MONETARY BOARD CENTRAL BANK OF SRI LANKA25 May 2021 CIRCULAR No. 05 of 2021CONCESSIONS FOR CO VID-19 AFFECTEDBUSINESSES AND INDIVIDUALSWith the outbreak of the third wave of CO VID-19 in Sri Lanka, requests from many concerned parties and Government Authorities were received by the Central Bank of Sri Lanka (CBSL) to consider granting certain concessions to the affected borrowers/customers. Accordingly, with a view to meeting the challenges faced by businesses and individuals due to the third wave of COVID-19, CBSL requests licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks), to extend the following concessions to COVID-19 affected businesses and individuals (hereinafter referred to as the Scheme). Further, licensed banks may offer additional concessions to businesses and individuals affected due to the third wave of COVID-19, on their request, in a way that the overall benefits to the borrower/customer are not less than the benefits offered under this Circular. Accordingly, this Circular is issued to give effect to the Scheme in a consistent manner across all licensed banks, with a view to easing the burden on the borrowers of banks that are affected by the current disruption in business /income generating activities to duly repay their loans.1. Deferment or restructuring of existing credit facilities in the performing category as at 15 May 2021(a) Licensed banks shall defer recovery of capital, interest, or both of the existing credit facilities of borrowers who are affected by the third wave of CO VID-19, on case-by-case basis, during the period up to 31 August 2021, considering the financial difficulties faced by the eligible borrowers, such as loss of job, loss or reduction of income/salaries or sales, closure of business, etc.(b) The deferment of capital, interest or both shall be granted for one or more of the existing credit facilities granted in Rupees or in foreign currencies, considering the financial


existing credit facilities granted in Rupees or in foreign currencies, considering the financial difficulties and repayment capacity of the eligible borrowers.(c) In the case of any Rupee facilities considered for the above deferment, licensed banks may charge an interest rate not exceeding the 364-days Treasury Bills auction rate as at 19 May 2021 plus 1 per cent per annum (i.e., 5.18% + 1% = 6.18% p.a.), for the deferred period and only on the amount deferred amount. In1


MONETARY BOARD CENTRAL BANK OF SRI LANKA25 May 2021 CIRCULAR No. 05 of 2021the case of foreign currency loans, licensed banks may charge a concessionary interest rate considering the prevailing low interest rates.(d) Alternatively, licensed banks may restructure the existing credit facilities over a longer period, considering the repayment capacity of the borrower and an acceptable revival plan. In this case, the licensed bank and the borrower shall agree on an interest rate, considering the prevailing low interest rates.(e) Licensed banks shall extend the due dates of revolving credit facilities, including but not limited to facilities such as working capital, pawning, temporary overdrafts, short-term trade finance facilities, etc., during the period up to 31 August 2021, provided such due dates fall during 15 May 2021 to 31 August 2021. Licensed banks may charge interest for the deferred period and only on the amount deferred amount as stated in 1 (c) above.(f) Penal interest shall not be accrued or charged during the concessionary period, i.e., 15 May 2021 to 31 August 2021.(g) Licensed banks shall accommodate any request from affected borrowers to delay the due dates of loans repayment by few days (maximum 10 working days) due to the ongoing travel restrictions, without deferring or re-structuring such facilities. Licensed banks shall not charge any additional interest or other charges for such delay.(h) Borrowers who are currently enjoying deferment of lease repayments under Circular No. 03 of 2021 issued on 13 March 2021 or moratorium under Circular No. 04 of 2021 issued on 19 March 2021 are not eligible for concessions provided above.2. Concessions for credit facilities in the non-performing category as at 15 May 2021(a) Licensed banks may reschedule the existing non-performing credit facilities as at 15 May 2021, over a longer period, considering the repayment capacity of the borrower and an acceptable revival plan. In this case, the licensed bank and the


capacity of the borrower and an acceptable revival plan. In this case, the licensed bank and the borrower shall agree on the terms and conditions including the interest rate.2


MONETARY BOARD CENTRAL BANK OF SRI LANKA25 May 2021 CIRCULAR No. 05 of 2021(b) Licensed banks shall waive-off penal interest accrued or charged during the period1 April 2020 to 15 May 2021, provided such facilities are considered for rescheduling under this scheme.(c) Licensed banks shall suspend all types of recovery actions until 31 August 2021, against credit facilities that have been classified as non-performing on or after 01 April 2020.3. Licensed banks shall not levy excessive fees or charges in relation to granting of concessions.4. Licensed banks shall extend the validity period of cheques valued less than Rs. 500,000 until 30 June 2021.5. Licensed banks shall discontinue charging for cheque returns and stop payments in relation to all cheque payments until 30 June 2021.6. Licensed banks shall discontinue late payment fee on credit cards and other credit facilities during the period up to 30 June 2021, for those who are demonstrably affected.7. Licensed banks shall not charge any early settlement fee, in the case where a borrower has expressed his willingness to settle his/her existing credit facilities on or before 31 August 2021, instead of opting for the deferment or restructuring of the existing credit facility/facilities.8. Reporting to the Credit Information Bureau (CRIB) of Sri Lanka(a) Licensed banks shall not decline loan applications from eligible borrowers under this Scheme solely based on an adverse CRIB record.(b) Licensed banks, in consultation with CRIB, shall develop a reporting modality to report deferment/ restructuring granted under this Scheme, so that participation in the Scheme will not have an impact on the credit score of borrowers in the future, or be negatively reflected in future CRIB reports.9. Deadline for submission of request(a) Eligible borrowers may request for the above concessions on or before 21 June 2021 in writing or through electronic means. Licensed banks shall expeditiously communicate the concessions, deadline, and


electronic means. Licensed banks shall expeditiously communicate the concessions, deadline, and application format for submission to3


MONETARY BOARD CENTRAL BANK OF SRI LANKA25 May 2021 CIRCULAR No. 05 of 2021all eligible borrowers via printed and/or electronic means including e-mail and SMS.(b) Licensed banks shall accept any request submitted after 21 June 2021, if the reasons for delay in making such request is acceptable.(c) Any eligible borrower who has the capacity to service the loan repayment is expected to service such loan repayments instead of requesting for deferment or restructuring of credit facilities.(d) Licensed banks shall ensure that the borrowers are made aware of the structure of the deferment or restructuring of credit facilities prior to approval. In the case of declined requests, licensed banks shall clearly mention the reasons for such decline.10. Accounting considerations on the moratoriumLicensed banks shall account for the concession granted under this scheme as per Sri Lanka Accounting Standards and additional guidance provided by CBSL under Circular No. 09 of 2020 dated 28 October 2020. Licensed banks may seek advice from CASL and Auditors for additional guidance/clarification in this regard.11. Reporting requirementLicensed banks shall report the details of concessions availed by their borrowers to the Bank Supervision Department as at 30th of each month, within 15 working days, commencing 30 June 2021. The reporting format will be circulated in due course.Prof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka4


MONETARY BOARD CENTRAL BANK OF SRI LANKA07 June 2021 CIRCULAR No. 06 of 2021PROVISION OF BANKING SERVICES AMIDST THE COVID-19 OUTBREAKThe Central Bank of Sri Lanka (CBSL), upon obtaining approval/consent of the Director General of Health Services and the Inspector General of Police (IGP), has already requested licensed commercial banks and licensed specialised banks (licensed banks) to carry out essential banking services, strictly adhering to all relevant safety measures and guidelines issued in providing banking services under the on-going travel restrictions to control the spread of COVID-19.1. Accordingly, all licensed banks shall make necessary arrangements to provide uninterrupted banking services during the COVID-19 outbreak complying with the following:(i) Opening of bank branches only to provide essential services such as trade financing, treasury operations, clearing activities, payment of pensions/salaries, responding to other urgent requests/inquiries of customers, etc.;(ii) The number of staff permitted to report to work in branches of licensed banks shall not exceed 15 per branch;(iii) Staff shall report to work on a roster basis, or the branches shall only be opened on specified days taking note of specific requirements of customers of each branch; and(iv) Branch Managers shall obtain prior approval of the nearest Police Station for the travel of the relevant staff by producing a request letter containing relevant information including those provided in the specimen Annexed.2. Licensed banks shall:(i) Publish notices informing the general public how essential banking services can be obtained;(ii) Take adequate measures to keep the banks’ customers informed of the contact details for obtaining essential banking services during this period, including display of contact details of branch staff at the branch and Hot-line numbers, considering the various preferred modes of transacting;(iii) Ensure that the customer inquiries are answered and resolved


preferred modes of transacting;(iii) Ensure that the customer inquiries are answered and resolved expeditiously; and(iv) Continue to facilitate use of electronic/digital channels, including Automated Teller Machines (ATMs), Cash Deposit Machines (CDMs), Cash Recycling Machines (CRMs), and mobile banking vehicles. (7^) / /)Prof. W D LakshmanChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka


Annex ISpecimen Format to Request for Permits to Report to Work for Staff of Licensed BanksName of the BankName and Address of the BranchNearest Police Station to the BranchName of Staff (as per NIC)NIC NumberDesignationStaff IDResidential AddressNearest Police Station to the ResidenceSpecific Dates for Reporting to WorkVehicle No.


MONETARY BOARD CENTRAL BANK OF SRI LANKA21 August 2021 CIRCULAR No. 07 of 2021PROVISION OF BANKING SERVICES DURINGTHE ONGOING QUARANTINE CURFEW PERIODConsequent to the issuance of the press release dated 20 August 2021 by the Director General of Health Services outlining the functions that are permitted under quarantine curfew period effective from 10 p.m. 20 August 2021 to 4 a.m. 30 August 2021, the Central Bank of Sri Lanka requests licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) to carry out essential banking services uninterruptedly. Accordingly, all licensed banks shall make necessary arrangements to provide banking services during this period complying with the following:(i) Open bank branches only to provide essential services such as trade financing, treasury operations, clearing activities, payment of salaries, responding to other urgent requests/inquiries of customers, etc.;(ii) Operate with the minimal staff required to provide very restricted, essential banking services on a roster basis, or the branches shall only be opened on specified days taking note of specific requirements of customers of each branch;(iii) Strictly adhere to all relevant safety measures and guidelines;(iv) Publish notices informing the general public how essential banking services can be obtained;(v) Take adequate measures to keep the banks’ customers informed of the contact details for obtaining essential banking services during this period, including display of contact details of branch staff at the branch and Hot-line numbers, considering the various preferred modes of transacting;(vi) Ensure that the customer inquiries are answered and resolved expeditiously; and(vii) Continue to facilitate and encourage the use of electronic/digital channels, including Automated Teller Machines (ATMs), Cash Deposit Machines (CDMs), Cash Recycling Machines (CRMs), and mobile banking vehicles.PrtrfrWTDL aksh m anChairman of the Monetary Board


Machines (CRMs), and mobile banking vehicles.PrtrfrWTDL aksh m anChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka


No. 08 of 2021MONETARY BOARDCENTRAL BANK OF SRI LANKA01 September 2021CIRCULARCONCESSIONS FOR COVID-19 AFFECTED BUSINESSES AND INDIVIDUALSConsidering the new surge in COVID-19 outbreak in Sri Lanka, requests from many concerned parties were received by the Central Bank of Sri Lanka (CBSL) to consider extending the concessions granted to the affected borrowers/customers under the Circular No. 05 of 2021 dated 25 May 2021. Accordingly, with a view to facilitating to meet the challenges faced by businesses and individuals due to the ongoing COVID-19 pandemic, CBSL requests licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks), to extend the concessions granted under Circular No. 05 of2021 dated 25 May 2021 as specified below. Further, licensed banks may offer additional concessions to businesses and individuals affected due to the COVID-19 pandemic, on their request, in a way that the overall benefits to the borrower/customer are not less than the benefits offered under this Circular.This Circular is issued to give effect to the Scheme in a consistent manner across all licensed banks, with a view to easing the burden on the borrowers of banks that are affected by the current disruption in business /income generating activities to duly repay their loans. This Circular is not appliable for borrowers in the tourism sector, who are eligible to obtain concessions granted for the tourism sector.1. Deferment or restructuring of existing credit facilities in the performing category as at 01 September 2021(a) Licensed banks shall defer recovery of capital, interest or both of the existing performing credit facilities of borrowers who are affected by COVID-19, on case-by- case basis, during the period up to 31 December 2021, considering the financial difficulties faced by such borrowers, including loss of job, loss or reduction of income/salaries or sales, reduction or impairment business operations or the closure of business,


income/salaries or sales, reduction or impairment business operations or the closure of business, etc.(b) Licensed banks shall prioritise accommodating the requests for concessions made by borrowers in the Micro, Small and Medium Enterprises (MSME) sector.(c) The deferment of capital, interest or both shall be granted for one or more of the existing credit facilities granted in Rupees and/or in foreign currencies, considering the financial difficulties and repayment capacity of the eligible borrowers.1


MONETARY BOARD CENTRAL BANK OF SRI LANKA01 September 2021 CIRCULAR No. 08 of 2021(d) Licensed banks shall amalgamate the amounts fallen due during the previous moratorium/deferment schemes (i.e., capital, interest and applicable interest for the respective moratorium/deferment period on the respective moratorium/deferred amount) and the amounts falling due during the current scheme (i.e., capital and interest) in to one new loan. Licensed banks may charge an interest rate as stated in 1 (e) below commencing from 01 September 2021, on the new loan referred above and for the agreed period of repayment as referred in 1 (f) and (g) below, based on a separate loan amortization schedule for this period.(e) In the case of Rupee facilities considered for the above deferment, licensed banks may charge an interest rate not exceeding the latest available 364-days Treasury Bills auction rate as at 31 August 2021 plus 1 per cent per annum (i.e., 5.93% + 1% = 6.93%). In the case of foreign currency loans, licensed banks may charge a concessionary rate of interest. Further, interest for the remaining capital outstanding balance, excluding the deferred capital amount of the existing facility will continue to accrue at the contracted interest rate after the end of the deferment period.(f) In the case of installment loans including lease facilities, a licensed bank and the respective borrower need to agree on a repayment period commencing from 01 July 2022, up to 6 months, to settle the new loan referred to in 1 (d) above, considering the financial difficulties faced by such borrowers as stated in 1 (a) above. The borrower may commence the repayment of the new loan at an earlier date, if the borrower wishes to do so. However, the borrower shall commence repayment of existing facilities from 01 January 2022.(g) In the case where a borrower requests for a period beyond 6 months to settle the new loan referred to in 1 (d) above, the borrower and the bank need to agree on a concessionary


the new loan referred to in 1 (d) above, the borrower and the bank need to agree on a concessionary interest rate beyond the 6 months period.(h) Licensed banks shall explain the benefits of commencing early repayment and the implications of extending the repayment period to the borrower, in order to encourage the borrower to commence early repayment of deferred amount.(i) Alternatively, licensed banks may restructure the existing credit facilities, on case-by- case basis, over a longer period, considering the repayment capacity of the borrower2


MONETARY BOARD CENTRAL BANK OF SRI LANKA01 September 2021 CIRCULAR No. 08 of 2021and an acceptable revival plan. In this case, the licensed bank and the borrower shall agree on an interest rate, considering the prevailing low interest rates.(j) Licensed banks shall extend the due dates of revolving credit facilities, including but not limited to facilities such as working capital, pawning, temporary overdrafts, short-term trade finance facilities, etc., on case-by-case basis, during the period up to 31 December 2021, provided such due dates fall during 01 September 2021 to 31 December 2021. Licensed banks may charge interest for the deferred period and only on the deferred amount as stated in 1 (e) above.(k) Penal interest shall not be accrued or charged during the concessionary period, i.e., 01 September 2021 to 31 December 2021, for the amounts falling due during this period.(1) Licensed banks shall accommodate any request from affected borrowers to delay the due dates of loan repayments by few days (maximum 15 working days) due to the ongoing quarantine lockdown, without deferring or re-structuring such facilities. Licensed banks shall not charge any additional interest or other charges for such delay.2. Concessions for credit facilities in the non-performing category as at 01 September 2021(a) Licensed banks may reschedule the existing non-performing credit facilities as at 01 September 2021, on case-by-case basis, over a longer period, considering the repayment capacity of the borrower and an acceptable revival plan. In this case, the licensed bank and the borrower shall agree on the terms and conditions including the interest rate, considering the prevailing low interest rates.(b) Licensed banks shall waive off penal interest accrued or charged during the period 1 April 2020 to 01 September 2021, provided such facilities are considered for restructuring under this scheme.(c) Licensed banks shall suspend all types of recovery actions until 31 December 2021


this scheme.(c) Licensed banks shall suspend all types of recovery actions until 31 December 2021 against credit facilities that have been classified as non-performing on or after 01 April 2020. Further, licensed banks shall take all the precautions not to excessively contact/force the borrower or visit the borrower as part of the routine collection procedure with regard to the above borrowers. In instances where there are on-going litigations in Courts relating to recovery, borrowers shall enter into an agreement in the Courts to obtain this concession.3


MONETARY BOARDCENTRAL BANK OF SRI LANKA01 September 2021 CIRCULAR No. 08 of 20213. Licensed banks shall not levy excessive fees or charges in relation to granting of concessions and shall inform such fees or charges in writing to the borrower.4. Licensed banks shall extend the validity period of cheques valued less than Rs. 500,000 until 31 October 2021.5. Licensed banks shall discontinue charging for cheque returns and stop payments in relation to all cheque payments until 30 September 2021.6. Licensed banks shall discontinue late payment fee on all credit cards and other credit facilities during the period up to 31 October 2021 for those who are demonstrably affected.7. In the case where a borrower who is eligible for concessions under this scheme, has expressedhis/her willingness to settle his/her existing credit facilities or amounts fallen due during the moratorium period, instead of opting for concessions under this scheme, licensed banks are encouraged to provide interest rebates. Further, licensed banks shall waive-off early settlement fees and other fees and charges including recovery of future interest of lease facilities, if any, to such borrowers.8. Reporting to the Credit Information Bureau (CRIB) of Sri Lanka(a) Licensed banks shall not decline loan applications from eligible borrowers under this scheme solely based on an adverse CRIB record.(b) Licensed banks, in consultation with CRIB, shall develop a reporting modality to report deferment/ restructuring granted under this Scheme, so that participation in the Scheme will not have an impact on the credit score of borrowers in the future, or be negatively reflected in future CRIB reports.9. Concessions for credit facilities granted under refinance/ interest subsidy schemes Licensed banks are required to seek necessary guidelines from the relevant agencies with regard to providing concessions for credit facilities granted under various refinance or interest subsidy schemes.10. Deadline for submission of


granted under various refinance or interest subsidy schemes.10. Deadline for submission of request(a) Licensed banks shall circulate this Circular to all branches within 3 days and provide necessary internal guidelines/circulars within 7 days.(b) Eligible borrowers may request for the above concessions on or before 21 September 2021 in writing or through electronic means. Licensed banks shall expeditiously4


MONETARY BOARD CENTRAL BANK OF SRI LANKA01 September 2021 CIRCULAR No. 08 of 2021communicate the concession, deadline and application format for submission to all eligible borrowers via printed and/or electronic means including e-mail and SMS.(c) Licensed banks shall accept any request submitted after 21 September 2021, if the reasons for delay in making such request is acceptable.(d) Any eligible borrower who has the capacity to service the loan repayment is expected to service such loan repayments instead of requesting for deferment or restructuring of credit facilities.(e) Licensed banks shall ensure that the borrowers are made aware of the structure of the deferment or restructuring of credit facilities prior to approval and the consent of the borrower shall be obtained in writing or through electronic means.(f) In the case of a rejection of the application, licensed banks shall inform the applicant, preferably within 14 days, in writing/ through electronic medium, the reasons for such rejection, and that there is an opportunity for the borrower to appeal against such rejection to the Director, Financial Consumer Relations Department (FCRD), Central Bank of Sri Lanka requesting for a review. The licensed bank shall advise the applicant by and through the same letter of rejection that the applicant is entitled to duly avail himself of the review facility, if the borrower so wishes.11. Accounting considerations on the moratoriumLicensed banks shall account for the concession granted under this scheme as per Circular No. 09 of 2020 dated 28 October 2020. In the case of risk elevated borrowers or sectors, licensed banks are required make adequate impairment charges. Licensed banks may seek advice from the Institute of Chartered Accountants of Sri Lanka (CASL) and Auditors for additional guidance/clarification in this regard.12. Reporting requirementLicensed banks shall report the details of concessions availed by their borrowers to the Bank Supervision Department as


report the details of concessions availed by their borrowers to the Bank Supervision Department as at 30th of each month, within 15 working days, commencing 30 September 2021. The reporting format will be issued in due course.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka5


08 September 2021MONETARY BOARD CENTRAL BANK OF SRI LANKACIRCULARNo. 09 of 2021RECOGNITION OF LANKA RATING AGENCY LTD AS AN ACCEPTABLE CREDIT RATING AGENCYThe Central Bank of Sri Lanka recognises Lanka Rating Agency Ltd (LRA) as an acceptable External Credit Assessment Institution for the purpose of Banking Act Directions No. 01 of 2016 on Capital Requirements Under Basel III for Licensed Commercial Banks and Licensed Specialised Banks and other related regulatoiy requirements pertaining to licensed commercial banks and licensed specialised banks.Accordingly, Table 1 and Table 3 under the item No. 2.3 of Schedule I Appendix IV of the Banking Act Directions No. 01 of 2016 on Capital Requirements Under Basel Ill for Licensed Commercial Banks and Licensed Specialised Banks are revised as in Annex.Prof. W D LakshmanChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka
1


Table 1 - Mapping of Notations of the Credit Rating Agencies in Sri LankaFitch Rating LankaICRA LankaLimitedLanka Rating Agency LimitedRating Scale for Capital RatiosAAA (Ika)(SL) AAAAAAAAAAA+ (Ika)(SL) AA+AA+AA+AA (Ika)(SL) AAAAAAAA- (Ika)(SL) AA-AA-AA-A+ (Ika)(SL) A+A+A+A (Ika)(SL)AAAA- (Ika)(SL) A-A-A-BBB+ (Ika)(SL) BBB+BBB+BBB+BBB (Ika)(SL) BBBBBBBBBBBB- (Ika)(SL) BBB-BBB-BBB-BB+ (Ika)(SL) BB+BB+BB+BB (Ika)(SL) BBBBBBBB- (Ika)(SL) BB-BB-BB-B+ (Ika)(SL) B+B+B+B (Ika)(SL)BBBB-(lka) & Lower(SL) B- & LowerB- & LowerB- & LowerTable 3 - Mapping of Short-Term RatingsStandard and Poor’sMoody’sFitch RatingsICRA Lanka LimitedLanka Rating Agency LimitedRisk weightsA - 1+/A - 1P-1F1+/F1(SL) A1+/A1A1+/A120%A - 2+/A - 2P-2F2(SL) A2+/A2A250%A - 3+/A - 3P-3F3(SL) A3+/A3A3100%Below A - 3NPBelow F3(SL) Below A3A4150%
2


1 $ March 2021MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSNo. 04 of 2021INVESTMENTS IN SRI LANKA INTERNATIONAL SOVEREIGN BONDS BY LICENSED COMMERCIAL BANKS AND NATIONAL SAVINGS BANKIssued in terms of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act No. 30 of 1988, as amended.The Central Bank of Sri Lanka with a view to easing pressure on the exchange rate and considering the substantial amount of possible/potential outflow of foreign exchange by banks and its impact on banks’ risk management, licensed commercial banks and National Savings Bank are hereby informed to suspend the purchase of Sri Lanka International Sovereign Bonds with effect from 23 March 2021 until 09 April 2021.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka


CENTRAL BANK OF SRI LANKA
BANK SUPERVISION DEP ARTMENT

17 February 2021        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 01 of 2021

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Amendm ents to Frequently Asked Questions No. 0 5 of 2020  on Monetary Law Act Order No. 3
of 2020 - Maximum Interest Rates on Mortgage -backed Housing Loans

1. What are the key purposes/expectations of this Order?
 Support the expansion of home ownership of the Sri Lankan general public.
 Provide an additional stimulus to the domestic construction sector and its supply chains.

2. Who are eligible to obtain housing loans under the terms of this Order ?
Salaried employees  serving  in confirmed service in the  public and private sectors , obtaining new
mortgage -backed housing loans from a licensed bank under the terms of this Order , with effect from
10 December 2020.

3. What other conditions are to be met to be eligible to obtai n housing loans under the terms of
this Order ?
 The same property to be developed/purchased is to be mortgaged to the bank.
 Such mortgage i s to be only a primary mortgage.
 If a condominium property is purchased out of this loan, then the bank and customers are to enter
into an arrangement to convert the property to a primary mortgage when the construction is
completed.

4. What are the terms of repayment for housing loans obtained under the terms of this Order ?
 Tenure of repayment:
o Will be from the date borrowed up to the period where the salaried employee is expected to
retire from such employment.
o Employees are to provide banks a confirmation from their respective employer regarding the
retirement date/age, as applicable.  Please note that  is an update to the ‘Frequently Asked Questions (FAQs)’  No. 05 of 2020 dated
22.12.2020 issued in relation to the Monetary Law Act Order No. 3 of 2020 on Maximum Interest
Rates on Mortgage -backed Housing Loans  and has been compiled  based on regulations issued by


Rates on Mortgage -backed Housing Loans  and has been compiled  based on regulations issued by
the Central Bank of Sri Lanka up to 17.02.2021.
The responses herein are subject to changes based on future regulations and/or amendments, if any.


CENTRAL BANK OF SRI LANKA
BANK SUPERVISION DEP ARTMENT

17 February 2021        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 01 of 2021

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 Rate of interest:
o Interest duri ng the first 5 years will be fixed at a rate of 7% per annum.
o Interest during the period after the first 5 years will vary based on the Average Weighted
Prime Lending Rate (AWPR) as the applicable rate is AWPR plus 1% per annum.
o The interest rate variance after the fixed 5 years will take place every 6 months based on the
average monthly  AWPR for the banking sector published by the Central Bank of Sri Lanka
during the immediately preceding 6 months.

5. Will customers be allowed to o btain a housing loan  under the terms specified in this Order to
settle existing housing loans at the same or any other bank?
No.

6. For what purposes can the housing loan under this Order be utilized?
 Housing  loans under the terms of this Order can be obtained for  the following purposes provided
that the facility is secured by primary mortgage over the same property:
o purchase of land for construction of a house,
o purchase of a house,
o construction of a house, or
o renovation  of an existing house.
 However, this scheme is not intended for commercial scale real estate developers.

7. Can borrowers settle housing loans obtained under the terms of this Order without a pre -
settlement cost?
Yes, but only if the facility is settled in full at end of the first 5 years where the rate of interest remains
fixed  at 7% per annum.

8. Is there a minimum or maximum limit on the amount permitted to be borrowed under the
terms specified in this Order?
No.
The amount will depend on the  respective bank’s assessment/evaluation over the borrower’s income,
repayment capacity, value of property offered as the primary mortgage and any other factors based
on the bank’s internal policy and/or business decision.


CENTRAL BANK OF SRI LANKA
BANK SUPERVISION DEP ARTMENT

17 February 2021        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 01 of 2021

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9. Will a bank consider other incom e (non -related to salary) of the borrower as a source of income
for repayment?
At the discretion of the respective bank , based on their internal policy and/or business decision , the
bank may consider other income of the borrower  as an additional source of income for repayment.

10. Will a bank grant a joint housing loan under the terms of this Order for two individuals to
purchase/ develop the same property, when both are eligible for housing loans and both expect
to obtain the loan?
Yes, if both parties are sal aried employees in the public and/or private sector  and t he housing loan is
secured by primary mortgage over the same property.

11. What if only one of the joint borrowers is a salaried employee in the public/private sector?
Such requests can be considered favourably, however, only at the discretion of the respective bank
based on their internal policy and/or business decision.

12. Are borrowers  allowed to mortgage another (alternative) property and obtain a loan to build a
house or purchase land at some other place?
No, housing loans granted under the terms of this Order is limited only to develop/purchase the same
property that is offered as a primary mortgage to the bank.

13. Will a bank grant a housing loan under the terms of this Order to purchase/ develop  properties
owned by the spouse of salaried employees?
Yes, a joint loan secured by primary mortgage over the same property  can be considered by the bank.

14. Can the  Non-executive  Directors  of companies with monthly fixed remuneration as resolved by
the company, apply for a housing loan under this Order?
Non-executive Directors  are not considered as employees of the company and there is no retirement


Non-executive Directors  are not considered as employees of the company and there is no retirement
age for such positions. Therefore, such positions are not covered by this Order.


CENTRAL BANK OF SRI LANKA
BANK SUPERVISION DEP ARTMENT

17 February 2021        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 01 of 2021

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15. Will a bank grant an additional housing loan (2nd loan) under the terms of this Order, for the
same property,  which is purchased with bank funds, mortgaging the same property?
Housing loans cannot be granted under the terms of this Order based on mortgages other than the
primary mortgages.

16. Can a borrower apply for second loan for a new property with  a primary mortgage?
Considering the objectives of this Order (i.e., need to support the expansion of home ownership of
general public and to provide an additional stimulus to the domestic construction sector and its supply
chains), there is no restriction  in this Order to grant a second loan for a new property with a primary
mortgage provided that other requirements under the Order are met.

17. Can a borrower apply for  an additional loan for property /land  already pledge d as a primary
mortgage for the purpo se of constructing a house or for extension of the existing house?
Since the  bank  has already granted a loan on the property before the date of this Order, granting an
additional loan on the same property may depend on the current valuation of the property . If the
current valuation is adequate to cover the additional loan  banks may accommodate such request.
Accordingly, customers may obtain an additional loan from the same bank . However, if the current
valuation is inadequate to cover the additional loan, banks may decline such request.

18. What if the existing housing loans are repaid at a much higher interest rate compared to the
terms specified under this Order? Can the interest  rate of such existing housing loans be
reduced?
Considering the cost of funds, market interest rates and other relevant factors based on their internal


policy and/or business decision, the respective bank may reduce the interest rate of an existing
housin g loan  at their discretion.  However , such housing loans will not fall under this scheme.

--------------------------  These FAQs were last updated on 17.02.2021  ----------------------------


MONETARY BOARDCENTRAL BANK OF SRI LANKA24 April 2021MONETARY LAW ACT ORDERNo. 01 of 2021PRIORITY SECTOR LENDING TARGETS FORLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS TO THE MICRO, SMALL AND MEDIUM SCALE ENTERPRISES SECTORHaving recognised the need to promote economic sectors with high potential in terms of domestic economic growth and export earnings, leading to the broad-based revival of the economy, CBSL introduces priority sector lending target on credit granted by licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) to individuals and businesses in the Micro, Small and Medium Enterprises (MSME) sector, as follows:1. Empowerment2. Priority SectorLending Target1.1 In terms of Section 101 (1) (b) of the Monetary Law Act No. 58 of 1949 (as amended), the Monetary Board may from time to time fix limits to the rate at which the amount of loans and investments may be increasedwithin specified periods by licensed banks.2.1 Licensed banks shall grant credit to individuals and businesses inMSME sector and ensure a growth rate of not less than 20 per cent perannum on Y-o-Y basis, over the outstanding stock of lending to MSMEs at the end of the previous year.2.2 The lending target in 2.1 above shall be prioritised in the followingeconomic sub-sectors that display higher potential in terms of domestic growth and export earnings within the broader MSME sector, but shall not be restricted to the said sectors:(i) Food and beverage processing(ii) Production of medical utilities and related products(iii) Development of distance learning facilities(iv) Domestic cottage industry(v) Rubber and rubber products(vi) Ship and boat building(vii) Cosmetics(viii) Batik and handloom1


MONETARY BOARDCENTRAL BANK OF SRI LANKAApril 2021MONETARY LAW ACT ORDER No. 01 of 2021(ix) Gem and Jewellery(x) Health and wellness(xi) Electronics and electrical components(xii) Motor vehicle assembly(xiii) Pharmaceutical manufacturing(xiv) Porcelain, ceramics, and pottery3. Applicability3.1 Credit facilities shall include term loans, leasing, overdrafts and trade finance facilities including off-balance sheet exposures, denominated in the Sri Lankan Rupee and foreign currencies granted by licensed banks to all businesses and individuals in MSME Sector in Sri Lanka.3.2 Enterprises with an annual turnover not exceeding Rs. 1,000 mn will be considered as MSMEs for the purpose of this Order in line with the definition of SME provided in Banking Act Directions No. 07 of 2020 on Amendments to the Banking Act Directions No. 01 of 2016 on Capital Requirements under Basel III for Licensed Commercial Banks and Licensed Specialised Banks.4. Exclusions4.1 Advances for pawning granted by licensed banks to individuals and businesses in MSME sector shall be excluded from the priority sector lending target in 2.1 above.5. Monitoring and Reporting5.1 Licensed banks shall have a continuous monitoring mechanism once credit facilities under this Order are disbursed.5.2 Licensed banks shall report details of lending to MSMEs in the format in Annex I, to the Director of Economic Research and the Director of Bank Supervision within 30 days from the end of each quarter commencing 01 April 2021.rof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka2


Annex ILending to the Micro, Small and Medium Scale Enterprises SectorName of the BankReporting PeriodCategoryAs at the end of 2020 Rs. MnAs at the end of the reporting period Rs. MnYTD Growth % (Total)PerformingNon - PerformingTotalPerformingNon - PerformingTotal1. Agriculture, Forestry & Fishing2. Industry of which:2.1 ManufacturingOf which:2.1.1 Food and beverages processing2.1.2 Production of medical utilities and related products2.1.3 Domestic cottage industry2.1.4 Rubber and rubber products2.1.5 Ship and boat building2.1.6 Cosmetics2.1.7 Batik and handloom2.1.8 Gem and jewellery2.1.9 Electronics and electrical components2.1.10 Motor vehicle assembly3


Please Email to;• Economic Research Department, Money & Banking Division - money&banking@cbsl.lk• Bank Supervision Department, Database - bsddb@cbsl.lk2.1.11 Pharmaceutical manufacturing2.1.12 Porcelain, ceramics, and pottery2.1.13 Other (Specify)2.2 Construction3. Servicesof which:3.1 Tourism3.2 Transportation and Storage3.3 Wholesale and Retail Trade3.4 Information Technology and Communication3.5 Professional, Scientific & Technical Activities3.6 Arts, Entertainment & Recreation3.7 Education Of which:3.7.1 Development of distance learning facilities3.8 Health Care, Social Services & Support ServicesOf which:3.8.1 Health and wellness4. Other (Specify)Total Lending to MSME SectorTotal Loans and Advances to the Private Sector4


3. Interest Rates and tenure of mortgage-backed housing loans of salaried employeesMONETARY BOARD CENTRAL BANK OF SRI LANKA31 December 2021 MONETARY LAW ACT ORDER No. 04 of 2021AMENDMENT TO THE MONETARY LAW ACT ORDER NO. 03 OF 2020 ON MAXIMUM INTEREST RATES ON MORTGAGE-BACKED HOUSING LOANSIssued under Section 104(l)(b) of the Monetary Law Act, No. 58 of 1949, as amended.Considering the current and expected macroeconomic developments and the prevailing market interest rates of rupee denominated loans and advances granted by licensed banks, the Monetary Board hereby issues an amendment to the Monetary Law Act Order No. 03 of 2020 on Maximum Interest Rates on Mortgage-backed Housing Loans.Accordingly, Order 3.1 of the cited Monetary Law Act Order shall be replaced as follows.3.1 The applicable maximum interest rates for mortgage-backed housing loans specified under Order 2.1 above shall be:(i) A fixed interest rate which shall be the monthly Average Weighted Prime Lending Rate (AWPR) prevailing at the date of disbursement of the loan for the first five years of the loan tenure.(ii) After the first five years, the applicable interest rate will be a floating interest rate linked to the monthly AWPR plus 200 basis points for the remaining tenure of the loan and will be re-priced every six months.(iii) The monthly loan instalment for the first five years shall be computed considering AWPR prevailing at the date of disbursement as the interest rate for the entire tenure of the loan.This Order shall be effective from 01 January 2022.Nivard Ajith Leslie CabraalChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka


30 December 2021MONETARY BOARI)
CENTRAL BANK OF SRI LAIIKA
MONETARY LAW ACT ORDER No.03 of2021
MAXIMUM INTEREST RATES ON FOREIGN CURRENCY DEPOSITS
OF LICENSED COMMERCIAL BANKS AND THE NATIONAL SAVINGS BANK
Issued under Section 10a(l)(a) of the Monetary Law Act, No. 58 of 1949, as amended.
Considering the current and expected macroeconomic developments and the prevailing interest
rates on foreign culrency deposits of licensed banks, the Monetary Board hereby issues an Order
on maximum interest rates to be paid in respect of foreign currency deposit products of licensed
commercial banks and the National Savings Bank.
1. Empowerment
under the
Monetary Law
Act
2. Maximum
interest rates on
FCY deposits
3. Basis of
calculation1.1
2.1
2.2
3.1
3.2In terms of Section 10a(1)(a) of the Monetary Law Act, the Monetary
Board may from time to time fix the maximum rates of interest which
licensed commercial banks and licensed specialised banks may pay
upon various classes of deposits.
The maximum interest rates that shall be offered or paid by a licensed
commercial bank and the National Savings Bank on foreign currency
(FCY) deposits are as follows;
(D with a maturity of less than or equal to one year shall be based
on the simple average of the primary market yields of 364-days
Treasury Bills determined at auctions held during the last
calendar month of the previous quarter less 150 basis points, or
5 per cent, whichever is higher and;
(ii) with a maturity of more than one year shall be determined based
on the market behaviour.
In the case of Special Deposit Accounts in FCY, the additional interest
rate that can be offered or paid shall be over and above the interest
rate applicable in 2.1 above.
The auctions for calculating the above average rate, shall be selected
based on the auction date falling within the corresponding calendar
month, and not the settlement date.
The maximum interest rates for the forthcoming quarter shall be


month, and not the settlement date.
The maximum interest rates for the forthcoming quarter shall be
computed on the last working day of the current quarter.


30 December 2021MONETARY BOARD
CENTRAL BANK OF SRI LANKA
MONETARY LAW ACT ORDER No.03 of202l
4. SWAP Cost
5. Regulatory
Reporting and
Disclosure
6. Implementation 6.1
7. Revocation 7.t4.1Considering recent excessive volatility observed in the USD/LKR
domestic swap market, and to ensure orderly conduct of the same,
licensed banks are hereby instructed to execute USD/LKR swap
transactions, subject to a maximum USD interest rate of 10 per cent
per annum. Accordingly, the USD/LKR swap points shall be pro-
rated based on the above benchmark USD interest rate for the
respective tenors until further notice.
Every licensed commercial bank and the National Savings Bank shall;
(i) submit details of the interest rates offered on FCY deposit
products in accordance with the weekly retum on 'Rates of
Interest', and
(ii) make arrangements to inform and display the interest rates
offered to customers on FCY deposit products.
These Orders shall be effective from 31.12.2021 and shall be
applicable for new FCY deposits, existing FCY savings deposits and
at the renewal of FCY term deposits.
Monetary Law Act Order No. 02 of 2021 dated 24.08.202I on
Maximum Interest Rates on Foreign Currency Deposits of Licensed
Commercial Banks and the National Savings Bank is hereby
rescinded.
+^N>J C-J-
Nivard Ajith Leslie Cabraal
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lankn5.1


MONETARY BOARDCENTRAL BANK OF SRI LANKA09 April 2021BANKING ACT DIRECTIONSNo. 05 of 2021INVESTMENTS IN SRI LANKA INTERNATIONAL SOVEREIGN BONDS BY LICENSED COMMERCIAL BANKS AND NATIONAL SAVINGS BANKIssued in terms of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act No. 30 of 1988, as amended.The Central Bank of Sri Lanka with a view to easing pressure on the exchange rate and considering the substantial amount of possible/potential outflow of foreign exchange by banks and its impact on banks’ risk management, requires the licensed commercial banks and National Savings Bank to suspend the purchase of Sri Lanka International Sovereign Bonds until 23 April 2021.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka

data\CBSL\2021\Investments in Sri Lanka International Sovereign Bonds by Licensed Commercial Banks and National Savings Bank.pdf


05 December 2022MONETARY BOARI)
CENTRAL BAIIK OF SRI LANKA
BAI{KING ACT DETERMINATION No.01 of2022
ANNUAL LICENCE FEE OF
LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS
Determination made by the Monetary Board of the Central Bank of Sri Lanka under
Sections 8 and 76D (6) of the Banking Act, No. 30 of 1988, as amended.
In terms of Sections 8O and 76D (6) of the Banking Act No. 30 of 1988, the Monetary Board
has determined that every licensed commercial bank and licensed specialised bank shall pay the
licence fee in respect of the calendar year 2023 to the Central Bank of Sri Lanka on or before
3l't January 2023, based on the total assets of such bank as per regulatory reporting as at the end
of 2022, as set out in the Table below.
Annual licence fee for theyear 2023
Total Assets
as at the end2022 @s. Bn)Licence Fee
(Rs. Mn)
Above 2,000 38.0
Above 1,000 to 2,000 35.0
Above 500 to 1,000 28.5
Above 200 to 500 2s.0
Above 125 to 200 18.s
Above 75 to 125 t2.5
25 to 75 6.5
Less than 25 J.J
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lanka


MONETARY BOARD CENTRAL BANK OF SRI LANKA22 March 2022 BANKING ACT DIRECTIONS No. 01 of 2022FORWARD SALES AND PURCHASES OF FOREIGN EXCHANGE BY LICENSEDCOMMERCIAL BANKSIssued in terms of powers conferred by Section 46(1) of the Banking Act No. 30 of 1988, as amended.Banking Act Directions No. 07 of 2021 dated 25 April 2021 on Forward Sales and Purchases of Foreign Exchange by Licensed Commercial Banks are hereby revoked.Nivard Ajith Leslie CabraalChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka


06 May 2022MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSNo. 02 of 2022RESTRICTIONS ON DISCRETIONARY PAYMENTS OF LICENSED BANKSThe Monetary Board of the Central Bank of Sri Lanka (CBSL), having considered the possible adverse impact on liquidity and other key performance indicators of licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) due to the prevailing macroeconomic conditions and the importance of maintaining appropriate levels of liquidity and capital buffers in licensed banks, hereby issues these Directions on restrictions on discretionary payments of licensed banks.1. Empowerment1.1In terms of Section 46(1) of the Banking Act, in order to ensure the soundness of the banking system, the Monetary Board is empowered to issue Directions to all licensed commercial banks, regarding the manner in which any aspect of the business of such bank or banks is to be conducted.1.2 In terms of Section 76J(1) of the Banking Act, the Monetary Board is empowered to give Directions to licensed specialised banks or to any category of licensed specialised banks, regarding the manner in which any aspect of the business of such banks is to be conducted.2. Scope ofApplication2.1These Directions shall be applicable to every licensed bank incorporated in Sri Lanka and every licensed bank, which is a branch of a bank incorporated or established outside Sri Lanka, on a standalone basis.3. Restrictions on Discretionary Payments3.1Every licensed bank incorporated or established in Sri Lanka shall defer payment of cash dividends until the financial statements/interim financial statements for the year 2022 are finalized and audited by its External Auditor.1


MONETARY BOARD CENTRAL BANK OF SRI LANKA06 May 2022 BANKING ACT DIRECTIONS No. 02 of 20223.2 Every licensed bank incorporated outside Sri Lanka shall defer repatriation of profits not already declared for financial years 2021 and 2022 until the financial statements for the year 2022 are finalized and audited by its External Auditor.3.3 Licensed banks shall give due considerations to the requirements of the Banking Act Direction No. 01 of 2016 on Capital Requirements under Basel III for Licensed Banks, expected assets growth, business expansion and the potential impact of the COVID-19 pandemic and prevailing macroeconomic conditions when deciding on payments of cash dividends and profit repatriations.3.4 Licensed banks shall adhere to the following with immediate effect, until 31 December 2022.(a) Refrain from buying-back of its own shares.(b) Refrain from increasing management allowances and payments to Board of Directors.(c) Refrain from incurring non-essential and/or non-urgent expenditure and have a Board approved policy to rationalise if such expenditure is to be incurred.(d) Exercise extreme due diligence and prudence when incurring capital expenditure, if any.4. Effective Date 4.1 These Directions shall be implemented with immediate effect.
42.Dr. P Nandalal Weerasinghe Chairman of the Monetary Board and the Governor of the Central Bank of Sri Lanka2


MONETARY BOARD CENTRAL BANK OF SRI LANKA19 May 2022BANKING ACT DIRECTIONSNo. 03 of 2022MARGIN REQUIREMENTS AGAINST IMPORTSIssued in terms of the powers conferred by Sections 46(1) and 76(J)( 1) of the Banking Act No. 30 of 1988, as amended.The Central Bank of Sri Lanka, with a view to preserving the stability of the exchange rate and foreign currency liquidity in the banking system, requires licensed commercial banks (LCBs) and National Savings Bank (NSB) to adopt the following measures on imports of certain non-essential and non-urgent goods, with immediate effect until further notice.1. A 100 per cent non-interest bearing cash margin shall be kept on the invoiced value of imports specified in Annex I, made under Documents against Acceptance (DA) and Documents against Payment (DP) terms.2. In the case of NSB, the margin requirements specified in Direction 1 above, shall be applicable for such imports made under Letter of Credit (LC) terms, in addition to DA and DP terms.3. In the case of existing DAs and DPs covering the importation of goods covered by these Directions, no increase in the value of such DAs and DPs shall be permitted by LCBs and NSB unless such increase is covered by the cash margin deposits as required in Direction 1 above.4. Such non-interest bearing cash margin shall be placed by the importer with the bank that releases documents, at the time of acceptance of documents by the importer or at the time of making the endorsement by the licensed bank, in terms of Operating Instructions No. 05/2022 dated 12.05.2022, issued by the Controller General of Imports & Exports.5. Such non-interest bearing cash margin requirement shall be on the total value of the invoice, regardless that the same invoice includes goods that are not covered under these Directions.6. LCBs and NSB shall endorse the invoice to the effect that the margin deposit has been obtained.7. The margin deposit shall be released on providing documentary evidence on payments through the


The margin deposit shall be released on providing documentary evidence on payments through the banking channels in Sri Lanka and customs documents relating to clearance of imports.8. LCBs and NSB shall not grant any loan facilities to enable importers to place the margin deposits in respect of these imports.9. The provisions of these Directions shall have effect in addition to any requirement in force for the time being and such other requirements that may be introduced in terms of any law in respect of importation of goods.Dr.TNandalaTWeerasrngheChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka


23 May 2022MONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 04 of 2022REGULATORY REQUIREMENTS AMIDST PREVAILING EXTRAORDINARY MACROECONOMIC CONDITIONSAs a measure to maintain adequate capital to meet any losses, the banking sector has over the years built-up capital to enable banks to operate in a sound and resilient manner. These buffers have stood well to absorb unexpected losses during challenging times and has also helped banks to mobilise long term funding at reduced levels of risk-premia as well as maintain its credit ratings.However, after carefully considering the extraordinary circumstances caused by the current macroeconomic conditions, the Monetary Board hereby issues the following Directions to licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks), subject to periodic review.1. Empowerment 1.1 In terms of Section 46(1) of the Banking Act, in order to ensure the soundness of the banking system, the Monetary Board is empowered to issue Directions to all licensed commercial banks, regarding the manner in which any aspect of the business of such bank or banks is to be conducted.1.2 In terms of Section 76J( 1) of the Banking Act, the Monetary Board is empowered to give Directions to licensed specialised banks or to any category of licensed specialised banks, regarding the manner in which any aspect of the business of such banks is to be conducted.2. Capital Conservation Buffer (CCB)2.1 Licensed banks may drawdown the CCB, up to 2.5% subject to conditions stipulated in Direction No. 01 of 2016 on Capital Requirements under Basel III for licensed commercial banks and licensed specialized banks, which are specified below:(i) The distributions will be subject to the following restrictions as specified in Table 01.1


MONETARY BOARDCENTRAL BANK OF SRI LANKA2.3 May 2022BANKING ACT DIRECTIONSNo. 04 of 2022Table 01 - Minimum CCB RatiosCCB Maintenance RatioApplicable Minimum Earnings Retention Ratio2.5 %0%> 1.875%-2.5%40%> 1.25%- 1.875%60%> 0.625% - 1.25%80%0 % < - 0.625 %100%(ii) Licensed banks shall consider this Direction as a prior approval of the Monetary Board to drawdown CCB and shall submit a Board approved capital augmentation plan on rebuilding the CCB within 03 years, to the Director of Bank Supervision within 21 days of drawing down the CCB.3. Computation of Risk Weighted Assets for3.1 As stipulated under Banking Act Direction No.01 of 2016, licensed banks may move to The Standardised Approach (TSA) or The Alternative Standardised Approach (ASA) to compute risk weightedOperationalassets for Operational Risk, until 31.12.2023, by adopting a prudentRisk underdocumented procedure for mapping its current business activities toCapitalthe appropriate business lines in accordance with Directions, subject toAdequacyRequirementsobtaining prior written approval of the Director of Bank Supervision.4. Staggering theMark to Market4.1 Licensed banks may stagger the overnight mark to market losses on Government Securities denominated in LK.R, held at fair value arisingLossesfrom the changes in policy interest rates as announced in the Monetary Policy Review No-03 dated 08.04.2022, up to Q2 of 2024 as stipulated below for the purpose of computing the capital adequacy ratio, subject to the conditions stipulated in Directions 4.2 and 4.3 below:2


13 May 2022
5. Treatment of Other Comprehensive Income (OCI)6. LiquidityCoverage Ratio (LCR) and Net Stable Funding Ratio (NSFR)6 ■MONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 04 of 2022Table 02 - Staggering of overnight Mark to Market loss for Computation of Capital Adequacy RatioCumulative percentage of AbsorptionQ2 2022Q2 2023Q2 202433.33 %66.66% 100%4.2 Licensed banks are required to submit an assessment of such loss to be staggered to the Director of Bank Supervision with a certification provided by external/internal auditors validating the amount.4.3 If a licensed bank decides to stagger the above mark to market loss, such licensed banks shall not pay any dividends/repatriate any profits and shall refrain to the extent possible from incurring non-essential and capital expenditure until the entire mark to market loss on Government Securities is fully recognised in the capital adequacy computation.5.1 Licensed banks may include 100 percent of accumulated OCI gains which are reflected in the statement of changes in equity as per the latest available annual or interim audited financial statements, subject to complying with all other conditions stipulated in the Banking ActDirections No.01 of 2016.6.1 Licensed banks are permitted to operate maintaining an LCR and NSFR at a minimum level of 90% up to 30.09.2022, as a short-term measure to adjust the liquidity profiles of licensed banks, with enhanced supervision and frequent reporting.3


MONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSMay 2022No. 04 of 20227. Minimum7.1 The deadline for the enhancement of minimum capital requirement ofCapitallicensed banks as stipulated in Banking Act Direction No. 05 of 2017Requirementis extended up to 31.12.2023, for licensed banks which fail to meet the minimum capital requirement by 31.12.2022.7.2 Such licensed banks shall submit their capital augmentation plan, including plans to consolidate or merge with suitable financial institutions, together with timelines to the Director of Bank Supervision by 31.12.2022 to meet the minimum requirements by 31.12.2023 and shall refrain from distribution of dividends/ repatriation of profits until the minimum capital requirements are met.8. Submission of8.1 Licensed banks are granted time until 30.06.2022 to submit theInternal CapitalAdequacyAssessmentICAAP document for 2022.Process(ICAAP)CL-9 oDr. P Nandalal WeerasingheChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka


22 Jtne2022CENTRAL BANK OF SRI LANKA
BANK SI'PERVISION DEPARTMENT
BANKING ACT DIRECTIONS No.05 of2022
SUSTAINABLE FINANCE ACTIVITIES OF LICENSED BANKS
The Central Bank of Sri Lanka (CBSL), having considered the importance trf committing to
achieving the Sustainable Development Goals of United Nations and the need to transit towards
a green, inclusive, and balanced economy in Sri Lanka, published the Road Map for Sustainable
Finance in Sri Lanka in 2019. The Road Map provides a broader direction to financial
regulators and financial institutions to effectively manage environmental, social and
govemance (ESG) risks associated with projects they finance and promote assistance to
businesses that are greener, climate-friendly, and socially inclusive.
The Road Map, required to establish a classification and measurement system for sustainable
activities, i.e., a taxonomy, for Green Finance activities in Sri Lanka with the support of all
stakeholders. The Sri Lanka Green Finance Taxonomy was published by CBSL on 06 May
2022.
Considering the national importance ofpromoting sustainable financing initiatives and the need
for providing a govemance and risk management framework for licensed banks in respect of
sustainable finance activities, the Monetary Board hereby issues the following Directions on
Sustainable Finance activities in licensed commercial banks and licensed specialised banks,
hereinafter referred to as licensed banks, with a view to facilitating a sustainable economy and
promoting the sustainable finance practices of licensed banks, in line with Sustainable Finance
Road Map of CBSL.
1. Empowerment 1.1 In terms of Section a6(1) of the Banking Act, in order to ensure
the soundness of the banking system, the Monetary Board is
empowered to issue Directions to all licensed commercial banks,
regarding the manner in which any aspect of the business of such
banks is to be conducted.
1.2 In terms of Section 76J (l) of the Banking Act, the Monetary


banks is to be conducted.
1.2 In terms of Section 76J (l) of the Banking Act, the Monetary
Board is empowered to give Directions to licensed specialised
banks or to any category oflicensed specialised banks, regarding
the manner in which any aspect of the business of such banks is
to be conducted.


22 June2022CENTRAL BANK OF SRI LANKA
BANK SUPERVISION DEPARTMENT
BANKING ACT DIRECTIONS No.05 o12022
2. Applicability
3. Sustainable
Finance
Initiatives
4. Identified
Priority
Sectors3.1
3.2
a1J.J2.1 These Directions shall be applicable to all licensed banks.
Licensed banks shall identif,z and develop appropriate guidelines to
conduct its business activities in a sustainable manner.
Licensed banks shall develop innovative financial solutions to
support sustainable initiatives.
Licensed banks shall consider raising funds via instruments such as
green/sustainable bonds and allocate such funding to invest in/fund
sustai nable activities.
The following sectors/activities are identified as priority sectors to
provide sustainable lending facilities by licensed banks:
Identified Sectors Prioritized Sub Sectors
Agriculture, forestry and
loggingSustainable agriculture,
forestry development
Manufacturing Energy saving machinery/
equipment
Electric power generation,
transmission and distributionRenewable energy projects
Transportation and storage All forms of sustainable
transport and storage
Water supply, sewerage and
waste managementWater supply/management
projects, Waste management
projects
Construction Green construction proj ects
Sustainable Tourism an(
recreationAll sustainable tourism an(
recreational activities
Other Sectors Gas, steam and air
conditioning supply, Financial
Services, Information and
communications technology,
Sustainable Women
Empowerment initiatives etc.4.1


22 Jtne2022CENTRAL BANK OF SRI LANKA
BANK SUPERVISION DEPARTMENT
BANKING ACT DIRECTIONS No.05 of2022
4.2Licensed banks shall consider the applicable environmental/climate
adaptation and mitigation aspects, social imfact, regulations,
certifications, and relevant external and internal guidelines on
sustainable activities granting funding to above priority sectors and
reporting above information.
Licensed banks shall ensure the compliance with the requirements
of the Sri Lanka Green Finance Taxonomy when identifying the
above priority sectors and activities.
Board of Directors (BOD) and senior management shall ensure
effective and efficient overseeing of the Sustainable Finance
activities and a BOD approved policy at a minimum shall include
the following:
(a) clear roles and responsibilities of BOD and senior
management on overseeing of the bank's environmental and
social risks and sustainable business activities;
(b) identify main risks for the licensed bank on environmental
aspects and green and climate financing activities;
(c) ensuring that sustainable financing activities and identified
environmental risks are addressed in the bank's overall risk
management framework;
(d) policies and processes to assess, monitor, review and report
such risks;
(e) parameters and metrics for measuring the progress of
sustainable finance initiatives; and
(f) appropriate internal controls to be in place.
The Chief Executive Officer and relevant Key Management
Personnel of licensed banks under the guidance provided by BOD
shall ensure:4.3
5.1 5.Governance
Framework for
Sustainable
Finance
Initiatives
5.2


22 Jane2022CENTRAL BANK OF SRI LANKA
BANK SUPERVISION DEPARTMENT
BANKING ACT DIRECTIONS No.05 of2022
6.1 6.Risk
Management(a) policies, tools, metrics, operational procedures and controls
implemented by the bank in respect of sustaiRable finance are
reviewed and updated regularly (at least annually) and
integrated with other relevant policies and procedures of the
bank;
(b) adequate resources, skills and expertise are allocated to the
management of sustainable finance activities;
(c) clear articulation of the roles and responsibilities of business
units and functions in managing risks associated with
sustainable finance; and
(d) BOD is informed in a timely manner on material issues,
relating to sustainable financing and business practices.
Licensed banks shall identify and evaluate the risks stemming from
associated climate, environmental and other green financing
activities considering the nature, scale, complexity, and
interconnectedness of its operations and assess the magnitude and
materiality of such risks.
Licensed banks shall incorporate ESG risk management to the
entire decision-making processes, including environmental and
social policies, risk assessment, environmental and social
covenants.
A11 material risks, defined in Direction 6.1 above, shall be
considered in the Pillar II assessment under Capital requirements
for the licensed banks.
Licensed banks shall identi$, how risks identified in Direction 6.1
will affect its business model and assess the potential impact on the
bank.6.2
6.3
6.4


22 June2022CENTRAL BANK OF SRI LANKA
BANK SUPERYISION DEPARTMENT
BANKING ACT DIRECTIONS No.05 of2022
6.5
6.6
7.1Licensed banks shall implement effective risk management
practices and intemal controls to mitigate risks"in Direction 6.1
above.
Licensed banks may conduct scenario analysis and stress testing to
assess the impact of potential/alternative climate related risks and
green fi nancing activities.
Licensed banks are expected to build capacity on Sustainable
Finance activities going forward providing adequate training to
staff members.
Licensed banks are expected to develop and provide new innovative
sustainable finance solutions to customers.
Licensed banks shall develop expertise in environmental stress
testing and scenario analysis, whilst obtaining appropriate external
expertise on environment and climate related risk aspects.
Licensed banks shall disclose the following information related to
sustainable finance practices in their annual reports:
(a) Al overview on bank's sustainable finance policies and
activities;
(b) Identified sustainable finance related risks and associated
mitigation measures; and
(c) A statement on banks approach towards sustainable finance
activities and way forward.
Licensed banks are encouraged to disclose environmental and
social impact generated from business activities using
intemationally recognized reporting frameworks, such as Global
Reporting Initiative (GRD and recommendations ofthe Task Force
on Climate-related Financial Disclosures (TCFD).7. Capacify
Building and
Innovation
8. Disclosures and
Reporting7.2
7.3
8.1
8.2


22 Jtne2022CBNTRAL BANK OF SRI LANKA
BANK ST]PERVISION DEPARTMENT
BANKING ACT DIRECTIONS No.05 of2022
8.3 Licensed banks shall submit the information required as per Annex
I to the Bank Supervision Department within 30 days from the end
ofeach quarter.
Dr. P Nandalal Weerasinfhe r )
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lanka


22 June2022CENTRAL BANK OF SRI LANKA
BANK SI]PER\'ISION DEPARTMENT
BANKING ACT DIRECTIONS No.05 of2022
Annex I
Quarterly Statement on Sustainable Financing Activities of Licensed Banks
As at .. .. ....
Name of the Licensed Bank -
Email to Bank Supervision Department, Database - bsddb@obs1.lk, within 30 days from the end of each quarter
ISectorSub Sector
(Identify as defined in Sri
Lanka Green Finance
Taxonomy for applicable
facilities)No. of
Credit
FacilitiesValue of
Outstanding
Credit
Facilities as
at Q... XXNo of
New
Credit
F acilities
granted
during
Q....XXValue of
the new
Credit
Facilities
granted
during
Q...XX
IAgriculture,
Forestry and
LoggingSustainable Asriculture
Forestrv and Lossins
Other Sustainable Activities
2Manufacturing Energy saving
machinerv/eouioment
Other Sustainable
Manufacturing
JElectric power
generation,
transmission
and distributionRenewable energy proiects
Other Sustairable Activities
4Transportation
and storageAll forms of sustainable
Transportation and storage
5Water supply,
sewerage and
waste
managementWater supply/management
oroiects
Waste management projects
Other Sustainable Activities
6Construction Green construction proj ects
Other Sustainable Activities
1Sustainable
tourism and
recreationAll sustainable tourism and
recreation activities
8Other Sectors Gas, steam and air
conditionins supply
Financial Services
Information and
communications technolosy
Sustainable Women
empowerment initiatives, if
not covered under any other
a{ea
Other Sustainable Lending
(Please SpecifV)
Total


0 tt Juty 2022MONETARY BOARI)
CENTRAL BANK OF SRI LANKA
BA}[KING ACT DIRECTIONS No.06 of2022
ADDENDUM TO THE BANKING ACT DIRECTION NO. 8 OF 2011
CUSTOMER CHARTER OF LICENSED BANKS
ACCESSIBILITY TO BANKING SERVICES FOR CUSTOMERS
WITH SPECIAL NEEDS
Issued in terms of the powers confered by Sections 46(l) and 76(JX1) of the Banking Act, No. 30 of
1988, as amended.
The Monetary Board of the Central Bank of Sri Lanka hereby issues the following addendum to the
Banking Act Direction No. 08 of 2011, on Customer Charter of Licensed Banks, with a view to further
strengthening the financial consumer protection measures for customers with special needs.
Accordingly, paragraph 7 of the Annexure to Banking Act Direction No. 08 of 201 1 on Customer Charter
of Licensed Banks, is expanded as follows:
Special attention and care
The customers such as elderly, disabled or customers with low financial literacy (hereinafter
referred as customers with special needs) have the right to receive special attention to facilitate
them to have a fair access to banking services.
Accordingly, licensed banks shall implement comprehensive policies and procedures to ensure
improved access to banking services for customers with special needs, including but not limited
to the Guidelines provided in Schedule 1.
Licensed banks shall expedite the implementation of such measures at branches to avoid
inconvenience to concerned customers.1
7.1
7.2
7.3
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lanka


2
 SCHEDULE 1
GUIDELINES FOR LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED
BANKS TO IMPROVE ACCESSIBILITY TO BANKING SERVICES FOR CUSTOMERS
WITH SPECIAL NEEDS
1. Introduction
1.1 These guidelines set minimum requirements for licensed banks to facilitate accessible banking
services for customers with special needs and improve financial consumer protection, and
financial inclusion of such customers.
1.2 In the context of these guidelines, “customers with special needs” refer to individuals who
require additional assistance to perform banking transactions and/or to obtain banking services
due to physical, or medical conditions including, but not limited to visual impairments, hearing
impairments, loss of limb/s, etc. and due to old age.
2. General Guidelines
2.1 Improve Accessibility to Banking Services
(i) Licensed banks shall ensure that customers with special needs have fair access to banking
services and products, in a similar manner to any other customer.
(ii) In this regard, licensed banks shall provide the following to ensure accessible banking services
to individuals with special needs.
(a) Licensed banks shall ensure that all newly opened physical service outlets such as bank
branches, mobile banking units, and self-service machines including Automated Teller
Machines (ATMs) and Cash Deposit Machines (CDMs) are accessible to customers with
special needs including customers using wheelchairs, crutches, walkers, etc.
(b) Digital banking channels including internet banking and mobile banking apps to be
compatible with international accessibility standards accommodating options such as
screen magnifiers, screen readers, text to speech and providing text transcript to allow


3
 audio information accessible, etc., where applicable. In this regard, licensed banks are
expected to streamline their apps and website to be compatible with the in-built, standard
accessibility features of devices (mobile phones, laptops, tabs, etc.) used by customers
with special needs.
(c) Licensed banks are required to establish quality control/assurance function or a similar
arrangement to ensure that banking products and services are accessible friendly for
customers with special needs.
2.2 Special Attention and Due Care
(i) Licensed banks may consider flagging bank accounts of customers with special needs enabling
the bank staff to recognize such customers and pay special attention and due care when
providing banking services to such customers.
(ii) Licensed banks shall provide special training to relevant staff at bank branches and other service
outlets to equip them to provide cordial and effective service to customers with special needs.
(iii) Licensed banks shall ensure that the customers with special needs have access to obtain
assistance from bank staff in case the customer believes that such assistance is necessary for
them to perform/obtain banking services.
(iv) Licensed banks shall maintain a customer care hotline/electronic media (live chat) to assist
customers with special needs in resolving their complaints/issues and make customers aware of
such facilities.
2.3 Ensure Fair Treatment
(i) Licensed banks shall ensure fair treatment to all customers, including those with special needs.
Accordingly, licensed banks shall review their internal policies and procedures that hinder fair
access to banking services by customers with special needs.
(ii) Licensed banks shall not deny the provision of banking services to customers based on their age
or special needs, nor enforce any additional terms and conditions (including any requirement


or special needs, nor enforce any additional terms and conditions (including any requirement
that prevent such customer from obtaining banking services from a branch other than the branch


4
 where the respective account is opened) which may place such customers in a disadvantageous
position.
(iii) Licensed banks may consider using biometric authentication options such as fingerprint readers
to verify the identity of such customers whose identity cannot be verified due to not being able
to place a valid signature.
(iv) Licensed banks are encouraged to promote a diverse and inclusive culture to create a welcoming
environment for individuals with special needs and ensure zero tolerance for discrimination on
any grounds.
3. Specific Guidelines to Improve Banking Experience for Customers with Visual
Impairments
3.1 Facilitate Informed Decision Making: Licensed banks shall ensure that the customers with
visual impairment have access to adequate information on the banking products and services at
the point of onboarding and, thereafter, with respect to, but not limited to, the features, terms
and conditions of the products or services for informed decision making.
3.2 Banks may consider allocating dedicated staff to assist customers with special needs and make
available the key documents in accessible friendly electronic media to make informed decisions.
3.3 Accessibility and Visibility Options:  Licensed banks shall formulate a plan with timelines to
provide customers the option to opt for high visibility versions of various documents such as
bank statements, mandates, various applications with larger fonts and high contrast colours for
the benefit of elderly customers and those with partial visual impairment.
3.4 Licensed banks shall consider accessibility features for visually impaired customers as
important when procuring new Automated Teller Machines (ATMs), Cash Deposit Machines
(CDMs) and other self-service machines (SSMs) with a view to making use of Brail keypads
and audio input/output facilities therein to provide access to banking services for visually


and audio input/output facilities therein to provide access to banking services for visually
impaired customers. In this regard, banks shall introduce such machines to facilitate the visually
impaired customers and replace existing incompatible ATM machines with new machines, in
an orderly manner in the future.


5
 3.5 Licensed banks shall establish above machines strategically in consultation with other banks to
ensure that at least one such machine is generally available in each locality catering to the needs
of visually impaired cusotmers.
3.6 Licensed banks shall ensure that no additional conditions are enforced on visually impaired
customers, such as forcing to open joint accounts, restricting banking services to the branch at
which such customers have opened their  bank accounts.
4. Implementation
4.1 Licensed banks shall implement comprehensive policies and procedures to ensure improved
access to banking services for customers with special needs, including but not limited to the
Guidelines, with a view to addressing any practical difficulties faced by such customers in
obtaining banking services.
4.2 Licensed banks shall not levy any additional charge or fee to the customers who avail such
accessibility options obtaining banking services.
4.3 Considering the additional resources involved in implementing certain requirements, banks are
permitted to stagger the implementation, with a view to achieving full compliance by
31.12.2022.


29 August 2022MONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 07 of 2022MANDATORY RECORDING OF THE UNIQUE IDENTIFICATION NUMBERS OF DEPOSITORS BY LICENSED BANKSThe Central Bank of Sri Lanka with a view to strengthening the soundness and integrity of the information management process of the licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks), hereby issues the following Directions to licensed banks on mandating the recording of Unique Identification Numbers (UINs) of depositors by licensed banks in the respective banking systems.
Depositors1. Empowerment1.1 In terms of Section 46(1) of the Banking Act, in order to ensure the soundness of the banking system, the Monetary Board is empowered to issue Directions to all licensed commercial banks, regarding the manner in which any aspect of the business of such banks is to be conducted.1.2 In terms of Section 76J(1) of the Banking Act, the Monetary Board is empowered to give Directions to licensed specialised banks or to any category of licensed specialised banks, regarding the manner in which any aspect of the business of such banks is to be conducted.2. Scope andApplicability2.1 These Directions shall be applicable to all licensed banks including operations conducted through agents and third-party service providers.3. Mandatory3.1 All licensed banks shall mandatorily record the identificationRecording ofnumber given in Annex I to these Directions as the UIN for eachUINs oftype of depositor.1


29 August 20224. ImplementationMONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 07 of 20224.1 Licensed banks shall comply with the requirements of these Directions with effect from 01.10.2022 for all new depositors.4.2 Licensed banks shall complete recording of UINs of the existing depositors in the systems by 31.12.2023.Dr. P NandaiaTWeeFasinghej \Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka
2


Annex ITABLE 1: UNIQUE IDENTIFICATION NUMBERS (UINs) FOR EACH CATEGORY OF DEPOSITORSType of DepositorType of Identification NumberRemarksIndividualsSri Lankan CitizensNational Identity Card (NIC) NumberLicensed banks can accept the driving licence or passport of the customer to open accounts. However, it is compulsory to record the NIC number in the banks’ systems. ‘Sri Lankan Citizen (residing outside Sri Lanka/PR holders/TR holders)Sri Lankan Dual Citizens (residing in SL), Sri Lankan Dual Citizens (residing outside Sri Lanka)National Identity Card (NIC) NumberSri Lankan Passport Number can be used only when NIC has been temporarily surrendered by a depositor.Non-Sri Lankan CitizensForeign Passport NumberIncluding Foreign Nationals of Sri Lankan origin (residing outside Sri Lanka), Foreign Nationals on temporary visit to Sri Lanka or intending to visit Sri Lanka, Foreign Diplomats.3


Type of DepositorType of Identification NumberRemarksMinor DepositorsDate of Birth + Birth Certificate NumberE.g.:Date of Birth - 07th January 2005 (2005.01.07)Birth Certificate Number - 0325UIN - 200501070325Date of birth followed by the Birth Certificate Number in the same field to create a 12-digit numberInstitutionsCompanies registered under the CompaniesActCompany Registration NumberJSNon-Governmental OrganizationsRegistration Number issued by the NationalSecretariat for Non-GovernmentalOrganizationsInstitutions registered under divisional/local government bodies such asProprietorships/Partnerships/Joint Ventures, etc.Business Registration NumberAll other entities such as clubs, associations, societies, etc.Registration Number issued by the relevantAuthorities-4


MONETARY BOARDCENTRAL BANK OF SRI LANKA18 November 2022 BANKING ACT DIRECTIONS No. 08 of 2022REGULATORY REQUIREMENTS ON LIQUIDITY RATIOSThe Monetary Board, considering the extraordinary circumstances caused by the current macroeconomic conditions, issues the following Directions to licensed commercial banks and licensed specialised banks.1. Empowerment1.1 In terms of Section 21(1) of the Banking Act, every licensed commercial bank (LCB) shall maintain liquid assets in such amount as may from time to time be determined by the Monetary Board having regard to the nature of the business carried on by such bank provided that the percentage determined by Monetary Board shall not be less than 20 per cent and not more than 40 per cent.1.2 In terms of Section 46(1) of the Banking Act, in order to ensure the soundness of the banking system, the Monetary Board is empowered to issue Directions to all licensed commercial banks, regarding the manner in which any aspect of the business of such bank or banks is to be conducted.1.3 In terms of Section 76J(1) of the Banking Act, the Monetary Board is empowered to give Directions to licensed specialised banks or to any category of licensed specialised banks, regarding the manner in which any aspect of the business of such banks is to be conducted.2. Statutory2.1 Commencing from December 2022, licensed commercial banks areLiquid AssetsRatio (SLAR)required to maintain liquid assets of an amount not less than 20% of total adjusted liabilities, on a consolidated basis for the overall bank, until further notice.2.2 The requirement to maintain SLAR. separately for Domestic Banking Unit (DBU) and Off-shore Banking Unit (OBU) as stipulated under the Circulars dated 21 January 2003, 08 October 2003 and 20 May 2004 is temporarily deferred.


18 November 2022MONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 08 of 20222.3 Licensed commercial banks shall continue the reporting of separate SLAR for DBU and OBU to the Bank Supervision Department for monitoring purposes.3. LiquidityCoverage Ratio (LCR) and NetStable FundingRatio (NSFR)3.1 Licensed commercial banks and licensed specialised banks are permitted to maintain an LCR and NSFR at a level not less than 90% up to 31.12.2022, as a short-term measure to allow further time to adjust the liquidity profiles of licensed banks, with enhanced supervision and frequent reporting.Chairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka
2


MONETARY BOARD CENTRAL BANK OF SRI LANKA26 August 2022 BANKING ACT ORDER No. 01 of 2022BANKING (OFF-SHORE BANKING BUSINESS SCHEME) ORDER DESIGNATED FOREIGN CURRENCIESOrder made by the Monetary Board of the Central Bank of Sri Lanka with the approval of the Minister, under Sections 23, 25 and 26 of the Banking Act, No. 30 of 1988, as amended.1. Designated 1.1Foreign Currencies1.2
1. Australian Dollar2. Canadian Dollar3. Chinese Renminbi4. Danish Kroner5. Euro6. Hongkong Dollar7. Indian Rupee8. Japanese YenThe foreign currencies set out in the Schedule below in this Order are determined as the Designated Foreign Currencies under the Banking (Off-Shore Banking Business Scheme) Order.The Schedule in this Order, replaces the Schedule in the Banking (Off- Shore Banking Business Scheme) Order No. 01 of 2021, dated 18.06.2021.—Dr. P Nandalal WeerasingheChairman of the Monetary Board and Governor of the Central Bank of Sri LankaSchedule Designated Foreign Currencies9. New Zealand Dollar10. Norwegian Kroner11. Pound Sterling12. Singapore Dollar13. Swedish Kroner14. Swiss Franc15. Thai Baht16. United States Dollar


llMarch2022MONETARY BOARD
CENTRAL BANK OF SRI LANKA
MONETARY LAW ACT ORDER No.01 of 2022
AMENDMENT TO THE MAXIMUM INTEREST RATES ON LENDING PRODUCTS
OF LICENSED BANKS
Issued under Section I 04(1)0) of the Monetary Law Act, No. 58 of 1949, as amended.
The Central Bank of Sri Lanka has adopted monetary policy tightening measures in the recent
past including an increase of policy interest rates to dampen the possible build-up of underlying
demand pressures in the economy, which would, in turn, help ease pressures in the external sector,
thus promoting greater macroeconomic stability. Consequently, considering the increase in
overall market interest rates, the Monetary Board hereby issues an amendment to the Monetary
Law Act Order No. 02 of 2020 on the Maximum Interest Rates on Lending Products of Licensed
Banks.
Accordingly, Order 2.1 of the Cited Order is replaced as follows and Order 2.2 is deleted.
2. Interest Rates on
LKR
denominated
loans and
advances2.1 Commencing 14 March 2022, the maximum interest rates that
shall be charged by licensed commercial banks and licensed
specialised banks for the credit card advances, pre-alranged
temporary overdrafts and pawning advances are given below:
(D 20 per cent per annum on credit card advances commencing
from the next billing cycle.
(iD l8 per cent per annum on pre-affanged temporary overdrafts.
(iii) 12 per cent per annum on the money lent for pawning
advances collateralised by personal articles made of gold
accepted as a pledge, for all new pawning advances and
existing pawning facilities that are renewed.
h'/,wJul-
Nivard Ajittr Leslie Cabraal
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lanka


llMarch2022MONETARY BOARI)
CENTRAL BANK OF SRI LANKA
MONETARY LAW ACT ORDER No.02 of 2022
AMENDMENT TO THE MAXIMUM INTEREST RATES ON FOREIGN CURRENCY
DEPOSITS OF LICENSED COMMERCIAL BANKS AND THE NATIONAL SAVINGS
BANK
Issued under Section 10a(1)(a) of the Monetary Law Act, No. 58 of l94i,as amended.
Considering the recent monetary policy tightening measures, the expected macroeconomic
developments and the prevailing interest rates on foreign culrency deposits of licensed banks, the
Monetary Board hereby issues an amendment to the Monetary Law Act Order No. 03 of 2021 on
Maximum Interest Rate on Foreign Currency Deposits of Licensed Commercial Banks and the
National Savings Bank, removing the existing maximum interest rate limits imposed on foreign
cuffency deposits of licensed commercial banks and the National Savings Bank.
Accordingly, Orders 2 and 3 of the cited Order are deleted.
A;u ^sJ cJ<-
Nivard Ajith Leslie Cabraal
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lanka


a,\ April2022MONETARY BOARI)
CENTRAL BANK OF SRI LANKA
MONETARY LAW ACT ORDER No.03 of2022
INTEREST RATES ON LENDING AND DEPOSIT PRODUCTS OF
LICENSED BANKS
(1) The Central Bank of Sri Lanka (CBSL) having considered the tight monetary policy measures
adopted thus far hereby revokes Order 2. 1 of the Monetary Law Act drder No. 02 of 2020dated
21 August 2020 as amended by the Order 2.1 of the Monetary Law Act Order No. 01 of 2022
dated 11 March 2022, effective as follows.
(i) Credit card advances, cofllmencing from the next billing cycle.
(ii) A11 new pre-alranged temporary overdrafts and existing pre-alranged temporary
overdrafts that are renewed/extended.
(iii) All new pawning advances and existing pawning advances that are renewed.
(2) Licensed banks shall adjust the deposit rates adequately, in line with the tight monetary policy
measures adopted by CBSL, to attract deposits into the banking system.
Mrs.TMJYPFernando
Senior Deputy Governor
Central Bank of Sri Lanka


8 June 2022MONETARY BOARD CENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDERNo. 04 of 2022MAXIMUM INTEREST RATES ON FOREIGN CURRENCY DEPOSITS OF LICENSED COMMERCIAL BANKS AND THE NATIONAL SAVINGS BANKIssued under Section 104(l)(a) of the Monetary Law Act, No. 58 of 1949, as amended.Monetary Law Act Order No. 03 of 2021 dated 30 December 2021 on Maximum Interest Rates on Foreign Currency Deposits of Licensed Commercial Banks and the National Savings Bank except Order 7 is hereby revoked.Dr. P Nandalal WeerasinghChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka


MONETARY BOARD CENTRAL BANK OF SRI LANKAMarch 2022CIRCULAR No. 01 of 2022GUIDELINES ON ESTABLISHMENT OF POST COVID-19 REVIVAL UNITS INLICENSED BANKSThe prolonged nature of the COVID-19 pandemic has led to disruption in income generating activities of businesses adversely impacting their ability to duly repay their loans and thereby impairing the recovery process of licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks). Therefore, with a view to facilitating the sustainable economic revival of businesses affected by the COVID-19 pandemic and to mitigate the increase in impaired assets of licensed banks, the Central Bank of Sri Lanka (CBSL) in its “Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability” announced the need for establishment of Post COVID-19 Revival Units in licensed banks. Accordingly, CBSL hereby issues broad guidelines to give effect to the establishment of Post C0V1D-19 Revival Units in licensed banks.1. Objective1.1 The purpose of establishment of the Post COVID-19 Revival Unit(hereinafter referred to as the Unit) is to identify and assist under performing and non-performing borrowers of licensed banks who are affected by COVID-19 and are facing financial difficulties due to reduction of income or sales, reduction or impairment of business operations or the closure of business etc., with the aim of reviving viable businesses which will provide benefits to such borrowers, leading to enhancement of economic activities and contributing to the development of the national economy.2. Governance Framework andResources2.1 Licensed banks are required to formulate a revival and rehabilitation policy approved by the Board of Directors for a locally incorporated licensed bank and the regional/global head office for a licensed bank incorporated outside Sri Lanka.


No. 01 of 2022March 2022MONETARY BOARD CENTRAL BANK OF SRI LANKACIRCULAR2.2 The revival and rehabilitation policy should inter alia include the following at a minimum:(i) the mandate for establishment of the Unit;(ii) its scope of activities including deliverables;(iii) the revival mechanism for borrowers including financial and non-financial strategies which may include but not limited to rescheduling/restructuring of existing credit facilities;(iv) granting other additional credit facilities on needs basis and;(v) provide any other appropriate measures for the revival of affected borrowers, post COVID-19.2.3 The Unit shall be headed by a Key Management Personnel of the licensed bank with sufficient authority and seniority to ensure effective and efficient oversight of the Unit and expeditious implementation of revival and rehabilitation activities.2.4 Licensed banks to ensure that the Unit shall be adequately staffed and possess sufficient expertise and authority for credit appraisal and monitoring and be provided with all other resources on needs basis.2.5 In the case of banks with more than 50 bank branches, such licensed banks may consider establishment of Units at large branches / regional offices of banks as appropriate. Other licensed banks shall have the Post COVID-19 Revival Unit centrally.3. Duties and 3.1 The Unit shall actively liaise with branches and other business Functions of the units of the bank to;Revival Unit (i) identify borrowers who require rehabilitation assistance,including borrowers considered for liquidity support to unwind moratorium(ii) develop rehabilitation proposals after completing a thorough analysis and coordination with all stakeholders2


No. 01 of 2022MONETARY BOARDCENTRAL BANK OF SRI LANKA24 March 2022CIRCULAR
4. Accounting Considerations(iii) obtain necessary approvals and review the performance3.2 In the case of 3.1(i) above, licensed banks shall not consider the following borrowers for revival.(a) Borrowers that have been identified as willful defaulters(b) Borrowers that have defaulted due to diversion of funds (i.e., funds borrowed from licensed banks have been utilised for purposes un-related to the operations of the business of the borrower)(c) Borrowers that have defaulted due to mismanagement and/or frauds in the business(d) Borrowers engaged in unviable projects3.3 In the case of 3.1(i) above, licensed banks may consider the following borrowers for revival at the discretion of the banks.(i) Borrowers that have been classified as non-performing prior to 01 April 2020.(ii) Borrowers that are under litigation.3.4 The Unit shall conduct awareness programs on rehabilitation, initiatives, procedures and methodologies to relevant stakeholders viz., branches and business units of the bank, borrowers etc.3.5 The Unit shall provide credit counselling and business advisory services and assist businesses in reaching out to potential investors, obtain seed capital, equity etc., if necessary.4.1 Licensed banks shall adopt accounting treatment for facilities considered under the Unit as per the Sri Lanka Accounting Standards and related Circulars/guidelines issued by CBSL. In the case of risk elevated borrowers or sectors, licensed banks are required to make adequate impairment charges. Licensed banks may seek advice from the Institute of Chartered Accountants of Sri3


MONETARY BOARD CENTRAL BANK OF SRI LANKA 24 March 2022 CIRCULARNo. 01 of 2022Lanka and Auditors for additional guidance and clarification in this regard.5. Reporting to the 5.1 CreditInformationBureau (CRIB) of Sri LankaLicensed banks, in consultation with CRIB, shall develop a reporting modality to report credit facilities transferred to this Unit, so that participation in revival and rehabilitation schemes of this Unit will not have an impact on the credit score of borrowers in the future, or be negatively reflected in future CRIB reports.6. Re-finance or 6.1Interest SubsidySchemesThe restructuring of facilities granted under refinance or interest subsidy schemes shall be considered in accordance with the related guidelines issued by the Regional Development Department of CBSL or the Ministry of Finance in this regard.7. Recovery Action 7.1for Default afterRevivalLicensed banks may adopt suitable recovery actions against borrowers that have failed to adhere to the terms and conditions agreed for revival and rehabilitation under this Unit as per the bank’s internal guidelines and policies.8. Implementation 8.1Licensed banks are required to make necessary arrangements to establish Post COVID-19 Revival Units by 30 April 2022. In the case of licensed banks that have already established Revival Units such banks may expand the scope of activities of these Units to be in line with the requirements of this Circular.9. Reporting 9.1RequirementLicensed banks shall report the details on progress of rehabilitation proposals availed to the bank’s borrowers as at the end of each quarter, within 15 working days, commencing 30 June 2022 as per the reporting format given in Annex I.Nivard Ajith Leslie CabraalChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka4


Annex IReport on Eligible Borrowers Availing Concessions under Post COVID Revival UnitsName of the bank : All Amounts in Rs. 000Total No. of facilties under revival:Serial No.Borrower CategoryDetails of Existing Credit Facility/ FacilitiesRevival MechanismPost Monitoring MechanismIndividual/BusinessType of Business (Micro/Small/Me dium/Corporate)SectorDate transferred to the Post COVID Revival UnitStatus of the facilities (performing/ non-performing)Total Amount outstandingDetails of financial/non- fianancial strategies for revivalRevival Mechanism (Rescheduled/ Restructured/ New Loan)Rescheduled/ Restructure/New loan granted dateAny additional credit facilities grantedOther measures taken, if anyStatus of the Rescheduled/Restructured / New Loan Granted (Performing/Non- Pefroming) 12345678910111213
Notes:Column 4 - Sectors to be mentioned as per the Sectorwise Return, specify sub-sectors if applicableColumn 7 - Outstanding balance/s of credit facility/facilities that are considered for revivalPlease email the position as at the end of each quarter, within 15 working days commencing from 31.03.2022 to bsddb@cbsl.lk