Mawatha
Colombo 1.
15th September, 1998
Dear Sir,
BUSINESS OF PAWN BROKING
 W e enclose herewith the Direction issued by the  Monetary Board, in terms of Section 76 j(1)
of the Banking Act, No.30 of 1988 as amended by Act, No.33 of 1995, relating to the business of pawn
broking conducted by a Regional Development Bank, which is a Licensed Specialised Bank within the
meaning of the Banking Act referred to above, for your information and compliance.
 The ef fective date of this Direction would be 1st October 1998.
 Please acknowledge receipt of this letter .
Yours faithfully,
Sgd. Y. A. Piyatissa
Director of Bank Supervision
Encl.


Directions, Determinations, and Circulars issued to Licensed Specialised Banks  345
BANKING ACT NO. 30 OF 1988
AS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995
Directions issued by the Monetary Board of the Central Bank of Sri Lanka, under Section 76 j(1) of
the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995 relating
to business of pawn broking carried on by a Regional Development Bank, being a licensed specialised
bank within the meaning of the Banking Act.
Sgd. A. S. Jayawardena
Governor
Colombo
7th September 1998
REGIONAL DEVELOPMENT BANKS (PAWNING) DIRECTIONS 1998
1. ( 1)  These Directions may be cited as the Regional Development Banks
(Pawning) Directions, 1998.
 (2) These Directions shall apply to the business of pawn broking, (hereafter
referred to as “pawning”) carried on by a Regional Development Bank or
any branch or agency of such bank (hereafter referred to as the “pawnee”).
2. In these Directions “pawning” means the  lending of money on the security of
personal articles made of gold (hereafter referred to as the “article”) accepted as
a pledge for a period not exceeding an initial period of 12 months.
3. (1) A  pawnee shall not accept an article as  a pledge where the pawnee has
reasonable grounds to believe that the person who gives the article as a
pledge is not the owner or the authorised agent of the owner of the article.
 ( 2)  A  person who gives an article as a pledge or redeems an article shall
establish the identity of the person to he satisfaction of the pawnee.
4. Pawning shall be carried on by a pawnee
 (a) between the opening and closing hours of business for the public by the
Regional Development Bank
 (b) on such other dates and times as may be specified in a notice displayed in a
conspicuous place at the place of business of the Pawnee.
5. A  pawnee shall, for the purpose of testing and valuing articles for pawning, have


5. A  pawnee shall, for the purpose of testing and valuing articles for pawning, have
staff with sufficient training and competency in and the equipment for assaying
the gold content of an article.
6. (1) The standard measurement for the determination of the quality of an article
shall be a carat.
 (2) The standard measurement of weight used in the valuation of an article shall
be a gram.
 (3) An article measuring less than 9 carats shall not be accepted as a pledge.Citation &
Application.
Interpretation.
Ownership of
pledge.
Dates & Times of
Pawning.
Competence
of Staff and
equipment.
Standard
Measurement.