{"page_content": "Attachment 4Baseline Security Standard for Information Security ManagementAssurance Level 1Version 1.0", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 0, "year": 2013}, "type": "Document"}
{"page_content": "PART I: IntroductionForewordDriven by business objectives, such as increasing revenue and customer base, many organisations are embracing ICT-enabled solutions to provide richer online services to their client base. These very services have driven many banks and other organisations to interconnect via common communications and information processing infrastructure.In terms of security posture, organisations in Sri Lanka represent a spectrum of capabilities. However, just as the strength of a chain lies with its weakest link, so does the strength of information security in the financial services sector lie with its weakest member, which in turn poses a threat to all other members, which may potentially lead to financial fraud.The Centra] Bank of Sri Lanka (CBSL), the Sri Lanka Computer Emergency Readiness Team | Co-ordination Center (Sri Lanka CERT|CC) and the Sri Lanka Banks' Association (SLBA) worked towards the establishment of the Baseline Security Standard for Information Security Management (BSS), based on the globally recognized ISO 27000 series of international Standards for information security. The implementation of the Standard will be supervised by CBSL and the subsequent revisions to the Standard will be proposed by Bank Computer Security Incident Response Team (Bank CSIRT) to CBSL for consideration.1. Fundamentals1.1. Information Security ManagementThe preservation of the Confidentiality, Integrity and Availability of information by the appropriate and systematic application of security controls to manage the risk of exposure to a threat, which arises due to the existence of vulnerabilities in information assets.1.2. Information Security Risk ManagementInformation security risk management is the systematic approach to ascertaining the impact and likelihood of an information asset being exposed to a threat.", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 1, "year": 2013}, "type": "Document"}
{"page_content": "This Standard assumes the application of ISO 27005, to assign risk ratings to information assets which fall within the scope of the Information Security Management System of the Organization concerned.1.3. Security ConsiderationsAll organisations are required to derive their security requirements to conform to the laws in Sri Lanka including the regulatory requirements set by the respective regulators and the international best practices adopted globally. Additionally, security requirements are also governed by the business objectives set by the board of directors and the senior management of the organization. The BSS is developed taking into consideration the requirements set in these Standards, with a view towards increasing the level of conformance with such requirements. Significant changes to these requirements will be reflected in the revised versions of the BSS.1.3.1. Legal RequirementsAll organisations are liable to comply with the laws applicable in this regard including the Computer Crimes Act No. 24 of 2007, the Electronic Transactions Act No. 19 of 2006, Payment Devices Frauds Act No. 30 of 2006, and Intellectual Property Act No. 36 of 2003 of which any violations amounts to an offence.1.3.2. Regulatory RequirementsLocal industry regulations/directives set forth by the CBSL and other regulatory bodies must be complied with.1.3.3. International StandardsIn order to be recognized as competent online/e-banking service providers, organizations need to comply with internationally recognized industry specific security standards, such as PCI-DSS.1.3.4. Information Security ObjectivesInformation Security objectives must be identified supporting fulfillment of key business objectives within the framework of the information security policies, statutory requirements, other requirements and business processes.2", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 2, "year": 2013}, "type": "Document"}
{"page_content": "2. Terms and DefinitionsThe following terms and definitions are applicable throughout this document.2.1. AssetAnything that has value to the organization./ISO/ZEC 13335-1:2004]2.2. BSSBaseline Security Standard on Information Security Management.2.3. ControlMeans managing risk through policies, procedures, guidelines, practices or organizational structures, which can be of an administrative, technical, management or legal nature.2.4. FraudWrongful or criminal deception intended to result in financial or personal gain.2.5. GuidelineA description that clarifies what shall be done and how to achieve the objectives set out in policies./ZSCMEC 13335-1:2004]2.6. IECInternational Electrotechnical Commission.2.7. ISOInternational Organization for Standardization.2.8. Information SystemAny information processing system, service or infrastructure, or the physical locations housing them.3", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 3, "year": 2013}, "type": "Document"}
{"page_content": "2.9. Information SecurityPreservation of confidentiality, integrity and availability of information. Other attributes such as authenticity, accountability, non-repudiation and reliability can also be involved.2.10. Information Security EventAn identified occurrence of a system, service or network state indicating a possible breach of information security policy or failure of safeguards, or a previously unknown situation that may be security relevant.[ISO/IEC Technical Report 18044:2004]2.11. Information Security IncidentA single or a series of unwanted or unexpected information security events that have a significant probability of compromising business operations and threatening information security.[ISO/IEC Technical Report 18044:2004]2.12. Malicious CodesPrograms that cause undesirable effects to the Information Systems. Examples of malicious codes include computer viruses, network worms, Trojan horses, logic bombs, spyware etc.2.13. OrganizationsFinancial institutions who are members of Bank CSIRT.2.14. OutsourcingAn agreement between a licensed bank and a third party \u2018service provider\u2019, whereby the service provider performs an activity, function or process connected with the operations of a licensed bank.[Banking Act Directions No. 2 of 2012]2.15. PolicyOverall intention and direction as formally expressed by the Board/Senior management.4", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 4, "year": 2013}, "type": "Document"}
{"page_content": "2.16. PCI-DSSPayment Card Industry - Data Security Standard.2.17. RiskA combination of the likelihood of an event and its impact.[ISO/IEC Guide 73:2002]2.18. Risk analysisSystematic use of information to identify sources of risk and to estimate the level of risk.[ISO/IEC Guide 73:2002]2.19. Risk assessmentOverall process of risk analysis and risk evaluation.[ISO/IEC Guide 73:2002]2.20. Risk EvaluationProcess of comparing the estimated risk against given risk criteria to determine the significance of the risk.[ISO/IEC Guide 73:2002]2.21. Risk ManagementCoordinated activities to direct and control an organization with regard to risk.[ISO/IEC Guide 73:2002]222. Risk TreatmentProcess of selection and implementation of measures to modify risk.[ISO/IEC Guide 73:2002]5", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 5, "year": 2013}, "type": "Document"}
{"page_content": "2.23. Service Provider\u2018Includes the Head Office, parent institution, another branch or related company of a Licensed Commercial Bank or Licensed Specialised Bank, or an unrelated institution, whether located in Sri Lanka or elsewhere.[Banking Act Directions No. 2 of 2012]2.24. Third PartyA person or body corporate that is recognized as being independent of the parties involved, as concerns the issue in question.[ISO/IEC Guide 2:1996]2.25. ThreatA potential cause of an unwanted incident, which may result in harm, damage to a system or an organization.[ISO/IEC 13335-1:2004]2.26. VulnerabilityA weakness of an asset or a group of assets that can be exploited by one or more threats.[ISO/IEC 13335-1:2004]3. Applicability of BSSThis section defines the applicability and preservation of this document.3.1. ScopeThis Standard is applicable to all Information Security Management Systems used within organisations who are members of the Bank CSIRT, as well as personnel handling such information and information systems, both internal and third party.3.2. StructurePart I of the Standard addresses the ownership and management of this document, its structure, scope of applicability and recommended risk management methodologies.6", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 6, "year": 2013}, "type": "Document"}
{"page_content": "Part II of the Standard introduces fourteen (14) main security domains to be considered within the current version of this Standard.33. MaintenanceThis document is to be reviewed in six (6) months from the time of introduction, and the result is to be published as Version 2 in case if changes are made, otherwise revision status remains unchanged with the date of reviewed. Bank CSIRT shall take responsibility for this task in consultation with the CBSL. Adoption of each subsequent version will provide improved information security management3.4. ImplementationExpected implementation period for Version 1 is 12 months from the time of introduction of the standard.4. Risk ManagementRisk management is a fundamental component of any cost effective information security management system.4.1. Risk as a basis for Information Security ManagementAssets contain vulnerabilities due to weak design, production, implementation, handling, management and a host of other activities. These vulnerabilities may be exploited to give rise to threats. The combination of the likelihood of a threat being realized and the impact of that exposure is called risk, and is an important measure of the relative urgency and need to impose control measures to mitigate that risk.4.2. Risk Treatment and Security ControlsAdoption of BSS and its successive revisions, will introduce security controls which would mitigate identified risks.4.3. Guidelines for Risk ManagementRisk Management shall be done in accordance with ISO 27005:2011.7", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 7, "year": 2013}, "type": "Document"}
{"page_content": "4.4. Associated Documents and ActivitiesThe establishment of Guidelines, policies, procedural manuals, schemes and templates by the respective organisations will aid the implementation of the BSS.PART II: Security Domains1. Organization of Information Security ManagementObjective: To introduce a structured approach to managing information security by defining security roles and assigning responsibilities and making available the necessary resources and authority to perform activities to enhance the Information Security Management System of the organization.Scope: Applicable to all personnel handling information and information assets within the Information Security Management System of the organization.1.1. Management Commitment to Information Security1.2. Management shall establish a clear information security policy direction across the organization on par with its business strategies and objectives. Such policies shall be approved by the Board of Directors or senior management of the organization or the head/Regional Office, as the case may be. These management activities include regular review and amendments depending on the evolving ICT, security, legal, regulatory and audit environments. The management shall provide adequate resources and assign security roles and responsibilities to achieve the above.1.3. Information Security Risk AssessmentRisk assessments shall identify, quantify and prioritize risks against criteria for risk acceptance and objectives relevant to the organization. Results of risk assessment should guide and determine the appropriate management action and priorities for managing information security risk and for implementing controls selected to protect against these risks. The information security risk assessments shall have a clearly defined scope and should be performed periodically to address changes in the security requirements.8", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 8, "year": 2013}, "type": "Document"}
{"page_content": "1.4. Information Security Risk TreatmentRisk treatment decision shall be made after following the risk assessment.1.5. Information Security CoordinationInformation Security shall be coordinated by authorized representatives with required technical skills from different parts of the organization with relevant roles and responsibilities assigned to them. This function shall be executed in compliance with information security policy of the organization.1.6. Allocation of Information Security (IS) ResponsibilitiesAllocation of IS responsibilities shall be clearly defined in accordance with the information security policy. These responsibilities shall adequately address the ways and means for identification of IS assets and delegation of responsibilities, level of protection required and necessary documentation.Confidentiality or non-disclosure agreements shall reflect the institutional needs for information security and protection from unauthorized access using legally enforceable terms. Such agreements shall be included in employment and outsourcing arrangements.1.7. Communication with AuthoritiesOrganizations shall have procedures in place that define who and how to communicate with external authorities in reporting IS incidents and related events.1.8. Communication with Special Interest GroupsAppropriate contacts with special interest groups, IS forums and professional bodies shall be maintained.1.9. Independent Review of Information SecurityRespective IS policies, procedures and control objectives shall be reviewed at planned intervals and as and when significant change of ICT infrastructure occurs within the organization.9", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 9, "year": 2013}, "type": "Document"}
{"page_content": "2. Information Security (IS) PolicyObjective:To provide management direction and support for information security in accordance with business, legal and regulatory requirements. IS Policy Document.The IS policy document shall state the management commitment and set out the approach for managing information security defining overall objectives, scope and the importance of security and commitment to comply with legal and regulatory requirements.2.2. Review of the IS Policy DocumentIS policy document shall be reviewed in planned regular intervals and when significant ICT infrastructure changes occur within the organization. All reviews shall be properly documented and retained.2.3. Administration and implementation of the IS Policy DocumentPolicy administration shall be assigned to an appropriate division or department of the organization, with an appointment of an Information Security Officer to be responsible for the implementation with identified procedures and methodologies.3. Third PartiesObjective: To maintain the security of the organization\u2019s information, information processing facilities and information assets that are accessed, processed, communicated to or managed by third parties.3.1. Identification of Risk Related to Third PartiesRisk to organization\u2019s information, information systems and assets from business processes involving third parties shall be identified and appropriate controls shall be implemented before granting access to such third parties.3.2. Addressing Security when Dealing with CustomersAll identified security requirements shall be addressed before giving customers access to the organization\u2019s information and information assets.10", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 10, "year": 2013}, "type": "Document"}
{"page_content": "3.3. Addressing Security in Third Party AgreementsRespective agreements with third parties shall cover all relevant information security requirements and shall ensure that there is no misunderstanding between the respective third party and the organization.3.4. Service DeliveryIntended service delivery by third parties shall be covered with a Service Level Agreement (SLA) that includes and clearly describes the measures taken to ensure information security, the service to be provided, expected level of service, performance criteria, escalation procedures for problem resolution, respective liabilities of the third party and involvement of sub contractors by third parties and conditions for termination.3.5. Monitoring and Review of Third Party ServicesServices rendered by the third party in accordance with the SLA shall be monitored closely and shall be reviewed in planned intervals by the appropriate internal division or department of the organisation. Third parties are required to adhere to the information security requirements of the organizations even after the expiry of their service contracts.4. Information Asset ManagementObjective: To achieve and maintain appropriate level of protection of organization\u2019s information assets.4.1. Inventory of Information AssetsAll information assets shall be clearly identified and an inventory of all such information assets shall be recorded and maintained. This asset inventory shall include all information required for recovery from a disaster.4.2. Information Asset ClassificationInformation classification guidelines of the organization shall be published in the information security policy document to support the asset owner who shall classify the information to indicate the need, priorities, and expected level of protection when handling the information. Appropriate set of procedures for labeling information shall be developed 11", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 11, "year": 2013}, "type": "Document"}
{"page_content": "and implemented in accordance with the classification guidelines of the organization (Refer Section 77 of the Banking Act, No 30. of 1988, as amended)4.3. Acceptable use of Information AssetsRules for acceptable use of information and assets shall be identified, documented, implemented and reviewed periodically. These rules shall be followed by employees, contractors and third parties for the acceptable use.5, Human Resource SecurityObjective: To ensure that employees, contractors, service providers and third party users understand their roles and responsibilities to reduce the risk of theft, fraud and unauthorized use of facilities.5.1. Definition of Roles and ResponsibilitiesOrganization\u2019s information security policy shall clearly define the roles and responsibilities of every user or user group.5.2. Security ScreeningBackground screening checks for all candidates especially for sensitive job holders for employment, contractors, service providers and third party users shall be carried out.5.3. Terms and Conditions of EmploymentAs part of employment or service contract, all employees, contractors, service providers and third parties (users) shall agree and sign the terms and conditions of the employment contract. All contractual documents shall include reference and acceptance to the Information Security Policy.5.4. Management ResponsibilitiesManagement shall require all users to apply security in accordance with established policies and procedures of the organization. They shall be properly briefed on their roles and responsibilities prior to granting access to information systems.12", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 12, "year": 2013}, "type": "Document"}
{"page_content": "5.5. Information Security Awareness, Education and TrainingRegular updates to this policy and changes to ICT infrastructure shall be communicated to all users. Appropriate technical and user training to carry out their duties shall be provided to respective officers on regular basis.5.6. Breach of Security and PenaltiesThere shall be formal and defined disciplinary procedure/s for investigation of information security incidents or breaches.5.7. Termination FormalitiesResponsibilities for performing employment termination or change of employment, including changes to user access rights shall be clearly defined and assigned. Such responsibilities and duties still valid after termination of employment shall be included into respective agreements.5.8. Return of I nformation AssetsAll users shall return/declare organization\u2019s information assets including logical access information in their possession upon termination of their employment, contract or agreement.5.9. Revocation of Access RightsUpon termination or changes of the employment status or third party contract, access to information, information systems and information processing facilities shall be removed or changed with immediate effect.6. Operations SecurityObjective: To protect from unauthorized access, damage and interference to organization\u2019s premises, information and operations.6.1. Information Processing SitesAppropriate security perimeters shall be implemented and maintained in good order to protect areas, equipment, both on-site and off-site and network cabling that contain information and information processing facilities from natural or manmade disasters.13", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 13, "year": 2013}, "type": "Document"}
{"page_content": "6.2. Equipment MaintenanceEquipment shall be maintained in good working order to ensure its continued availability and integrity. Those deployed for critical operations shall be covered with annual maintenance and support agreements with the vendor.6.3. Documented Operating ProceduresOperating procedures shall be documented, maintained and made available for all users on need to know basis. If there is a significant change to the ICT infrastructure and systems, relevant documents must be updated to reflect such changes/ modifications.6.4. Segregation of DutiesDuties and areas of responsibility shall be segregated to reduce unauthorized access, modification and misuse of organization\u2019s information and systems giving due consideration to specific job functions.6.5. Change ManagementChanges to information systems and information processing facilities shall be attended in a controlled manner adhering to industry accepted good practices. Duties and areas of responsibility shall be segregated to reduce instances for unauthorized access, modifications and misuse of organization\u2019s information system assets.6.6. Separation of Development, Test and Operational FacilitiesDevelopment, test and production operations shall be separated to reduce the unauthorized access, misuse and changes to the operational systems6.7. Capacity ManagementUse of resources shall be monitored, tuned and projected to capture future growth and capacity requirements to ensure the required level of performance is maintained for continuity of operations.14", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 14, "year": 2013}, "type": "Document"}
{"page_content": "6.8. System AcceptanceAcceptance criteria for the implementation of in-house developed applications, acquisition of application software or major upgrades shall be in place and appropriate system tests shall be carried before moving for live operations.6.9. Controls Against Malicious CodesDetection, prevention and recovery controls to protect against malicious codes shall be in place along with appropriate user awareness programmes.6.10. Information BackupAppropriate backup policy shall be implemented to ensure the availability of critical, sensitive and other required information to be used in a contingency situation. These backup copies of information systems and procedures shall be tested regularly.6.11. Information Handling ProceduresProper procedures shall be in place to prevent unauthorized disclosure, modification and removal/disposal of media used to store information of the organization.6.12. Security of System DocumentationSystem documentation shall be stored securely to protect against unauthorized access.6.13. Information Exchange Policies and ProceduresProper procedures shall be designed and in place to protect information from interception, copying, modification, misuse, and destruction. Policies and procedures shall be designed and in place to protect information associated with the interconnection of business information systems giving due consideration to address known vulnerabilities in managing information sharing.6.14. Audit LoggingAudit logs that record user activities, exceptions and information security events shall be maintained with proper care for designated periods as per the audit and legal requirements.15", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 15, "year": 2013}, "type": "Document"}
{"page_content": "6.15. Monitoring System Use and Protection of Log InformationSystems shall be monitored to review administrator, operator and fault logs and information security events (if any) shall be recorded. These logs shall be used to ensure that information system problems are identified and addressed.6.16. Clock SynchronizationThe system time stamps of all information systems shall be synchronized with an agreed, standard time source.7. Communications SecurityObjective: Prevention of unauthorized interception from accessing telecommunication networks in an intelligible form, while delivering content to the intended recipients. This shall cover crypto security, transmission security, emission security and physical security of information and its processing facilities and transmission mechanisms implemented in the organization.7.1. Oversight of Critical Infrastructure by the Board or Delegated AuthorityRegular reviews of development and continued maintenance of security control infrastructure for the safeguard of electronic banking systems shall be conducted. This shall include the establishment of authorization privileges, logical and physical access controls to maintain appropriate boundaries and restrictions on both internal and external user activities.7.2. Network Security ManagementTo ensure the protection of information in networks and the protection of the supporting infrastructure.7.3. Network ControlsCapability of users connecting to the organization\u2019s local area or wide area network shall be restricted in accordance with the access control policy of the organization. Groups of network services, users and information systems shall be separately maintained in the 16", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 16, "year": 2013}, "type": "Document"}
{"page_content": "network to access those resources in accordance with the information security policy of the organisation.7.4. Mobile Computing and CommunicationsThe information security policy shall cover the appropriate security measures to protect against the risks of using mobile computing and communication facilities.7.5. User Authentication for External ConnectionsAppropriate authentication methods shall be used to control access by remote users. Physical and logical access to diagnostic and configuration ports shall be controlled.7.6. Equipment Identification in NetworksAutomatic equipment creation and identification shall be considered as a means to authenticate connections from specific locations and equipment.7.7. Network Connection ControlFor shared networks that extend the boundaries of the organization, the capability of users to connect to the network shall be controlled in accordance with the access control policy of the organization.7.8. Network Routing ProtocolRouting controls shall be in place for networks to ensure that network connections and information flows do not breach the access control policy of the organization.8. Physical and Environmental SecurityObjective: To prevent unauthorized physical access, damage, and interference to the organization\u2019s premises, information and information system assets.8.1. Physical Security PerimeterAppropriate security perimeters (barriers such as walls, card controlled entry points, manned information processing facilities) shall be implemented to protect areas that contain information systems and information processing facilities.17", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 17, "year": 2013}, "type": "Document"}
{"page_content": "8.2. Physical Entry ControlsOnly authorized personnel are allowed to enter into information processing facilities with proper access control mechanisms. A register shall be maintained to record access by visitors entering such areas and they shall be accompanied always by an authorized officer.8.3. Securing Offices, Rooms and FacilitiesPhysical security for offices, sites, rooms and facilities shall be properly designed and implemented.8.4. Protection from External and Environmental ThreatsPhysical protection against damage from natural or manmade disaster shall be designed and implemented.8.5. Working in Secured AreasPhysical protection and guidelines for working in secured areas shall be designed, implemented and made available to respective officers on a regular basis.8.6. Public Access, Delivery and Loading AreasAccess points such as delivery and loading bays where unauthorized personnel may enter the facilities shall be controlled and isolated from the information processing facilities where possible.8.7. UtilitiesAll equipment shall be protected from failure of power and air conditioning, fire and other disruptions caused by failures in supporting utilities.8.8. Cabling SecurityPower and telecommunication cables carrying data and information services shall be protected from interception or damage.18", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 18, "year": 2013}, "type": "Document"}
{"page_content": "9. Access ControlObjective: Access to information, information systems, facilities and business processes shall be on the basis of organisation\u2019s business and security requirements.9.1. Access Control PolicyAn access control policy shall be established, documented, and reviewed based on the business and security requirements.9.2. User Access ManagementFormal procedures shall be in place to provide access to authorized officers while denying access to unauthorized officers. Management shall review the user access rights in regular intervals using a formal procedure.9.3. User Identification and AuthenticationThere shall be a formal user creation and deactivation procedure in place when granting and revoking access to information systems.9.4. Password Management SystemsAllocation of passwords and password governing rules shall be established in the security policies of the organization. Users are required to follow good security practices in selection and use of passwords.9.5. Session Timeout/Limitation of Connection TimeTermination of active sessions is required when the respective work is completed. Users shall ensure that unattended equipment has appropriate protection from unauthorized access.10. Internet and E-mail SecurityObjective: A secure and well structured framework shall be established to ensure the effective use of email and internet facilities.10.1. Electronic Messaging and Internet19", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 19, "year": 2013}, "type": "Document"}
{"page_content": "The corporate email and Internet connections are primarily for official use only. Procedures shall be in place to authenticate the identity and authorization of customers providing facilities for Internet banking.10.2. OnlineTransactionsProcedures shall be in place to ensure the implementation of adequate segregation of duties within the organization for systems and databases that shall use transaction authentication methods to ensure non-repudiation and shall establish accountability for internet banking transactions. Organizations shall maintain comprehensive audit trails and logs and shall employ appropriate cryptographic techniques, specific protocols or other security controls to ensure the confidentiality of customer internet banking data.10.3. Publicly Available InformationOrganization shall ensure that they provide correct and appropriate level of information to its customers through different media, electronically as well as in printed form.11. Information Systems Acceptable UseObjective: Formal procedures shall be established to prevent unauthorized user access and compromise or theft of information, and information processing facilities.11.1. Authorization Process for Information SystemsAllocation and revocation of access rights, to information systems and information services shall be handled using controlled and secure mechanisms. Management shall review user access rights in regular intervals using a formal procedure.11.2. Media HandlingA secure framework has to be established by the management to ensure that electronic and printed media are used, managed and disposed by authorized officers as per the agreed policies of the organization.11.3. Use of System UtilitiesUse of system utilities shall be restricted to authorized officers and controlled to ensure that the intended service is delivered.20", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 20, "year": 2013}, "type": "Document"}
{"page_content": "11.4. Clear Desk and Clear Screen PolicyA clear desk policy for printed and removable storage media and a clear screen policy for information processing facilities shall be adopted in accordance with the information classification guidelines of the organization.12. Information Security Incident ManagementObjective: Formal incident reporting and escalation procedures shall be in place. These procedures shall be made available to all relevant stake holders.12.1. Reporting Information Security IncidentsInformation security events shall be reported through appropriate management channels as quickly as possible. A formal reporting procedure shall be implemented together with an incident response and escalation procedure setting the action to be taken.12.2. Reporting Security WeaknessesAll employees, contractors or third party users of information systems and services are required to note and report observed or suspected security weaknesses in the systems or service delivery.12.3. Responsibilities and ProceduresManagement responsibilities and procedures shall be established to ensure quick, effective and orderly response to information security incidents. These procedures shall cover analysis and identification of the incident, contents, planning and implementation of corrective measures to avoid future recurrence.12.4. Learning from Information Security IncidentsThere shall be mechanisms in place to enable types, volumes and costs of information security incidents to be quantified and monitored.12.5. Collection of EvidenceWhere a follow-up action against a person or organization after an information security incident involves legal action (either civil or criminal), evidence shall be collected, retained, 21", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 21, "year": 2013}, "type": "Document"}
{"page_content": "and presented to conform to the requirements on evidence as set out in the relevant jurisdiction(s).13. Acquisition, Development and Maintenance of Information SystemsObjective: To ensure that information security management is an integral part of information systems.13.1. Information Security Requirements Analysis and Specification for Software and HardwareInformation security requirements shall be identified, justified, agreed and documented as part of the implementation and overall business case for an information system.13.2. Correct Processing in ApplicationsTo prevent errors, losses, unauthorized modifications or misuses of information, appropriate controls shall be implemented at data input, processing and output stages.13.3. Message IntegrityRequirements for ensuring authenticity and protecting message integrity in applications shall be identified and implemented.13.4. Control of Operational SoftwareFormal procedures for controlling operational software in production environments shall be in place to minimize the risk of corruptions. Use of pirated software shall be prohibited and compliance to the acts and laws pertaining to intellectual property in Sri Lanka must be maintained.13.5. Protection of System Test DataSystem testing shall be carried out in a separate test environment to avoid unauthorized access to production databases and these test results and test scripts shall be retained for control /audit purposes.22", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 22, "year": 2013}, "type": "Document"}
{"page_content": "13.6. Access Control to Program Source CodeAccess to source code shall be restricted. Source code of purchased software packages that are deployed for critical operations should be kept with an escrow agent based on the policy adopted by respective organisation.13.7. Change Control ProceduresFormal change control procedures shall be in place to control the implementation of changes to information systems.13.8. Technical Review of Applications After Operating System ChangesReview of application controls and integrity checks shall be conducted to ensure that the changed computing environment has not compromised the internal controls.13.9. Restrictions on Changes to Software PackagesModifications to software packages must be discouraged and shall be used without modification. If modifications are required, the risk of in-built controls and integrity processes shall be evaluated with the vendor\u2019s technical support.13.10. Information LeakagePossibilities for information leakages shall be prevented at all times.13.11. Outsourced Software DevelopmentWhen software development is outsourced, licensing arrangements shall be established respecting the intellectual property rights. Outsourced software development shall be monitored and supervised by the organization.13.12. Technical Vulnerability ManagementTimely information about technical vulnerabilities of information systems being used shall be obtained. The organization's exposure to such vulnerabilities evaluated, and appropriate measures taken to address the associated risk.23", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 23, "year": 2013}, "type": "Document"}
{"page_content": "13.13. Control ofTechnical VulnerabilitiesTechnical vulnerability controls shall be implemented through effective and systematic measurements to ensure the hardware and software are functioning as intended.14. Business Continuity ManagementObjective: To counteract with the interruption to business and to protect critical business processes from the effects of major failures of information systems and facilities or disasters and to ensure their timely resumption within tolerable time frames.14.1. Preparation and Approval for Business Continuity Plans (BCP)A single framework of enterprise wide business continuity plan shall be maintained to ensure all plans are consistent, addressing information security requirements and identifying priorities for testing and maintenance. BCP shall be prepared on the basis of business impact analysis that is conducted giving due considerations to business operations of the organization. BCP shall be approved by the Board of Directors or Senior management of the organization or the Head/Regional office as the case may be.14.2. Business Continuity and Risk AssessmentEvents that can cause interruptions to business processes and facilities shall be identified, along with the probability and impact of such interruptions and their consequences for information security.14.3. Including Information Security in the Business Continuity Management ProcessA managed process shall be in place for business continuity throughout the organization that addresses the information security requirements needed for the entire organization\u2019s business continuity.14.4. Developing and Implementing BCP including Information SecurityPlans shall be developed, documented, maintained and reviewed regularly to ensure the restoration of business operations.24", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 24, "year": 2013}, "type": "Document"}
{"page_content": "14.5. Testing, Maintenance and Revision of BCPBusiness continuity plan shall be tested and updated regularly to ensure that they are up to date and effective. These tests should ensure that all members of the recovery, operational and other relevant teams are aware of the plan, their role for business continuity and information security.End of BSS Version 1\n25", "metadata": {"source": "data\\CBSL\\2013\\Attachement_4_BaselineSecurityStandard.pdf", "page": 25, "year": 2013}, "type": "Document"}
{"page_content": "ffiF,ffiiilir\"l*n\nOco4 q6re5'r oqerboo@dQO eunirdl GLo$unrieoou$ pileoour6eenLb Bank Supervision Department\nRef. : 02117 1500/0540/001 O\\ December 2013\nTo: Chief Executive Officers of Licensed Commercial Banks\nDear Sir/Madam\nDefinition of Liquid Assets under Section 86 of the Banking Act, No. 30 of 1988\nInterms of Item (g) of the definition of \"liquid assets\" under section 86 of the BankingAct,\nNo. 30 of 1988, as amended, the Monetary Board has determined that investments in International\nSovereign Bonds issued by the Government of Sri Lanka shall be treated as liquid assets.\n2. Licensed commercial banks shall:(, take into account the daily market value of their investment in the Intemational\nSovereign Bonds in computing their liquid assets ratio for the purpose of complying\nwith the provisions of section 21 of the Banking Act; and(ii) repofi the eligible value of the investments in International Sovereign Bonds under:(a) code number 4.I.2.4.0.0 of the monthly web based return on Statutory Liquid\nAssets Ratio for Domestic Banking Unit (BSD-MF-04-LD); and(b) code number 4.2.2.4.0.0 of the monthly web based return on Statutory Liquid\nAssets Ratio for Off-shore Banking Unit (BSD-MF-04-LF),\nas the case may be.\nYours faithfully\n(Mrs.)TMJYPFemando\nDirector of Bank Supervision\n6 O(D @(,g, qoro 30, d{rlAcaS @)OeD,\no.. @E).59O, @loleo Ol, @ goo:O\nI ga'n zqnfiorcsg V sa r6 \u20ac|gLb ong, @eu. :O uor$u$ ormgiog Getr(grbq 1\np. Gu. @a1.590, Gsnlgrirq Ol. O6)rdlos\n11 K banksup@cbsl,lkkvd 6, N0.30, Janadhlpathl Mawatha, Colombo 1\nP.0. Box.590, Colombo 01, Sri Lanka.\nwww.cbsl.(ov.lk", "metadata": {"source": "data\\CBSL\\2013\\bsd_2013_Circular_Definition_of_Liquid_Assets_e_0.pdf", "page": 0, "year": 2013}, "type": "Document"}
{"page_content": "0 flohr gdrnrC0, ol0d0,{ elndeloC fiaf er000\nThe Gazette of theDemocrffifffiiuli,tRepublic of srilanka\nEXTRAORDINARY\nq\"a 1843/8 - 2Ot3 oqesl@Ob @ee 3O O1E esgqc _ 2OI3.LZ.3O\nNo. 1843/8 -MONDAY DECEMBER 30, 2013\n(Published by Authority)\nPART I : SECTION (I) - GENBRAL\nCentral Bank of Sri Lanka Notices\nTIIE MONETARYLA\\ilACT\nREGULATIONS made by the Monetary Board under Section 32E of the Monetary Law Act, (Chapter 422-).\nNrvano Anru Lpsrm CaSRAAL,\nChairmarq\nMonetary Board.\n::ffif,*ofSriLanka'\n?.3'dDe*ember,2013.\nsriLanka Depositlnsurance and Liquidity support scheme Regulations\nAmendment to the Sri Lanka Deposit Insurance Scheme Regulations, No. I of 2010\nI . I These Regulations shall be cited as Sri Lanka Deposit Insurance and Liquidity Support Scheme\nRegulations, No. 1 of20l3.\n2.1 Sri Lanka Deposit Insurance Scheme Regulations, No. I of 2010 published.in Gazette\nExtraordinary No. 167311 I of28th September, 2010 is hereby amended as follows :_\n2.2 rn regtlation 3.1 thereof, by the substitution for the words \"This scheme shall be titled sri\nLanka Deposit Insurance Scheme\" of the words \"This Scheme shall be titled Sri Lanka Deposit Insurance\nand Liquidity Support Scheme (hereinafter referred to as \"the Scheme,,),,.\n. 2.3In regulation 7. I thereof, by the substitution for the words \"The Scheme shall have a fund titled';Deposit Lesurance Fund\" \" of the words \"The Scheme shall have a fund titled ,,Sri Lanka Deposit Insurance\nand Liquidify Support Fund\"',.l. Citation\n2. Amendments\nto the principal\nregulation\nThis Gazette Extraordinary can be downloaded from www.documents.gov.lkIA", "metadata": {"source": "data\\CBSL\\2013\\bsd_2013_gazette_SL_deposit_Insurance_e_0.pdf", "page": 0, "year": 2013}, "type": "Document"}
{"page_content": "2A I oacOes ' (I) odqq: - 6 e.ro, gefcorcaJ$a es@ce5OcQ eSarde5ooi qB Sooeo ct16o <,:goo - 2013.12.30\nPenr I : Src. (l) - GAZETTE EXTRAORDINARY OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA - 30.12.2013\nr 2.4 In regulation 9.7 thereof, by the substitution for the words \"Deposit Insurance Fund\", and\nwherever those words oceur in these regulations, of the words \"Sri Lanka Deposit Insurance and Liquidity\nSupport Fund\".\n2.5 In regulation 10.5 thereof, by the substitution for the words \"Sri Lanka Deposit Insurance\nScheme\", and wherever thoie words occur in these regulations, of the words \"Sri Lanka Deposit Insurance\niquidity Support Schsme\".\n3. Effective' dat e 3. 1 These amendments shall come into effect from 22nd November, 201 3 .\n01 -4t7\nPRINTEDATTHE DEPARTMENT OF GOVERNMENT PRINTING SRI LANKA.", "metadata": {"source": "data\\CBSL\\2013\\bsd_2013_gazette_SL_deposit_Insurance_e_0.pdf", "page": 1, "year": 2013}, "type": "Document"}
{"page_content": "ffieF,ffiiil[*];*\nOooq qdrre6r oqerboo@do2O ounirdl GLogrunrteoor$ pleoour6oor6 Bank Supervision Department\nRef. :021171500105401001\nTo: Chief Executive Officers of Licensed Commercial Banks\n6 OeD @t'e, qclo 30, crerlaeS @lorD,\ntDa. oc, . 59O, @!'l\u20ac@ Ol, 6 ecrDto6 e5Lb onq, go. 30 eonplupfl Dtrilfi@E oanqgLbq I\np. Gu. @m.500, GsrT@6tl 01, O6oritosoft December 2013\nkvel 6, No.30, Janadhipathi Mawatha, Colombo 1\nP.0. Box' 590, Colombo 01, Sri Lanka.Dear Sir/Madam\nPermitting licensed commercial banks to invest in\nInternational Sovereign Bonds issued by the Government of Sri Lanka\nIn tetms of section 25 of the Banking Ac| No. 30 of 1988, as amended, the Monetary Board\nwith the concufl'ence of the Minister of Finance and Planning has authorised off-shore banking\nunits of licensed commercial banks to invest in International Sovereign Bonds issued by the\nGovernment of Sri Lanka, in the secondary market.\nYours faithfully\n(Mrs.)TMJYPFernando\nDirector of Bank Supervision\nI sd't't zan'toorcss lJ sa fi 2477711 banksup@cbsl;lk\nilflIiilfitilliililililfl ililfiflililil flilfiltilililliilflililfl ilflllllillfl", "metadata": {"source": "data\\CBSL\\2013\\bsd_2013_Permitting_LCB_International_Sovereign_Bonds_e_0.pdf", "page": 0, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars\nissued to\nLicensed Commercial Banks\n \n(Inclusive of Amendments made up to 30 November 2013)\nBank Supervision Department\nCentral Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 0, "year": 2013}, "type": "Document"}
{"page_content": "DISCLAIMER\nThis updated edition contains of Directions, Determinations \nand Circulars issued by Central Bank of Sri Lanka to \nLicensed Commercial Banks up to 30th November 2013. \nPlease note that this edition is issued only for the purpose \nof convenience, and although every effort has been made to \nensure the accuracy of the text, the Central Bank of Sri Lanka \ndoes not hold itself responsible for any errors, omissions or \ninadvertent alterations, in any manner.\nPrinted at Central Bank Printing Press, 58, Sri Jayawardenepura Mw., Rajagiriya, Sri Lanka.\nPublished by Bank Supervision Department\nCentral Bank of Sri Lanka, 30, Janadhipathi Mawatha, Colombo 01, Sri Lanka.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 1, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  iii\nGovernor\u2019s Statement\nSri Lankan economy has now entered into an accelerated growth path of achieving Rs. 100 \nbillion economy with USD 4,000 per capita income by 2016. In this scenario, Sri Lankan banking sector \nwhich holds more than 55% of the financial sector assets of the country is destined to play a pivotal role \nin supporting the growth momentum of the economy. Improved resilience to face external and internal \nshocks, innovative and futuristic banking products, expanded access to finance and consumer protection \nare some of the key drivers to promote a strong and dynamic banking sector through business excellence.\nDespite the global financial crisis, Sri Lanka\u2019s banking sector has remained resilient with the \nexisting prudential regulatory initiatives and reforms that have ensured the financial system stability.  \nA strong regulatory framework that promotes risk management of banks is a key component of the safety \nnet to ensure systemic stability. Thus, the earlier regulatory initiatives on improving risk management, \ncorporate governance and capital requirements have continued with reforms in 2013 too. Compliance \nwith these new regulatory reforms has enabled the Banks to improve their governance structure, risk \nmanagement framework and capital requirements. It is expected that the consolidation between banks \nand the financial institutions would further strengthen the resilience in the financial sector .\nAt the same time, the Directors of Banks are expected to play a major role in setting strategic  \ndirections to ensure a sound and resilient banking sector in the country by adopting prudent policies in line \nwith new financial reforms. In that context, the Central Bank expects all Directors, Senior Management \nand Other Staff of the banks to be fully conversant with the Directions, Determinations, and Circulars", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 2, "year": 2013}, "type": "Document"}
{"page_content": "issued time to time by the Central Bank, thereby ensure compliance. In order to facilitate such task, this \nvolume containing \u201cDirections, Determinations, and Circulars issued to Licensed Commercial Banks\u201d, \nincorporating the changes and amendments up to 30 November 2013, is being issued.\nIt is hoped that this new volume will create greater awareness of and compliance therewith,  \nso that more effective inputs will contribute to ensure improved risk management, corporate governance, \nefficiency and resilience in the Banking Sector.\nAjith Nivard Cabraal\nGovernor\nCentral Bank of Sri Lanka\n02 December 2013", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 2, "year": 2013}, "type": "Document"}
{"page_content": "iv Directions, Determinations, and Circulars issued to Licensed Commercial Banks", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 3, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  v\nContents\nPage No.\n1. Licensing of Banks\n Determinations  \n 1.1 Determination No.1 of 201 1 \u2013 Annual Licence Fee  1\n Circulars  \n 1.2 Establishment of Bank Branches  2\n 1.3 Classification of Banking Outlets  3\n2. Capital Adequacy\n 2.1 The Adoption of Basel II Capital Adequacy Framework Beginning 2008  4\n Directions  \n 2.2 Direction No. 09 of 2007 \u2013 Maintenance of Capital Adequacy Ratio  6\n 2.3 Direction No. 05 of 2013 \u2013 Supervisory Review Process \n  (Pillar 2 of Basel II) for Licensed Commercial Banks and Licensed Specialised Banks  74\n 2.4 Direction No. 09 of 201 1 \u2013 Amendments to Directions on Maintenance of  \nCapital Adequacy Ratio  88\n 2.5 Direction No. 01 of 2009 \u2013 Amendment to Directions on Ownership of \n  Issued Capital Carrying V oting Rights  89\n 2.6 Direction No. 01 of 2007 \u2013 Ownership of Issued Capital Carrying V oting Rights  90\n Determinations  \n 2.7 Foreign Participation in the Share Capital of a Licensed Commercial Bank\n  Incorporated or Established in Sri Lanka  93\n Circulars  \n 2.8 ICRA  Lanka Limited \u2013 Recognition as an External Credit Assessment Institution  94\n 2.9 Criteria for Selection of Valuers Undertaking the Revaluation of Fixed Assets \n  for the Computation of the Capital Adequacy Ratio  96\n 2.10 Interpretation of Capital Funds  98\n 2.1 1  Enhancement of Minimum Capital Requirement of Banks  99\n 2.12 Request to Maintain Capital of Banks in Foreign Currency  103\n 2.13 Shipping Guarantees Issued by Banks  105\n3. Cr edit Risk Management  \n Directions  \n 3.1 Direction No. 07 of 2007 \u2013 Maximum Amount of Accommodation  106\n 3.2 Direction No. 03 of 2010 \u2013 Amendments to Directions on Classification of Loans and\n  Advances, Income Recognition and Provisioning  112\n 3.3 Direction No. 03 of 2008 \u2013 Classification of Loans and Advances, Income Recognition and \nProvisioning  113", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 4, "year": 2013}, "type": "Document"}
{"page_content": "vi Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n 3.4 Direction No. 01 of 2013 \u2013 Exposure to Stock Market by  \nLicensed Commercial Banks and Licensed Specialised Banks  126\n Determinations\n 3.5 Shares in Companies Held by Licensed Commercial Banks  129\n 3.6 Accommodation Granted to a Director / a Close Relation of such Director / \n  any Concern in which Director has a Substantial Interest  130\n 3.7 Determination No. 3 of 2009 \u2013 Lease-Backed Trust Certificates / Lease Receivables \n  as Approved Security for Accommodation to any Director  133\n Circulars  \n 3.8 Accounting for Properties Acquired by Foreclosure of Collateral / Part Settlement of \n  Debt  134\n 3.9 Establishment of a Revolving Fund to grant Loans to Acquire Property to \n  the State Sector Employees  135\n 3.10 Financial Accommodation to Finance Companies  136\n 3.1 1  Prepayment of Import Bills  137\n 3.12 Recovery of Accommodation to Exporters  140\n 3.13 Concessions Granted to Tourism Industry  148\n 3.14 Relief Package for the Tea Sector  149\n 3.15 Granting Credit Facilities to Private Sector  150\n Orders\n 3.16 Monetary Law Act Order No. 01 of 2012 \u2013 Ceiling on Credit Growth of Licensed Banks  151\n Guidelines\n 3.17 Guidelines on the Grant of Facilities for the Issue of Commercial Paper and \n  other Forms of Promissory Notes  152\n4. Liquidity Risk Management  \n Circulars  \n 4.1 Definitions of Liquid Assets  156\n 4.2 Monthly Statement of Liquid Assets  163\n 4.3 Monthly Statement of Liquid Assets for the Domestic Banking Unit and the  \nOff-Shore Banking Unit  166\n 4.4 Monthly Statement of Liquid Assets for the Off-Shore Banking Unit  167\n Determinations\n 4.5 Application of Prudential Regulations on Of f-Shore Banking Units  169\n 4.6 Liquid Assets  93\n5. Market Risk Management  \n Directions  \n 5.1 Prudential Norms for Classification, Valuation and Operation of \n  the Bank\u2019 s Investment Portfolio  170", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 5, "year": 2013}, "type": "Document"}
{"page_content": "the Bank\u2019 s Investment Portfolio  170\n 5.2 Direction No. 03 of 2009 \u2013 Risk Management Relating to Foreign Exchange Business  173", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 5, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  vii\n 5.3 Direction No. 01 of 2012 \u2013 Foreign Exchange Trading Activities of  \nLicensed Commercial Banks in Sri Lanka  182\n Circulars  \n 5.4 Adoption of the ACI Model Code by Sri Lanka  188\n 5.5 Declaration to be Submitted by Persons Engaged in Foreign Exchange Business  189\n 5.6 Forward Sales and Purchases of Foreign Exchange  192\n Explatory Notes  \n 5.7 Explanatory Note 2/2012  \nDirection No. 01 of 2012 Foreign Exchange Trading Activities / FAQ  199\n6. Operational Risk Management  \n Directions  \n 6.1 Direction No. 02 of 2012 \u2013 Outsourcing of Business Operations of a  \nLicensed Commercial Bank and Licensed Specialised Bank  201\n Circulars  \n 6.2 Use of Banking System by Institutions and Persons not Authorised to Accept Deposits  207\n 6.3 Regulations made under the Public Security Ordinance Proscription of \n  T amil Rehabilitation Organization  208\n 6.4 Acceptance of Certificates of Deposit  211\n 6.5 Scheme of Certificates of Deposit with Maturity Periods of not less than Four Years 214\n 6.6 Conduct of Non-Government Or ganizations (NGO) Accounts by Licensed Banks  215\n 6.7 Customer Due Diligence \u2013 \u201cKnow Your Customer\u201d Procedures  219\n 6.8 Dishonoured Cheques  223\n 6.9 Internal Audit Function  224\n 6.10 Prevention of Frauds Using Electronic Cards  225\n 6.1 1  Reporting of Post-T sunami Remittances Received through \n  NGOs and Non-NGOs to the Central Bank of Sri Lanka  227\n7. Corporate Governance for  Banks  \n Directions\n 7.1 Direction No.1 1 of 2007 \u2013 Corporate Governance  229\n 7.2 Direction No. 05 of 2008 \u2013 Amendments to Directions on Corporate Governance  245\n 7.3 Direction No. 07 of 2008 \u2013 Amendments to Directions on Corporate Governance  246\n 7.4 Direction No. 03 of 2013 \u2013 Amendments to Direction on  \nCorporate Governance Issued to Licensed Commercial Banks in Sri Lanka  247\n 7.5 Direction No. 07 of 201 1 \u2013 Integrated Risk Management Framework  248\n Determinatio ns", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 6, "year": 2013}, "type": "Document"}
{"page_content": "7.5 Direction No. 07 of 201 1 \u2013 Integrated Risk Management Framework  248\n Determinatio ns\n 7.6 Determination No. 03 of 2010 \u2013 Assessment of Fitness and Propriety of  \nOfficers Performing Executive Functions  277", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 6, "year": 2013}, "type": "Document"}
{"page_content": "viii Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n Circulars  \n 7.7 Special Payments / Benefits to Directors at their Retirement  284\n 7.8 Disclosures in Annual Reports  285\n 7.9 Appointment of Directors of Banks   286\n 7.10 Disclosures in Terms of the Direction on Corporate Governance  300\n 7.1 1  Requirements Under the Corporate Governance Direction   301\n 7.12 Assessment of Fitness and Propriety of Chief Executive Officers   302\n Explanatory Notes  \n 7.13 Explanatory Note 1/2012 \u2013 Authority of the Monetary Board to Issue Directions to  \nLicensed Banks Reaffirmed by the Court of Appeal  311\n8. Off-Shor e Banking Business  \n Circulars  \n 8.1 Permitting Licensed Commercial Banks to Trade in the International Sovereign Bonds\n  Issued in 2007 by the Government of Sri Lanka  312\n Orders\n 8.2 Amendment to Banking Act Order No. 02 of 2011 \u2013 Banking (Off-shore Banking  \nBusiness Scheme) Order  313\n 8.3 Banking Act Order No. 1 of 2011 \u2013 Banking (Off-shore Banking Business Scheme)  \nOrder  315\n 8.4 Banking Act Order No. 1 of 2008 \u2013 Banking (Off-Shore Banking Business Scheme) Order   317\n 8.5 Banking Act Order No. 1 of 2009 \u2013 Banking (Off-Shore Banking Business Scheme) Order   319\n 8.6 Banking (Of f-Shore Banking Scheme) Order 2000  321\n 8.7 Of f-Shore Banking Business  324\n9. Abandoned Pr operty  \n Directions  \n 9.1 Direction No. 05 of 2009 \u2013 Identifying, Reporting, Transferring and Maintaining \n  Abandoned Property  326\n Guidelines  \n 9.2 Implementation of the Provisions of Part IX (Sections 72 to 76) of the Banking Act on \nAbandoned Property  334\n10. Disclosures  \n Circulars  \n 10.1 Implementation of Part V of the Banking Act  340\n 10.2 List of Qualified Auditors  341\n 10.3 Preparation, Presentation and Publication of Annual Audited Accounts of Banks  343\n 10.4 Display of Interest Rates, Exchange Rates, Service Char ges, Fees & Commissions  380\n 10.5 Inadequate / Incorrect Disclosures / Press Statements by Banks  385", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 7, "year": 2013}, "type": "Document"}
{"page_content": "10.5 Inadequate / Incorrect Disclosures / Press Statements by Banks  385\n 10.6 Publication of Audited Financial Statements of Banks in the Press  386\n 10.7 Public Disclosure by Publication of Quarterly Financial Statements of Banks in Press  387\n 10.8 Public Disclosure by Publication of Bank Accounts in the Press  401", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 7, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  ix\n 10.9 Publication of Capital Adequacy Statement in the Annual Report  402\n 10.10  Submission of Audited Financial Statements by Banks  403\n 10.1 1  Publication of Financial Statements and other Disclosures on the Websites  404\n Guidelines  \n 10.12  Guidelines for External Auditors Relating to their Statutory Duties  405\n11. Reporting of Data to Central Bank  \n Circulars  \n 1 1.1  Submission of Statutory Returns  415\n 1 1.2  Implementation of the New Web-based Off-Site Surveillance System  417\n 1 1.3  Submission of the Monthly & Quarterly Compliance Reports  423\n12. General Banking Practices  \n Directions  \n 12.1 Licensed Commercial Banks (Pawning) Conditions 1998  424\n 12.2 Secrecy of Banking Transactions  434\n 12.3 Direction No. 08 of 201 1 \u2013 Customer Charter of Licensed Banks  435\n Circulars  \n 12.4 Cap on Penal Interest Rates Char ged by Licensed Banks on Loans and Advances  440\n 12.5 Interest Rates on Credit Cards and other Loans and Advances  441\n 12.6 Interest Rates on Credit Cards and Housing Loans  442\n 12.7 Extending / Restricting of Banking Hours by the Banks  443\n 12.8 Incentive Schemes for Mobilising Demand Deposit Accounts  444\n 12.9 Introduction of Products Based on Islamic Principles  445\n 12.10  Withdrawals on Savings Accounts  446\n 12.1 1  Withdrawals on Savings Accounts and 7 Day Call Deposit Accounts  447\n 12.12  Threshold Age of Senior Citizens for Transactions with Licensed Banks  448\n13. Sri Lanka Deposit Insurance Scheme  \n Directions  \n 13.1 Direction No. 05 of 2010 \u2013 Insurance of Deposit Liabilities  449\n Gazette Notifications  \n 13.2 Amendment to the Sri Lanka Deposit Insurance Scheme Regulation, No. 02 of 201 1 450\n 13.3 Amendment to the Sri Lanka Deposit Insurance Scheme Regulation, No. 01 of 201 1 451\n 13.4 Sri Lanka Deposit Insurance Scheme Regulation, No. 01 of 2010  452\n Circulars", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 8, "year": 2013}, "type": "Document"}
{"page_content": "13.4 Sri Lanka Deposit Insurance Scheme Regulation, No. 01 of 2010  452\n Circulars  \n 13.5 Sri Lanka Deposit Insurance Scheme \u2013 Operating Instruction, No. 01 of 201 1 457\n 13.6 Sri Lanka Deposit Insurance Scheme \u2013 Operating Instruction, No. 02 of 2010  458\n 13.7 Sri Lanka Deposit Insurance Scheme \u2013 Premium to be Levied on Insured Deposits, \n  No. 01 of 2010  460", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 8, "year": 2013}, "type": "Document"}
{"page_content": "x Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n14. Other  Determinations, Circulars and Guidelines  \n Determinations  \n 14.1 Limits on Purchase of Immovable Property  462\n 14.2 Definition of Intangible Assets  93\n Circulars  \n 14.3 Exempting Foreign Borrowings of Licensed Commercial Banks from Regulatory  \nLimits  463\n 14.4 Decision of the Cabinet of Ministers on Reservation of Government Sector  \nImport Cargo for the Ceylon Shipping Corporation Ltd.  464\n 14.5 Stimulus Package Approved by the Government for the Finance and Leasing Industry  465\n 14.6 Appointment of Compliance Officers  466\n 14.7 Enhancing Lending to Agriculture Sector  468\n 14.8 Mandatory Lending to Agriculture Sector  469\n 14.9 Payment of Taxes by the Banking and Financial Sector  475\n 14.10  Misleading and Unethical Advertisements  476\n 14.11  Registration of Secured Interest over Movable Properties with the  \n  Secured T ransaction Registry  478\n Guidelines\n 14.12  Guidelines for Employment of Expatriate Staf f in Banks  479\n 14.13  Guidelines on Credit Rating of Banking Institutions  482\n 14.14  Amendments to Guidelines on the Operation of the Investment Fund Account  483\n 14.15  Guidelines on the Operations of the Investment Fund Account  485", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 9, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  1\nAnnual licence \nfee for the period\n2012 \u2013 2014.Determinations made by the Monetary Board of the Central Bank of Sri Lanka under Section 8 of the \nBanking Act, No. 30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n29 September 2011\nBANKING ACT DETERMINATION NO.1 OF 2011\nANNUAL LICENCE FEE OF LICENSED COMMERCIAL BANKS\n1. In terms of Section 8(1) of the Banking Act, the Monetary Board has determined \nthat the licence fee that shall be paid by a licensed commercial bank for the \nperiod 2012 to 2014 shall be based on the total assets as follows:\nTotal assets as at end of the previous year Licence fee\nAbove Rs. 200 bn Rs. 20 mn \nRs. 125 bn to Rs. 200 bn Rs. 15 mn\nRs. 75 bn to Rs. 125 bn Rs. 10 mn\nRs. 25 bn to Rs. 75 bn Rs.  5 mn\nLess than Rs. 25 bn Rs.  2 mn\n2. Every licensed commercial bank shall pay the licence fee to the Central Bank of \nSri Lanka on or before 31st day of January of the respective year.\n3. Licence fee shall be paid on calendar year basis.Payment of \nlicence fee.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 10, "year": 2013}, "type": "Document"}
{"page_content": "2 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Supervision Department\n26 May 2008\nTo :  CEOs of Licensed Commer cial Banks and\n   CEOs of Licensed Specialised Banks\nDear Sir/Madam,\nESTABLISHMENT OF BANK BRANCHES\nThe Central Bank currently approves the opening of bank branches and other outlets by licensed \nbanks considering the feasibility and suitability of the proposed expansion. At present, nearly 40 per \ncent of the bank branches in the country are concentrated in the Western Province resulting in a banking \ndensity (bank branches for 100,000 persons) of 11.9 in the Western Province as against a range of 5.3 to \n8.4 in the other provinces.  \nThere is a need to accelerate economic development in areas of the country outside the Western \nProvince to achieve balance regional development in the country.  Establishing more branches and \nbanking outlets outside the Western Province is expected to enhance access to finance and promote the \nsavings habits, thereby increasing economic activity in those regions. \nTo facilitate this, the Monetary Board has decided that banks shall establish a minimum of two \nbranches outside the Western Province for each new branch established in the Western Province. This \nnew criteria will be applicable for all future requests made to the Central Bank for opening of branches. \nYours faithfully,\nSgd. B.D.W.A. Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 11, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  3\nOur Ref. : 02  / 17 / 500 / 0554  / 001\nBank Supervision Department\n29 November 2012\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nCLASSIFICATION OF BANKING OUTLETS\nAs intimated to you at the periodic meeting of the CEOs of licensed banks held on 26th January \n2012, the current classification of banking outlets system for licensed banks has been reviewed with a \nview to streamline and rationalize the branch approval procedures.\n2. Accordingly , the Monetary Board has granted approval for licensed banks to: \na. reclassify the banking outlets into two categories, namely branches and student savings units \nand seek future approvals under these two outlet categories ; \nb. upgrade all existing banking outlets except student savings units to branches with effect from \n01.01.2013 ; and\nc. conspicuously display the list of activities for the information of the customers in the premises \nof a branch when such branch is extending only selected banking services. \n3. Circular issued under Ref. No. 02/08/005/0002/002 dated May 03, 2006 on the above subject is \nhereby rescinded.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 12, "year": 2013}, "type": "Document"}
{"page_content": "4 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Supervision Department\n26 December 2007\nTo : The CEOs of all Licensed Commer cial Banks and\n Licensed Specialised Banks\nDear Sir  / Madam,\nTHE ADOPTION OF BASEL II CAPITAL ADEQUACY FRAMEWORK \nBEGINNING 2008\nAs announced in the \u201cRoad Map: Monetary and Financial Sector Policies for 2007 and beyond\u201d, \nreleased by the Central Bank on January 2, 2007, the Monetary Board of the Central Bank of Sri Lanka \nhas issued the Directions on the maintenance of capital adequacy ratios under the BASEL II for Licensed \nCommercial Banks (LCBs) and Licensed Specialised Banks (LSBs), in terms of the provisions under \nSection 46(1) and 76 J(1), of the Banking Act, No. 30 of 1988, respectively , which will be effective from \nJanuary 1, 2008. These Directions have been prepared on the basis of the \u201cInternational Convergence of \nCapital Measurement and Capital Standards \u2013 a Revised Framework\u201d, widely known as Basel II, issued \nby the Basel Committee on Banking Supervision of the Bank for International Settlements (BIS) in  \nJune 2004 and revised thereafter in June 2006.\n2. The Adoption of the Basel II\nAs you are aware, Basel II provides a  \u201cthree pillar\u201d  approach, i.e., (1) Minimum Capital Requirements;  \n(2) Supervisory Review Process; and (3) Market Discipline, for the implementation of this \nframework. However, as announced at the Bank Managers\u2019 Meeting held on November 22, 2007, \nthe Central Bank has decided to adopt Pillar I, i.e., \u201cMinimum Capital Requirements\u201d effective from \n01 January 2008 and to adopt the other two pillars in the medium term. The approach for adoption \nof Basel II is as follows. \n 2.1 The Adoption of Pillar I: Minimum Capital Requirements\nThe Basel II framework provides several options for the implementation of the Pillar I, based \non the level of sophistication and development of the banking system. Accordingly, all LCBs", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 13, "year": 2013}, "type": "Document"}
{"page_content": "on the level of sophistication and development of the banking system. Accordingly, all LCBs \nand all LSBs are required to apply the Standardised Approach for credit risk, the Standardised \nMeasurement Method for market risk and the Basic Indicator Approach for operational risk, \nin computing the capital requirements, commencing January 1, 2008. For this purpose, the \nfollowing documents are attached herewith.\n i. Banking Act, Directions No.9 (for LCBs) and No.10 (for LSBs) dated 26.12.2007 issued \nby the Monetary Board.\n ii. Guidelines on computation of capital adequacy ratio (Schedule I).*\n iii. Return to be submitted on capital adequacy ratio (Schedule II).*\n 2.2  Migration to Advanced Approaches\nThe central Bank has decided to move to adopting the internal ratings based (IRB) advanced \napproaches beginning 2013. Once the Central Bank is satisfied that the banks have the \nappropriate models and risk management systems capacities, permission will be granted for", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 13, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  5\nthem to proceed with the IRB approaches. Separate guidelines in this regard will be issued later, \nspecifying the pre-requisites and procedures for seeking the Central Bank\u2019s prior approval for \nsuch migration.\n 2.3 Resour ce Requirements: Data, IT Needs and Training\nData and IT Needs:  Banks should begin preparing a comprehensive data capturing system \nto identify, measure and report all material risks and to assess and allocate capital against \nthese risks in a systematic and objective manner to meet the requirements under the simplified \napproaches and to move to advanced approaches in the future. Accordingly, banks are required \nto implement changes, especially plan for systems integration, modifications to internal systems \nand use of new software for appropriate data collection, to move to the advanced approaches.  \nIn this regard, Banks are expected to have in place, or be actively developing, a data \u201cwarehouse\u201d, \nthat is, a process that enables a bank to collect, store and draw upon loss statistics in an efficient \nmanner over time. Guidelines in this regard are given in Annex I.*\nTraining: Upgrading skills in the areas of credit risk models and capital assessment strategies, \ncredit risk mitigation techniques and measuring market and operational risks will be critical to \nthe successful implementation of Basel II.\n 2.4 Adoption of the other  two Pillars\n 2.4.1  The Pillar  II: Supervisory Review Process (SRP)\nThe objective of SRP is to ensure that banks have adequate capital to support all \nmaterial risks in their business and also encourage them to adopt more sophisticated risk \nmanagement techniques for monitoring and managing all risks. For this purpose, banks \nare required to establish well-defined internal assessment processes within themselves \nin order to determine the additional capital requirement for all material risks, internally,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 14, "year": 2013}, "type": "Document"}
{"page_content": "in order to determine the additional capital requirement for all material risks, internally, \nand which would also be able to assure the Central Bank that adequate capital is actually \nheld towards all their material risk exposures. However, considering the current level of \ninternal systems of the banks, it has been decided to adopt the Pillar II from 2010.\n 2.4.2  The Pillar  III: Market Discipline\nThe introduction of disclosure requirements for banks, based on the revised framework, \nwill be initiated along with the adoption of new international accounting standards, \ni.e., the International Financial Reporting Standards (IFRS 7). Accordingly, banks are \nadvised to continue with the current disclosure requirements until the adoption of the \nPillar III.\nYours faithfully,\nSgd, B D W A Silva\nActg. Director of Bank Supervision\nCopy To : Secretary General / SLBA\n* The schedule I and II and Annex I are available at www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 14, "year": 2013}, "type": "Document"}
{"page_content": "6 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of SriLanka under Section 46(1) of \nthe Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nGovernor\nColombo\n26th December 2007\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 9 OF 2007\nMAINTENANCE OF CAPITAL ADEQUACY RATIO\nWHEREAS in terms of the powers conferred by Section 19(7)(a) of the Banking Act, No.30 of 1988 \nas amended, the Monetary Board has arrived at a determination in respect of the maintenance of capital \nadequacy ratio of licensed commercial banks having regard to the guidelines for capital adequacy set out \nby the Bank for International Settlements in Basle; and\nWHEREAS in the exercise of powers conferred by Section 46(1) of the Banking Act, No.30 of 1988 as \namended, the Monetary Board hereby issues the following directions.\nMinimum Capital \nAdequacy Ratio.1(1) Commencing from 01 January 2008, all licensed commercial banks shall, at \nall times, maintain a capital adequacy ratio of not less than 10% in relation \nto total risk weighted assets with core capital constituting not less than 5% \nin relation to total risk weighted assets.\n1(2) T he capital adequacy ratios referred to in Direction 1(1) above shall \nbe computed as per guidelines given in Schedule I hereto prepared in \naccordance with the Basel II Capital Accord \u201cInternational Convergence \nof Capital Measurement and Capital Standards - A Revised Framework\u201d \nrecommended by the Basle Committee on Banking Supervision at the Bank \nfor International Settlements.\n2 Licensed commercial banks shall use the format at Schedule II attached hereto \nfor reporting of capital adequacy ratios on a periodic basis as specified in \nSchedule  I. \n3 Where a licensed commer cial bank has failed to comply with these Directions, \nsuch licensed commercial bank shall not pay dividends or repatriate profits until", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 15, "year": 2013}, "type": "Document"}
{"page_content": "such licensed commercial bank shall not pay dividends or repatriate profits until \nsuch compliance is effected and confirmed by the Director of Bank Supervision.\n4(1) Al l previous Determinations, Directions and Guidelines that have been \nissued to licensed commercial banks by the Monetary Board in relation to \nmaintenance of capital adequacy ratio in terms of Section 19(7) or 46(1) of \nthe Banking Act are hereby revoked. \n4(2) Notwithstanding the revocation referred to in Direction 4(1) above, licensed \ncommercial banks granted time by the Monetary Board in terms of Section \n19(7)(b) of the Banking Act shall comply with the requirements contained \nin such previous Determinations, Directions and Guidelines until the \nexpiration of the time so granted.Reporting Format.\nSteps to secure \ncompliance with \nDirections.\nRevocation \nof previous \nDeterminations.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 15, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  7\nSchedule I\nGuidelines\non\nComputation of Capital Adequacy Ratio\n(Revised Framework \u2013 Basel II)\nCONTENTS\n1. Introduction\n 1.1 Approaches to Implementation of the Basel II Framework\n 1.2 An initial step towards adopting Basel II\n2. Scope of Application\n3. Minimum Capital Ratio\n4. Reporting Format\n5. Submission dates\n6. Instructions for  Completion the Return\n 6.1 Part I \u2013 Computation of Capital Adequacy Ratio\n 6.2 Part II ( a) \u2013 Computation of Total Capital Base (Regulatory Capital)\n 6.3 Part II ( b) \u2013 Computation of Eligible Tier III for Market Risk\n 6.4 Part III ( a) \u2013 Computation of Risk-weighted Amount for Credit Risk\n 6.5 Part III ( b) \u2013 Computation of Credit Equivalent Amount of Off-Balance Sheet Items\n 6.6 Part III ( c) \u2013 Exposures Recognized under Credit Risk Mitigation (CRM)\n 6.7 Part IV  \u2013 Computation of Risk-weighted Amount for Market Risk\n 6.8 Part V \u2013 Computation of Risk-weighted Amount for Operational Risk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 16, "year": 2013}, "type": "Document"}
{"page_content": "8 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAbbreviations\nAMA  \u2013 Advanced Measurement Approaches\nBIA \u2013 Basic Indicator Approach\nBIS \u2013 Bank for International Settlements\nBCBS  \u2013 Basel Committee on Banking Supervision\nCAR  \u2013 Capital Adequacy Ratio\nCBSL  \u2013 Central Bank of Sri Lanka\nCCR  \u2013 Counterparty Credit Risk\nCIPC  \u2013 Cash Items in the Process of Collection\nCRM  \u2013 Credit Risk Mitigation\nECAI  \u2013 External Credit Assessment Institution\nGOSL  \u2013 Government of Sri Lanka\nIMF  \u2013 International Monetary Fund\nLKR  \u2013 Sri Lanka Rupee\nMDB  \u2013 Multilateral Development Bank\nNPA  \u2013 Non Performing Aassets\nPSE \u2013 Public Sector Entities\nSA \u2013 Standardised Approach\nSLECIC  \u2013 Sri Lanka Export Credit Insurance Corporation\nSME  \u2013 Small and Medium Enterprise\nSMM  \u2013 Standardised Measurement Method\nLCB  \u2013 Licensed Commercial Bank\nLSB  \u2013 Licensed Specialised Bank", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 17, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  9\n1. Introduction\n1.1 Appr oach to Implementation of the Basel II Framework:  As announced by the Central Bank \nof Sri Lanka (CBSL) in March 2006, the \u201cInternational Convergence of Capital Measurement \nand Capital Standards \u2013 a Revised Framework\u201d, widely known as Basel II, issued by the Basel \nCommittee on Banking Supervision of the Bank for International Settlements in June 2004 and \nas amended to framework in June 2006, will be the basis for the computation of the Capital \nAdequacy Ratio effective from 1st January 2008.\n1.2 As an initial step towards adopting Basel II, all licensed commercial banks (LCBs) and licensed  \nspecialized banks (LSBs) are required to apply the following approaches in computing the \ncapital adequacy ratio.\n1.2.1  The Standardised Approach for credit risk\n1.2.2  The Standardised Measurement Method for market risk\n1.2.3  The Basic Indicator Approach for operational risk .\n2. Scope of Application\n2.1 The revised capital adequacy norms will be applicable, in the case of all LCBs and LSBs  \nincorporated in Sri Lanka:\n2.1.1  on the solo basis - All positions of the bank and its local and overseas branches/offices.\n2.1.2  on the consolidated basis \u2013 All position of the bank (including its local and overseas \nbranches/ offices) and its subsidiary companies.\n2.2 In the case of LCBs incorporated outside Sri Lanka, the revised capital adequacy norms will  \nbe applicable to the branch operations in Sri Lanka and subsidiaries in Sri Lanka, established \nwith the assigned capital of the branch, if any.\n2.3 All LCBs and LSBs are required to use the attached reporting format (Schedule II) for reporting \ncapital adequacy, commencing 2008.\n3. Minimum Capital Ratio\n All LCBs and LSBs shall at all times maintain the capital adequacy ratios determined by the  \nMonetary Board in term of Sections 19(7)( a) and 76J(1)( a) of the Banking Act, commencing \nfrom 01 January 2008.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 18, "year": 2013}, "type": "Document"}
{"page_content": "from 01 January 2008.\n4. Reporting Format\n4.1 The attached reporting format (Schedule II) collects information on the capital adequacy  \nposition of licensed banks. The return comprises 5 major parts.\n4.1.1  Part 1  \u2013   Computation of capital adequacy ratio.\n4.1.2  Part 1I  \u2013 (a)  Computation of total capital base.\n   (b)  Computation of eligible Tier III capital for market risk.\n4.1.3  Part III  \u2013  (a)  Computation of risk-weighted amount for credit risk.\n   (b)  Credit equivalent of off-balance sheet items.\n   (c)  Exposures recognized under credit risk mitigation (CRM).\n4.1.4  Part IV  \u2013   Computation of risk-weighted amount for market risk.\n4.1.5  Part V  \u2013   Computation of risk-weighted amount for operational risk.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 18, "year": 2013}, "type": "Document"}
{"page_content": "10 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n5. Submission dates\n5.1 The return should show the position as at the last calendar day of each quarter/each financial  \nyear, and should be submitted through the web-based system as follows. Regional Developments \nBanks are required to submit the attached return (Schedule II) in the manual form.\n5.1.1  Quarterly return/s \u2013 within 1 month after the end of each quarter .\n5.1.2  An nual audited return/s \u2013 within 6 months after the end of the financial year of the \nrespective bank.\n5.1.3  If the submission deadline falls on a bank holiday , it will be deferred to the next working \nday.\n5.2 T he Statement of Certification on the information submitted in the above return/s and the \ncapital adequacy ratio should be forwarded to Bank Supervision Department in manual form. \nFor this purpose, banks may use the existing format (copy attached), which was issued under \nthe implementation of the new web-based returns in July 2006.\n6. Instructions for  Completion the Return\n The instructions for completion of the capital adequacy return are divided into eight parts. The \ndetails/definitions of each element in these eight parts are described with the web-based return \ncode (WBRC).\n6.1 Part 1 \u2013 Computation of Capital Adequacy Ratio\n The values of the items in this form are updated automatically on the web-based return.\n6.1.1  Eligible Cor e Capital (Eligible Tier I)\n (WBRC 1 1.1.1.0.0.0)\n The amount must agree with item 6.2.2.1 of Part II ( a) Computation of total capital base \nbelow.\n  [= WBRC 11.2.1.1.0.0 of Part II ( a)]\n6.1.2  Capital Base (Regulatory Capital)\n (WBRC 1 1.1.2.0.0.0)\n The amount must agree with item 6.2.2.9 of Part II ( a) Computation of total capital base \nbelow.\n [= WBRC 11.2.1.5.0.0 of Part II ( a)]\n6.1.3  T otal Risk-Weighted Amount\n (WBRC 1 1.1.3.0.0.0)\n T otal risk-weighted assets are determined by adding the resulting figures to the sum of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 19, "year": 2013}, "type": "Document"}
{"page_content": "T otal risk-weighted assets are determined by adding the resulting figures to the sum of \nrisk-weighted assets for credit risk, market risk and operational risk.\n T otal of risk-weighted amount for credit risk (6.1.3.1), market risk (6.1.3.2) and \noperational risk (6.1.3.3).\n (WBRC 1 1.1.3.1.0.0 + 11.1.3.2.0.0 + 11.1.3.3.0.0)\n6.1.3.1  Risk-W eighted Amount for Credit Risk\n (WBRC 1 1.1.3.1.0.0)\n The amount must agree with item 6.4.3.1 of Part III ( a) Computation of risk-\nweighted amount for credit risk below.\n [=WBRC1 1.3.1.0.0.0 of Part III ( a)]", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 19, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  11\n6.1.3.2  Risk-W eighted Amount for Market Risk\n (WBRC 1 1.1.3.2.0.0)\n T he amount must agree with item 6.7.8.2 of Part IV Computation of risk-\nweighted amount for market risk below.\n [= WBRC 11.4.2.0.0.0 of Part IV]\n6.1.3.3  Risk-W eighted Amount for Operational Risk\n (WBRC 1 1.1.3.3.0.0)\n The amount must agree with item 6.8.2.3 of Part III ( a) Computation of risk-\nweighted amount for operational risk below.\n [= WBRC 11.5.3.0.0.0 of Part V]\n6.1.4  Cor e Capital (Tier I) Ratio, %\n (WBRC 1 1.1.4.0.0.0)\n Eligible core capital (6.1.1) divided by Total risk-weighted amount (6.1.3)\n (WBRC 1 1.1.1.0.0.0/11.1.3.0.0.0)*100\n6.1.5  T otal Capital Ratio, %\n (WBRC 1 1.1.5.0.0.0)\n T otal capital base (6.1.2) divided by Total risk-weighted amount (6.1.3)\n (WBRC 1 1.1.2.0.0.0/11.1.3.0.0.0)*100\n6.2 Part II ( a) \u2013 Computation of Total Capital Base (Regulatory Capital)\n6.2.1  Constituents of Capital Base\n Capital base consists of eligible core capital (Tier I), eligible supplementary capital (Tier \nII) and eligible short term subordinated debt covering market risk (Tier III).\n6.2.2  Specific instructions for  elements of Capital\n6.2.2.1  Eligible Cor e Capital (Eligible Tier I)\n (WBRC 1 1.2.1.1.0.0)\n The Eligible Core Capital shall be the total core capital less total amount of deductions/\nadjustments to core capital. Total eligible core capital should represent at least half of \ntotal capital base, i.e., the sum total of eligible supplementary capital plus eligible  \nTier III capital should not exceed total eligible core capital.\n The amount must agree with core capital (6.2.2.2) less Tier I adjustments \n(6.2.2.3).\n (WBRC 1 1.2.1.1.1.0 - 11.2.1.1.2.0)\n6.2.2.2  Cor e Capital (Tier I)\n (WBRC 1 1.2.1.1.1.0)\n Core capital includes only permanent shareholders\u2019 equity (issued and fully paid \nordinary shares/common stock and perpetual non-cumulative preference shares),", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 20, "year": 2013}, "type": "Document"}
{"page_content": "ordinary shares/common stock and perpetual non-cumulative preference shares), \nassigned capital and disclosed reserves (created or increased by appropriations \nof retained earnings or other surplus, e.g.,  share premiums, retained profit, \ngeneral reserves and statutory reserves).\n The amount must agree with the sum of the following elements from 6.2.2.2.1 to  \n6.2.2.2.10\n (WBRC 1 1.2.1.1.1.1 to 11.2.1.1.1.10)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 20, "year": 2013}, "type": "Document"}
{"page_content": "12 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.2.2.2.1  Paid-up Ordinary Shar es/Assigned Capital\n (WBRC 1 1.2.1.1.1.1)\n In the case of LCBs and LSBs incorporated in Sri Lanka:  Issued \nand fully paid ordinary shares in terms of the Banking Act. For the \ncomputation only the paid up portion of partly paid shares should be \ncounted as capital (will be revised in terms of the Companies Act, \nNo.7 of 2007).\n LCB incorporated or established outside Sri Lanka:  Equity capital \nthat shall be assigned by the Head Office of a LCB incorporated or \nestablished outside Sri Lanka.\n6.2.2.2.2  Non-cumulative, Non-r edeemable Preference Shares\n (WBRC 1 1.2.1.1.1.2)\n Issued and fully paid non-cumulative, non-redeemable preference  \nshares where the payment of dividend could be reduced or waived \npermanently in the event of profitability being inadequate to support \nsuch payment in part or full.\n6.2.2.2.3  Shar e Premium\n (WBRC 1 1.2.1.1.1.3)\n The excess of issue price over the par value of the ordinary shares or  \ncommon stock or non-cumulative, non-redeemable preference shares \n(will be revised in terms of the Companies Act, No.7 of 2007).\n6.2.2.2.4  Statutory Reserve Fund\n (WBRC 1 1.2.1.1.1.4 )\n Balance in the Reserve Fund as per last audited statement of accounts  \nand set up by banks in terms of the Banking Act.\n6.2.2.2.5  Published Retained Pr ofits/(Accumulated Losses)\n (WBRC 1 1.2.1.1.1.5)\n Balance in the profit and loss acc ount brought forward from the \nprevious financial years and as reported in the last audited statement \nof accounts. Accumulated losses should be reported in parenthesis and \ndeducted from the other capital constituents.\n6.2.2.2.6  General and Other  Reserves\n (WBRC 1 1.2.1.1.1.6)\n Disclosed reserves in the form of general or other reserves created  \nor increased by appropriation of retained earnings, share premium or \nother surplus as per last audited financial statements.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 21, "year": 2013}, "type": "Document"}
{"page_content": "other surplus as per last audited financial statements.\n6.2.2.2.7  Gain/(Loss) After Tax Arising from the Sale of Fixed and Long-\nterm Investments\n (WBRC 1 1.2.1.1.1.7)\n Any ga in/(loss) after tax arising from the sale of fixed and long-\nterm investments since the closing date of the last audited accounts. \nNet loss arising from the sale of fixed and long-term investments \nshould be reported in parenthesis and deducted from the other capital \nconstituents.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 21, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  13\n6.2.2.2.8  Unpublished Curr ent Year\u2019s Profit/(Loss)\n (WBRC 1 1.2.1.1.1.8)\n Current year profit (excluding any profit/ (loss) after tax arising from  \nthe sale of fixed and long term investments) earned/incurred since the \nclosing date of the last audited accounts and subject to certification by \nthe institution\u2019s external auditor. Current year loss should be reported \nin parenthesis and deducted from the other capital constituents. For \nthis purpose, the banks are required obtain the audit certificate based \non the Sri Lanka Auditing Practice Statements 1 (SLAPs 1) \u201cThe \nAuditor\u2019s Report on Special Purpose Audit Engagements\u201d\n6.2.2.2.9  Minority Inter ests (consistent with the above capital constituents)\n (WBRC 1 1.2.1.1.1.9)\n Minority interests on consolidation of capital items.\n6.2.2.2.10  Perpetual Debt Capital Instruments\n (WBRC 1 1.2.1.1.1.10)\n Perpetual debt capital instruments that satisfy the following conditions:\n (i) Prior written approval of the CBSL  has been obtained.\n (ii) Such instruments shall have no maturity .\n (iii) Unsecured, fully paid up and subordinated to the interests of  \ncreditors\n (iv) The perpetual debt capital instruments should contain a clause  \nthat the issuing bank shall not be liable to pay interest, if:\n a. T he bank\u2019s CAR is below the minimum regulatory \nrequirement in terms of the Direction on CAR, or\n b. The impact of such payment results in the bank\u2019s CAR \nfalling below the minimum CAR, and\n c. Such interest not paid shall not be cumulative or accrued for  \npayment in the future.\n (v) Such instruments may contain a call option, which may be  \nexercised in 10 years from the date of issue, provided that the \nprior approval of CBSL has been obtained to exercise such \noption.\n (vi) T otal perpetual debt approved as core capital shall not exceed 15 \nper cent of the total non-innovative core capital after adjustments \nand deductions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 22, "year": 2013}, "type": "Document"}
{"page_content": "per cent of the total non-innovative core capital after adjustments \nand deductions.\n (vii) Any other conditions stipulated by CBSL  on prudential grounds.\n6.2.2.3  Deductions/Adjustments \u2013 Cor e Capital (Tier I)\n (WBRC 1 1.2.1.1.2.0)\n The amount must agree with the sum of the following items from 6.2.2.3.1 to  \n6.2.2.3.9\n (WBRC 1 1.2.1.1.2.1 to 11.2.1.1.2.9)\n6.2.2.3.1  Goodwill\n (WBRC 1 1.2.1.1.2.1)\n Report the amount of goodwill as shown in the balance sheet.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 22, "year": 2013}, "type": "Document"}
{"page_content": "14 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.2.2.3.2  Net Deferred Tax\n (WBRC 1 1.2.1.1.2.2 )\n Net debit balance of deferred tax.\n6.2.2.3.3  Other  Intangible Assets\n (WBRC 1 1.2.1.1.2.3)\n Intangible assets and losses in the current period and those brought  \nforward from previous periods should be deducted from core capital.\n6.2.2.3.4  Advances granted to employees of the bank for  the purchase of \nshares of the bank under a share ownership plan.\n (WBRC 1 1.2.1.1.2.4)\n6.2.2.3.5  Amount due fr om head office & branches outside Sri Lanka in Sri \nLanka Rupees (applicable only to branches of foreign banks).\n (WBRC 11.2.1.1.2.5)\n Debit balances in VOSTRO current accounts in Sri Lanka Rupees held \nby Head Office and branches outside Sri Lanka in Sri Lanka Rupees.\n6.2.2.3.6  Amount due to head office & branches outside Sri Lanka in Sri  \nLanka Rupees (-)  (applicable only to branches of foreign banks)\n (WBRC 11.2.1.1.2.6)\n Credit balances in VOSTRO current accounts in Sri Lanka Rupees \nheld by Head Office and branches outside Sri Lanka in Sri Lanka \nRupees. Report with negative (-) sign.\n6.2.2.3.7  Amount due fr om head office & branches outside Sri Lanka in \nForeign Currency (net)  (applicable only to branches of foreign \nbanks)\n (WBRC 11.2.1.1.2.7)\n Net Debit balances (after netting of credit balances) in NOSTRO  \ncurrent accounts in foreign currency held with Head Office and \nbranches outside Sri Lanka and the net amount of fixed and other \ndeposits placed with and amounts lent to Head Office and branches \noutside Sri Lanka (after netting of fixed and other deposits and \namounts borrowed from Head Office and branches outside Sri Lanka) \nin foreign currency. Ignore any net credit balance.\n6.2.2.3.8  50 per  cent of Investments in Unconsolidated Banking and \nFinancial Subsidiary Companies\n (WBRC 1 1.2.1.1.2.8)\n 50 per cent of investments in capital by way of shares, perpetual/", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 23, "year": 2013}, "type": "Document"}
{"page_content": "(WBRC 1 1.2.1.1.2.8)\n 50 per cent of investments in capital by way of shares, perpetual/\nhybrid capital instruments or subordinated term debt in unconsolidated \nbanking and financial subsidiary companies.\n6.2.2.3.9  50 per  cent of Investments in the Capital of Other Banks and \nFinancial Institutions\n (WBRC 1 1.2.1.1.2.9)\n 50 per cent of investments in capital by way of shares, perpetual/\nhybrid capital instruments or subordinated term debt in other banks \nand financial institutions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 23, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  15\n6.2.2.4  Supplementary Capital (T ier II)\n (WBRC 1 1.2.1.2.1.0)\n The amount must agree to sum of following items from 6.2.2.4.1 to 6.2.2.4.5\n (WBRC 1 1.2.1.2.1.1 to 11.2.1.2.1.5)\n6.2.2.4.1  Revaluation Reserves (appr oved by CBSL)\n (WBRC 1 1.2.1.2.1.1)\n Revaluation reserves may be included within Tier II Supplementary \nCapital provided that such revaluation is prudently valued reflecting \nfully the possibility of price fluctuations and forced sale, with prior \napproval of CBSL, subject to a discount of 50 per cent. Revaluation \nsurplus may be included in Tier II capital not more than once in 7 \nyears.\n6.2.2.4.2  General Pr ovisions\n (WBRC 1 1.2.1.2.1.2)\n General provisions or general loan loss reserves created against the  \npossibility of future losses. Where they are not ascribed to particular \nassets and do not reflect deduction in the valuation of particular assets, \nthey qualify for inclusion in Supplementary Capital (Tier II). General \nprovisions should not exceed 1.25 per cent of the sum of risk-weighted \nassets.\n6.2.2.4.3  Hybrid Capital Instruments (Debt/Equity)\n (WBRC 1 1.2.1.2.1.3)\n Capital instruments which combine certain characteristics of equity  \ncapital and debt. i.e., cumulative redeemable preference shares, etc. \nand satisfy the following characteristics :\n (i) Prior written approval of CBSL  has been obtained for inclusion of \nsuch items in the capital.\n (ii) Unsecured, fully paid up and subordinated to the interests of \ncreditors.\n (iii) Not redeemable in less than 5 years or without the prior approval  \nof CBSL.\n (iv) A vailable to participate in losses without the Bank being \nobliged to cease trading.\n (v) Obligation to pay interest can be deferred where the profitability  \nof the Bank would not support such payment.\n (vi) Any other condition stipulated by CBSL  on prudential grounds.\n6.2.2.4.4  Minority Inter ests arising from Preference Shares", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 24, "year": 2013}, "type": "Document"}
{"page_content": "6.2.2.4.4  Minority Inter ests arising from Preference Shares\n (WBRC 1 1.2.1.2.1.4)\n Minority interests arising from the consolidation of preference shares.\n6.2.2.4.5  Appr oved Subordinated Term Debt\n (WBRC 1 1.2.1.2.1.5)\n Subordinated term debt that satisfies the following conditions:\n (i) T he prior written approval of CBSL has been obtained for \ninclusion as Tier II capital.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 24, "year": 2013}, "type": "Document"}
{"page_content": "16 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (ii) Unsecured and subordinated to the interests of creditors, at fully  \npaid up value in the case of coupon bonds or paid up value plus \naccrued interest in the case of zero coupon bonds.\n (iii) A  minimum original maturity of 5 years.\n (iv) Early repayment or redemption shall not be made without the  \nprior consent of CBSL.\n (v) The amount counted as capital should be discounted by 1/5th  \neach year during the four years preceding maturity.\n (vi) The total approved subordinated term debt should not exceed 50 \nper cent of total Tier 1 capital .\n (vii) Any other conditions stipulated by CBSL on prudential grounds.\n6.2.2.4.6  Actual Amount of Approved Subordinated Term Debts\n (WBRC 0.0.0.0.0.0)\n Report total actual amount of approved subordinated term debts.\n6.2.2.5  Deductions \u2013 Tier II\n (WBRC 1 1.2.1.2.2.0)\n The amount must agree to sum of following items from 6.2.2.5.1 to 6.2.2.5.2\n (WBRC 1 1.2.1.2.2.1 to 11.2.1.2.2.2)\n6.2.2.5.1  50 per  cent of Investments in Unconsolidated Banking and \nFinancial Subsidiary Companies\n (WBRC 1 1.2.1.2.2.1)\n 50 per cent of investments in capital by way of shares, perpetual/\nhybrid capital instruments or subordinated term debt in unconsolidated \nbanking and financial subsidiary companies.\n6.2.2.5.2  50 per  cent of Investments in the Capital of Other Banks and \nFinancial Institutions\n (WBRC 1 1.2.1.2.2.2)\n 50 per cent of investments in capital by way of shares, perpetual/\nhybrid capital instruments or subordinated term debt in other banks \nand financial institutions.\n6.2.2.6  T otal Supplementary Capital\n (WBRC 1 1.2.1.2.0.0)\n The amount must agree to Supplementary Capital (Tier II)  (6.2.2.4) less Tier \nII deductions (6.2.2.5).\n (1 1.2.1.2.1.0 - 11.2.1.2.2.0)\n6.2.2.7  Eligible Supplementary Capital\n (WBRC 1 1.2.1.3.0.0)\n Eligible supplementary capital (Eligible Tier II) will be restricted to 100 per cent", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 25, "year": 2013}, "type": "Document"}
{"page_content": "Eligible supplementary capital (Eligible Tier II) will be restricted to 100 per cent \nof Total Core Capital (6.2.2.1) (After deductions/adjustments).\n6.2.2.8  Short Term Subordinated Debt (Tier III)\n (WBRC 1 1.2.1.4.0.0)\n Short term subordinated debt may be used for the sole purpose of meeting a  \nproportion of the capital requirements for market risk. For short-term subordinated", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 25, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  17\ndebt to be eligible as supplementary capital, it needs, if circumstances demand, to \nbe capable of becoming part of a bank's permanent capital and thus be available \nto absorb losses in the event of insolvency. It must, therefore, at a minimum:\n (i) be unsecured, subordinated and fully paid up\n (ii) have an original maturity of at least two years\n (iii) not be repayable before the agreed repayment date unless the prior consent  \nof CBSL is obtained\n (iv) be subject to a lock-in clause which stipulates that neither interest nor  \nprincipal may be paid (even at maturity) if such payment means that the \nbank falls below or remains below its minimum capital requirement.\n6.2.2.8.1  Appr oved Short Term Subordinated Debt\n (WBRC 1 1.2.1.4.1.0)\n T otal amount of approved short-term subordinated debts under above \nconditions.\n6.2.2.8.2  Eligible Supplementary Capital (Eligible Tier III) - Utilised\n (WBRC 1 1.2.1.4.2.0)\n The amount must agree with item 6.3.3.6.1 of Part II ( b) subject to the \nfollowing conditions. \n [=WBRC 1 1.2.2.6.1.0 of Part II ( b)]\n (i) A  minimum of about 28\u00bd per cent of market risk needs to be \nsupported by eligible core capital that is available to support \nmarket risk.\n (ii) T ier III capital will be limited to 250 per cent of a bank\u2019s \neligible core capital that is available to support market risk after \nmeeting credit risk and operational risk.\n6.2.2.9  Capital Base\n (WBRC 1 1.2.1.5.0.0)\n The amount must agree with the sum of items of eligible core capital (6.2.2.1),  \neligible supplementary capital (6.2.2.7) and eligible tier III capital (6.2.2.8.2).\n (WBRC 1 1.2.1.1.0.0 + 11.2.1.3.0.0 + 11.2.1.4.2.0)\n6.2.3  An indicative list of institutions which may be deemed to be financial subsidiaries/\ninstitutions for the purposes of items 6.2.2.3.8, 6.2.2.3.9, 6.2.2.5.1 and 6.2.2.5.2 above \nis as under:\n (WBRC 1 1.2.1.1.2.8, 11.2.1.1.2.9, 11.2.1.2.2.1 and 11.2.1.2.2.2)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 26, "year": 2013}, "type": "Document"}
{"page_content": "is as under:\n (WBRC 1 1.2.1.1.2.8, 11.2.1.1.2.9, 11.2.1.2.2.1 and 11.2.1.2.2.2)\n (i) LCBs and LSBs,\n (ii) Insurance Companies,\n (iii) Registered Finance Companies,\n (iv) Specialised Leasing Companies,\n (v) Merchant Banks,\n (vi) Primary Dealers.\n6.2.4  Subsidiary companies referred to in items 6.2.2.3.8, 6.2.2.3.9, 6.2.2.5.1 and 6.2.2.5.2  \nabove will be as defined in the Banking Act.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 26, "year": 2013}, "type": "Document"}
{"page_content": "18 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.3 Part II ( b) - Computation of Eligible Tier III for Market Risk\n6.3.1  Rule of Short-T erm Subordinated Debt Covering Market Risk (Tier III Capital)\n Fo r short-term subordinated debt to be eligible as Tier III capital, it needs, if \ncircumstances demand, to be capable of becoming part of a bank's permanent capital and \nthus be available to absorb losses in the event of insolvency. Short-term subordinated \ndebt may be used for the sole purpose of meeting a proportion of the capital requirements \nfor market risk. It must, therefore, at a minimum:\n (i) be unsecured, subordinated and fully paid up\n (ii) have an original maturity of at least two years\n (iii) not be repayable before the agreed repayment date unless the prior consent of CBSL  \nis obtained\n (iv) be subject to a lock-in clause which stipulates that neither interest nor principal  \nmay be paid (even at maturity) if such payment means that the bank falls below or \nremains below its minimum capital requirement.\n6.3.2  Eligible Tier III capital\n (i) T ier III capital will be limited to 250 per cent of a bank\u2019s eligible core capital that \nis available to support market risk after meeting credit risk and operational risk.\n (ii) The minimum of about 28\u00bd per cent of market risk needs to be supported by  \neligible core capital that is available to support market risk.\n (iii) T ier 2 elements may be substituted for Tier III up to the same limit of 250 per \ncent so far as the overall limits stated in paragraphs 6.2.2.4.5 and 6.2.2.7 are not \nbreached, i.e., eligible supplementary capital may not exceed eligible core capital, \nand long-term subordinated debt may not exceed 50 per cent of core capital.\n (iv) In addition, eligible core capital should represent at least half of total capital base,  \ni.e., the sum total of supplementary capital plus Tier III capital should not exceed \neligible core capital.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 27, "year": 2013}, "type": "Document"}
{"page_content": "eligible core capital.\n (v) In determining the level of eligible core capital for the purposes of determining  \neligible Tier III capital, all adjustments required in arriving at the total capital base \n(as stated in 6.2.2.3 and 6.2.2.5) should be taken into consideration.\n6.3.3  Specific instructions for  Computation of eligible Tier III for market risk\n The values of the items in this form are updated automatically, except item 6.3.3.5.1 \nbelow.\n (WBRC 1 1.2.2.5.1.0)\n6.3.3.1  T otal Risk Weighted Assets (RWA)\n (WBRC 1 1.2.2.1.0.0)\n The amount must agree with the sum of the following items from 6.3.3.1.1 to  \n6.3.3.1.2\n (WBRC 1 1.2.2.1.1.0 to 11.2.2.1.2.0)\n6.3.3.1.1  T otal Risk Weighted Assets for Credit and Operational Risks\n (WBRC 1 1.2.2.1.1.0)\n The amount must agree with the sum of item 6.4.3.1 of Part III ( a) \nComputation of risk-weighted amount for credit risk and item 6.8.2.3 of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 27, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  19\nPart V Computation of risk-weighted amount for operational risk \nbelow.\n (WBRC 1 1.3.1.0.0.0 of Part III ( a) and 1.5.3.0.0.0 of Part V)\n6.3.3.1.2  T otal Risk Weighted Assets for Market Risk\n (WBRC 1 1.2.2.1.2.0)\n The amount mus t agree to item 6.7.8.2 of Part IV Computation of  \nrisk-weighted amount for market risk.\n (WBRC 1 1.4.2.0.0.0 of Part IV)\n6.3.3.2  Minimum Capital Charge\n (WBRC 1 1.2.2.2.0.0)\n The amount must agree with the sum of the following items from 6.3.3.2.1 to  \n6.3.3.2.2 (WBRC 11.2.2.2.1.0 to 11.2.2.2.2.0)\n6.3.3.2.1  Capital charge for  Credit and Operational Risk\n (WBRC 1 1.2.2.2.1.0 )\n The amount must agree with 10 per cent of the total risk weighted  \nassets for credit and operational risks item 6.3.3.1.1 above.\n (10% of WBRC11.2.2.1.1.0)\n6.3.3.2.2  Capital Charge for  Market Risk\n (WBRC 1 1.2.2.2.2.0)\n The amount must agree with 10 per cent of total risk weighted assets  \nfor market risk item 6.3.3.1.2\n (10% WBRC 11.2.2.1.2.0)\n6.3.3.3  T otal Capital Available to Meet the Capital Charge for Credit and \nOperational Risks\n (WBRC 1 1.2.2.3.0.0)\n The amount must agree with the sum of total core capital (6.2.2.1) and eligible  \nsupplementary capital (6.2.2.7) of Part II (a) Computation of total capital base \nabove.\n [WBRC1 1.2.1.1.0.0 and 11.2.1.3.0.0 of Part II ( a)]\n6.3.3.4  T otal Capital Base Available to meet Market Risk\n (WBRC 1 1.2.2.4.0.0)\n T otal capital available to meet the capital charge for credit and operational risks \n(6.3.3.3) less capital charge for credit and operational risks (6.3.3.2.1)\n (WBRC 1 1.2.2.3.0.0 - 11.2.2.2.1.0)\n6.3.3.5  T otal Available Tier III Capital\n (WBRC 1 1.2.2.5.0.0)\n6.3.3.5.1  Appr oved Short-term Subordinated Debt\n (WBRC 1 1.2.2.5.1.0)\n Report total amount of approved short-term subordinated debts under  \nthe conditions are stated at item 6.2.2.8.\n (as per WBRC 11.2.1.4.0.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 28, "year": 2013}, "type": "Document"}
{"page_content": "20 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.3.3.5.2  Minimum of 28.5 per  cent of Capital Charge for Market Risk to be \nmet by eligible core capital that is not Required for Credit Risk\n (WBRC 1 1.2.2.5.2.0)\n A minimum of about 28\u00bd per cent of market risk needs to be supported \nby eligible core capital that is available to support market risk.\n (i) Limit\n  (WBRC 11.2.2.5.2.1)\n  Limit is computed under condition at 6.2.2.8.2 ( i) above. The \namount must agree to item 6.3.3.2.2 *28.5%\n  (WBRC 1 1.2.2.2.2.0*28.5%)\n (ii) Amount Utilised\n  (WBRC 1 1.2.2.5.2.2)\n  Minimum utilised amount should be equal to above limit.\n6.3.3.5.3  Maximum of 250 per cent of eligible core capital that is not \nRequired for Credit and Operational Risks\n (WBRC 1 1.2.2.5.3.0)\n T ier III capital will be limited to 250 per cent of a bank's eligible core \ncapital that is available to support market risk after meeting credit risk \nand operational risk.\n (i) Limit\n  (WBRC 11.2.2.5.3.1)\n  Limit is computed under condition at 6.2.2.8.2 (ii) above. The \namount must agree to item 6.3.3.4 *250%\n  (WBRC 1 1.2.2.4.0.0*250%)\n (ii) Amount Utilised\n  (WBRC 1 1.2.2.5.3.2)\n  The utilized amount is computed automatically .\n6.3.3.6  Eligible Tier III Capital\n (WBRC 1 1.2.2.6.0.0)\n Eligible Tier III capital for market risk is computed as follows.\n6.3.3.6.1  Eligible Tier III Capital utilised\n (WBRC 1 1.2.2.6.1.0)\n T otal capital charge for market risk (6.3.3.2.2) less eligible core \ncapital utilized for market risk [6.3.3.5.2 ( ii)]\n (WBRC 1 1.2.2.2.2.0 - 11.2.2.5.2.2)\n6.3.3.6.2  Eligible but Unutilized Tier III Capital\n The approved short-term subordinated debt (6.3.3.5.1) less eligible  \nTier III capital utilized (6.3.3.6.1).\n (11.2.2.5.1.0 - 11.2.2.6.1.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 29, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  21\n6.4 Part III ( a) \u2013 Computation of Risk-weighted Amount for Credit Risk\n6.4.1  General Rules for  Measuring Credit Risk Based on the Standardised Approach \n(SA)\n6.4.1.1  Un der the SA, the rating assigned by the eligible external credit assessment \ninstitutions (ECAIs) will largely support the measure of credit risk. Banks \nmay rely upon the ratings assigned by the ECAIs recognised by CBSL (See \nparagraph 6.4.2) for assigning risk weights for capital adequacy purposes as per \nthe mapping furnished in these guidelines.\n6.4.1.2  The risk weighting of claims will be as described in paragraphs 6.4.3 (under  \nspecific rules for measuring credit risk).\n6.4.1.3  Claims (exposures) on a counterpart would include placements with banks,  \ninvestments, loans and advances or any other credit exposure.\n6.4.1.4  On-balance sheet claims (exposures) would be risk weighted applying the  \nrisk weight as given in paragraphs 6.4.3 while off-balance sheet items would \ncontinue to be converted to credit equivalents using the credit conversion factors \ngiven in paragraph 6.5 and thereafter risk weighted according to the risk weight \napplicable to the counterpart.\n6.4.1.5  All exposures should be risk-weighted net of specific provisions and interest in  \nsuspense that has been charged to the respective customer account.\n6.4.2  External Credit Assessments\n6.4.2.1  Recognition of Eligible Cr edit Rating Agencies\n6.4.2.1.1  T he Revised Capital Adequacy Framework requires recognizing \nECAIs and developing a mapping process to assign the ratings issued \nby eligible credit rating agencies to the risk weights available under \nthe Standardised Approach. In accordance with the principles laid \ndown in the revised framework, CBSL has identified the following \ntwo credit rating agencies operating in Sri Lanka for the purposes of \nrisk weighting claims by banks for capital adequacy purposes:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 30, "year": 2013}, "type": "Document"}
{"page_content": "risk weighting claims by banks for capital adequacy purposes:\n (i) Fitch Ratings Lanka Ltd. and\n (ii) Lanka Rating Agency Ltd.\n6.4.2.1.2  The following internationally recognized credit ratings agencies are  \nalso accepted as ECAIs.\n (i) Moody\u2019 s\n (ii) Standard and Poor \u2019s and\n (iii) Fitch Ratings\n6.4.2.1.3  Banks are required to obtain the prior approval of CBSL  for the use of \nother ECAIs.\n6.4.2.2  Scope of Application of External Ratings\n6.4.2.2.1  Banks should use the chosen ECAIs and their ratings consistently  \nfor each type of claim, for both risk weighting and risk management \npurposes. Banks will not be allowed to \u201ccherry pick\u201d the assessments \nprovided by different ECAIs.\n6.4.2.2.2  Banks shall not use one ECAI\u2019s rating for one exposure, while \nusing another ECAI\u2019s rating for another exposure to the same", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 30, "year": 2013}, "type": "Document"}
{"page_content": "22 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\ncounterpart, unless the respective exposures are rated by only one of \nthe chosen ECAIs, whose ratings the bank has decided to use. External \nassessments for one entity within a corporate group cannot be used to \nrisk weight other entities within the same group.\n6.4.2.3  Mapping Pr ocess\n6.4.2.3.1  T he ratings issued by the eligible ECAIs have been mapped to the \nappropriate risk weights applicable as per the Standardised Approach \nunder the Revised Framework. The rating risk weight - mapping \nfurnished in the tables below shall be adopted by all banks:\nTable 1\nMapping of Notations of the Credit Rating Agencies in Sri Lanka\nFitch Ratings Lanka Lanka Rating AgencyRating Scale\nof CAR\nAA(sri) AAA AAA\nAA+(sri) AA1 AA+\nAA(sri) AA2 AA\nAA-(sri) AA3 AA-\nA+(sri) A1 A+\nA(sri) A2 A\nA-(sri) A3 A-\nBBB+(sri) BBB1 BBB+\nBBB(sri) BBB2 BBB\nBBB-(sri) BBB3 BBB-\nBB+(sri) BB1 BB+\nBB(sri) BB2 BB\nBB-(sri) BB3 BB-\nB+(sri) B1 B+\nB(sri) B2 B\nB-(sri) & Lower B3 & Lower B- & Lower", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 31, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  23\nTable 2\nMapping of Notations of the International Credit Rating Agencies\nStandard and \nPoor\u2019sMoody\u2019s Fitch Ratings Rating Scale of \nCAR\nAAA Aaa AAA AAA\nAA+ Aa1 AA+ AA+\nAA Aa2 AA AA\nAA- Aa3 AA- AA-\nA+ A1 A+ A+\nA A2 A A\nA- A3 A- A-\nBBB+ Baa1 BBB+ BBB+\nBBB Baa2 BBB BBB\nBBB- Baa3 BBB- BBB-\nBB+ Ba1 BB+ BB+\nBB Ba2 BB BB\nBB- Ba3 BB- BB-\nB+ B1 B+ B+\nB B2 B B\nB- & Lower B3 & Lower B- & Lower B- & Lower\nTable 3\nMapping of Short Term Ratings\nShort term ratingsRisk\nweightsLanka Rating \nAgencyStandard and \nPoor\u2019sMoody\u2019sFitch \nRatings \nL - 1 A - 1+/A - 1 P - 1 F1+/ F1 20%\nL - 2 A - 2+/A - 2 P - 2 F2 50%\nL - 3 A - 3+/A - 3 P - 3 F3 100%\nNP Below A - 3 NP Below F3 150%\n6.4.2.4  Short-T erm Ratings\n6.4.2.4.1  Short-term assessments may only be used for short-term claims  \nagainst banks and corporates.\n6.4.2.4.2  Fo r risk-weighting purposes, short-term ratings are deemed to be \nissue specific. They can only be used to derive risk weights for claims \narising from the rated facility. They cannot be generalised to other \nshort-term claims. In no event can a short-term rating be used to \nsupport a risk weight for an unrated long-term claim.\n6.4.2.4.3  If a short-term rated facility attracts a 50 per cent risk weight, unrated   \nshort-term claims cannot attract a risk weight lower than 100 per cent. \nIf an issuer has a short-term facility with an assessment that warrants \na risk weight of 150 per cent, all unrated claims, whether long term or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 32, "year": 2013}, "type": "Document"}
{"page_content": "24 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nshort term, should also receive a 150 per cent risk weight, unless the \nbank uses recognized CRM techniques for such claims.\n6.4.2.4.4  The above risk weight mapping of both long term and short-term  \nratings of the chosen domestic rating agencies would be reviewed \nannually by CBSL.\n6.4.2.5  Use of Unsolicited Ratings\n A  rating would be treated as solicited only if the issuer of the instrument has requested \nthe credit rating agency for the rating and has accepted the rating assigned by the agency. \nAs a general rule, banks should use only solicited rating from the chosen ECAIs.  \nNo ratings issued by the credit rating agencies on an unsolicited basis should be \nconsidered for risk weight Computation as per the Standardised Approach.\n6.4.2.6  Issuer versus Issues Assessment\n Where a bank\u2019s exposure is to a particular issue that has an issue-specific \nassessment, the risk weight of the claim will be based on this assessment.\n6.4.2.7  Use of Multiple Rating Assessments\n Banks shall be guided by the following in respect of exposures/obligors having  \nmultiple ratings from the eligible ECAIs chosen by the bank for the purpose of \nrisk weight Computation:\n6.4.2.7.1  If there is only one rating by an eligible credit rating agency for a  \nparticular claim, that rating would be used to determine the risk weight \nof the claim.\n6.4.2.7.2  If there are two ratings accorded by eligible credit rating agencies,  \nwhich map into different risk weights, the higher risk weight should \nbe applied.\n6.4.2.7.3  If there are three or more ratings accorded by eligible credit rating  \nagencies with different risk weights, the ratings corresponding to the \ntwo lowest risk weights should be referred to and the higher of those \ntwo risk weights should be applied, i.e., the second lowest risk weight.\n6.4.3  Specific Rules for  Measuring Credit Risk Based on the Standardised Approach (SA)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 33, "year": 2013}, "type": "Document"}
{"page_content": "6.4.3  Specific Rules for  Measuring Credit Risk Based on the Standardised Approach (SA)\n6.4.3.1  T otal Risk-weighted amount for Credit Risk\n (BRC 1 1.3.1.0.0.0)\n The amount must agree to sum of total amount of on-balance sheet items and  \ntotal amount of credit equivalent items (from 6.4.3.1.1 to 6.4.3.1.14) after \napplying the specific risk weight assigned.\n (WBRC 11.3.1.1.0.0 to11.3.1.14.0.0)\n6.4.3.1.1  Claims on Government of Sri Lanka and Central Bank of Sri  \nLanka\n (WBRC 1 1.3.1.1.0.0)\n All claims on Government of Sri Lanka and Central Bank of Sri Lanka are \nrisk-weighted at zero per cent . The amount must agree to sum of items  \n(i) and (ii)\n (WBRC 1 1.3.1.1.1.0 to 11.3.1.1.2.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 33, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  25\n (i) Claims on Government of Sri Lanka\n  (WBRC 1 1.3.1.1.1.0)\n  All claims on Government of Sri Lanka are risk-weighted at 0%.\n (ii) Claims on Central Bank of Sri Lanka\n  (WBRC 1 1.3.1.1.2.0)\n  All claims on Central Bank of Sri Lanka are risk-weighted at 0%.\n6.4.3.1.2  Claims on For eign Sovereigns and their Central Banks\n (WBRC 1 1.3.1.2.0.0)\n Exposures on foreign sovereigns and their central banks will attract  \nrisk weights as per the rating assigned to those sovereigns/sovereign \nexposures by international rating agencies as given in the table below. \nThe amount must agree to sum of following items from (i) to (vi).\n (WBRC 1 1.3.1.2.1.0 to 11.3.1.2.6.0)\nTable 4\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.2.1.0 AAA to AA- 0%\n(ii) 11.3.1.2.2.0 A+ to A- 20%\n(iii) 11.3.1.2.3.0 BBB+ to BBB- 50%\n(iv) 11.3.1.2.4.0 BB+ to B 100%\n(v) 11.3.1.2.5.0 Below B- 150%\n(vi) 11.3.1.2.6.0 Unrated 100%\n6.4.3.1.3  Claims on Public Sector  Entities (PSEs)\n (WBRC 1 1.3.1.3.0.0)\n All performing claims on domestic public sector entities (including \npublic corporations, statutory boards, provincial authorities, local \ngovernment bodies, etc.) and claims on foreign PSEs will be risk \nweighted in a manner similar to claims on corporates  as given in the \ntable below. The amount must agree to sum of following items from \n(i) to (v ).\n (WBRC 1 1.3.1.3.1.0 to 11.3.1.2.5.0)\nTable 5\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.3.1.0 AAA to AA 20%\n(ii) 11.3.1.3.2.0 A+ to A- 50%\n(iii) 11.3.1.3.3.0 BBB+ to BB- 100%\n(iv) 11.3.1.3.4.0 Below BB- 150%\n(v) 11.3.1.3.5.0 Unrated 100%", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 34, "year": 2013}, "type": "Document"}
{"page_content": "26 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.4.3.1.4  Claims on Official Entities and Multilateral Development Banks \n(MDBs)\n (WBRC 1 1.3.1.4.0.0)\n The amount must agree with the sum of the following items from ( i) \nto (iii ).\n (WBRC 1 1.3.1.4.1.0 to 11.3.1.4.6.0)\n (i) Exposures on following official entities will be assigned zero \nrisk weight:\n (a) Bank for International Settlements (BIS)\n (b) International Monetary Fund (IMF)\n (c) European Central Bank (ECB)\n (d) European Community (EC)\n (ii) The following Eligible MDBs  will be assigned a zero risk  \nweight:\n (a) The World Bank Group comprising of the International \nBank for Reconstruction and Development (IBRD) and the \nInternational Finance Corporation (IFC)\n (b) The Asian Development Bank (ADB)\n (c) The African Development Bank (AFDB)\n (d) The European Bank for Reconstruction and Development  \n(EBRD)\n (e) The Inter -American Development Bank (IADB)\n (f) The European Investment Bank (EIB)\n (g) The European Investment Fund (EIF)\n (h) The Nordic Investment Bank (NIB)\n (i) The Caribbean Development Bank (CDB)\n (j) The Islamic Development Bank (IDB)\n (k) The Council of Europe Development Bank (CEDB)\n (l) The International Finance Facility for Immunization (IFFIm)\n (iii) The risk weight applicable to claims on other MDBs will depend \non the external rating  assigned for each MDBs as follows:\nTable 6\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.4.1.0 BIS,IMF and MDBs 0%\n(ii) 11.3.1.4.2.0 AAA to AA- 20%\n(iii) 11.3.1.4.3.0 A+ to BBB- 50%\n(iv) 11.3.1.4.4.0 BB+ to B- 100%\n(v) 11.3.1.4.5.0 Below B- 150%\n(vi) 11.3.1.4.6.0 Unrated 100%", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 35, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  27\n6.4.3.1.5  Claims on Banks\n (WBRC 1 1.3.1.5.0.0 )\n Total performing claims on banks denominated in LKR and foreign \ncurrency. The amount must agree to sum of total rupee claims and \nforeign currency claims.\n (WBRC 1 1.3.1.5.1.0 + 11.3.1.5.2.0 + 11.3.1.5.3.0)\n Short-Term Claims: In order to qualify for the preferential treatment \nfor short-term claims, they should have an original contractual \nmaturity of 3 months or less, and should not be rolled over.\n Branches of banks incorporated abroad: The rating applicable to \nthe Head Office may be used as the rating applicable to the particular \nbranch, if the branch is not rated locally.\n (i) Claims on Banks: Rupee Exposures less than 3 months\n  (WBRC 1 1.3.1.5.1.0)\n  All performing claims  on all banks (short-term) including \nLCBs and LSBs, excluding investment in equity shares and other \ninstruments eligible for capital status, denominated in LKR  \nwould be risk weighted based on their external credit assessment \nas follows:\n  The amount must agree with the sum of the following items from   \n(i) to (iv).\n  (WBRC 1 1.3.1.5.1.1 to 11.3.1.5.1.4)\nTable 7\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.5.1.1 AAA to BBB- 20%\n(ii) 11.3.1.5.1.2 BB+ to B- 50%\n(iii) 11.3.1.5.1.3 Below B- 150%\n(iv) 11.3.1.5.1.4 Unrated 100%\n (ii) Claims on Banks: Foreign Currency Exposures less than 3 \nmonths\n  (WBRC 1 1.3.1.5.2.0)\n  All performing claims  denominated in foreign currency  on \nbanks (short-term) will be risk weighted based on their external \ncredit assessment as given in the table below.\n  The amount must agree with the sum of the following items from   \n(i) to (v ).\n  (WBRC 1 1.3.1.5.2.1 to 11.3.1.5.2.5)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 36, "year": 2013}, "type": "Document"}
{"page_content": "28 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nTable 8\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.5.2.1 AAA to A- 20%\n(ii) 11.3.1.5.2.2 BBB+ to BBB- 50%\n(iii) 11.3.1.5.2.3 BB+ to B- 100%\n(iv) 11.3.1.5.2.4 Below B- 150%\n(v) 11.3.1.5.2.5 Unrated 100%\n (iii) Claims on Banks: Rupee and Foreign Currency Exposures \nmore than 3 months\n  (WBRC 1 1.3.1.5.3.0)\n  All performing claims  denominated in rupee and foreign \ncurrency on banks (more than 3 months) will be risk weighted \nbased on their external credit assessment as given in the table \nbelow.\n  The amount must agree with the sum of the following items from   \n(i) to (v ).\n  (WBRC 1 1.3.1.5.3.1 to 11.3.1.5.3.5)\nTable 9\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.5.3.1 AAA to AA- 20%\n(ii) 11.3.1.5.3.2 A+ to BBB- 50%\n(iii) 11.3.1.5.3.3 BB+ to B- 100%\n(iv) 11.3.1.5.3.4 Below B- 150%\n(v) 11.3.1.5.3.5 Unrated 100%\n6.4.3.1.6  Claims on Financial Institutions\n (WBRC 1 1.3.1.6.0.0)\n Total performing claims on non-bank financial institutions. However, \ninvestment in equity shares and other instruments eligible for capital \nstatus in the financial institutions are stated in paragraph 6.2.3 and \n6.2.4 should be excluded from here.\n (WBRC 1 1.3.1.6.1.0 + 11.3.1.6.2.0)\n (i) Claims on Primary Dealers/Finance Companies/Specialised \nLeasing Companies\n  (WBRC 1 1.3.1.6.1.0)\n  All performing claims  on following institutions.\n  Primary Dealers:  Registered under the Local Treasury Bills \nOrdinance (Primary Dealers), Regulations No.1 of 2002.\n  Finance Companies: Registered under the Finance Companies \nAct, No.78 of 1988, as amended.\n  Specialised Leasing Companies: Registered under the Finance \nLeasing Act, No.56 of 2000.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 37, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  29\n  The amount must agree with the sum of the following items from   \n(i) to (v ).\n  (WBRC 1 1.3.1.6.1.1 to 11.3.1.6.1.5)\nTable 10\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.6.1.1 AAA to AA- 20%\n(ii) 11.3.1.6.1.2 A+ to BBB- 50%\n(iii) 11.3.1.6.1.3 BB+ to B- 100%\n(iv) 11.3.1.6.1.4 Below B- 150%\n(v) 11.3.1.6.1.5 Unrated 100%\n (ii) Claims on Other Financial Institutions\n  (WBRC 1 1.3.1.6.2.0)\n  All performing claims  on other financial institutions.\n  The amount must agree with the sum of the following items from   \n(i) to (v ).\n  (WBRC 1 1.3.1.6.2.1 to 11.3.1.6.2.5)\nTable 11\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.6.2.1 AAA to AA- 20%\n(ii) 11.3.1.6.2.2 A+ to A- 50%\n(iii) 11.3.1.6.2.3 BBB+ to BB- 100%\n(iv) 11.3.1.6.2.4 Below BB- 150%\n(v) 11.3.1.6.2.5 Unrated 100%\n6.4.3.1.7  Claims on Corporates\n (WBRC 1 1.3.1.7.0.0)\n All performing claims  on corporates shall be risk weighted as per the \nratings assigned.\n Banks can, with prior approval of CBSL, exercise the option to rate all  \ncorporate customers at 100 per cent. Once decided and approved by \nCBSL the banks should apply a single consistent approach.\n The amount must agree with the sum of the following items from   \n(i) to (v ).\n (WBRC 1 1.3.1.7.1.0 to 11.3.1.7.5.0)\nTable 12\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.7.1.0 AAA to AA- 20%\n(ii) 11.3.1.7.2.0 A+ to A- 50%\n(iii) 11.3.1.7.3.0 BBB+ to BB- 100%\n(iv) 11.3.1.7.4.0 Below BB- 150%\n(v) 11.3.1.7.5.0 Unrated 100%", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 38, "year": 2013}, "type": "Document"}
{"page_content": "30 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.4.3.1.8  Retail Claims\n (WBRC 1 1.3.1.8.0.0)\n All performing retail claims include:  Retail claims that qualify for \nregulatory capital purposes and retail claims that do not qualify for \nregulatory capital purposes.\n However, the following shall be excluded from the retail portfolio:\n (a) Investments in securities such as bonds and equities (to be treated  \nas investments).\n (b) Residential housing loans secured by mortgages over the residential  \nproperty that qualify for inclusion as claims secured by residential \nproperty (refer WBRC 1.3.1.9.0.0).\n The amount must agree with the sum of the retail claims that qualify  \nfor regulatory capital purposes and retail claims that do not qualify  for \nregulatory capital purposes.\n (WBRC 1 1.3.1.8.1.0 to 11.3.1.8.2.0)\n (i) Retail claims that qualify for regulatory capital purposes\n  (WBRC 1 1.3.1.8.1.0 )\n  Performing claims  that meet the criteria given below qualify for \ninclusion in the regulatory retail portfolio. All such exposures \nqualify for a 75 per cent risk weight.\n  The qualifying criteria for the Regulatory Retail Portfolio  \n(applicable to both the retail and SME portfolios):\n (a) Orientation Criterion  \u2013 The exposure should be to an \nindividual  person or persons or to a SME.\n (b) Product Criterion \u2013 The exposure should be of one of the \nfollowing product types. Both fund based and non-fund \nbased facilities to be included:\n\u2022 Revolving credit and lines of credit including overdrafts \nand credit cards\n\u2022 Personal term loans and leases ( e.g., installment loans, \nvehicle loans and leases, student and educational loans, \npersonal finance)\n\u2022 SME facilities.\n (c) Granularity Criterion  \u2013 The regulatory retail portfolio must \nbe sufficiently diversified to a degree that reduces the risks \nin the portfolio. In order to meet this criterion,\n\u2022  No aggregate exposure without considering CRM, to", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 39, "year": 2013}, "type": "Document"}
{"page_content": "\u2022  No aggregate exposure without considering CRM, to \none counterpart  should exceed 0.2 per cent of the overall \nretail portfolio (excluding any non-performing retail/\nSME claims).\n\u2022 \u201cT o one counterpart\u201d means one or several entities that \nconstitute a single beneficiary, e.g.: in the case of a small \nbusiness affiliated to another small business, the limit \nwould apply to the bank\u2019s aggregate exposure on both \nbusinesses.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 39, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  31\n (d) Low value of Individual Exposures \u2013\n\u2022 Individual Exposures:  The maximum aggregate retail \nexposure (not taking any CRM into account) to one \ncounterpart cannot exceed:\n\u2013  the lower of 0.4 per cent of capital base  (as included \nin the computation as at the reporting date) or Rs.10 \nmillion  at the time of first granting.\n\u2013 This criterion will be applicable for a period of 3 years  \nfrom adoption.\n\u2013 From 01.01.201 1, the criterion would be the lower of \n0.2 per cent or Rs.10 million.\n\u2022 SME Exposures:\n\u2013  The maximum exposure in the case of SME loans \nwould be Rs.35 million at the time of first granting.\n\u2013 In order to qualify as an SME, the firm\u2019s annual \nturnover should not be more than Rs.140 million.\n\u2013 The annual turnover should be based on the latest  \navailable audited financial statements at the time of \ngranting the facilities.\n\u2013 If audited financial statements are not available, the  \ndraft accounts may be used. However, the audited \nfinancial statements should be obtained during the \nyear.\n\u2013 The quali fying criteria is given above should be \nreviewed in respect of each financial year.\n (ii) Retail claims that do not qualify for regulatory capital purposes\n  (WBRC 1 1.3.1.8.2.0 )\n  Cl aims that not qualify for inclusion in the regulatory retail \nportfolio:\n  Performing claims  that do not meet  the criteria given above do not \nqualify for inclusion in the regulatory retail portfolio. All such \nexposures qualify for a 100 per cent risk weight.\n6.4.3.1.9  Claims Secur ed by Residential Property\n (WBRC 1 1.3.1.9.0.0)\n All performing  claims secured by residential property  include:  \nClaims that qualify for regulatory capital purposes and claims that do \nnot qualify for regulatory capital purposes.\n However , the exposures secured by mortgages on commercial real \nestates shall be excluded from here.\n The amount must agree with the sum of the claims secured by", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 40, "year": 2013}, "type": "Document"}
{"page_content": "estates shall be excluded from here.\n The amount must agree with the sum of the claims secured by \nresidential property  that qualify  for regulatory capital purposes \nand claims secured by residential property  that do not qualify  for \nregulatory capital purposes.\n (WBRC 1 1.3.1.9.1.0 to 11.3.1.9.2.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 40, "year": 2013}, "type": "Document"}
{"page_content": "32 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (i) Claims that qualify for regulatory capital purposes\n  (WBRC 1 1.3.1.9.1.0)\n (a) Subject to conditions below, residential housing loans fully \nsecured by a primary mortgage  over such residential \nproperty that is or will be occupied by the borrower, or \nrented, qualify for a risk weight of 50 per cent .\n  The claims should strictly meet the following qualifying  \ncriteria to be able to use the preferential risk weight\n\u2013 A  margin of at least 25 per cent on the value of the \nproperty based on the latest valuation report\n\u2013 Valuation of property:  valuation of property is carried \nout by an external independent valuer or current internal \nassessment of the value of the properties subject to the \nconditions stated in the Directions on Classification of \nAdvances and Specific Provisions issued under Banking \nAct.\n (b) Mortgages other than primary mortgages  will qualify for the \nsame risk weight, subject to the above conditions, if:\n\u2013 The mortgage is with the same bank\n\u2013 The purpose of the loan is for residential purposes.\n (ii) Claims that do not qualify for regulatory capital purposes\n  (WBRC 1 1.3.1.9.2.0)\n  Performing claims  that do not meet  the criteria given above do not \nqualify for inclusion in the regulatory residential portfolio. All \nsuch exposures qualify for a 100 per cent risk weight.\n6.4.3.1.10  Claims Secur ed by Commercial Real Estate\n (WBRC 1 1.3.1.10.0.0)\n Commercial real estate exposure is defined as exposures secured by  \nmortgages on commercial real estate  (office buildings, multi-purpose \nor multi-tenanted commercial premises, multi-family residential \nbuildings, industrial or warehouse space, hotels, land acquisition, land \ndevelopment and construction).\n Commercial real estate exposures, as defined above will attract a risk \nweight of 100 per cent.\n6.4.3.1.11  Non-Performing Assets (NPAs)\n (WBRC 1 1.3.1.11.0.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 41, "year": 2013}, "type": "Document"}
{"page_content": "weight of 100 per cent.\n6.4.3.1.11  Non-Performing Assets (NPAs)\n (WBRC 1 1.3.1.11.0.0)\n The unsecured portion of NPAs , other than a qualifying residential \nmortgage loan which is addressed in item 6.4.2.1.12, net of specific \nprovision will be risk weighted as items ( i) and (ii) below.\n For the purpose of computing the level of specific provisions of \nNPAs for deciding the risk-weighting, all funded NPA exposures of a \nsingle counterparty (without netting the value of the eligible collateral \nunder CRM) should be reckoned in the denominator.\n For the purpose of defining the secured portion of the NPA, eligible \ncollateral will be the same as recognised for credit risk mitigation \npurposes. Hence, other forms of collateral like land, buildings, plant,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 41, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  33\nmachinery, current assets, etc., will not be reckoned while computing \nthe secured portion of NPAs for capital adequacy purposes.\n The amount must agree with the sum of the following items ( i) and (ii).\n (WBRC 1 1.3.1.11.1.0 + 11.3.1.11.2.0)\n (i) Specific provisions are equal or more than 20 per cent\n  (WBRC 1 1.3.1.11.1.0)\n  100 per cent risk weight  when specific provisions are equal or \nmore than 20 per cent of the outstanding amount of the NPA.\n (ii) Specific provisions are less than 20 per cent\n  (WBRC 1 1.3.1.11.2.0 )\n  150 per cent risk weight  when specific provisions are less than 20 \nper cent of the outstanding amount of the NPA.\n6.4.3.1.12  Non-Performing Assets Secured by Residential property\n (WBRC 1 1.3.1.12.0.0)\n The unsecured of portion NPAs  (without netting the value of property \nmortgage), net of specific provision will be risk weighted as items ( i)  \nand (ii):\n For the purpose of computing the level of specific provisions in \nNPAs for deciding the risk-weighting, all funded NPA exposures of a \nsingle counterparty (without netting the value of property mortgage) \nshould be reckoned in the denominator.\n The amount must agree with the sum of the following items ( i) and (ii).\n (WBRC 1 1.3.1.12.1.0 + 11.3.1.12.2.0)\n (i) Specific provisions are equal or more than 20 per cent\n  (WBRC 1 1.3.1.12.1.0)\n  50 per cent risk weight  when specific provisions are equal or more \nthan 20 per cent of the outstanding amount of the NPA.\n (ii) Specific provisions are less than 20 per cent\n  (WBRC 1 1.3.1.12.2.0 )\n  100 per cent risk weight  when specific provisions are less than 20 \nper cent of the outstanding amount of the NPA.\n6.4.3.1.13  Higher -Risk Categories\n (WBRC 1 1.3.1.13.0.0)\n Exposures to the following segments, which are considered as high-\nrisk exposures, will attract a higher risk weight of 150 per cent:\n (i) V enture capital funds/companies", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 42, "year": 2013}, "type": "Document"}
{"page_content": "(i) V enture capital funds/companies\n (ii) Private equity investments\n6.4.3.1.14  Cash Items and Other  Assets\n (WBRC 1 1.3.1.14.0.0)\n The amount must agree with the sum of cash items ( i) and Other Assets \n(ii)\n (WBRC 1 1.3.1.14.1.0 to 11.3.1.14.2.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 42, "year": 2013}, "type": "Document"}
{"page_content": "34 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (i) Cash Items\n  (WBRC 1 1.3.1.14.1.0)\n  T otal of cash items from (a) to (c)\n (a) Notes and Coins\n   (WBRC 1 1.3.1.14.1.1)\n  Local currency notes and coins held by tellers, in ATMs, in vault  \nand petty cash.\n  Risk weight is 0 per cent\n (b) Gold and Bullion held in own vault\n   (WBRC 1 1.3.1.14.1.2)\n  Gold and bullion held in the bank\u2019s vaults. Gold items held in \nsafe custody should be excluded.\n  Risk weight is 0 per cent\n (c) Cash Items in the pr ocess of Collection\n  (WBRC 1 1.3.1.14.1.3)\n  Cheques, drafts and other cash items, such as money  \norders, postal orders drawn on banks and other authorized \ninstitutions and paid immediately on presentation. Trade \nbills, such as import bills and export bills, in the process of \ncollection should be excluded from this item and considered \nas loans and advances.\n  Risk weight is 20 per cent.\n (ii) Other  Assets\n  (WBRC 1 1.3.1.14.2.0)\n  T otal of items ( a) and (b ) below.\n (a) Fixed Assets\n  (WBRC 1 1.3.1.14.2.1)\n  The item includes bank premises, immovable property , \nmachinery and equipment, motor vehicles, furniture and \nfittings and other fixed assets, reported at cost or at revalued \namount, net of accumulated depreciation will attract a risk \nweight of 100 per cent.\n (b) Other  Assets/Exposures\n  (WBRC 1 1.3.1.14.2.2)\n  All other assets/exposures which are not specified elsewhere  \nwill attract a uniform risk weight of 100 per cent.\n6.5 Part III ( b) \u2013 Computation of Credit Equivalent Amount of Off-Balance Sheet Items\n6.5.1  General Instructions\n6.5.1.1  The risk-weighted amount of an of f-balance sheet item that gives rise to credit \nexposure is generally calculated by means of a two-step process:\n6.5.1.1.1  The notional amount of the transaction is converted into a credit  \nequivalent amount, by multiplying the amount by the specified credit \nconversion factor or by applying the current exposure method, and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 43, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  35\n6.5.1.1.2  The resulting credit equivalent amount is multiplied by the risk weight  \napplicable to the counterpart or type of asset.\n6.5.1.2  Where the of f-balance sheet item is secured by eligible collateral or guarantee, \nthe CRM guidelines detailed in paragraph 6.6 may be applied.\n6.5.2  The cr edit conversion factors to be used will be as follows:\n6.5.2.1  Off-Balance Sheet Items:\n (WBRC 1 1.3.2.0.0.0)\n The exposure on of f-balance sheet items is to be included in the computation \nof the risk weighted capital ratio. The conversion of the credit risk inherent in \neach off-balance sheet item would be converted into an on-balance sheet credit \nequivalent by multiplying the principal amount by a credit conversion factor. The \ncredit equivalent amount would then be weighted according to the corresponding \nasset item.\n The amount must agree with the sum of the principal amount of of f-balance \nsheet items and credit equivalent of off-balance sheet items from 6.5.2.1.1 to \n6.5.2.1.10.\n (WBRC 1 1.3.2.1.0.0 to11.3.2.10.0.0)\n6.5.2.1.1  Direct Credit Substitutes\n (WBRC 1 1.3.2.1.0.0)\n T otal direct credit substitutes of the following items from ( i) to (iv).\n Conversion Factor 100 per cent\n (WBRC 1 1.3.2.1.1.0 to 11.3.2.1.4.0)\n (i) General Guarantees of Indebtedness\n  (WBRC 1 1.3.2.1.1.0)\n  General guarantees of indebtedness where the risk of loss in the  \ntransaction may crystallise into a direct liability and become a \ndirect claim on the counterparty. These include Guarantees in \nrespect of counterparties like insurance agents, sales agents, \netc.,  to cover any non-payment by them of premium, sales \nproceeds, etc. to their beneficiaries. Bank Guarantees in favor \nof customs would cover any non-payment of customs duties by \ntheir counterparties.\n (ii) Stand-by LCs serving as Financial Guarantees\n  (WBRC 1 1.3.2.1.2.0)\n  Stand-by Letters of Credit, which are direct, credit substitutes", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 44, "year": 2013}, "type": "Document"}
{"page_content": "(WBRC 1 1.3.2.1.2.0)\n  Stand-by Letters of Credit, which are direct, credit substitutes  \nwhere the risk of loss in the transaction is equivalent to that of a \ndirect claim on the counterparty. This includes stand-by Letters \nof Credit serving as financial guarantees for loans, securities \nand other financial liabilities.\n (iii) Bank Acceptances\n  (WBRC 1 1.3.2.1.3.0)\n  Liabilities arising from acceptances on accommodation of bills  \nbut excludes bills that have been discounted by the bank itself. \nRisk participation and other similar commitments undertaken to \nrepay the financial obligation of a customer, on his failure to do \nso, should be included.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 44, "year": 2013}, "type": "Document"}
{"page_content": "36 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (iv) Others\n  (WBRC 1 1.3.2.1.4.0)\n  Any other obligation which carries the same risk of loss in the  \ntransaction and is equivalent to that of a direct claim on the \ncounterparty.\n6.5.2.1.2  T ransaction-Related Contingencies\n (WBRC 11.3.2.2.0.0)\n Total transaction-related contingencies of following items from ( i) to \n(iii).\n Conversion Factor 50 per cent\n (WBRC 11.3.2.2.1.0 to 11.3.2.2.3.0)\n (i) Performance Bonds, Bid Bonds & Warranties\n  (WBRC 1 1.3.2.2.1.0)\n  T ransaction-related contingent items such as Performance \nBonds, Bid Bonds and Warranties, where the risk of loss \narises from an irrevocable obligation to pay a third party, \nthe non-financial obligation of the customer upon his failure \nto fulfill obligations under a contract or a transaction. Such \ncontingencies would crystallise into actual liabilities dependent \nupon the occurrence or non-occurrence of an event other than \nthat of a default in payment by the counterparty.\n (ii) Stand-by LCs r elated to particular transactions\n  (WBRC 1 1.3.2.2.2.0)\n  Cont ingent liabilities relating to particular transactions. Here \ntoo, there is a likelihood of the contingencies crystallizing \ninto actual liabilities depending upon the occurrence or non-\noccurrence of an event other than that of a default in payment \nby a counterparty.\n (iii) Others\n  (WBRC 1 1.3.2.2.3.0)\n  Other contingent liabilities arising from an irrevocable obligation  \nto pay a third party, the non-financial obligation of a customer \nupon his failure to fulfill such obligation or terms under contract \nor transaction.\n6.5.2.1.3  Short-T erm Self Liquidating Trade-Related Contingencies\n (WBRC 1 1.3.2.3.0.0)\n T otal short-term self liquidating trade-related contingencies of \nfollowing items from ( i) to (iv).\n Conversion Factor 20 per cent\n (WBRC 1 1.3.2.3.1.0 to 11.3.2.3.4.0)\n (i) Shipping Guarantees\n  (WBRC 1 1.3.2.3.1.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 45, "year": 2013}, "type": "Document"}
{"page_content": "(WBRC 1 1.3.2.3.1.0 to 11.3.2.3.4.0)\n (i) Shipping Guarantees\n  (WBRC 1 1.3.2.3.1.0)\n  Guarantees issued by the reporting institution to customers where  \nthe reporting institution agrees to indemnify fully, to a named", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 45, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  37\nshipping agent, against all liabilities arising from the release \nof goods without production of Bills of Lading and/or other \nshipping documents by the receiving party.\n (ii) Documentary Letters of Cr edit\n  (WBRC 1 1.3.2.3.2.0)\n  Documentary credits collateralised by the underlying shipments  \nwhich are short-term self-liquidating and trade-related \ntransactions.\n (iii) T rade-Related Acceptances\n  (WBRC 1 1.3.2.3.3.0)\n  Liabilities arising from acceptances that are based on a specific  \ntrade transaction either domestic or foreign e.g.: Letters of \nCredit.\n (iv) Others\n  (WBRC 1 1.3.2.3.4.0)\n  Contingent liabilities arising from short-term self-liquidating  \ntrade related obligations.\n6.5.2.1.4  Sale and Repur chase agreements and Assets sale with recourse \nwhere the credit risk remains with the bank\n (WBRC 1 1.3.2.4.0.0)\n T otal of following items from ( i) to (vi).\n Conversion Factor 100 per cent\n (WBRC 1 1.3.2.4.1.0 to 11.3.2.4.6.0)\n () Sale and Repur chase Agreements\n  (WBRC 1 1.3.2.4.1.0)\n  Sale and Repurchase Agreement (REPO) is an agreement whereby \na bank sells an asset to a third party with a commitment to \nrepurchase it at an agreed price on an agreed future date. \nPurchase and Resale Agreements (Reverse REPOS) should be \nconsidered as collateralised loans. The risk is to be measured as \nan exposure to the counterparty unless the underlying asset has \nbeen reported as an on-balance sheet item where the risk weight \nappropriate to the underlying asset should be used.\n (ii) Housing Loans Sold with Recourse\n  (WBRC 1 1.3.2.4.2.0)\n  The amount of housing loans sold to a counterparty with  \nrecourse where the credit risk remains with the Bank.\n (iii) Other  Assets Sold with Recourse\n  (WBRC 1 1.3.2.4.3.0)\n  Assets sold with recourse where the credit risk remains with the  \nreporting institution. The holder of the asset is entitled to put the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 46, "year": 2013}, "type": "Document"}
{"page_content": "reporting institution. The holder of the asset is entitled to put the \nassets back to the reporting institution within an agreed period \nor under certain prescribed circumstances \u2013 e.g.: deterioration \nin the value or credit quality of the asset concerned.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 46, "year": 2013}, "type": "Document"}
{"page_content": "38 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (iv) Forward Assets Purchases\n  (WBRC 1 1.3.2.4.4.0 )\n  Commitment to purchase, at a specified future date and/or on  \npre-arranged terms, a loan, security or other asset from another \nparty.\n (v) Partly-Paid Shar es/Securities\n  (WBRC 1 1.3.2.4.5.0)\n  Unpaid amounts on partly-paid shares and securities where the \nissuer may call upon the bank to pay at a pre-determined or \nunspecified date in the future.\n (vi) Others\n  (WBRC 1 1.3.2.4.6.0)\n  Pl acements of forward deposits and other commitments with \ncertain drawdown. A forward deposit is an agreement between \ntwo parties whereby one will place and the other will receive, \nat a pre-determined future date, a deposit, at an agreed rate of \ninterest. A commitment to place a forward deposit should be \nreported under this item and weighted according to the risk-\nweight appropriate to the counterparty.\n6.5.2.1.5  Obligations under  an On-going Underwriting Agreement\n (WBRC 1 1.3.2.5.0.0)\n T otal of following items from ( i) to (iii ).\n Conversion Factor 50 per cent\n (WBRC 1 1.3.2.5.1.0 to 11.3.2.5.3.0)\n (i) Underwriting of Shar es/Securities Issue\n  (WBRC 1 1.3.2.5.1.0)\n  Obligations due to underwriting of shares and securities, net of  \nthe amount sub-underwritten by another institution.\n (ii) No te Issuance Facilities and Revolving Underwriting Facilities\n  (WBRC 1 1.3.2.5.2.0)\n  Arrangements where a borrower may draw funds up to a  \nprescribed limit over a pre-defined period through the issue of \nnotes which the reporting bank has committed to underwrite.\n (iii) Others\n  (WBRC 1 1.3.2.5.3.0)\n  Other obligations due to on-going underwriting agreements.\n6.5.2.1.6  Commitments with an Original maturity of up to one year  or \nwhich can be unconditionally cancelled at any time\n (WBRC 1 1.3.2.6.0.0)\n T otal of following items from ( i) to (iv).\n Conversion Factor 0 per cent\n (WBRC 1 1.3.2.6.1.0 to 11.3.2.6.4.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 47, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  39\n (i) Formal Stand-by Facilities and Cr edit Lines\n  (WBRC 1 1.3.2.6.1.0)\n  Commitments include the undrawn portion of any binding  \narrangements which obligate the reporting institution to provide \nfunds at some future date. Such commitments would have \nan original maturity of less than one year or which can be \nunconditionally cancelled at any time by the reporting bank \nat its discretion. Formal stand-by facilities and credit lines for \nLetters of Credit, Trust Receipts, etc; should be included under \nthe item.\n (ii) Undrawn T erm Loans\n  (WBRC 1 1.3.2.6.2.0)\n  Undrawn portion of a term loans with an original maturity of less \nthan one year or which can be unconditionally cancelled  at any \ntime by the reporting bank.\n (iii) Undrawn Overdraft Facilities/Unused Cr edit Card Lines\n  (WBRC 1 1.3.2.6.3.0)\n  The undrawn portion of overdraft facilities and credit card lines  \nwith an original maturity of less than one year or which can be \nunconditionally cancelled at any time by the reporting bank.\n (iv) Others\n  (WBRC 1 1.3.2.6.4.0)\n  Any other commitment with an original maturity up to one year  \nor which can be unconditionally cancelled at any time.\n6.5.2.1.7  Other  Commitments with an Original maturity of up to one year\n (WBRC 1 1.3.2.7.0.0)\n T otal of following items from ( i) to (iii ).\n Conversion Factor 20 per cent\n (WBRC 1 1.3.2.7.1.0 to 11.3.2.7.3.0)\n (i) Formal Stand-by Facilities and Cr edit Lines\n  (WBRC 1 1.3.2.7.1.0)\n  The commitments under formal standby facilities and credit  \nlines with an original maturity is up to one year.\n (ii) Undrawn T erm Loans\n  (WBRC 1 1.3.2.7.2.0)\n  The undrawn portion of term loans where the original maturity  \nis up to one year.\n (iii) Others\n  (WBRC 1 1.3.2.7.3.0)\n  Any other commitment with an original maturity up to one year .\n6.5.2.1.8  Other  Commitments with an Original maturity of over one year\n (WBRC 1 1.3.2.8.0.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 48, "year": 2013}, "type": "Document"}
{"page_content": "6.5.2.1.8  Other  Commitments with an Original maturity of over one year\n (WBRC 1 1.3.2.8.0.0)\n T otal of following items from ( i) to (iii ).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 48, "year": 2013}, "type": "Document"}
{"page_content": "40 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n Conversion Factor 50 per cent\n (WBRC 1 1.3.2.8.1.0 to 11.3.2.8.3.0)\n (i) Formal Stand-by Facilities and Cr edit Lines\n  (WBRC 1 1.3.2.8.1.0)\n  The commitments under formal standby facilities and credit  \nlines with an original maturity is over one year.\n (ii) Undrawn T erm Loans\n  (WBRC 1 1.3.2.8.2.0)\n  The undrawn portion of term loans where the original maturity  \nis over one year.\n (iii) Others\n  (WBRC 1 1.3.2.8.3. 0)\n  Any other commitme nt with an original maturity over one year.\n6.5.2.1.9  Exchange Rate Contracts\n (WBRC 1 1.3.2.9.0.0)\n Exchange rate contracts shall include the following items ( a to e), but \nexclude exchange rate contracts which have an original maturity of 14 \ncalendar days or less.\n (a) Forward foreign exchange contracts\n (b) Currency futures\n (c) Currency options purchased\n (d) Cross currency FX swaps\n (e) Other similar instruments\nTo arrive at the credit equivalent amounts of exchange rate contracts, \napplying the original exposure method, a bank will have to apply one \nof the conversion factors as given in the table below to the notional \nprincipal amounts of each instrument according to the nature of the \ninstrument and its maturity.\nTable 13\nItem WBRC Original Maturity Conversion \nFactor\n(i) 11.3.2.9.1.0 Less than one year 2%\n(ii) 11.3.2.9.2.0 One year and less than two years 5%\n(iii) 11.3.2.9.3.0 For each additional year 3%\n6.5.2.1.10  Inter est Rat e Contracts\n (WBRC 1 1.3.2.10.0.0 )\n Interest rate contracts shall include,\n (a) Single currency interest rate swaps\n (b) Basis swaps\n (c) Forward rate agreements\n (d) Interest rate futures\n (e) Interest rate options purchased, and\n (f) Other sim ilar instruments", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 49, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  41\nTo arrive at the credit equivalent amounts of interest rate contracts, \napplying the original exposure method, a bank will have to apply one \nof the conversion factors as given in the table below to the notional \nprincipal amounts of each instrument according to the nature of the \ninstrument and its maturity.\nTable 14\nItem WBRC Original Maturity Conversion \nFactor\n(i) 11.3.2.10.1.0 Less than one year 0.5%\n(ii) 11.3.2.10.2.0 One year and less than two years 1.0%\n(iii) 11.3.2.10.3.0 For each additional year 1.0%\nNote: In the case of foreign exchange and interest rate contracts \nabove, the netting of contracts subject to novation would be permitted. \nTherefore, the net rather than the gross claims arising out of swaps \nand similar contracts (subject to novation) with the same counterparts \nwill be weighted. In this context, novation is defined as a bilateral \ncontract between two counterparties under which any obligation to \neach other to deliver a given currency on a given date is automatically \namalgamated with all other obligations for the same currency and \nvalue date, legally substituting one single net amount for the previous \ngross obligations.\n6.6 Part III ( c) \u2013 Exposures Recognized under Credit Risk Mitigation (CRM)\n6.6.1  Overview of CRM\n6.6.1.1  Banks use a number of techniques to mitigate the credit risks to which they are  \nexposed. For example, exposures may be collateralised by first priority claims, in \nwhole or in part with cash or securities, a loan exposure may be guaranteed by a \nthird party, or a bank may buy a credit derivative to offset various forms of credit \nrisk. Additionally, banks may agree to net loans owed to them against deposits \nfrom the same counterpart.\n6.6.1.2  The revised approach to credit risk mitigation allows a wider range of credit risk  \nmitigants to be recognised for regulatory capital purposes than is permitted under", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 50, "year": 2013}, "type": "Document"}
{"page_content": "mitigants to be recognised for regulatory capital purposes than is permitted under \nBasel I, provided that these techniques meet the minimum conditions described \nbelow.\n6.6.1.3  While the use of CRM techniques reduces or transfers credit risk, it simultaneously \nmay increase other risks (residual risks). Residual risks include legal, operational, \nliquidity and market risks. Therefore, it is imperative that banks employ robust \nprocedures and processes to control these risks, including strategy, consideration \nof the underlying credit, valuation, policies and procedures, systems, control of \nroll-off risks and management of concentration risk arising from the bank\u2019s use \nof CRM techniques and its interaction with the bank\u2019s overall credit risk profile.\n6.6.1.4  Legal Certainty:  All documentation used in collateralised transactions and \nguarantees must be binding on all parties and legally enforceable in all relevant \njurisdictions. Banks must have conducted sufficient legal review, which should \nbe well documented, to verify this. Such verification should have a well founded \nlegal basis for reaching the conclusion about the binding nature and enforceability \nof the documents. Banks should also undertake such further review as necessary \nto ensure continuing enforceability.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 50, "year": 2013}, "type": "Document"}
{"page_content": "42 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.6.1.5  T reatment of Pools of CRM Techniques:  In case where a bank has multiple \nCRM techniques covering a single exposure ( e.g.: a bank has both collateral and \nguarantee partially covering an exposure), the bank will be required to subdivide \nthe exposure into portions covered by each type of CRM technique ( e.g.: portion \ncovered by collateral, portion covered by guarantee) and the risk-weighted assets \nof each portion must be calculated separately. When credit protection provided \nby a single protection provider has differing maturities, they must be subdivided \ninto separate protection as well.\n6.6.2  CRM T echniques\n6.6.2.1  Collateralised T ransactions: A collateralised transaction is one in which:\n\u2022 banks have a credit exposure or potential credit exposure; and\n\u2022 t hat credit exposure or potential credit exposure is hedged in whole or in \npart by collateral posted by a counterpart or by a third party on behalf of the \ncounterpart.\n6.6.2.1.1  The Simple Approach will be Followed in Computing the Effects \nof CRM\n (i) In the simple approach, the portions of claims collateralised by  \nthe market value of recognised collateral receive the risk weight \napplicable to the collateral instrument. The risk weight on the \ncollateralised portion will be subject to a floor of 20 per cent. \nThe remainder of the claim should be assigned to the risk weight \nappropriate to the counterparty.\n (ii) Mi smatches in the maturity of the underlying exposure and \ncollateral will not be allowed, i.e., the collateral must be pledged \nfor at least the life of the exposure.\n6.6.2.1.2  Risk W eights\n (i) The  20 per cent floor for the risk weight on a collateralised \ntransaction will not be applied and 0 per cent risk weight can be \napplied provided the exposure and the collateral are denominated \nin the same currency, and either:\n (a) the collateral is cash on deposit and gold or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 51, "year": 2013}, "type": "Document"}
{"page_content": "in the same currency, and either:\n (a) the collateral is cash on deposit and gold or\n (b) the collateral is in the form of Government securities or\n (c) the collateral is in the form provident fund balances.\n6.6.2.1.3  Minimum Conditions\n (i) Legal Certainty: as described in paragraph 6.6.1.4\n (ii) Ability to Liquidate: The bank should have the right to liquidate \nor take legal possession of it, in a timely manner, in the event of \nthe default, insolvency or bankruptcy (or one or more otherwise-\ndefined credit events set out in the transaction documentation) of \nthe counterparty (and, where applicable, of the custodian holding \nthe collateral). Furthermore banks must take all steps necessary \nto fulfill those requirements under the law applicable to the \nbank\u2019s interest in the collateral for obtaining and maintaining an \nenforceable security interest.\n (iii) Material Correlation: In order for collateral to provide \nprotection, the credit quality of the counterparty and the value of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 51, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  43\nthe collateral must not have a material positive correlation. For \nexample, securities issued by the counter party or by any related \ngroup entity - would provide little protection and so would be \nineligible.\n (iv) Recovery Procedures:  Banks must have clear and robust \nprocedures for the timely liquidation of collateral to ensure that \nany legal conditions required for declaring the default of the \ncounter party and liquidating the collateral are observed, and that \ncollateral can be liquidated promptly. Where the collateral is held \nby a custodian, banks must take reasonable steps to ensure that \nthe custodian segregates the collateral from its own assets.\n6.6.2.1.4  Eligible Financial Collateral\n The following collateral instruments are eligible for recognition in the  \nsimple approach:\n (i) Cash (as well as certificates of deposit or comparable instruments, \nincluding fixed deposit receipts, issued by the lending bank) \non deposit with the bank, which is incurring the counterparty \nexposure.\n (ii) Gold: Gold would include both bullion and jewellery .\n (iii) GOSL  securities\n (iv) Provident fund balances\n (v) Debt securities rated by a recognized ECAI where these are either\n\u2013 At least BB- when issued by sovereigns or PSEs that have been \nrecognized, or\n\u2013 At least BBB- when issued by other entities (including banks),  \nor\n\u2013 At least A-3//P-3 for short-term debt instruments.\n (vi) Debt securities not rated by a ECAI where these are:\n\u2013 Issued by a bank; and\n\u2013 Listed on a recognized exchange, and\n\u2013 Classified as senior debt\n\u2013 Other securities, specified by the Central Bank.\n (vii) Equities  those are included in the Milanka index, subject to a \ndiscount of 25 per cent on the market value.\n6.6.2.2  On-Balance Sheet Netting - Where a bank,\n6.6.2.2.1  has a w ell-founded legal basis for concluding that the netting or \noffsetting agreement is enforceable in each relevant jurisdiction", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 52, "year": 2013}, "type": "Document"}
{"page_content": "offsetting agreement is enforceable in each relevant jurisdiction \nregardless of whether the counterpart is insolvent or bankrupt;\n6.6.2.2.2  is able at any time to determine those assets (loans) and liabilities  \n(deposits) with the same counterpart that are subject to the netting \nagreement;\n6.6.2.2.3  monitors and controls its roll-of f risks; and\n6.6.2.2.4  monitors and controls the relevant exposures on a net basis", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 52, "year": 2013}, "type": "Document"}
{"page_content": "44 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.6.2.2.5  it may use the net exposure of loans and deposits as the basis for its \ncapital adequacy computation.\n6.6.2.3  Guarantees\n6.6.2.3.1  Guaranteed Transactions:  Where guarantees are direct, explicit, \nirrevocable and unconditional, banks may take account of such credit \nprotection in calculating capital requirements.\n6.6.2.3.2  Minimum Conditions\n (i) A  guarantee (or counter-guarantee) must represent a direct claim \non the protection provider and must be explicitly referenced to \nspecific exposures or a pool of exposures, so that the extent of \nthe cover is clearly defined and incontrovertible.\n (ii) Other than non-payment by a protection purchaser of money due  \nin respect of the credit protection contract it must be irrevocable; \nthere must be no clause in the contract that would increase the \neffective cost of cover as a result of deteriorating credit quality \nin the hedged exposure.\n (iii) It must also be unconditional; there should be no clause in the  \nprotection contract outside the control of the bank that could \nprevent the protection provider from being obliged to pay out in \na timely manner in the event that the original counterpart fails \nto make the payment(s) due.\n (iv) In addition to the legal certainty requirements above, the following  \nconditions must also be satisfied:\n\u2013 On the qualifying default or non-payment of the counterpart,  \nthe bank may in a timely manner pursue the guarantor for any \nmonies outstanding under the documentation governing the \ntransaction. The guarantor may make one lump sum payment \nof all monies under such documentation to the bank, or the \nguarantor may assume the future payment obligations of the \ncounterpart covered by the guarantee. The bank must have \nthe right to receive any such payments from the guarantor \nwithout first having to take legal actions in order to pursue \nthe counterpart for payment.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 53, "year": 2013}, "type": "Document"}
{"page_content": "without first having to take legal actions in order to pursue \nthe counterpart for payment.\n\u2013 The guarantee is an explicitly documented obligation assumed  \nby the guarantor.\n\u2013 E xcept as noted in the following sentence, the guarantee \ncovers all types of payments the underlying obligor is \nexpected to make under the documentation governing the \ntransaction, for example notional amount, margin payments, \netc.\n\u2013 Where a guarantee covers payment of principal only , interests \nand other uncovered payments should be treated as an \nunsecured amount.\n6.6.2.3.3  Eligible Guarantors (counter -guarantors):  Credit protection given \nby the following entities will be recognised: sovereign entities, PSEs \nand other entities with a risk weight of 20 per cent or better and a lower \nrisk weight than the counterpart.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 53, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  45\n6.6.2.3.4  Risk W eights\n The protected portion is assigned the risk weight of the protection \nprovider. The uncovered portion of the exposure is assigned the risk \nweight of the underlying counterpart.\n (i) A  zero risk weight will be applied to that portion of loans \nguaranteed by GOSL and CBSL.\n (ii) The portion of exposures guaranteed by the Sri Lanka Export  \nCredit Insurance Corporation (SLECIC) will receive a 50 per \ncent risk weight.\n6.6.3  Specific Instructions for  completion Part III ( c)\n6.6.3.1  T otal CRM Exposure\n (WBRC 1 1.3.3.0.0.0)\n Total exposure of collateralised transactions and other CRM techniques. \nAll exposures should be reported net of specific provisions and interest \nin suspense that has been charged to the respective counterparty \naccount. Exposures which are reported in this part under CRM \nshould not be reported in the other parts of the capital adequacy return.  \nThe amount is automatically shown on web-based return.\n The amount must agree with the sum of items 6.6.3.1.1 and 6.6.3.1.2.\n (WBRC 1 1.3.3.1.0.0 + 11.3.3.2.0.0)\n6.6.3.1.1  Collateralised T ransactions\n (WBRC 1 1.3.3.1.0.0)\n The sum of collateralised retail exposures and collateralised other  \nexposures. The amount must agree to sum of items ( i) and (ii). The \namount is automatically shown on web-based return.\n (WBRC 1 1.3.3.1.1.0 + 11.3.3.1.2.0)\n (i) Retail Exposur es\n  (WBRC 1 1.3.3.1.1.0)\n  T he total amount of retail exposures against the collateral \ninstruments which are eligible for recognition in the simple \napproach as specified in paragraph 6.6.2.1.4. The amount is \nautomatically shown on web-based return.\n  (WBRC 1 1.3.3.1.1.1 to 11.3.3.1.1.7)\n (ii) Other  Exposures\n  (WBRC 1 1.3.3.1.2.0)\n  T he total amount of other exposures against the collateral \ninstruments which are eligible for recognition in the simple \napproach as specified in paragraph 6.6.2.1.4. The amount is", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 54, "year": 2013}, "type": "Document"}
{"page_content": "approach as specified in paragraph 6.6.2.1.4. The amount is \nautomatically shown on web-based return.\n  (WBRC 1 1.3.3.1.2.1 to 11.3.3.1.2.7)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 54, "year": 2013}, "type": "Document"}
{"page_content": "46 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.6.3.1.2  Other  CRM Techniques\n (WBRC 1 1.3.3.2.0.0)\n The total amount of exposures against the other CRM techniques (other \nthan collateralized transactions). The amount is automatically shown on  \nweb-based return.\n (WBRC 1 1.3.3.2.1.0 + 11.3.3.2.2.0)\n (i) On-Balance Sheet Netting\n  (WBRC 1 1.3.3.2.1.0)\n  The total amount of exposures against the on-balance sheet  \nnetting should be reported in line with the instructions given in \nthe items under paragraph 6.6.2.2 above.\n (ii) Guarantees\n  (WBRC 1 1.3.3.2.2.0)\n  The total amount of exposures against the guarantees should be  \nreported in line with the instructions given in the items under \nparagraph 6.6.2.3 above.\n6.7 Part IV  \u2013 Computation of Risk-weighted Amount for Market Risk\n6.7.1  Capital Charge for Market Risk  - Market risk is defined as the risk of losses in on-\nbalance sheet and off balance sheet positions arising from movements in market prices. \nThe market risk subject to the capital charge requirements are:\n6.7.1.1  The risks pertaining to interest rate related instruments  in the trading book.\n6.7.1.2  The risks pertaining to equities in the trading book.\n6.7.1.3  T he risks pertaining to foreign exchange position  (including gold positions) \nthroughout the bank.\n6.7.2  Scope and Coverage of Capital Charge for  Market Risks\n6.7.2.1  This involves computing capital char ges for interest rate related instruments \nin the trading book, equities in the trading book and foreign exchange risk \n(including gold positions) throughout the bank. For the purpose of this section, \nthe trading book and foreign exchange position will include the following:\n6.7.2.1.1  Securities classified in the \u2018Trading Account\u2019 in terms of the direction \non Prudential Norms for Classification, Valuation and Operation of the \nBank\u2019s Investment Portfolio issued by the CBSL dated 01 March 2006.\n6.7.2.1.2  Open gold positions", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 55, "year": 2013}, "type": "Document"}
{"page_content": "Bank\u2019s Investment Portfolio issued by the CBSL dated 01 March 2006.\n6.7.2.1.2  Open gold positions\n6.7.2.1.3  Open foreign exchange positions.\n6.7.3  Measur ement of Capital Charge for Interest Rate Risk\n6.7.3.1  This section describes the framework for measuring the risk of holding or taking  \npositions in debt securities and other interest rate related instruments denominated in  \nSri Lanka Rupees as well as foreign currencies  in the trading book.\n6.7.3.2  The capital char ge for interest rate related instruments would apply to the \ncurrent market value  of these items in the bank\u2019s trading book. Since banks", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 55, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  47\nare required to maintain capital for market risk on an ongoing basis, they are \nrequired to mark-to-market their trading positions on a daily basis. The current \nmarket value will be determined according to the Direction on Prudential Norms \nfor Classification, Valuation and Operation of the bank\u2019s investment portfolio \nissued by CBSL.\n6.7.3.3  The minimum capi tal requirement is expressed in terms of two separately \ncalculated charges, \u201cspecific risk\u201d  charge for each security, which is akin to the \nconventional capital charge for credit risk, both for short and long positions, and \n\u201cgeneral market risk\u201d  charge for interest rate risk in the portfolio, where long \nand short positions in different securities or instruments can be offset.\n6.7.3.3.1  Specific Risk\n (i) The capital char ge for specific risk is designed to protect against \nan adverse movement in the price of an individual security \nowing to factors related to the individual issuer.\n (ii) The risk char ges to be used in the Computation of specific risk \nwill be as follows:\n (iii) Specific risk char ge for government securities and central banks :\n (a) Government securities issued by the GOSL  and securities \nissued by the CBSL will be subject to a risk charge of 0 per \ncent.\n (b) Securities issued by a foreign government or by a foreign  \ncentral bank will be subject to a risk charge based on the \ncredit rating as indicated in the following table:\nTable 15\nSpecific Risk Charge for Securities Issued by Foreign \nGovernments/Central Banks\nSovereign Rate Capital Charge for Specific Risk\nAAA to AA- 0%\nA+ to BBB- 0.25% (residual term to final maturity 6 \nmonths or less)\n1% (residual term to final maturity greater \nthan 6 and up to and including 24 months)\n1.60% (residual term to final maturity \nexceeding 24 months)\nAll others 10.00%\n (iv) The \u2018Qualifying\u2019  category for Corporate entities:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 56, "year": 2013}, "type": "Document"}
{"page_content": "exceeding 24 months)\nAll others 10.00%\n (iv) The \u2018Qualifying\u2019  category for Corporate entities:\n (a) Corporate entities (Local) will be given a risk char ge for \nspecific market risk based on their ratings as indicated in \nthe table below:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 56, "year": 2013}, "type": "Document"}
{"page_content": "48 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nTable 16\nSpecific Risk Charge for Corporates\nSovereign Rate Capital Charge for Specific Risk\nAAA to AA- 0.25%\nA+ to BBB- 1.00% (residual term to final maturity 6 \nmonths or less)\n1.60% (residual term to final maturity \ngreater than 6 and up to and including 24 \nmonths)\n10.00% (residual term to final maturity \nexceeding 24 months)\nAll others 10.00%\n (b) The specific risk char ge for foreign corporates would be \none notch less favourable than the risk charge applied to \nthe local corporates.\n (v) \u2018Public sector entities\u2019 should be treated like corporate entities \nunless they are backed by an explicit Treasury guarantee, which \nwarrants a risk charge of 0 per cent.\n (vi) The \u2018 Other\u2019 category:\n  A  capital charge of 10 per cent will apply to all other types of \nexposures.\n (vii) Banks may rely upon the ratings assigned by the ECAIs recognised  \nby CBSL (See paragraph 6.4.2)  for the purpose of ratings \nreferred in the table 15 and 16 above.\n6.7.3.3.2  General Market Risk\n The capital requirements for general market risk are designed to  \ncapture the risk of loss arising from changes in market interest rates. \nThe capital charge is the sum of four components:\n (i) the net short or long position in the whole trading book;\n (ii) a smaller proportion of the matched positions in each time-band  \n(the \u201cvertical disallowance\u201d);\n (iii) a  larger proportion of the matched positions across different \ntimebands (the \u201chorizontal disallowance\u201d), and\n (iv) a net char ge for positions in options, where appropriate.\nNote \u2013 Components (ii), (iii) and (iv) will not apply at present.\n6.7.3.4  It has been decided to allow banks to initially adopt the Standardised \nMeasurement Method , as Sri Lankan banks are still at a nascent stage of \ndeveloping internal risk management models. There are two principal methods \nof measuring market risk under the Standardised Measurement Method, i.e.,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 57, "year": 2013}, "type": "Document"}
{"page_content": "of measuring market risk under the Standardised Measurement Method, i.e., \na \u2018maturity\u2019 method and a \u2018duration\u2019 method. It has been decided to adopt the \n\u2018duration\u2019 method to arrive at the capital charge. Accordingly, banks are required", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 57, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  49\nto measure the general market risk charge by calculating the price sensitivity of \neach instrument in the trading book separately and adding the resulting price \nsensitivities based on a maturity ladder, subject to disallowances if any.\n6.7.3.5  The steps for the computation are as follows:\n6.7.3.5.1  Calculate the price sensitivity of each instrument in terms of a change \nin interest rates between 1.2 and 2.0 percentage points, depending on \nthe maturity of the instrument (see Table 17);\n6.7.3.5.2  slot the resulting price sensitivities into a duration based maturity  \nladder with the fifteen time bands as set out in Table 17;\n6.7.3.5.3  su bject long and short positions in each time band to a 5 per cent \nvertical disallowance designed to capture basis risk; and\n6.7.3.5.4  carry forward the net positions  in each time-band for horizontal \noffsetting subject to the disallowances set out in Table 18.\nNote \u2013 Steps (6.7.3.5.2) to (6.7.3.5.4) are not required at present since components \nii, iii and iv under paragraph 6.7.3.3.2 above are currently not applicable.\nTable 17\nDuration Method \u2013 Time Bands and Assumed Changes in Yield\nTime Bands Assumed Change in Yield\nMaturity Zone 1\n1 month or less 2.00\nOver 1 month to 3 months 2.00\nOver 3 months to 6 months 2.00\nOver 6 months to 12 months 2.00\nMaturity Zone 2\nOver 1.0 year to 1.9 years 1.80\nOver 1.9 years to 2.8 years 1.60\nOver 2.8 years to 3.6 years 1.50\nMaturity Zone 3\nOver 3.6 years to 4.3 years 1.50\nOver 4.3 years to 5.7 years 1.40\nOver 5.7 years to 7.3 years 1.30\nOver 7.3 years to 9.3 years 1.20\nOver 9.3 years to 10.6 years 1.20\nOver 10.6 years to 12 years 1.20\nOver 12 years to 20 years 1.20\nOver 20 years 1.20", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 58, "year": 2013}, "type": "Document"}
{"page_content": "50 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nTable 18\nHorizontal Disallowances\nMaturity Zones Time BandWithin\nthe zonesBetween \nadjacent zonesBetween zones\n1 and 3\nMaturity Zone 11 month or less\n40%\n40%\n 100%over 1 month to 3 months\nover 3 months to 6 months\nover 6 months to 12 months\nMaturity Zone 2Over 1.0 year to 1.9 years\n30% Over 1.9 years to 2.8 years\nOver 2.8 years to 3.6 years\nMaturity Zone 3Over 3.6 years to 4.3 years\n30% 40%Over 4.3 years to 5.7 years\nOver 5.7 years to 7.3 years\nOver 7.3 years to 9.3 years\nOver 9.3 years to 10.6 years\nOver 10.6 years to 12 years\nOver 12 years to 20 years\nOver 20 years \n  \n6.7.4  Measur ement of Capital Charge for Equities\n6.7.4.1  The minimum capital requirement to cover the risk of holding or taking positions  \nin equities in the trading book is set out below. It applies to all instruments that \nexhibit market behaviour similar to equities. The instruments covered include \nequity shares (voting and non-voting), convertible securities that behave like \nequities ( e.g.:  units of unit trusts) and commitments to buy or sell equity \nsecurities ( e.g.: warrants, right issues and bonus issues).\n6.7.4.2  Specific and General Market Risk\n6.7.4.2.1  Specific Equity Risk\n Specific risk is defined as the bank\u2019s gross equity positions ( i.e., the \nsum of all long equity positions and of all short equity positions). The \ncapital charge for specific risk for equities on the Milanka Price Index \nwill be 5 per cent, while all other equities will have a specific risk \ncharge of 10 per cent.\n6.7.4.2.2  General Equity Risk\n General market risk is defined as the overall net position in an equity \nmarket ( i.e., the difference between the sum of the longs and the sum \nof the shorts). The general market risk charge will be 10 per cent .\n6.7.5   Measur ement of the Capital Charge for Foreign Exchange and Gold Open Positions\n6.7.5.1  This section sets out the minimum capital requirement to cover the risk of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 59, "year": 2013}, "type": "Document"}
{"page_content": "6.7.5.1  This section sets out the minimum capital requirement to cover the risk of  \nholding or taking positions in foreign currencies, including gold. Gold is treated", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 59, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  51\nas a foreign exchange position rather than a commodity because its volatility is \nmore in line with foreign currencies, and banks manage it in a similar manner.\n6.7.5.2  The Of f-balance sheet position, including forward contracts, will be included in \ncomputation of the capital charge for foreign exchange risks.\n6.7.5.3  Computing the capital requirement for foreign exchange risk consists of two  \nprocesses.\n6.7.5.3.1  Measuring the Exposur e in a Single Currency Position\n The bank\u2019s net open position in each currency should be calculated by \nsumming the net position of all on balance sheet and off-balance sheet \nposition, including forward contracts denominated in that particular \ncurrency.\n6.7.5.3.2  Measuring the Risks Inher ent in a Bank\u2019s Mix of Long and Short \nPositions in Different Currencies\n Banks are required to adopt the shorthand method of computation. \nUnder the shorthand method, the nominal amount of the net position \nin each foreign currency and in gold is converted at spot rates into \nthe reporting currency ( i.e., LKR). The overall net open position is \nmeasured by aggregating:\n (i) the sum of t he net short positions or the sum of the net long \npositions, whichever is the greater, plus\n (ii) the net position (short or long) in gold, regardless of sign.\n6.7.5.4  The capital char ge will be 10 per cent of the overall net open position of foreign \ncurrency and gold.\nTable 19\nExample of the Shorthand Measure of Foreign Exchange Risk\nYEN EURO GB INR US$ GOLD\n+50 +100 +150 -20 -180 -35\n+300 -200 -35\nIn the above example, the capital charge would be 10 per cent of the higher \nof either the net long currency positions or the net short currency positions  \n(i.e., 300) and of the net position in gold (35) = 335 x 10% = 33.5.\n6.7.6  Aggr egation of the Capital Charge for Market Risks\n The capital charges for specific risk and general market risk are to be computed", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 60, "year": 2013}, "type": "Document"}
{"page_content": "The capital charges for specific risk and general market risk are to be computed \nseparately before aggregation.\n6.7.7  Capital Charge for  Interest Rate Derivatives\n The capital charge for interest rate derivatives will be excluded from the capital charge \nfor market risks at present and will be introduced shortly.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 60, "year": 2013}, "type": "Document"}
{"page_content": "52 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.7.8  Specific Instruction for  completion of Part IV return\n (Computation of Risk-weighted amount for  Market Risk)\n6.7.8.1  T otal Capital Charge for Market Risk\n (WBRC 1 1.4.1.0.0.0)\n The total amount of capital charge for interest rate risk (6.7.8.1.1), capital charge \nfor equity risk (6.7.8.1.2) and capital charge for foreign exchange risk (6.7.8.1.3).  \nThe amount is automatically shown on web-based return.\n (WBRC 1 1.4.1.1.0.0 + 11.4.1.2.0.0 + 11.4.1.3.0.0)\n6.7.8.1.1  Capital Charge for  Interest Rate Risk\n (WBRC 1 1.4.1.1.0.0)\n The total amount of capital charge for general interest rate risk \nand capital charge for specific interest rate risk. The amount is \nautomatically shown on web-based return.\n (WBRC 1 1.4.1.1.1.0 + 11.4.1.1.2.0)\n (i) General Interest Rate Risk\n  (WBRC 1 1.4.1.1.1.0)\n  Capital char ge for general interest rate risk should be calculated in \nline with the specific instruction given in the paragraph 6.7.3.3.2\n (ii) Specific Interest Rate Risk\n  (WBRC 1 1.4.1.1.2.0)\n  Capital char ge for specific interest rate risk should be calculated in \nline with the specific instruction given in the paragraph 6.7.3.3.1\n6.7.8.1.2  Capital Charge for  Equity Risk\n (WBRC 1 1.4.1.2.0.0)\n The total amount of capital char ge for general equity risk and capital \ncharge for specific equity risk. The amount is automatically shown on \nweb-based return.\n (WBRC 1 1.4.1.2.1.0 + 11.4.1.2.2.0)\n (i) General  Equity Risk\n  (WBRC 1 1.4.1.2.1.0)\n  Capital char ge for general equity risk should be calculated in line \nwith the specific instruction given in the paragraph 6.7.4.2.2.\n (ii) Specific Equity Risk\n  (WBRC 1 1.4.1.2.2.0)\n  Capital char ge for specific equity risk should be calculated in line \nwith the specific instruction given in the paragraph 6.7.4.2.1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 61, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  53\n6.7.8.1.3  Capital Charge for  Foreign Exchange & Gold\n (WBRC 1 1.4.1.3.0.0)\n Capital charge for Foreign exchange & gold should be calculated in \nline with the specific instruction given in the paragraph 6.7.5.\n6.7.8.2  T otal Risk-weighted Amount for Market Risk\n (WBRC 1 1.4.2.0.0.0)\n The total amount of risk-weighted amount for market risk should be ten times the  \ncapital charge for market risk (6.7.8.1*10). The amount is automatically shown \non web-based return.\n (WBRC 1 1.4.1.0.0.0*10)\n6.8  Part V \u2013 Computation of Risk-weighted Amount for Operational Risk.\n6.8.1  Capital Charge for  Operational Risk\n6.8.1.1  Definition of Operational Risk:  Operational risk is defined as the risk of loss \nresulting from inadequate or failed internal processes, people and systems or \nfrom external events. This definition includes legal risk, but excludes strategic \nand reputational risk. Legal risk includes, but is not limited to, exposure to fines, \npenalties, or punitive damages resulting from supervisory actions, as well as \nprivate settlements.\n6.8.1.2  The Basic Indicator  Approach (BIA): To begin with, banks shall compute the \ncapital requirements for operational risk under the BIA. Under the BIA, banks \nmust hold capital for operational risk equal to the average over the previous three \nyears of a fixed percentage (denoted \u03b1) of positive annual gross income. Figures \nfor any year in which annual gross income is negative or zero should be excluded \nfrom both the numerator and denominator when calculating the average.\n6.8.1.3  The char ge may be expressed as follows:\nKBIA = [ \u2211 (GI 1\u2026n x \u03b1.) ] / n\n Where;\nKBIA  = the capital char ge under the Basic Indicator Approach\nGI  = annual gross income, where positive, over the previous three audited  \nfinancial years\nn  = number of the previous three financial years for which gross income is  \npositive\n\u03b1  = 15%, which is set by the BCBS.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 62, "year": 2013}, "type": "Document"}
{"page_content": "positive\n\u03b1  = 15%, which is set by the BCBS.\n6.8.1.4  Gross income is defined as \u201cnet interest income\u201d plus \u201cnet non-interest income\u201d.  \nIt is intended that this measure should:\n6.8.1.4.1  be gross of any provisions ( e.g.: for unpaid interest),\n6.8.1.4.2  be gross of operating expenses, including fees paid to outsourcing  \nservice providers, in contrast to fees paid for services that are \noutsourced, fees received by banks that provide outsourcing services \nshall be included in the definition of gross income,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 62, "year": 2013}, "type": "Document"}
{"page_content": "54 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6.8.1.4.3  exclude realized profits/losses from the sale of securities in the bank -\ning book, and\n6.8.1.4.4  exclude extraordinary or irregular items.\n6.8.1.5  Banks are advised to compute the capital char ge for operational risk under the \nBIA as follows:\n6.8.1.5.1  A verage of [  Gross Income x \u03b1  ] for each of the last three financial \nyears, excluding years of negative or zero gross income\n6.8.1.5.2  Gross income = Net interest income + non-interest income \u2013 items  \n(6.8.1.4.3) and (6.8.1.4.4) of above.\n6.8.1.5.3  \u03b1 = 15%\n6.8.2  Specific Instruction for  completion of Part V\n (Computation of Risk-weighted amount for  Operational Risk)\n6.8.2.1  Gr oss Income\n (WBRC 1 1.5.1.0.0.0)\n The total gross income should be total net income (6.8.2.1.1) less total exclude  \nitems as specified in the paragraph 6.8.1.4.3 and 6.8.1.4.4. The amount is \nautomatically shown on web-based return.\n (WBRC 1 1.5.1.1.0.0 - 11.5.1.2.0.0)\n6.8.2.1.1  Net Income\n (WBRC 1 1.5.1.1.0.0)\n The total net income should be sum of total net interest income and  \ntotal non-interest income. The amount is automatically shown on web-\nbased return.\n (WBRC 1 1.5.1.1.1.0 + 11.5.1.1.2.0)\n (i) Net Inter est Income\n  (WBRC 1 1.5.1.1.1.0)\n  The total net interest income should be the total interest income  \nless total non-interest expenses as reported in the annual audited \nprofit and loss statement.\n (ii) Non-Inter est Income\n  (WBRC 1 1.5.1.1.2.0)\n  The total non-interest income should be the total income other  \nthan the interest income.\n6.8.2.1.2  Less Amount\n (WBRC 1 1.5.1.2.0.0)\n The total aggregate amount of following items, as specified in the  \nparagraph 6.8.1.4.3 and 6.8.1.4.4, which banks are required to deduct \nfrom total net income.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 63, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  55\n6.8.2.2  T otal Capital Charge for Operational Risk\n (WBRC 1 1.5.2.0.0.0)\n The total capital char ge for operational risk should be 15 per cent of gross income \n(6.8.2.1.) above. The amount is automatically shown on web-based return.\n (WBRC 1 1.5.1.0.0.0*15%)\n6.8.2.3  T otal Risk-weighted Amount for Operational Risk\n (WBRC 1 1.5.3.0.0.0)\n The total amount of risk-weighted amount for operational risk should be ten times  \nthe capital charge for operational risk (6.8.2.2*10). The amount is automatically \nshown on web-based return.\n (WBRC 1 1.5.2.0.0.0*10)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 64, "year": 2013}, "type": "Document"}
{"page_content": "56 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nSchedule II\nCAPITAL ADEQUACY RATIO OF\nLICENSED COMMERCIAL / SPECIALISED BANKS\nBANK ONLY (SOLO Basis) / CONSOLIDATED RETURN", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 65, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  57\nPart I \u2013 Computation of Capital Adequacy Ratio (Rs. \u2019000)\nWeb-based\nReturn CodeItem Amount\n11.1.1.0.0.0 Eligible Core Capital (Eligible Tier I) = 11.2.1.1.0.0 of Part II ( a) \n11.1.2.0.0.0 Capital Base = 11.2.1.5.0.0 of Part II (a )\n11.1.3.0.0.0 Total Risk-weighted Amount\n11.1.3.1.0.0 Risk-Weighted Amount for Credit Risk = 11.3.1.0.0.0 of Part III ( a)\n11.1.3.2.0.0 Risk-Weighted Amount for Market Risk = 11.4.2.0.0.0 of Part IV\n11.1.3.3.0.0 Risk-Weighted Amount for Operational Risk = 11.5.3.0.0.0 of Part V\n11.1.4.0.0.0 Core Capital (Tier 1) Ratio, % = (11.1.1.0.0.0/11.1.3.0.0.0)*100\n11.1.5.0.0.0 Total Capital Ratio, % = (11.1.2.0.0.0/11.1.3.0.0.0)*100 \nPart II (a ) \u2013 Computation of Total Capital Base (Rs. \u2019000)\nWeb-based \nReturn CodeItem Amount\n11.2.1.1.0.0 Eligible Core Capital (Eligible Tier I)\n11.2.1.1.1.0 Core Capital (Tier 1)\n11.2.1.1.1.1 Paid-up Ordinary Shares/ Assigned Capital\n11.2.1.1.1.2 Non-cumulative, Non-redeemable Preference Shares\n11.2.1.1.1.3 Share Premium\n11.2.1.1.1.4 Statutory Reserve Fund\n11.2.1.1.1.5 Published Retained Profits/(Accumulated Losses) (+/-)\n11.2.1.1.1.6 General and Other Reserves\n11.2.1.1.1.7 Gain/(Loss) After Tax arising from the Sale of Fixed and Long-term \nInvestments\n11.2.1.1.1.8 Unpublished Current Year\u2019s Profit/(Loss) (+/-)\n11.2.1.1.1.9 Minority Interests (consistent with the above capital constituents)\n11.2.1.1.1.10 Perpetual Debt Capital Instruments\n11.2.1.1.2.0 Deductions/ Adjustments-Tier 1\n11.2.1.1.2.1 Goodwill\n11.2.1.1.2.2 Net Deferred Tax\n11.2.1.1.2.3 Other Intangible Assets\n11.2.1.1.2.4 Advances granted to employees of the bank for the purchase of \nshares of the bank under a share ownership plan. \n11.2.1.1.2.5 Amount due from head office & branches outside Sri Lanka in Sri \nLanka Rupees \n(applicable only to branches of foreign banks)\n11.2.1.1.2.6 Amount due to head office & branches outside Sri Lanka in Sri Lanka \nRupees (-)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 66, "year": 2013}, "type": "Document"}
{"page_content": "11.2.1.1.2.6 Amount due to head office & branches outside Sri Lanka in Sri Lanka \nRupees (-)\n(applicable only to branches of foreign banks)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 66, "year": 2013}, "type": "Document"}
{"page_content": "58 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nWeb-based \nReturn CodeItem Amount\n11.2.1.1.2.7 Amount due from head office & branches outside Sri Lanka in \nForeign Currency (net)\n(applicable only to branches of foreign banks)\n11.2.1.1.2.8 50% of Investments in Unconsolidated Banking and Financial \nSubsidiary Companies\n11.2.1.1.2.9 50% of Investments in the Capital of Other Banks and Financial \nInstitutions\n11.2.1.2.1.0 Supplementary Capital (Tier II)\n11.2.1.2.1.1 Revaluation Reserves (approved by CBSL)\n11.2.1.2.1.2 General Provisions\n11.2.1.2.1.3 Hybrid Capital Instruments (Debt/Equity)\n11.2.1.2.1.4 Minority Interests arising from Preference Shares\n11.2.1.2.1.5 Approved Subordinated Term Debt\n0.0.0.0.0.0 Actual Amount of Approved Subordinated Term Debts\n11.2.1.2.2.0 Deductions -Tier 1I\n11.2.1.2.2.1 50% of Investments in Unconsolidated Banking and Financial \nSubsidiary Companies\n11.2.1.2.2.2 50% of Investments in the Capital of Other Banks and Financial \nInstitutions\n11.2.1.2.0.0 Total Supplementary Capital \n(Tier II) = (Item 11.2.1.2.1.0 - 11.2.1.2.2.0)\n11.2.1.3.0.0 Eligible Supplementary Capital (Eligible Tier II)\n11.2.1.4.0.0 Short Term Subordinated Debt (Tier III Capital)\n11.2.1.4.1.0 Approved Short Term Subordinated Debt\n11.2.1.4.2.0 Eligible Tier III Capital-Utilised = (item 11.2.2.6.1.0)\n11.2.1.5.0.0 Capital Base\nPart I1 (b ) \u2013 Computation of Eligible Tier III Capital for Market Risk (Rs. \u2019000)\nWeb-based \nReturn CodeItem Amount\n11.2.2.1.0.0 Total Risk Weighted Assets (RWA)\n11.2.2.1.1.0 Total Risk Weighted Assets for Credit and Operational Risks \n11.2.2.1.2.0 Total Risk Weighted Assets for Market Risk\n11.2.2.2.0.0 Minimum Capital Charge\n11.2.2.2.1.0 Capital Charge for Credit and Operational Risk \n11.2.2.2.2.0 Capital Charge for Market Risk \n11.2.2.3.0.0 Total Capital Available to Meet the Capital Charge for Credit \nand Operational Risks \n11.2.2.4.0.0 Total Capital Base Available to meet Market Risk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 67, "year": 2013}, "type": "Document"}
{"page_content": "and Operational Risks \n11.2.2.4.0.0 Total Capital Base Available to meet Market Risk\n11.2.2.5.0.0 Total Available Tier III Capital\n11.2.2.5.1.0 Approved Short-term Subordinated Debt", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 67, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  59\nWeb-based \nReturn CodeItem Amount\n11.2.2.5.2.0 Minimum of 28.5% of Capital Charge for Market Risk to be met \nby Tier 1 Capital that is not Required for Credit Risk\n11.2.2.5.2.1 (a) Limit \n11.2.2.5.2.2 (b) Amount Utilised\n11.2.2.5.3.0 Maximum of 250% of Tier 1 Capital that is not Required for \nCredit and Operational Risks\n11.2.2.5.3.1 (a) Limit \n11.2.2.5.3.2 (b) Amount Utilised\n11.2.2.6.0.0 Eligible Tier III Capital\n11.2.2.6.1.0 Eligible Tier III Capital Utilised\n11.2.2.6.2.0 Eligible but Unutilized Tier III Capital\nPart III (a ) \u2013 Computation of Risk-weighted Amount for Credit Risk\n (Rs. \u2019000)\nWeb-based \nReturn \nCodeItem AmountCredit \nEquivalent \nof Off-\nbalance \nSheet ItemsTotalRisk \nWeight \n%Risk \nWeighted \nAssets \nAmount\n11.3.1.0.0.0 Total Risk-weighted Amount \nfor Credit Risk \n11.3.1.1.0.0 Claims on Government of Sri \nLanka and Central Bank of Sri \nLanka \n11.3.1.1.1.0 Government of Sri Lanka\n11.3.1.1.2.0 Central Bank of Sri Lanka\n11.3.1.2.0.0 Claims on Foreign Sovereigns \nand their Central Banks\n11.3.1.2.1.0 AAA to AA- 0\n11.3.1.2.2.0 A+ to A- 20\n11.3.1.2.3.0 BBB+ to BBB- 50\n11.3.1.2.4.0 BB+ to B- 100\n11.3.1.2.5.0 Below B- 150\n11.3.1.2.6.0 Unrated 100\n11.3.1.3.0.0 Claims on Public Sector \nEntities PSEs)\n11.3.1.3.1.0 AAA to AA- 20\n11.3.1.3.2.0 A+ to A- 50\n11.3.1.3.3.0 BBB+ to BB- 100\n11.3.1.3.4.0 Below BB- 150\n11.3.1.3.5.0 Unrated 100", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 68, "year": 2013}, "type": "Document"}
{"page_content": "60 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nWeb-based \nReturn \nCodeItem AmountCredit \nEquivalent \nof Off-\nbalance \nSheet ItemsTotalRisk \nWeight \n%Risk \nWeighted \nAssets \nAmount\n11.3.1.4.0.0 Claims on Official Entities \nand Multilateral Development \nBanks (MDBs)\n11.3.1.4.1.0 BIS,IMF, ECB, EC and Eligible \nMDBs0\n11.3.1.4.2.0 AAA to AA- 20\n11.3.1.4.3.0 A+ to BBB- 50\n11.3.1.4.4.0 BB+ to B- 100\n11.3.1.4.5.0 Below B- 150\n11.3.1.4.6.0 Unrated 100\n11.3.1.5.0.0 Claims on Banks\n11.3.1.5.1.0 Rupee Exposures less than 3 \nmonths\n11.3.1.5.1.1 AAA to BBB- 20\n11.3.1.5.1.2 BB+ to B- 50\n11.3.1.5.1.3 Below B- 150\n11.3.1.5.1.4 Unrated 100\n11.3.1.5.2.0 Foreign Currency Exposures \nless than 3 months\n11.3.1.5.2.1 AAA to A- 20\n11.3.1.5.2.2 BBB+ to BBB- 50\n11.3.1.5.2.3 BB+ to B- 100\n11.3.1.5.2.4 Below B- 150\n11.3.1.5.2.5 Unrated 100\n11.3.1.5.3.0 Rupee and Foreign Currency \nExposures more than 3 months\n11.3.1.5.3.1 AAA to AA- 20\n11.3.1.5.3.2 A+ to BBB- 50\n11.3.1.5.3.3 BB+ to B- 100\n11.3.1.5.3.4 Below B- 150\n11.3.1.5.3.5 Unrated 100\n11.3.1.6.0.0 Claims on Financial \nInstitutions\n11.3.1.6.1.0 Claims on Primary Dealers/\nFinance Companies/Specialised \nLeasing Companies\n11.3.1.6.1.1 AAA to AA- 20\n11.3.1.6.1.2 A+ to BBB- 50\n11.3.1.6.1.3 BB+ to B- 100", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 69, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  61\nWeb-based \nReturn \nCodeItem AmountCredit \nEquivalent \nof Off-\nbalance \nSheet ItemsTotalRisk \nWeight \n%Risk \nWeighted \nAssets \nAmount\n11.3.1.6.1.4 Below B- 150\n11.3.1.6.1.5 Unrated 100\n11.3.1.6.2.0 Claims on Other Financial \nInstitutions\n11.3.1.6.2.1 AAA to AA- 20\n11.3.1.6.2.2 A+ to A- 50\n11.3.1.6.2.3 BBB+ to BB- 100\n11.3.1.6.2.4 Below BB- 150\n11.3.1.6.2.5 Unrated 100\n11.3.1.7.0.0 Claims on Corporates\n11.3.1.7.1.0 AAA to AA- 20\n11.3.1.7.2.0 A+ to A- 50\n11.3.1.7.3.0 BBB+ to BB- 100\n11.3.1.7.4.0 Below BB- 150\n11.3.1.7.5.0 Unrated 100\n11.3.1.8.0.0 Retail Claims\n11.3.1.8.1.0 Retail claims that qualify  for \nregulatory capital purposes75\n11.3.1.8.2.0 Retail claims that not qualify  for \nregulatory capital purposes100\n11.3.1.9.0.0 Claims Secured by Residential \nProperty\n11.3.1.9.1.0 Claims that qualify for \nregulatory capital purposes50\n11.3.1.9.2.0 Claims that not qualify  for \nregulatory capital purposes100\n11.3.1.10.0.0 Claims Secured by Commercial \nReal Estate100\n11.3.1.11.0.0 Non-Performing Assets (NPAs)\n11.3.1.11.1.0 Specific provisions are equal or \nmore than 20%100\n11.3.1.11.2.0 Specific provisions are less than \n20%150\n11.3.1.12.0.0 Non-Performing Assets \nSecured by Residential \nProperty\n11.3.1.12.1.0 Specific provisions are equal or \nmore than 20%50\n11.3.1.12.2.0 Specific provisions are less than \n20%100", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 70, "year": 2013}, "type": "Document"}
{"page_content": "62 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nWeb-based \nReturn \nCodeItem AmountCredit \nEquivalent \nof Off-\nbalance \nSheet ItemsTotalRisk \nWeight \n%Risk \nWeighted \nAssets \nAmount\n11.3.1.13.0.0 Higher-Risk Categories 150\n11.3.1.14.0.0 Cash Items and Other Assets\n11.3.1.14.1.0 Cash Items \n11.3.1.14.1.1 Notes and Coins\n11.3.1.14.1.2 Gold Bullion held in own vault\n11.3.1.14.1.3 Cash Items in the Process of \nCollection20\n11.3.1.14.2.0 Other Assets \n11.3.1.14.2.1 Fixed Assets 100\n11.3.1.14.2.2 Other Assets/Exposures 100\nPart III (b ) \u2013 Credit equivalent of Off-Balance Sheet Items \n(Rs.\u2019000)\nWeb-based \nReturn CodeDescriptionPrincipal \namount of \nOff-Balance \nSheet ItemsCredit \nConversion \nFactor \n(%)Credit \nequivalent \nof \nOff-Balance \nSheet Items\n11.3.2.0.0.0 Off-balance Sheet Items  \n11.3.2.1.0.0 Direct Credit Substitutes  \n11.3.2.1.1.0 General Guarantees of Indebtedness 100 \n11.3.2.1.2.0 Stand-by LCs serving as Financial \nGuarantees100 \n11.3.2.1.3.0 Bank Acceptances 100 \n11.3.2.1.4.0 Others (please specify) 100 \n11.3.2.2.0.0 Transaction-related Contingencies\n11.3.2.2.1.0 Performance Bonds, Bid Bonds & \nWarranties50 \n11.3.2.2.2.0 Stand-by LCs related to particular \nTransactions50 \n11.3.2.2.3.0 Others (please specify) 50 \n11.3.2.3.0.0 Short-Term Self-Liquidating Trade-\nRelated Contingencies\n11.3.2.3.1.0 Shipping Guarantees 20 \n11.3.2.3.2.0 Documentary Letters of Credit 20 \n11.3.2.3.3.0 Trade related Acceptances 20 \n11.3.2.3.4.0 Others (please specify) 20", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 71, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  63\nWeb-based \nReturn CodeDescriptionPrincipal \namount of \nOff-Balance \nSheet ItemsCredit \nConversion \nFactor \n(%)Credit \nequivalent \nof \nOff-Balance \nSheet Items\n11.3.2.4.0.0 Sale and Repurchase Agreements and \nAssets Sale with Recourse where the \nCredit Risk remains with the Bank\n11.3.2.4.1.0 Sale and Repurchase Agreements 100 \n11.3.2.4.2.0 Housing Loans sold with Recourse 100 \n11.3.2.4.3.0 Other Assets sold with Recourse 100 \n11.3.2.4.4.0 Forward Assets Purchase 100 \n11.3.2.4.5.0 Partly paid Shares/Securities 100 \n11.3.2.4.6.0 Others (please specify) 100 \n11.3.2.5.0.0 Obligations under an On-going \nUnderwriting Agreement\n11.3.2.5.1.0 Underwriting of Shares/Securities Issue 50 \n11.3.2.5.2.0 Note Issuance Facilities and Revolving \nUnderwriting Facilities50 \n11.3.2.5.3.0 Others (please specify) 50 \n11.3.2.6.0.0 Commitments with an Original \nMaturity of up to one year or which \ncan be unconditionally cancelled at \nany time\n11.3.2.6.1.0 Formal Stand-by Facilities and Credit \nLines0 \n11.3.2.6.2.0 Undrawn Term Loans 0 \n11.3.2.6.3.0 Undrawn Overdraft Facilities/Unused \nCredit Card Lines0 \n11.3.2.6.4.0 Others (please specify) 0 \n11.3.2.7.0.0 Other Commitments with an Original \nMaturity up to 1 year\n11.3.2.7.1.0 Formal Stand-by Facilities and Credit \nLines20 \n11.3.2.7.2.0 Undrawn Term Loans 20 \n11.3.2.7.3.0 Others (please specify) 20 \n11.3.2.8.0.0 Other Commitments with an Original \nMaturity of over one year\n11.3.2.8.1.0 Formal Stand-by Facilities and Credit \nLines50 \n11.3.2.8.2.0 Undrawn Term Loans 50 \n11.3.2.8.3.0 Others (please specify) 50", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 72, "year": 2013}, "type": "Document"}
{"page_content": "64 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nWeb-based \nReturn CodeDescriptionPrincipal \namount of \nOff-Balance \nSheet ItemsCredit \nConversion \nFactor \n(%)Credit \nequivalent \nof \nOff-Balance \nSheet Items\n11.3.2.9.0.0 Exchange Rate Contracts\n11.3.2.9.1.0 Original Maturity-less than one year 2 \n11.3.2.9.2.0 Original Maturity-more than one year \nand less than two years5 \n11.3.2.9.3.0 Original Maturity-more than two years \n(For each additional year)3\n(for each \nyear)\n11.3.2.10.0.0 Interest Rate Contracts\n11.3.2.10.1.0 Original Maturity-less than one year 0.5 \n11.3.2.10.2.0 Original Maturity-more than one year \nand less than two years1 \n11.3.2.10.3.0 Original Maturity-more than two years \n(For each additional year)1\n(for each \nyear)\n \nPart III (c ) \u2013 Exposures Recognised under Credit Risk Mitigation (CRM)\n(Rs. \u2019000)\nWeb-based \nReturn CodeCRM techniquesPrincipal \nAmount\n11.3.3.0.0.0 Total CRM Exposure\n11.3.3.1.0.0 Collateralised Transactions\n11.3.3.1.1.0 Retail Exposure\n11.3.3.1.1.1 Cash\n11.3.3.1.1.2 Gold\n11.3.3.1.1.3 Government Securities\n11.3.3.1.1.4 Provident Fund Balances\n11.3.3.1.1.5 Debt Securities Rated by a recognised ECAIs\n11.3.3.1.1.6 Debt Securities not Rated by a recognised ECAIs\n11.3.3.1.1.7 Equities that are included in a Main Index.\n11.3.3.1.2.0 Other Exposures\n11.3.3.1.2.1 Cash\n11.3.3.1.2.2 Gold\n11.3.3.1.2.4 Provident Fund Balances\n11.3.3.1.2.3 Government Securities\n11.3.3.1.2.5 Debt Securities Rated by a recognised ECAIs\n11.3.3.1.2.6 Debt Securities not Rated by a recognised ECAIs\n11.3.3.1.2.7 Equities that are included in a Main Index.\n11.3.3.2.0.0 Other CRM Techniques\n11.3.3.2.1.0 On-balance Sheet Netting\n11.3.3.2.2.0 Guarantees", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 73, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  65\nPart IV \u2013 Computation of Risk-weighted Amount for Market Risk\n(Rs. \u2019000)\nWeb-based \nReturn CodeItemCapital Charge \nAmount\n11.4.1.0.0.0 Total Capital Charge for Market Risk \n= (11.4.1.1.0.0+11.4.1.2.0.0+11.4.1.3.0.0)\n11.4.1.1.0.0 Capital Charge for Interest Rate\n= (11.4.1.1.1.0+11.4.1.1.2.0)\n11.4.1.1.1.0 General Interest Rate Risk\n11.4.1.1.1.1 i) Net Long or Short Position\n11.4.1.1.1.2 ii) Horizontal Disallowance\n11.4.1.1.1.3 iii) Vertical Disallowance\n11.4.1.1.1.4 iv) Options\n11.4.1.1.2.0 Specific Interest Rate Risk\n11.4.1.2.0.0 Capital Charge for Equity = (11.4.1.2.1.0+11.4.1.2.2.0)\n11.4.1.2.1.0 General Equity Risk\n11.4.1.2.2.0 Specific Equity Risk\n11.4.1.3.0.0 Capital Charge for Foreign Exchange & Gold\n11.4.2.0.0.0 Total Risk-weighted Amount for Market Risk \n= (11.4.1.0.0.0*10)\nPart V \u2013 Computation of Risk-weighted Amount for Operational Risk\n(Rs. \u2019000)\nWeb-based \nReturn CodeItemFirst \nYearSecond \nYearThird \nYearTotal Average\n11.5.1.0.0.0 Gross Income     \n11.5.1.1.0.0 Net Income     \n11.5.1.1.1.0 Net Interest Income (Interest \nIncome-Interest Expenses)\n11.5.1.1.2.0 Non-interest Income\n11.5.1.2.0.0 Less  \n11.5.1.2.1.0 Realised Profits from the Sale of \nSecurities in the Banking Book\n11.5.1.2.2.0 Extraordinary / Irregular Items of \nIncome\n11.5.2.0.0.0 Total Capital Charge for \nOperational Risk \n= (11.5.1.0.0.0*15%)\n11.5.3.0.0.0 Total Risk-weighted Amount for \nOperational Risk \n= (11.5.2.0.0.0*10)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 74, "year": 2013}, "type": "Document"}
{"page_content": "66 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex I\nIMPLEMENTATION OF IT INFRASTRUCTURE FOR BASEL II\n1. Implementation of IT  Architecture and Design Principles for Basel II\nImportant requirements for this architecture are as follows;\n\u2022 C reate a robust, scalable & network friendly Basel II technology framework, which can \nsupport a regional user and is extendable to new regulatory compliance requirements as the \nBank increases its presence in the emerging markets.\n\u2022 Rationalise the technologies by choosing common platforms for common requirement across \nall Pillars and common business domain across all Pillars. This will reduce total cost of \nownership, maintenance overheads and will facilitate change management for the bank.\n\u2022 Adopt a robust and centralised data collection and consolidation approach for Basel II through \nthe Banking Data Warehouse (BDW) for risk analytics and Consolidated reporting\n\u2022 Reduce manual data capture methods for Basel II.\n\u2022 Design for Basel II applications should cater for high availabi lity, proper exception handling \nand proper backup/recovery to ensure that potential risk due to data loss during unforeseen \ncircumstances is negligible.\n\u2022 All new core banking applications and credit related applications in all geographical regions \nmust be Basel II compliant.\n\u2022 All Basel II applications must adhere to the bank\u2019s policies for infrastructure security, data \nsecurity, application controls and user administration.\n\u2022 All Basel II applications should demonstrate disaster recovery as a capability.\n2. Requir ements for a Regulatory Capital IT Solution\nThe following eight elements are the system level requirements that a financial services \ninstitution must meet to comply with the Basel II Accord.\n2.1 Storage of Curr ent and Historical Data in a Data Warehouse\nBasel II calls for financial institutions to store a substantial quantity of data. To produce", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 75, "year": 2013}, "type": "Document"}
{"page_content": "Basel II calls for financial institutions to store a substantial quantity of data. To produce \na measure of Risk Weighted Assets, the Bank for International Settlement (BIS) requires \nfinancial institutions to store a comprehensive database of operational loss incidents, \nfinancial instruments, credit losses, and general ledger data. For financial institutions that \nseek to calculate Pillar I capital using the Advanced IRB approach for retail or wholesale \nassets, seven years of default data are required to validate internal ratings models. Beyond \nhistorical data storage requirements, a Basel II compliant IT solution must also provide \nthe ability to store and process multiple versions of data. For example, in the area of stress \ntesting, financial institutions are required to test the assumptions of their models in a variety \nof economic scenarios. Given these requirements, scalable and efficient storage of current, \nhistorical, and alternative scenario data is critical.\n2.2 Auditable and Flexible Risk Weighted Asset Calculations\nThe Basel II Capital Accord defines a large number of rules for calculating Risk Weighted \nAssets and minimum required capital for credit, market and operational risks. However, \nbeyond simply performing calculations, the BIS also requires that financial institutions have \nthe ability to easily adjust these calculations, and the categorisations on which they depend. \nThe Accord also implicitly requires that a financial services institution be able to switch \nbetween the various Pillar I methodologies. Therefore, a regulatory capital IT solution", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 75, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  67\nshould not only provide all of the required calculations within the Accord, but should also \nallow auditors, regulators, and internal users to audit, review and revise these calculations \nas necessary. There are also certain areas where the Accord gives financial institutions the \nflexibility to optimise capital calculations such as in the case of collateral application. \n2.3 Contr ol Management with automatic workflows \nThe Basel II framework requires financial institutions to demonstrate that they have the \nappropriate procedures and controls in place to manage their risks. Therefore, a regulatory \ncapital IT system should allow financial institutions to map controls against their risks.  \nIn such a framework, financial institutions can define automatic workflows where the system \nprompts employees to act based on certain defined key performance indicators (KPIs) or \nuser-defined business events. Finally, the system should also allow financial institutions \nto audit and monitor their controls and procedures in order to periodically assess their risk \nmanagement practices based on actual loss experience.\n2.4 Sophisticated Analytical Tools\nFinancial institutions can implement sophisticated models to assess their risk position and \noptimise usage of capital. The BIS allows qualifying financial institutions to implement \ninternal models for Probability of Default (PD), Loss Given Default (LGD), and Exposure at \nDefault (EAD). Therefore, a regulatory capital IT solution must allow a financial institution \nto implement and test any model that can properly assess its risk position. These external \napplications would also have the ability to write information back to a central data source.\n2.5 Flexible User  Driven methods\nThe Basel II Accord defines a vast range of calculations and options. Examples of these", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 76, "year": 2013}, "type": "Document"}
{"page_content": "The Basel II Accord defines a vast range of calculations and options. Examples of these \noptions include whether to use the Simple or Comprehensive approach for credit risk \nmitigation, to use supervisory or own-estimate haircuts, and to determine the risk weighted \nassets based on a top-down approach. Given the range of possibilities, users must have \nthe flexibility to easily change the methods they use to calculate risk-weighted assets \nand assess the potential impact of those changes. Users should also have the flexibility to \nspecify which specific calculation components are processed in a given job submission.  \nFor example, the system should not force the user to reprocess every single statistic if \nall they seek to do is recalculate a subset of the organisation\u2019s assets. Additionally, the \nuser should have the option to generate detailed auditing output, either for a sampling of \naccounts or an individual transaction at their discretion.\n2.6 Coordinated Pr ocess Flow\nThe Basel II calculations requires data that would generally originate from different \nprocessing systems, including those used to support front office, back office and risk \nmanagement operations. Further, the Accord requires synchronisation of this data to \nperform calculations on a consistent and integrated basis. Once calculations are completed, \nthe system may need to further process the output data through a variety of third party \napplications for further analysis or reporting. Given these complex data workflow \nrequirements, a regulatory capital solution needs to consolidate each of these process flow \nissues without any error.\n2.7 T imely reporting that meets Internal and External Requirements\nSystems and data are irrelevant if they do not provide information in a timely manner. \nUnder the Basel II regime, financial institutions need to meet highly specific and demanding \nexternal and regulatory reporting requirements. Simultaneously, internal management", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 76, "year": 2013}, "type": "Document"}
{"page_content": "external and regulatory reporting requirements. Simultaneously, internal management \nrequires a continuous stream of information to better understand their organization\u2019s", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 76, "year": 2013}, "type": "Document"}
{"page_content": "68 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nrisk profile. Therefore, it is essential that a regulatory capital solution provide a sound \nmanagement reporting platform. A Basel II compliant IT solution must be able to regularly \nand accurately produce the necessary internal and external reports for sound risk and \nprofitability management.\n2.8 Low Cost and Low Risk\nFinancial services management and information systems professionals do not have the time \nor the budget to deal with high priced or unreliable solutions. For this reason, any regulatory \ncapital solution must maintain a low total cost of ownership and be highly reliable.  \nThe major components of the regulatory capital IT solution should be covered through \na single data source so that constant reconciliation of data is avoided. Just as important, \nthe system needs to eliminate the constant administrative management inherent to many \nenterprise systems. It should not have to rely on vigilant system administrators to coordinate \nthe functioning of different applications. \n3. Data Integration and the Data Warehouse\nThere is a need to align the data structures that drive risk and financial data. These are:\n1. Transactional data that covers all types of transaction and links the financial results of \neach transaction with the risk and financial objectives of the financial institution.\n2. Asset data  that covers all types of assets that might be linked to the transaction, the \nvaluation of these assets and the correlation of asset behaviour.\n3. Customer data for all counter-parties, which includes the credit risk of the counterparty \nand makes provisions when new information or circumstances changes that risk. Detailed \ndata on customers are required to support product selection and pricing in addition to other \nrelationship management decisions.\nThe above risk and financial data could be broadly categorised as follows:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 77, "year": 2013}, "type": "Document"}
{"page_content": "The above risk and financial data could be broadly categorised as follows:\nInstrument/Account Data \u2013  These data cover basic information about every financial \ninstrument held by the financial institution, i.e. Data about financial instruments such as \nexposure (provision/allowances, outstanding balances, credit lines, etc.), maturity, asset, \nproduct and industry classifications, interest rates, and so on.\nCustomer/Counterparty Data \u2013  This refers to the relevant data for different parties that a \nfinancial institution may deal with in a financial transaction. In addition, these data cover \ninformation such as industry classification and customer financial information that may be \nused in deriving PD estimates such as debt to equity ratios, current assets, net sales, retained \nearnings, revenues, profits, cost of goods, share price, and bond price. Financial institutions \nmay use these data with regulatory capital data to perform customer-based profitability analysis.\nLedger Data \u2013 These data cover transaction and account balance data stored in a ledger. Ledger \ndata are used to do business unit and product based profitability analysis. Users may analyse \nand report on capital for market, credit, and operational risk. \nRisk Mitigation Data \u2013  These data cover information about collateral, insurance, netting \nagreements, credit derivatives, and guarantees. Among other attributes, these data include \nthe mitigant type, mitigation value, maturity of the instrument, and the specific instrument to \nwhich the collateral maps. Insurance policy data information are relevant for the mitigation of \noperational risks.\nIncident Data \u2013 Analysis of credit and operational loss incidents depends upon having granular \nincident data. This data covers the essential information about loss incidents such as loss \namount, business unit, loss description and risk category.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 77, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  69\nHistorical Data \u2013  If financial institutions opt for the Advanced Internal Ratings based approach \nfor credit risk and the Advance Measurement approach for operational risk, they must store \na substantial volume of historical data. These data will be necessary to test historical default \nexperiences against the forecasted values generated by predictive models. These data cover both \nhistorical credit and operational loss data.\nLimits and Loss Provision Data \u2013  The Basel II requirement is that the financial institutions \nshould limit their exposures for lending based on industries, geography, and specific customers. \nThese data cover the exposure limits and the loan loss provisions. \nExamples of some data fields:\nBorrower Legal Name, Customer Basel segment, Borrower Credit Grade, Consolidated Group \nTurnover, Facility Currency, Limit Amount, Committed Limit Indicator, Collateral Type/Sub \nType, Country of Incorporation, Guarantor Credit Grade, Facility Type External Credit Rating, \nCollateral Currency, Collateral Location, Negative Pledge Indicator, Maturity Date etc.\nA typical Banking Data Warehouse for a financial institution could be as follows:\n4. Data Governance & Management\n4.1 Background\nTo achieve Basel II certification, the data used in all pillars must be effectively \nmanaged. This includes both data management and technology governance. IRBA data  \nself-assessment requires a process to be in place for vetting inputs into internal rating systems. \nIt should include an assessment of the accuracy, completeness and appropriateness of data. \nEstablishment of standards and conducting relevant tests for accuracy, completeness, \ntimeliness and reliability  of data are essential to assess on  an ongoing basis  the risks \narising from potential poor quality data and to ensure that appropriate risk mitigation \nmeasures have been undertaken.\n4.2 Data Quality Management (DQM) framework", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 78, "year": 2013}, "type": "Document"}
{"page_content": "measures have been undertaken.\n4.2 Data Quality Management (DQM) framework\nData quality management is an ongoing process and it consists of the stakeholders,  \nDQM process and DQM tools. \n4.2.1  The Stakeholders\nData owners, system owners, data consumers and data services are the main \nstakeholders. Data owners are responsible for the process of updating data into the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 78, "year": 2013}, "type": "Document"}
{"page_content": "70 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nsystem. They will define the data quality measurements, monitor data quality metrics, \nreport data quality metrics to data services and resolve data quality issues. A data \nconsumer is any stakeholder, who extracts data from another system for processing or \ninformation services. They will report data quality issues to DQ dashboard/DQ log, \nprovide input and take part in the resolution of DQ issues and escalate DQ issues to \ndata service in the event of non-resolution. The owner of the data management policy \nis Data Services. It will administer data ownership, resolve data ownership issues, \nadminister DQ Dashboard and Issues Log, facilitate root cause analysis process and \ntrain data quality management.\n4.2.2  Data Quality Management (DQM) Pr ocess\nThe DQM process can be elaborated under 6 steps.\nStep 1 - Identification of Critical Quality Elements (CQE) \nE.g., CQE for Probability of Default (PD) Drivers; Detailed Drivers \u2013 Borrower PD, \nGuarantor PD, PD validation; Field names \u2013 CRR, Ratings, Date of Ratings etc.\nStep 2 \u2013 Definition of quality (CACTI)\n1. Completeness \u2013 Are all the necessary data captured and present?  \n(E.g., Is this field mandatory?)\n2. Accuracy \u2013 Do the data accurately represent reality or a verified source?   \n(E.g., Is there maker/checker in place?)\n3. Consistency \u2013 Are the data elements consistently defined and understood?  \n(E.g., Is there a drop down list in the system?)\n4. T imeliness \u2013 Are the data available within the required timeframe?  \n(E.g., What is the agreed turnaround time to complete data \ncapture/extraction?)\n5. Integrity - Is the structure of the data and the relationship between fields  \nmaintained consistently?  \n(E.g., Is there data verification on the field?)\nStep 3 \u2013 Controls and checks\nThe business process that support data collection, updating and maintenance should", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 79, "year": 2013}, "type": "Document"}
{"page_content": "The business process that support data collection, updating and maintenance should \nhave the appropriate quality controls and checkpoints in place. This is to ensure \nthat data fit for the purpose is produced as close to the point of entry as possible, \nand avoids or reduces the possibility of data errors and the need for data cleansing. \nExamples of a control point include a maker checker process or mandatory fields in \nthe system. There are 3 defined stages to this step,\na) Document the data process flow\nb) Review control and checks using the CACTI framework\nc) Implement additional control checkpoints if required.\nStep 4 \u2013 Data quality measurement\n1. It will provide quantifiable evidence of an ef fective data management process.\n2. It can be used as a toll to monitor and track the data quality level.\n3. When combined with the data quality tar get, the measurement can be used as a \ntrigger to commence a review of the data management process.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 79, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  71\n4. The standard frequency for a data quality measurement is monthly . However, this \ncan vary depending on the type of data or system. \n    % Quality level =  No. of records meeting requirements              X   100\n                  Total No. of records in universe or sample\n5. The data quality tar get level should be set at a level, which is:\n \u2013 Realistic, given current knowledge of the data quality level;\n \u2013 Represents the next step that the data owner wants to achieve in improving data \nquality given incremental improvement is achievable.\nStep 5 \u2013 Monitoring\n1. Monitoring is critical to ensure the sustainability of any data  quality management effort.\n2. Monitoring can be achieved through periodic data quality measurement, manual or system \nerror reporting\n3. The data quality tar get level can be used as a tool to monitor data quality.\nStep 6 \u2013 Data cleansing, problem resolution and Escalation\nData owners \u2013 To ensure that data cleansing and error correction is performed in a consistent, \nsystematic and methodical manner, a documented error correction procedure is critical.\nData consumers \u2013 Data consumers may put in place a process for error correction.\nData quality escalation \u2013 Within each department, ideally, there should exist an escalation path \nfor dealing with data quality problems. These may include escalation for inaccurate or missing \ninformation, such as to the Business Unit Officer or Business Support Unit.\nData Quality Management Process \u2013 Six broad Data Quality Management (DQM) Process steps to \nguide Data Owners and Consumers to perform data quality management\nIdentify\nCritical\nQuality\nElementsDefine Data\nQuality\nRequirementsDocument\nData\nFlow\nReview\nControls\nand checks\nIn place\nImplement\nAdditional\nControl\ncheckpointsMeasure\nData quality\nlevel\nMonitor\nData quality\nlevel\nIdentifies Critical\nQuality elements\n& provides input for \nmeasurement \ndefinitionMonitors data", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 80, "year": 2013}, "type": "Document"}
{"page_content": "Identifies Critical\nQuality elements\n& provides input for \nmeasurement \ndefinitionMonitors data\nQuality as Data\nOwner of \nDownstream\napplicationCleansing ,\nError\nResolution\nEscalates data\nQuality issues\n& provide \ninputs\non resolution1. Identification 2. Measurement \nDefinition3. Controls \n& Checks4. Measure\n5. Monitoring6. Escalation , \nCleansing & \nResolution\nData Owner\n&\nSystem \nOwner\nData \nComsumerData\nConsumer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 80, "year": 2013}, "type": "Document"}
{"page_content": "72 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n5. T echnology Governance Framework\nThe following are the key requirements to consider from the Basel II Technology framework:\n1. Robustness \u2013 Robustness is the resilience of the system, especially when under stress or  \nwhen confronted with invalid inputs. It is the ability of the software system to maintain \nfunction even with changes in the internal structure or external environment.\n2. Scalability \u2013 Scalability indicates the capability of a system to increase total throughput  \nunder increased load when resources (typically hardware) are added. A scalable system is \none that can easily be altered to accommodate changes in the number of users, resources and \ncomputing entities.\n3. Security & Controls \u2013 The management, operational, and technical controls (i.e., safeguards \nor countermeasures) prescribed for an information system to protect the confidentiality, \nintegrity, and availability of the system and its information.\n4. System Availability \u2013 Availability means the degree to which a system, sub system or \nequipment is operable and in a committable state at the start of a mission, when the mission \nis called for at an unknown, i.e., a random, time.\n5. Sustainability \u2013 Sustainability is a systemic concept, relating to the continuity of commercial  \nand technology aspects in this context.\n6. Reusability \u2013 Reusability is the likelihood a technology component can be used again to add  \nnew functionalities with slight or no modification. The ability to reuse relies in an essential \nway on the ability to build larger things from smaller parts, and being able to identify \ncommonalities among those parts.\n7. T estability \u2013 An adjective meaning \u201cthe ability to be tested\u201d\n8. T echnology Adequacy \u2013 Refers to the sufficiency of the chosen technology to address a \nspecific business need.\nThe key areas to be focussed under Basel II requirements are as follows:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 81, "year": 2013}, "type": "Document"}
{"page_content": "specific business need.\nThe key areas to be focussed under Basel II requirements are as follows:\n1. The collection of data (data source and data consolidation) \u2013  \n- There should be a consistent and qualified process to collect and consolidate data with  \nproper metadata capture. \n- It should be well defined and automated if possible.  \n- All processes involved should be traceable, accountable and auditable.\n2. The storage of data and Basel II related system \u2013  \n- The storage should be on a robust data infrastructure that allows the financial institution \nto perform backup, restore, archive, replicate, high availability, and perform load \nbalancing when required. \n- The application must be designed with security as the underlying core.  \n- The system must comply with the financial institution\u2019s application and operational \nsecurity policies. \n- Further the system must be designed with proper error handling and a defined process  \nunder adequate control to cleanup and to recover the system to normal state.\n- T echnology used should be in line with the financial institution\u2019s architecture direction.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 81, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  73\n3. Data processing and transmission \u2013  \n- There must be control on all files that are exchanged between systems.  \n- There must be proper file identification for each file that is exchanged between systems.  \n- There should be a HASH total for each file that is exchanged between systems, to be \nconfirmed, if needed, as advised by regulators and internal security standards.\n4. Analytical and reporting for end-user consumption \u2013  \n- Data/report download and manual manipulation is not encouraged, unless justified by  \nbusiness and exception sought. \n- \u201cFit-for -purpose\u201d reporting and analytical tools should be used in the technical solution. \n- There should not be any manual report distribution via email or intranet.\n6. Conclusion\nBanks are free to develop, choose and purchase their IT systems and software for the Basel II \nprogramme depending on their risk modelling and data warehouse requirements. However, the \nBasel Committee has categorically outlined the following Supervisory expectations for the use \nof vendor products in IRB processes in their Newsletter No. 8 (March 2006):\n1. Banks must be able to document and explain the role of vendor products and the extent to  \nwhich they are used within their IRB processes. \n2. Banks must be able to demonstrate a thorough understanding of vendor products used in their \nIRB processes. \n3. V endor products must be appropriate to the bank\u2019s exposures and risk rating methodologies \nand suitable for use within the IRB framework. \n4. Banks must have clearly articulated strategies for regularly reviewing the performance of  \nvendor model results and the integrity of external data used in their IRB risk quantification \nprocesses. \n5. Further , the supervisors/regulators will only review and assess the acceptability of estimates \nbased on the system behind the estimates.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 82, "year": 2013}, "type": "Document"}
{"page_content": "74 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Sections 46(1) and  \n76(J)(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n31 July 2013\nBANKING ACT DIRECTION NO. 5 OF 2013\nSUPERVISORY REVIEW PROCESS (PILLAR 2 OF BASEL II) FOR\nLICENSED COMMERCIAL BANKS AND\nLICENSED SPECIALISED BANKS\nIn the exercise of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act, No. 30 \nof 1988, last amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues Directions \nNo. 5 of 2013 on the implementation of Supervisory Review Process (SRP) for  Licensed Commercial \nBanks (LCBs) and  Licensed Specialised Banks (LSBs), respectively,  in accordance with the Basel II \nCapital Accord \u201cInternational Convergence of Capital Measurement and Capital Standards \u2013 A Revised \nFramework\u201d issued by  the Basel Committee on Banking Supervision of the Bank for International \nSettlements in June 2006. \n1.1 In terms of Sections 19(7) and 76G(7) of the Banking Act, the Monetary Board \nis empowered to determine the capital adequacy ratio to be maintained by every \nLCB and LSB, respectively, as far as practicable by adopting the guidelines for \ncapital adequacy set out by the Bank for International Settlements in Basel.\n1.2 In terms of Sections 46(1) and 76(J)(1) of the Banking Act, in order to ensure \nthe soundness of the banking system, the Monetary Board is empowered to issue \nDirections to all or any LCB and LSB, respectively, regarding the manner in \nwhich any aspect of the business of such banks is to be conducted.\n2.1 Commencing from 1 January 2014, every LCB and LSB shall, at all times, \nmaintain adequate capital to cover its exposure to all risks, notwithstanding that", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 83, "year": 2013}, "type": "Document"}
{"page_content": "maintain adequate capital to cover its exposure to all risks, notwithstanding that \nit has complied with the requirements of the Banking Act, Directions No. 9 and \n10 of 2007 dated 26 December 2007 issued to LCBs and LSBs, respectively.\n2.2 In determ ining the adequate capital referred to in Direction 2.1 above, every \nLCB and LSB shall consider the requirements specified in the Regulatory \nFramework on SRP attached hereto.\n3.1 Every LCB and LSB shall develop and implement a sound Internal Capital \nAdequacy Assessment Process (ICAAP) in accordance with the requirements \nspecified in Part II of the Regulatory Framework on SRP attached hereto.Empowerment \nunder the \nBanking Act.\nMaintain Adequate \nCapital above the \nMinimum Capital \nRequirement.\nImplement \nSound Internal \nCapital Adequacy \nAssessment \nProcess.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 83, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  75\n4.1 T he Director of Bank Supervision or examiners of the Bank Supervision \nDepartment shall review and evaluate the following, in accordance with  \nPart III of the Regulatory Framework on SRP attached hereto.\n(a) ICAAP;\n(b) compliance with the requirements set out in these Directions and the  \nRegulatory Framework on SRP attached hereto; and\n(c) adequacy of capital maintained by each bank.\n5.1 The Central Bank of Sri Lanka shall intervene at an early stage to prevent capital  \nof a bank falling below the minimum requirement, in accordance with Part IV \nof the Regulatory Framework on SRP attached hereto.\n6.1 Every LCB and LSB shall submit a Board approved ICAAP Document to the \nDirector of Bank Supervision within six months from the end of its financial \nyear. For the purposes of these Directions and the Regulatory Framework on \nSRP attached thereto, in the case of banks incorporated outside Sri Lanka, the \n\u201cBoard\u201d shall mean the Head Office or the Regional Office that supervises the \nrespective bank.\n6.2 ICAAP  Document shall be prepared in accordance with the format given in \nAppendix I of the Regulatory Framework on SRP attached hereto. However, this \nformat shall be considered as the minimum requirement and ICAAP Document \nof every LCB and LSB shall be comprehensive and relative to its size, nature \nof the business and complexity of business activities.Supervisory \nReview and \nEvaluation \nProcess (SREP).\nSupervisory \nIntervention.\n \nRegulatory \nReporting.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 84, "year": 2013}, "type": "Document"}
{"page_content": "76 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nREGULATORY FRAMEWORK ON \nSUPEVISORY REVIEW PROCESS\n(PILLAR 2 OF BASEL II)\nATTACHMENT  TO THE\nBANKING ACT, \nDIRECTIONS No. 5 of 2013", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 85, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  77\nCONTENTS\nPART I \u2013 OVERVIEW\n1. Introduction\n2. Objectives of Supervisory Review Process (SRP)\n3. Principles governing SRP\n4. Scope and Applicability\nPART II \u2013 INTERNAL CAPITAL ADEQUACY ASSESSMENT PROCESS (ICAAP)\n5. Developing and maintaining ICAAP\n6. The Board of Directors and Senior Management Oversight\n  6.1 Board responsibilities for ICAAP\n  6.2 Senior management\u2019 s responsibilities for ICAAP\n7. Comprehensive assessment of risks\n8. Sound Capital Assessment\n9. Monitoring and Reporting\n10. Internal Controls and Independent review\nPART III \u2013 SUPERVISORY REVIEW AND EV ALUATION PROCESS (SREP)\n11. Key Components\n12. Review Methodologies \n13. Objectives\n14. Coverage\n15. Qualitative Assessment\n16. Dialogue with the bank\nPART IV \u2013 SUPERVISORY INTERVENTION\nAppendix I", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 86, "year": 2013}, "type": "Document"}
{"page_content": "78 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nPART  I  \u2013  OVERVIEW\n1. Introduction \n1.1 The Basel II capital adequacy framework, seeks to harness best practices in risk management into \nthe regulatory process, by providing a spectrum of approaches to measure capital adequacy of banks. \nThe Basel II framework also seeks to provide regulatory capital requirements that are both more \ncomprehensive and more sensitive to risk, and as such, more closely aligned to the risk appetite of \nbanks. \n The Basel II framework is based on three mutually reinforcing pillars:\na. Pillar 1: Minimum capital requirements for three major components of risks that banks face: \ncredit, market and operational risks;\nb. Pillar 2: Supervisory Review Process (SRP): Banks\u2019 own assessments of their capital adequacy \nand encourage banks to develop and use better risk management techniques in monitoring and \nmanaging their risks; and\nc. Pillar 3: Market Discipline: materially increased disclosure requirements.\n1.2 The SRP of licensed commercial banks (LCBs) and licensed specialised banks (LSBs) (hereinafter \nreferred to as \u201cbanks\u201d) is conducted to assess their capital adequacy and to determine whether \nbanks should hold additional capital to cover risks that are not covered or adequately covered by the \nminimum capital requirements under Pillar 1 of Basel II. \n2. Objectives of SRP\n SRP  is intended to:\n2.1 encourage banks to utilise better risk management techniques \u2013 the level of risks a bank is exposed \nto, and the control environment that will determine the level of capital required to be maintained by \nbanks;\n2.2 enhance the risk-based supervision of banks in order to assess the capital adequacy relative to risks;\n2.3 evaluate the bank\u2019s Internal Capital Adequacy Assessment Process (ICAAP) that determines the \nlevel of capital to be maintained against all risks and ensure that banks have adequate capital to \nsupport all risks; and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 87, "year": 2013}, "type": "Document"}
{"page_content": "support all risks; and\n2.4 ensure that banks use ICAAP in more general business decisions and budgets, in more specific \ndecisions such as allocating capital to business units and when evaluating individual credit decision \nprocess.\n3. Principles governing SRP\n SRP  is conducted based on the following four key principles provided in the Pillar 2 of Basel II \ncapital framework:\na. Banks shall have a process for assessing their overall capital adequacy in relation to their risk \nprofiles and a strategy for maintaining their capital levels (Principle 1 of Pillar 2-SRP).\nb. The Central Bank of Sri Lanka (CBSL) as the regulator will review and evaluate bank\u2019s ICAAP \nand strategies, as well as its ability to monitor and ensure compliance with regulatory capital \nratios (Principle 2 of Pillar 2-SRP).\nc. CBSL  expects banks to operate above the minimum regulatory capital ratios and requires banks \nto hold capital in excess of the minimum (Principle 3 of Pillar 2-SRP).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 87, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  79\nd. CBSL  will intervene at an early stage to prevent capital from falling below the minimum levels \nrequired to support the risk characteristics of a particular bank (Principle 4 of Pillar 2-SRP).\n4. Scope and Applicability\n This Regulatory Framework shall be applicable to banks on both standalone (\u201cSolo\u201d) level, as well \nas on the consolidated (\u201cGroup\u201d) level.\nPART  II  \u2013  INTERNAL CAPITAL ADEQUACY ASSESSMENT PROCESS (ICAAP)\n5. Developing and maintaining ICAAP\n5.1 Every bank shall develop and maintain a rigorous and well-documented ICAAP proportional to its \noperations and risk profile and consistent with prudential requirements. \n5.2 ICAAP  of a bank shall include the following five main features.\na. Board and senior management oversight\nb. Comprehensive assessment of risks\nc. Sound capital assessment\nd. Monitoring and reporting \ne. Internal controls and independent review\n5.3 A  bank shall design its ICAAP according to the size, complexity and business strategies of the \nrespective bank.\n6. The Board of Dir ectors and Senior Management Oversight \n6.1 Board responsibilities for ICAAP\na. The Board shall ensure that the bank has in place a strategic plan which clearly outlines its \ncurrent and future capital needs, anticipated capital expenditure, desirable capital level, and \nexternal capital sources.\nb. The Board shall review and approve the target level and composition of capital, and the process \nfor setting and monitoring such targets at least, annually.\nc. The Board shall ensure that the senior management:\n (i) performs an analysis of the current and future capital requirements of the bank in relation \nto its strategic objectives;\n (ii) establishes frameworks for assessing the categories of risks faced by the bank and develops \nsystems related to these risks to the capital level of the bank;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 88, "year": 2013}, "type": "Document"}
{"page_content": "systems related to these risks to the capital level of the bank;\n (iii) establishes a method for monitoring compliance with internal policies on risk assessment \nand the processes related to risks to capital levels; and\n (iv) establishes a strong internal control culture throughout the bank.\nd. The Board shall approve and exercise effective oversight over the bank\u2019s stress testing processes.\ne. The Board shall review ICAAP  of the bank periodically, at least annually, to:\n (i) assess the level and trend of material risks and their ef fects on capital levels;\n (ii) evaluate the sensitivity and reasonableness of key assumptions used in the capital \nassessment measurement system;\n (iii) determine that the bank holds adequate capital against the various risks and is in compliance \nwith established capital adequacy goals; and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 88, "year": 2013}, "type": "Document"}
{"page_content": "80 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (iv) assess the bank\u2019s future capital requirements based on its reported risk profile and make \nnecessary adjustments to the strategic plan, accordingly.\nf. The Board shall ensure that public disclosures are made in the bank\u2019s audited annual report/\naudited financial statements, both qualitative and quantitative information, to assist in assessing \nthe adequacy of bank\u2019s capital commensurate with all material risks the bank is exposed to in \nrelation to its current and future activities. \ng. The Board shall approve the annual ICAAP  document. \n6.2 Senior management\u2019s responsibilities for ICAAP\n The senior management shall: \na. ensure the appropriateness of ICAAP  on an ongoing basis;\nb. have a good understanding of the design and operation of ICAAP;\nc. be responsible for developing a risk management framework that is appropriate in light of the \nrisk profile and business strategy of a bank and integrating ICAAP with the capital planning and \nmanagement processes of the bank. In this regard, senior management shall, at a minimum:\n (i) establish robust policies and procedures to be approved by the Board to identify, measure \nand report all material risks;\n (ii) evaluate the level and trend of material risks and their ef fects on capital levels;\n (iii) evaluate the sensitivity and reasonableness of key assumptions used in the capital \nassessment and measurement system;\n (iv) determine if the bank holds adequate capital against the risks faced by the bank;\n (v) assess future capital needs based on the risk profile of the bank and propose necessary \nadjustments to its strategic plan; and\n (vi) ensure that ICAAP  is subject to annual independent review for robustness and integrity.\nd. establish comprehensive and adequate written policies and procedures, to be approved by the \nBoard, on its stress testing processes taking an active interest in the development and operation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 89, "year": 2013}, "type": "Document"}
{"page_content": "Board, on its stress testing processes taking an active interest in the development and operation \nof stress-testing and, allocating sufficient skilled and competent resources to the modeling \nfunction.\ne. ensure regular reporting of bank\u2019 s ICAAP to the Board.\nf. prepare the annual ICAAP document in accordance with the specified format given in  \nAppendix I; and\ng. submit the Board approved annual document of ICAAP to the Director of Bank Supervision \nwithin six months from the end of the financial year of the respective bank.\n7. Compr ehensive assessment of risks\n7.1 Bank\u2019 s ICAAP shall identify all material risks, which are arising from both on balance sheet and  \noff-balance sheet exposures, faced by the bank and measure these risks that can be reliably quantified \nunder both normal and stressed conditions. ICAAP shall, therefore, address the following risks.\na. Risks captured under Pillar 1: credit, market and operational risks;\nb. Risks not fully captured under Pillar 1; concentration risk (credit risk), interest rate/rate of return \nrisk in the banking book (market risk) and \nc. Risk types not covered by Pillar 1: risks which are not specifically addressed under Pillar 1, \nwhich includes liquidity risk, concentration risk, reputational risk, compliance risk, strategic and \nbusiness risk, residual risk.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 89, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  81\n7.2 A  bank shall be able to identify other external risk factors that may arise from the regulatory, economic \nor business environment. In addition, adequate corporate governance and proper risk management \nincluding internal control arrangements constitute the foundation of an effective ICAAP.\n7.3 The risk measurement systems shall be sufficiently comprehensive and rigorous to capture the \nnature and magnitude of the risks faced by the bank.\n7.4 The risks that are not easily quantifiable shall be evaluated using qualitative assessment and \nmanagement judgment.\n7.5 When measuring risks, comprehensive and rigorous stress tests shall be performed to identify \npossible events or market changes that could have serious adverse effects or significant impact on \nthe bank\u2019s capital and operations.\n7.6 In assessing risks, banks shall also consider the applicable Directions issued under the Banking Act.\n8 Sound Capital Assessment\n Internal capital allocation and assessment process shall meet the following requirements.\n8.1 Banks shall have an explicit Board approved capital plan which states the objectives and the time \nperiod for achieving those objectives, and in broad terms the capital planning process and the \nresponsibilities for that process.\n8.2 The plan shall also lay out how the bank will comply with capital requirements in the future related \nto the level of risk, and a general contingency plan for dealing with divergences and unexpected \nevents such as raising additional capital, restricting business activities or using risk mitigation \ntechniques.\n8.3 The bank shall set capital targets which are consistent with their risk profile, stage of the business \ncycle in which the bank is operating, and business plans. \n8.4 An internal strategy for maintaining capital levels which should not only reflect the desired level of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 90, "year": 2013}, "type": "Document"}
{"page_content": "risk coverage but also incorporate factors such as loan growth expectations, future sources and uses \nof funds, and dividend policy. \n8.5 The amount of capital held shall reflect not only the measured amount of risks but also an additional \namount to account for potential uncertainties in risk measurement. \n8.6 In assessing capital, a bank shall also evaluate the quality and capacity of its capital to absorb losses.\n8.7 The bank shall demonstrate to CBSL  that its capital assessement approach is conceptually sound \nand that outputs and results are reasonable.\n9. Monitoring and Reporting\n9.1 The bank shall establish an adequate system for monitoring and reporting risk exposures and, \nassessing how the bank\u2019s changing risk profile affects the capital requirements.\n9.2 The bank\u2019 s Board and the senior management shall:\na.  receive reports on the bank\u2019s risk profile and capital needs in a manner appropriate to facilitate \nthe conduct of their responsibilities; \nb. evaluate the level and trend of material risks and their ef fects on capital levels;\nc. evaluate the sensitivity and reasonableness of key assumptions used in the capital assessment \nmeasurement system;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 90, "year": 2013}, "type": "Document"}
{"page_content": "82 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nd. determine that the bank holds adequate capital against the risks and is in compliance with \nestablished capital adequacy goals; and\ne. assess its future capital requirements based on the bank\u2019s reported risk profile and make necessary \nadjustments to the bank\u2019s strategic plan, accordingly.\n10. Internal Contr ols and Independent Review\n10.1 The bank\u2019s internal control structure is essential to the capital assessment process. Effective control \nof the capital assessment process includes an independent review, and where appropriate, with the \ninvolvement of internal or external audits.\n10.2 The person(s) responsible for the development or implementation of ICAAP shall not be involved \nin the independent review.\n10.3 The bank shall conduct periodic independent reviews of its risk management processes to ensure \ntheir integrity, accuracy, and reasonableness. Areas that shall be reviewed include:\na. appropriateness of the bank\u2019s capital assessment process given the nature, scope and complexity \nof its activities;\nb. identification of lar ge exposures and risk concentrations;\nc. accuracy and completeness of data inputs into the bank\u2019 s assessment process;\nd. reasonableness and validity of scenarios used in the assessment process; and\ne. stress testing and analysis of assumptions and inputs.\nPART  III  \u2013  SUPERVISORY REVIEW AND EV ALUATION PROCESS (SREP)\n11. Key Components \n SREP , which consists of the following key components, shall be carried out by the Director of Bank \nSupervision or examiners of the Bank Supervision Department.\na. Review of the bank\u2019 s ICAAP;\nb. Review of the bank\u2019 s risk profile;\nc. Review of the levels and quality of capital held; and\nd. Communication of SREP  results to the bank.\n12. Review Methodologies \n SREP  shall involve a combination of:\na. periodic examinations or inspections;\nb. continuous supervision;\nc. discussions with the bank management;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 91, "year": 2013}, "type": "Document"}
{"page_content": "b. continuous supervision;\nc. discussions with the bank management;\nd. review of work of internal and external auditors; and\ne. periodic reporting.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 91, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  83\n13. Objectives \n The objective of the review is to: \na. evaluate the adequacy of bank\u2019s internal capital adequacy assessments and strategies, as well as \ntheir ability to monitor and ensure compliance with regulatory capital ratios; \nb. ensure that the bank operates above the minimum regulatory capital ratios and composition of \ncapital is appropriate for the nature and scale of the bank\u2019s business; \nc. identify existing or potential problems and key risks faced by the bank, deficiencies in their \ninternal control and risk management frameworks, and the degree of reliance that can be placed \non the outputs of ICAAP;\nd. intervene at an early stage to prevent capital from falling below the minimum levels required to \nsupport the risk characteristics of the bank;\ne. take appropriate supervisory action and regulatory measures if results of this process are not \nsatisfactory.\n14. Coverage\n SREP  will cover a quantitative review of bank\u2019s Pillar 1 inherent risk exposures and Pillar 2 \ninherent risk exposures.\n15. Qualitative Assessment\n If Pillar 2 risks are not readily quantifiable, the supervisory judgment is to be used with respect to \nqualitative assessments of the bank\u2019s ability to contain actual risk exposures within prudent, planned \nlevels through effective risk governance, oversight, management and control practices.\n16. Dialogue with the bank\n16.1 SREP  involves an active dialogue with the bank regarding ICAAP, through which CBSL seeks to:\na. gain deeper insights into the bank\u2019 s overall control and risk management framework;\nb. establish a closer understanding of how the bank approaches the risks that are not covered under \nthe minimum capital requirements and the amount of internal capital allocated to them;\nc. understand the mechanisms the bank has maintained for identifying, measuring, monitoring, \ncontrolling, mitigating and reporting its risks; and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 92, "year": 2013}, "type": "Document"}
{"page_content": "controlling, mitigating and reporting its risks; and \nd. understand whether additional capital on top of that assessed is necessary to cover the \nbanks\u2019existing risk exposures, as well as future planned sources of capital.\n16.2 The dialogue will provide an opportunity for the bank to make appropriate changes to its ICAAP . \n16.3 Communication of SREP  results:\na. After completion of the SREP, the Director of Bank Supervision may conduct discussions with \nthe bank based on the results of the assessment, including any areas of concern which may lead \nto an increase in bank\u2019s minimum CAR.\nb. The Director of Bank Supervision will explain the outcome of the assessment and recommend \nthe prompt corrective actions to address the concerns of the bank, if any. If there is a proposed \nincrease in the capital, the bank will be notified (with the opportunity to make representations) \nbefore the decision is finalised.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 92, "year": 2013}, "type": "Document"}
{"page_content": "84 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nPART  IV  \u2013  SUPERVISORY INTERVENTION\n17. Based on the outcome of SREP , CBSL shall intervene at an early stage to:\na. prevent capital from falling below the minimum requirement of the respective bank; and\nb. prevent potential impact to the stability of the financial system.\n18. Depending on the capita l level, a range of supervisory actions including the following shall be \ninitiated.\na. moral suasion to encourage the bank to improve their capital positions and levels;\nb. improve the bank\u2019 s ICAAP including risk management systems and controls;\nc. require the bank to submit a capital restoration plan;\nd. impose restrictions on the payment of dividends, business activities, acquisitions, investments \netc.; and\ne. require the replacement of the Board and/or the senior management.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 93, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  85\nAppendix I\nSPECIFIED FORMAT FOR THE PREPARATION OF ICAAP DOCUMENT\n1. General\n1.1 The purpose of ICAAP document is to inform the Board/senior management and the CBSL of the \nongoing assessment of the bank's risks, how the bank intends to mitigate those risks and how much \ncurrent and future capital is necessary having considered other mitigating factors.\n1.2 Annual document of ICAAP of a bank shall be prepared in accordance with the contents given in \nparagraph 2 below.\n1.3 However , CBSL expects there to be a fair degree of variation in the length and format of submissions \nsince banks\u2019 business and risk profiles differ from each other and ICAAP document should be \nproportional to the size, nature and complexity of a bank\u2019s business.\n1.4 Use of this format may, therefore, make the review process more efficient for both the bank and \nCBSL.\n1.5 Base period and financial data of ICAAP document shall be in accordance with the audited financial \ndata as at the end of the preceding financial year. \n1.6 The projected financial data of ICAAP  document should be at least for three financial years.\n2. Contents\n2.1 Executive Summary \n2.2 Background\n2.3 Board and Senior Management Oversight\n2.4 Risk Governance\n2.5 Sound stress testing processes\n2.6 Capital Planning\n2.7 Projected financial data and assessment of capital\n3. Executive summary\n This section will present an overview of ICAAP  methodology and results. This overview will \ninclude:\na. The purpose of the report and the group entities which are covered by ICAAP;\nb. Financial forecasts, including the strategic position of the bank, its balance sheet strength, and \nfuture profitability;\nc. Regulatory capital management;\nd. Regulatory capital assessment - Pillar 1;\ne. Internal capital assessment - Pillar 2;\nf. Ratio management: How much and what composition of internal capital the bank considers it", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 94, "year": 2013}, "type": "Document"}
{"page_content": "f. Ratio management: How much and what composition of internal capital the bank considers it \nshould hold as compared with the capital adequacy requirement under Pillar 1;\ng. Risk management processes and assessment;\nh. Descriptions of the capital and dividend plan; the manner in which the bank intends to manage \ncapital going forward and for what purposes;\ni. Stress testing approach; and\nj. Details of the approval.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 94, "year": 2013}, "type": "Document"}
{"page_content": "86 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n4. Background\n This section will include the relevant organization structure and business lines, group structure \n(legal and operations) and financial data of the bank largely including the profit, dividends, equity, \ncapital resources held and as compared with regulatory requirements, total assets, total loan and \nadvances, total deposits, and any conclusions that can be drawn from trends in the data which may \nhave implications for the bank\u2019s future.\n5. Board and Senior  Management Oversight\n This section would provide the following information:\na. Corporate governance structure;\nb. Board and senior management oversight; \nc. ICAAP  governance structure;\nd. Monitoring and controls; and\ne. Internal controls and independent review . \n6. Risk Governance\n This section will provide the following;\na. Risk appetite;\nb. Risk management framework;\nc. Regulatory risk assessment (Pillar 1); \n i. Credit risk\n ii. Market risk\n iii. Operational risk\nd. Internal risk assessment (Pillar 2);\n i. Concentration risk \n ii. Interest rate risk in the banking book\n iii. Settlement risk\n iv. Liquidity risk\n v . Compliance risk\n vi. Strategic/business risk, and\n vii. Reputation risk\n viii. Residual Risk \n7. Sound str ess testing processes\n This section will provide the following details of bank\u2019 s stress testing practices:\na. Overview of the stress testing process\nb. Stress scenario/types\nc. discuss the results of stress tests and its impact to the bank capital\nd. risk mitigation or contingency plans across a range of stressed conditions", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 95, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  87\n8. Capital planning\n This section will provide details of bank\u2019s capital planning and management processes, which, at a \nminimum, includes:\na. the bank\u2019s short-term and long-term capital adequacy goals in relation to its risk profile, taking \ninto account its strategic focus and business plan;\nb. the approved capital targets that are consistent with the bank\u2019s overall risk profile and financial \nposition; \nc. the approach for determining the bank\u2019s overall capital adequacy in relation to its risk profile; \nand\nd. Conclusions.\n9.\t Projected \tfinancial\tposition\tand\tassessment \tof\tcapital\n This section will explain Pillar 1 and 2 capital requirements, in respect to; \na. the expected changes to the business profile of the bank, the environment in which it expects to \noperate, its projected business plans (by appropriate lines of business), and projected financial \nposition for the next, three to five years; and\nb. given these business plans, this section would also discuss the bank\u2019s assessment as to whether \nadditional capital is necessary on top of that assessed to cover their existing risk exposures, as \nwell as future planned sources of capital.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 96, "year": 2013}, "type": "Document"}
{"page_content": "88 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of SriLanka under Section 46(1) of the \nBanking Act, No.30 of 1988, as amended.\nSgd. B D W A Silva\nSenior Deputy Governor\nCentral Bank of Sri Lanka\nColombo\n31 October 2011\n \nBANKING ACT DIRECTIONS NO. 9 OF 2011\nAMENDMENT TO DIRECTIONS ON\nMAINTENANCE OF CAPITAL ADEQUACY RATIO\nThe qualifying criteria for the SME exposures given in paragraph 6.4.3.1.8 ( i)(d) of Schedule I in \nDirection 1(2) of the Banking Act, Directions No. 9 of 2007 is amended by replacing with the following \nparagraph:\nSME Exposures.  i. The maximum credit exposure of the lending bank to an SME shall not exceed \nRs. 200 million. \n ii. The annual turnover of the SME shall not exceed Rs. 600 million.\n iii. The annual turnover should be based on latest available audited financial \nstatements or certified by a Chartered Accountant or an Approved Accountant \nacceptable to the Department of Inland Revenue. In the case of draft financial \nstatements, the turnover certified by a Chartered Accountant or an Approved \nAccountant should be obtained within the year.\n iv. In the case of grant of credit facilities less than Rs. 50 million, the condition \niii above shall not be applicable and banks shall adopt their own internal \nmechanism to verify the SME\u2019s annual turnover.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 97, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  89\nDirections made by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of \nthe Banking Act, No. 30 of 1988, as amended.\nSgd. W A Wijewardena\nSenior Deputy Governor \nCentral Bank of Sri Lanka\nColombo\n24 April, 2009\nDIRECTIONS\nBANKING ACT DIRECTION NO.1 OF 2009\nAMENDMENT TO DIRECTIONS ON OWNERSHIP OF ISSUED CAPITAL CARRYING\nVOTING RIGHTS FOR LICENSED COMMERCIAL BANKS\nIn the exercise of the powers conferred by Section 46(1) of the Banking Act, No. 30 of 1988,  \nlast amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues the following \nDirection amending Direction No.1 of 2007 dated 19 January 2007, issued by the Monetary Board of the \nCentral Bank of Sri Lanka. This Direction may be cited as the Banking Act Direction No.1 of 2009. \nThe following new Direction shall replace Direction No. 5 of the Banking Act Direction No. 1 of 2007. \n5. Nevertheless, in the case of a licensed commercial bank which requires  \nrestructuring to avoid inadequacy of capital, insolvency or potential failure, \nsuch upper limit as specified in Direction 4 above may not be imposed, and the \nMonetary Board may grant permission to any of the categories of shareholders \nspecified in Sections 12(1 c) and 46(1)(d) to acquire a material interest in \nexcess of 15 per cent of the issued capital carrying voting rights in the licensed \ncommercial bank, subject to the condition that the material interest so acquired \nshall be reduced to 15 per cent within a specified period as may be determined \nby the Monetary Board, on a case-by-case basis.Exceptions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 98, "year": 2013}, "type": "Document"}
{"page_content": "90 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board under Section 46(1) of the Banking Act, No.30 of 1988, \nas amended.\nNivard Ajith Leslie Cabraal\nGovernor\nColombo\n19 January 2007\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 1 OF 2007\nOWNERSHIP OF ISSUED CAPITAL CARRYING VOTING RIGHTS\n  \nIn exercise of the powers conferred by Section 46(1) of the Banking Act, No.30 of 1988, last \namended by the Banking Act, No.46 of 2006, the Monetary Board hereby issues Directions as follows:\n1. Thes e Directions may be cited as the Banking Act, Directions No.1 of 2007.  \nThe Sections referred to in these Directions will be those of the Banking Act, No.30 \nof 1988, last amended by the Banking Act, No.46 of 2006.\n2. In terms of Section 46(1), in order to ensure the soundness of the banking  \nsystem, the Monetary Board has been empowered to issue Directions to licensed \ncommercial banks regarding the manner in which any aspect of the business of \nsuch banks is to be conducted, including Directions pertaining to the maximum \npercentage of the share capital in a licensed commercial bank incorporated in Sri \nLanka\u2013\n (i) held by a company , an incorporated body, or an individual; \n (ii) held in the aggregate by\u2014\n (a) a company and one or more of the following:\u2014 \n(aa)  its subsidiaries\n(bb)  its holding company; \n(cc)  a subsidiary of its holding company; or \n(dd)  a company in which such company or its subsidiary, or its holding \ncompany, or a subsidiary of its holding company has a substantial \ninterest; or\n (b) an individual and one or more of the following:\u2014 \n(aa) his close relations; \n(bb) a company in which he has a substantial interest or in which his \nclose relation has a substantial interest; \n(cc) the subsidiary of such company; Citation.\nEmpowerment \nunder Section \n46(1).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 99, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  91\n(dd) a holding co mpany of such company;\n(ee) a subsidiary of such company's holding company; \n(ff) a company in which such company, or its subsidiary, or its holding \ncompany or a subsidiary of its holding company has a substantial \ninterest; or\n(gg) an incorporated body other than a company in which such individual \nor his close relation has a substantial interest; or \n(c) companies in each of which an individual or company as the case may \nbe, has either directly, indirectly or beneficially a substantial interest or \nsignificant management interest.\n3. (1) In terms of Section 12(1C)( a), an individual, partnership or corporate body \nshall not, either directly or indirectly or through a nominee or acting in concert \nwith any other individual, partnership or corporate body, acquire a \u201cmaterial \ninterest\u201d in a licensed commercial bank incorporated or established within Sri \nLanka by or under any written law without the prior written approval of the \nMonetary Board given with the concurrence of the Minister in charge of the \nsubject of Finance. \n (2) In terms of Section 12(1C)( b), the Monetary Board is empowered to grant such \napproval subject to terms and conditions it may deem fit. \n (3) A  \u201cmaterial interest\u201d means the holding of over 10 per cent of the issued capital \nof a licensed commercial bank carrying voting rights.\n4. Ac cordingly, the Monetary Board, subject to Sections 12(1B), 12(1C) and 13 \nand subject to terms and conditions it may deem fit, may grant permission on a  \ncase-by-case basis to any of the categories of shareholders referred to in Section \n12(1C) and 46(1)( d) to acquire a material interest not exceeding 15 per cent of the \nissued capital carrying voting rights in a licensed commercial bank.\n5. Nevertheless, in the case of a licensed commercial bank which requires restructuring", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 100, "year": 2013}, "type": "Document"}
{"page_content": "5. Nevertheless, in the case of a licensed commercial bank which requires restructuring \nto avoid inadequacy of capital, insolvency or potential failure, such upper limit as \nspecified in Direction 4 above may not be imposed, and the Monetary Board may \ngrant permission to any of the categories of shareholders specified in Sections \n12(1C) and 46(1)(d) to acquire a material interest in excess of 15 per cent of the \nissued capital carrying voting rights in the licensed commercial bank subject to \nthe condition that the material interest so acquired shall be reduced to 15 per cent \nwithin a specified period as may be determined by the Monetary Board on a case-\nby-case basis, provided also that such period shall not exceed five years from the \ndate of granting permission. \n6.  (1) Any material interest previously acquired by any of the categories of \nshareholders referred to in Sections 12(1C) and 46(1)(d) in excess of 15 per \ncent of the issued capital carrying voting rights in a licensed commercial bank \nand held at the date of these Directions, shall be disposed of and/or otherwise \nreduced by such shareholders to a level not exceeding 15 per cent of the issued \ncapital carrying voting rights in the licensed commerc ial bank.Empowerment \nunder Section \n12(1C).\nMaximum \npercentage \nof ownership \nof shares.\nExceptions.\nProvisions in \nrelation to existing \nownership.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 100, "year": 2013}, "type": "Document"}
{"page_content": "92 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (2) Such disposal and/or reduction shall be carried out within the period as may be \nspecified by the Monetary Board on a case-by-case basis, provided that such \nperiod shall not exceed five years from the date of stipulation. \n ( 3)  In the event, any of the categories of shareholders referred to in Section  \n12(1C) and 46(1)(d) fails to comply with the directives of the Monetary Board \nwithin the stipulated period of time, the voting rights in excess of 10 per cent \nattributable to the ownership of shares held by the categories of shareholders \nsubject to this Direction shall be deemed invalid with effect from the last date \nof the period specified by the Monetary Board to reduce the material interest.\n7. (1) W ithin two months of the date of these Directions, each licensed commercial \nbank shall inform the Monetary Board of instances, if any, in its bank where \nthe categories of shareholders referred to in Sections 12(1C) and 46(1)( d) own \na material interest exceeding 15 per cent of the issued capital carrying voting \nrights in its bank and seek a Direction from the Monetary Board as to the period \nwithin which the disposal and/or reduction of the material interest to the level \nof 15 per cent shall be carried out.\n (2) W ithin two months of receipt of such information and request, the Monetary \nBoard will specify the period within which the disposal and/or reduction should \ntake place as per Direction 6(2) above and inform the licensed commercial \nbank accordingly. \n ( 3)  Immediately thereafter , in terms of Section 46(3), the licensed commercial \nbank shall direct the shareholders who hold a material interest in its bank over \nthe limits specified in these Directions to dispose of and/or reduce the number \nof shares carrying voting rights in order to comply with these Directions, \nwithin the period as stipulated by the Monetary Board.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 101, "year": 2013}, "type": "Document"}
{"page_content": "within the period as stipulated by the Monetary Board. \n8. In terms of Section 12(1C)( c) and subject to Directions 6 and 7 above, a licensed \ncommercial bank shall not enter in its register of members the name of any \nshareholder referred to in Sections 12(1C) and 46(1)( d) as the holder of shares of \nthe bank, who or which has contravened the provisions of Section 12(1C) and/or \nthese Directions.\n9. Anything contained in these Directions shall not be construed to restrict the  \nownership of issued capital carrying voting rights in\u2013\n(a) the Bank of Ceylon established under the Bank of Ceylon Ordinance, No.53 of \n1938;\n(b) the People\u2019 s Bank established under the People\u2019s Bank Act, No.29 of 1961.\n(c) a licensed commercial bank established by a statute in which the ownership of \na majority of the shares is held by the Government or a public corporation or a \nstatutory body.\n10. (1) The Banking Act, Directions No.1 of 1998 (Share Capital Ownership) dated  \n22 October 1998 and Directions No.1 of 1999 (Share Capital Ownership) dated  \n5 March 1999 are hereby revoked. \n (2) The effect of revocation of previous Directions shall not affect any penalty or \nliability incurred under those Directions pri or to the revocation.Transitional \narrangements. \nSteps to secure \ncompliance.\nNon-application \nof Directions.\nRevocation \nof previous \nDirections.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 101, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  93\nBANKING ACT\nDeterminations made by the Monetary Board of the Central Bank of Sri Lanka under sections 8, 19, \n20, 21 and 86 of the Banking Act as amended by the determination made on 29th February, 2000.\nSgd. A. S. Jayawardena\nGovernor\nColombo\nDETERMINATION\n1. By virtue of the provisions of section 8, the Monetary Board has determined that with effect from  \n1st January 1989 the annual licence fee that shall be paid by a licensed commercial bank  \u2013\n (a) carrying on domestic banking business excluding foreign exchange business be \n  Rs.10,000.00;\n (b) carrying on domestic banking business including foreign exchange business and of f-shore, \nbanking business be Rs.250,000.00;\n (c) carrying on of f-shore banking business only be Rs.150,000.00.\n*2. In exercise of the powers conferred by section 19(4), the Monetary Board determined that, with \neffect from 24 May 2002, foreign participation in the share capital of a Licensed Commercial Bank \nincorporated or established in Sri Lanka, is permitted upto 100 percentum of its issued share capital, \nsubject to compliance with the provisions of section 12(1)d and the limitations on share capital \nownership imposed by Direction No.1 of 1998 issued on 22, October 1998 under section 46(1)d.\n3. For the purposes of the provison to section 20(1), \u201cintangible assets\u201d are determined to be goodwill, \npreliminary expenses including legal and other fees, all capitalised expenses and other items not \nrepresented by tangible assets.\n4. (a) The Monetary Board has determined:\n (i) by virtue of the provisions of section 21(1), that every licensed commercial bank shall \nwith effect from 1st April, 1989 maintain liquid assets of an amount not less than 20% \nof its total liabilities, less liabilities to the Central Bank and to the share holders;\n (ii) by virtue of section 21(3) that every licen sed commercial bank which fails to maintain", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 102, "year": 2013}, "type": "Document"}
{"page_content": "(ii) by virtue of section 21(3) that every licen sed commercial bank which fails to maintain \nliquid assets as required under section 21(1) shall pay to the Central Bank a penalty \nat the rate of 0.1% per day calculated on the amount of the deficiency of its required \nliquid assets. Such penalty shall be paid not later than the last working day of the month \nsucceeding the month in which deficiency of the liquid assets occurred.\n5. The Monetary Board has determined under section 86 that inland trade bills, cash items in process of \ncollection, balances with banks abroad and treasury bonds issued under section 21 a of the Registered \nStock and Securities Ordinance shall also form part of the liquid assets of a licensed commercial \nbank. \n* Amended by the determination dated 24th May, 2002.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 102, "year": 2013}, "type": "Document"}
{"page_content": "94 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOur Ref. : 02  / 17 / 500 / 0086  / 001\nBank Supervision Department\n07 December 2012\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nICRA Lanka Limited \u2013 \nRecognition as an External Credit Assessment Institution\nThe Monetary Board of the Central Bank of Sri Lanka (CBSL) has approved ICRA Lanka Limited \nas a recognised External Credit Assessment Institution, for the purpose of all regulatory requirements of \nCBSL applicable to Licensed Commercial Banks and Licensed Specialised Banks.\nAccordingly, Table 1 and Table 3 under the item No. 6.4.2.3.1 of the Guidelines on Computation \nof Capital Adequacy Ratio is revised as in Annex.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 103, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  95\nAnnex\nTable 1\nMapping of Notations of the Credit Rating Agencies in Sri Lanka\nFitch Rating LankaRAM Ratings \n(Lanka) LimitedRating of ICRA \nLanka Limited Rating Scale for CAR\nAAA (lka) AAA (SL) AAA AAA\nAA+ (lka) AA+ (SL) AA+ AA+\nAA (lka) AA (SL) AA AA\nAA- (lka) AA- (SL) AA- AA-\nA+ (lka) A+ (SL) A+ A+\nA (lka) A (SL) A A\nA- (lka) A- (SL) A- A-\nBBB+ (lka) BBB+ (SL) BBB+ BBB+\nBBB (lka) BBB (SL) BBB BBB\nBBB- (lka) BBB- (SL) BBB- BBB-\nBB+ (lka) BB+ (SL) BB+ BB+\nBB (lka) BB (SL) BB BB\nBB- (lka) BB- (SL) BB- BB-\nB+ (lka) B+ (SL) B+ B+\nB (lka) B (SL) B B\nB-(lka) & Lower B- & Lower (SL) B- & Lower B- & Lower\nTable 3\nMapping of Short Term Ratings\nShort term ratings\nRisk \nWeights RAM Ratings \n(Lanka) LimitedStandard and \nPoor\u2019sMoody\u2019sFitch \nRatingsICRA Lanka \nLimited\nP \u2013 1 A \u2013 1+ / A \u2013 1 P \u2013 1 F1+ / F1 (SL) A1+ / A1 20%\nP \u2013 2 A \u2013 2+ / A \u2013 2 P \u2013 2 F2 (SL) A2+ / A2 50%\nP \u2013 3 A \u2013 3+ / A \u2013 3 P \u2013 3 F3 (SL) A3+ / A3 100%\nNP Below A \u2013 3 NP Below F3 (SL) Below A3 150%", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 104, "year": 2013}, "type": "Document"}
{"page_content": "96 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 04 / 003 / 0400  / 001\nBank Supervision Department\n13 July 2004\nTo : CEOs of all Licensed Commercial Banks\nDear Sirs,\nCLASSIFICATION OF ADV ANCES AND SPECIFIC PROVISIONS  /\nCRITERIA FOR SELECTION OF V ALUERS UNDERTAKING THE REV ALUATION OF\nFIXED ASSETS FOR THE COMPUTATION OF THE CAPITAL ADEQUACY RATIO\nLicensed Commercial Banks (LCBs) are required to note the following :\u2013\n1.  Current professional valuation reports referred to in the Directions dated 22 August 1997 on \nClassification of Advances and Specific Provisions issued under Section 46 a of the Banking Act shall \nmean current professional valuation reports obtained from external Independent valuers.\n2.  For the Purpose of the Directions referred to in 1 above, the banks are exempted from the  \nrequirement to obtain professional valuation reports in  respect of loans and advances of Rs.250,000 or \nbelow, subject to the condition that a current internal assessment of the value of properties mortgaged for \nsuch loans, signed by the Assistant General Manager or such other senior officer of the bank in charge of \ncredit, is available.\nNote :  Current internal assessment is defined as an assessment that is not more than two years old.\n3.  V aluers referred to in the circular dated 19 April 1999 issued on \u201cCriteria for Selection of Valuers \nUndertaking the Revaluation of Fixed Assets for the Computation of the Capital  Adequacy Ratio\u201d shall \nmean external Independent valuers.\nPlease acknowledge receipt of this circular.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 105, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  97\nRef. No. : BS/69/93\nBank Supervision Dept.\n8th Floor, Renuka Building\nNo. 41 Janadhipathi Mawatha\nColombo 1.\n19th April 1999\nTo : All Licensed Commercial Banks\nDear Sir/Madam,\nCRITERIA FOR SELECTION OF V ALUERS UNDERTAKING\nTHE REV ALUATION OF FIXED ASSETS FOR THE\nCOMPUTATION OF THE CAPITAL ADEQUACY RATIO\nAll Licensed Commercial Banks are hereby informed that in the selection of Valuers to undertake \nthe revaluation of the Bank\u2019s fixed assets for the purpose of including 50 per cent of such revaluation \nreserves in the computation of the Capital Adequacy Ratios, the following eligibility criteria would \napply:\u2013\nThe Valuer shall be :\u2013\n (a) a Chartered Valuation Surveyor; or\n (b) a Fellow of the Institute of Valuers (Sri Lanka) with a Degree or Diploma in Valuation and \nwork experience of 15 years; or\n (c) a Licentiate of the Institute of Valuers (Sri Lanka) with work experience of over 25 years.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd. Ms. C I Fernando\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 106, "year": 2013}, "type": "Document"}
{"page_content": "98 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 04 / 002 / 0005  / 003\nBank Supervision Department\n06 January 2004\nTo : All Licensed Commercial Banks and\n       all Licensed Specialised Banks\nDear Sir  / Madam,\nINTERPRETATION OF CAPITAL FUNDS\nAll Domestic Licensed Commercial Banks and Licensed Specialised Banks are hereby informed \nthat the proceeds of redeemable cumulative preference shares would constitute part of Capital Funds of \nbanks for the purpose of Banking Act, and the direction issued thereunder, relating to the basis for the \ncomputation of the Single Borrower Limit and Investments in Equity in terms of section 46 and 17  a \nrespectively and, section 76 j(1) of the Banking Act.\nYours faithfully,\nSgd. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 107, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  99\nRef. No. : 02  / 17 / 402 / 0073  / 002\nBank Supervision Department\n29 July 2010\nTo : CEOs of Licensed Commercial Banks\nDear Sir  / Madam,\nENHANCEMENT OF MINIMUM CAPITAL REQUIREMENT OF BANKS\nWe refer to our Circular No. 02/17/402/0073/001 dated 12 April 2005 on the above subject and \nwrite to inform you that as announced at the meeting held on 24 November 2009, the Monetary Board \nof the Central Bank of Sri Lanka has decided to require all licensed commercial banks to increase their \ncapital as follows in the interest of a strong and sound banking system:\n(a) Rs. 3 bn by 31 December 201 1\n(b) Rs. 4 bn by 31 December 2013\n(c) Rs. 5 bn by 31 December 2015\nCapital for this purpose shall mean the Core Capital as defined in terms of item No. 6.2.2.2 in \nthe Guidelines that were annexed as Schedule I to the Banking Act Direction No. 9 of 2007 dated 26 \nDecember 2007 on Maintenance of Capital Adequacy Ratio.\nYours faithfully,\nSgd, T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 108, "year": 2013}, "type": "Document"}
{"page_content": "100 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 402 / 0073  / 002\nBank Supervision Department\n01 January 2008\nTo : CEOs of Licensed Commercial Banks\nDear Sir/Madam,\nENHANCEMENT OF MINIMUM CAPITAL REQUIREMENT OF BANKS\nFurther to our circular dated April 12, 2005 on the above, informing Licensed Commercial Banks \n(LCBs) of the decision of the Monetary Board of the Central Bank of Sri Lanka to increase the minimum \ncapital requirement of LCBs to Rs.2,500 million.\nWe write to inform you that \u2018capital\u2019 for the purpose of meeting the minimum capital requirement \nshall mean the Core Capital as defined under item No. 6.2.2.2 in the Guidelines annexed as Schedule I \nof the Banking Act, Direction No.9 of 2007 dated December 26, 2007 issued by the Monetary Board of \nthe Central Bank of Sri Lanka. \nYours faithfully,\nSgd, B.D.W.A. Silva\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 109, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  101\nRef. No. : 02  / 17 / 800 / 0002  / 001\nBank Supervision Department\n11 December 2006\nTo : CEOs of All Licensed Commercial Banks\nDear Sirs,\nMINIMUM CAPITAL REQUIREMENT OF LICENSED COMMERCIAL BANKS\nThis is to inform you that considering the difficulties faced by some Licensed Commercial Banks \nthat are in the process of infusing fresh capital to meet the increased minimum capital requirement in \nterms of Circular No. 02/17/402/0073/001, dated 12 April 2005, the Monetary Board of the Central Bank \nof Sri Lanka has decided to grant an extension of time to such banks on a case-by-case basis to meet the \nsaid requirement, on the following basis\u2013\n(a) till end 2008 to infuse at least 50 per cent of the shortfall\n(b) till end 2009 to meet the total capital requirement of Rs. 2,500 million \n2. The banks which require an extension of time may submit their requests to the Director of Bank \nSupervision for consideration of the Monetary Board, along with a time-bound capital infusion plan to \nmeet the minimum capital requirement by the new dates stipulated above. The Monetary Board may \ngrant extensions subject to such terms and conditions as it may deem necessary.\nYours faithfully,\nSgd, Mrs. L K Gunatilake\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 110, "year": 2013}, "type": "Document"}
{"page_content": "102 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 402 / 0073  / 001\nBank Supervision Department\n12 April 2005\nTo : The CEOs of all Licensed Commercial Banks\nDear Sirs,\nENHANCEMENT OF MINIMUM CAPITAL REQUIREMENTS OF BANKS\nAs intimated to you at the meeting held on 08.04.2005, as part of its responsibility to maintain \nfinancial system stability and in the interest of a strong and sound banking system, the Monetary Board \nof the Central Bank of Sri Lanka has decided to require all licensed commercial banks to increase their \ncapital to Rs.2,500 mn.  For this purpose capital shall mean the Tier I capital (Core Capital) as defined \nby the Directions dated 22.08.1997 issued by the Monetary Board under Section 19(2) and 19(7) of \nthe Banking Act as amended from time to time.  Commercial banks that do not currently meet this \nrequirement may enhance their capital in the following manner.\n\u2022 The current capital should be enhanced by at least 50% of the deficiency by the end of 2006; \nand\n\u2022 the balance of the  deficiency should be met by the end of 2007. \nAll commercial banks are required to meet the enhanced capital requirements within the stipulated \nperiods.\nThe Monetary Board has also determined, subject to the concurrence of the Hon. Minister of \nFinance, that, with immediate effect the required equity capital for a new commercial bank should be \nRs.2,500 mn and that the present requirement on foreign banks to remit the sum of US $ 2 mn under \nthe provisions of Section 4(1) of the Banking Act should be waived.  \nYou are kindly requested to assess the present position of your bank vis-\u00e0-vis the enhanced capital \nrequirements based on the audited financials for the last financial year and inform me of the position \nby 30 June 2005, along with a time bound plan for capital augmentation in case the level of capital is \nbelow the stipulated minimum capital requirement.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 111, "year": 2013}, "type": "Document"}
{"page_content": "below the stipulated minimum capital requirement.\nFurther, you are requested to be mindful of the enhanced capital requirements when deciding on \ndeclaration of dividends or repatriation of profits.\nPlease acknowledge receipt.\nYours faithfully,\nSgd, Director of Bank Supervision\ncc \u2013 Mr . Upali De Silva\n Secretary-General\n Sri Lanka Bankers Association (Gte) Ltd.\n Level 8, Ceylinco House\n Colombo 01.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 111, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  103\nRef. No. : 02  / 04 / 002 / 0018  / 001\nBank Supervision Department\n12 August 2005\nTo : The CEOs of all Licensed Commercial Banks\nDear Sirs,\nREQUEST TO MAINTAIN CAPITAL OF BANKS IN FOREIGN CURRENCY\nFurther to my circular dated 29 July 2005 on the above subject, informing the Licensed Commercial \nBanks of the decision of the Monetary Board to permit part of the new capital of banks that is brought in, \nto be maintained in foreign currency.\n2. The operating procedure for maintaining part of the capital as a reserve with the Central Bank of \nSri Lanka, for the banks that wish to exercise the option is as follows:\n2.1 Deposits may be made only in the following designated currencies:\n \u2022 US Dollars\n \u2022 Pounds Sterling\n \u2022 Euro\n2.2 The amount of capital that is required to be maintained with the CBSL should be deposited with the \nCBSL\u2019s current accounts, depending on the currency as follows:\nCurrency  US Dollars  Euro  Pounds Sterling\nBank Name  Federal Reserve Bank,  Deutsche Bundesbank,  HSBC plc,\n New York  Frankfurt   London\nAccount No.  SRILA  021083514  5040040828  39600144\nSwift Code  FRNYU33  MARKDEFF  MIDLGB22\n2.3 Upon transfer of funds to any of the CBSL\u2019s above accounts by the commercial banks, the bank \nconcerned should inform the undersigned (stating the amounts and the value dates of the deposits) with \ncopy to the Chief Accountant of the CBSL.\n3. Since the deposits are linked to the capital of the respective banks, generally, no withdrawals will \nbe permitted. Requests for any withdrawals should be submitted to the Director of Bank Supervision \n(DBS) for authorization. The Chief Accountant of the CBSL will not accept any withdrawals that have \nnot been authorized by the DBS.  Further, in view of the timing differences among the financial centres \nwhere CBSL maintains its reserve funds/investments, a minimum of one day\u2019s notice is required by the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 112, "year": 2013}, "type": "Document"}
{"page_content": "Chief Accountant of CBSL to effect the withdrawal. A minimum of one day\u2019s processing time is required \nby the DBS (Altogether two day\u2019s notice required by the CBSL).\n4. Reporting pr ocedure\n4.1 The capital held in foreign currency in the Off-shore Banking Unit (OSBU) should be reported \nin the monthly statement of assets and liabilities of the OSBU, under internal accounts, by inserting an \nadditional row to be named as \u201cCapital held in Foreign Currency\u201d.\n4.2 The reserve account held with the CBSL  should be reported as \u2018deposits with the CBSL\u2019, under \nassets \u2018in Sri Lanka\u2019.\n5. The reserve account held at CBSL which represents part of the capital held in foreign currency \nshould not be included as a liquid asset, since it is part of capital.\n6. Submission of capital plans\nThe banks that have so far not submitted their plans for meeting the increased capital requirement are \nrequested to do so not later than 31 August 2005.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 112, "year": 2013}, "type": "Document"}
{"page_content": "104 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Supervision Department\n29 July 2005\nTo : The CEOs of all Licensed Commercial Banks\nDear Sirs,\nREQUEST TO MAINTAIN CAPITAL IN FOREIGN CURRENCY\nWith the increase in the minimum capital requirement of banks, several licensed commercial \nbanks incorporated abroad have requested the Central Bank (CBSL) to permit them to maintain at least \npart of the capital in foreign currency. In order to accommodate this request, the Monetary Board of the \nCentral Bank has determined as follows:\nTo extend the following option to the licensed commercial banks incorporated abroad , that make \nsuch a request to maintain capital in foreign currency\u2013\n1. A  maximum amount of 50 per cent (50%) of the new capital that is brought in to be \nmaintained in foreign currency.  The balance 50 per cent should be converted to Rupees and \nmaintained in the Domestic Banking Unit of the bank.\n2. T wenty five per cent (25%) of the new capital to be brought in (50 per cent of the above) will \nhave to be maintained as a non-interest bearing reserve with the Central Bank.\n3. T wenty five per cent (25%) of the new capital to be brought in to be retained in the Off-Shore \nBanking Unit (OSBU) to be utilized only for lending to BOI companies. Any amount that \ncannot be lent in this manner to be deposited in the reserve account with the CBSL.\n4. The appreciation/depreciation in the capital maintained in foreign currency in Rupee terms, \nto be credited/debited to a separate account named \u2018Exchange Equalisation Account\u2019 which \nshould not be included as part of capital for prudential purposes. The rupee amount of capital \naccount should continue to be shown at the exchange rate prevailing on the day that the \ncapital was brought in.\n5. CBSL  reserves the right to request the banks to convert all or part of capital in foreign \ncurrency to Rupees in order to off-set operational losses.\nPlease acknowledge receipt.\nYours faithfully,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 113, "year": 2013}, "type": "Document"}
{"page_content": "Please acknowledge receipt.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 113, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  105\n02/04/003/0400/002\nBank Supervision Department\n16 December 2004\nTo : CEOs of Licensed Commer cial Banks\n CEOs of Licensed Specialised Banks\n Panel of Approved Auditors\n Secr etary-General / SLBA\nDear Sirs,\nSHIPPING GUARANTEES ISSUED BY BANKS\nFurther to the discussion of the above subject at the Meetings of the Chief Executive Officers \nof Licensed Commercial Banks and Licensed Specialised Banks, the amendment to the Directions \non Single Borrower Limit and Risk Weighted Capital Adequacy Ratio to enable the banks to include \nshipping guarantees issued at the invoice value of goods, are included herewith.\nPlease acknowledge receipt.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 114, "year": 2013}, "type": "Document"}
{"page_content": "106 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of \nthe Banking Act, No.30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nGovernor\nColombo\n01st November 2007\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 7 OF 2007\nMAXIMUM AMOUNT OF ACCOMMODATION\nIn exercise of the powers conferred by Section 46(1) of the Banking Act, No.30 of 1988, last \namended by the Banking Act, No.46 of 2006, the Monetary Board hereby issues Directions as follows:\n1. These Directions may be cited as the Banking Act, Direction No.7 of 2007. The \nSections referred to in these Directions will be those of the Banking Act, No.30 of \n1988, last amended by the Banking Act, No.46 of 2006.\n2. In terms of Section 46(1), the Monetary Board has been empowered to give \nDirections to licensed commercial banks or to any category of licensed commercial \nbanks regarding the manner in which any aspect of the business of such banks is \nto be conducted. Accordingly, the Monetary Board hereby gives Directions to \nlicensed commercial banks pertaining to the maximum amount of accommodation \nas may be made by such banks\u2013\n (i) to any single company, public corporation, firm, association of persons or an \nindividual; or \n (ii) in the aggregate to\u2013\n (a) an individual, his close relations or to a company or firm in which he has \na substantial interest; \n (b) a company and one or more of the following:\u2013\n (aa) its subsidiaries; \n (bb) its holding company; \n (cc) its associate company; \n (dd) a subsidiary of its holding company; or \n (ee) a company in which such company or its subsidiary , or its holding \ncompany, or a subsidiary of its holding company, has a substantial \ninterest.\n3. The maximum amount of accommodation that may be granted by a licens ed \ncommercial bank shall not exceed the following percentage of the capital base of \nthe licensed commercial bank subject to the Directions 7, 8 and 9.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 115, "year": 2013}, "type": "Document"}
{"page_content": "the licensed commercial bank subject to the Directions 7, 8 and 9.\n (i) 30 per cent in respect of customers referred to in Section 2(i) above. Citation.\nEmpowerment \nunder 46(1).\nMaximum limits of \naccommodation \nto customers \nreferred to in \nparagraphs 2(i) \nand 2(ii) above.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 115, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  107\n (ii) 33 per cent in respect of customers referred to in Section 2(ii) above. \n4. (1) Notwithstanding the provisions of Direction 3(ii) above, a licensed commercial \nbank may grant accommodation in excess of 33 per cent of the capital base of the \nlicensed commercial bank to customers referred to in paragraph 2(ii) above, on \nthe basis of a sum of scores assigned for the following as determined in Direction \n4(2) below.\n ( i) T he Credit Rating and Capital Adequacy Ratio of the bank granting \naccommodation and, \n (ii) The Credit Rating of the holding company of the customers referred to in \nparagraph 2(ii) above. In the event the relationships within the companies in \nrespect of whom accommodation shall be aggregated in terms of paragraph \n2(ii) above do not lead to a holding company, the credit ratings of each of \nthe companies that comprise such aggregate shall be considered and the \nlowest credit rating assigned to any company within such aggregate shall \nbe deemed to be the credit rating that shall be applicable for the purpose of \ngiving effect to this Direction.\n(2) The scores referred to in Direction 4(1) above shall be assigned as follows.Enhanced \nlimits of \naccommodation \nin aggregate \nto customers \nreferred to \nin paragraph \n2(ii) above.\nAggregate \nlimit of large \naccommodation.\nMonetary Board \nto approve \naccommodation Bank\u2019s\nCredit RatingCustomers\u2019\nCredit RatingBank\u2019s Capital \nAdequacy RatioScore Assigned \nfor Each Column\nAAA to AA- or \nequivalentAAA to AA- or \nequivalent> 12% 1\nA+ to A- or \nequivalentA+ to A- or \nequivalent11% - 12% 2\nBBB+ or \nequivalent and \nbelowBBB+ or \nequivalent and \nbelow or unrated10% - <11% 3\n(3) The maximum amount of accommodation that may be granted by a licensed  \ncommercial bank under Direction 4(1) above to customers referred to in \nparagraph 2(ii) above shall not exceed the following percentages of the capital", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 116, "year": 2013}, "type": "Document"}
{"page_content": "paragraph 2(ii) above shall not exceed the following percentages of the capital \nbase of the licensed commercial bank, based upon the sum of the scores assigned \nfor the three columns as per the Table set out in Direction 4(2) above.\n (i) 40 per cent if the sum of scores is between 3 and 5.\n (ii) 36 per cent if the sum of scores is between 6 and 8.\n5. In the case of amount of accommodations granted as at any given date to any  \ncategory of customers referred to in paragraphs 2(i) and 2(ii) above excluding the \nGovernment of Sri Lanka in excess of 15 per cent of the capital base of the licensed \ncommercial bank, the sum total of the outstanding amount of accommodation granted \nto such customers shall not exceed 55 per cent of the total outstanding amount of \naccommodation granted by the licensed commercial bank to all customers excluding \nthe Government of Sri Lanka as at the end of the immediately preceding month.\n6. (1) Notwithstanding the provisions of Directions 3 and 4 above, a licensed commercial \nbank may grant accommodation in excess of the maximum limits specified under", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 116, "year": 2013}, "type": "Document"}
{"page_content": "108 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections 3 and 4 above to the categories of customers referred to in paragraphs \n2(i) and 2(ii) above, provided that the prior approval of the Monetary Board has \nbeen sought and obtained. The Monetary Board may grant such approval on a \ncase-by-case basis, subject to terms and conditions it may deem fit, taking into \nconsideration, inter-alia, instances of national priorities and/or national interest \nand the ability of the licensed commercial bank to withstand the potential risk \narising from the exposure to such enhanced accommodation, provided that \nthe assessment of risks arising out of such accommodation to the licensed \ncommercial bank has been analysed in detail and such analysis is furnished by \nthe licensed commercial bank to the Monetary Board when seeking approval \nof the Monetary Board.\n ( 2)  Su bject to Direction 6(1) above, a licensed commercial bank may grant \naccommodation to the categories of customers referred to in paragraphs 2(i) \nand 2(ii) above up to 50 per cent of the capital base of the licensed commercial \nbank for the purpose of direct funding of infrastructure projects referred to in \nAnnex 1 hereto for the commencement or expansion of the projects, provided \nthat,\n (i) the customer(s) has (have) been awarded a contract to directly engage in \nan infrastructure development project in Sri Lanka, and,\n (ii) such project is funded to the extent of at least 50 per cent by sources \noutside Sri Lanka or by a consortium of licensed banks excluding the \nbank providing the accommodation.\n7. When computing the maximum amount of accommodation under Directions 3 and \n4 above that may be granted to any category of customers referred to in paragraphs  \n2(i) and 2(ii) above, the following accommodations shall be excluded.\n ( i) Ac commodation granted against the security of cash, gold, Government \nSecurities, Central Bank Securities, Treasury Guarantees, Central", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 117, "year": 2013}, "type": "Document"}
{"page_content": "Securities, Central Bank Securities, Treasury Guarantees, Central \nBank Guarantees and Guarantees issued by the World Bank, the Asian \nDevelopment Bank, International Development Association or any other \ninternational institution acceptable to the Director of Bank Supervision.\n ( ii) Ac commodation granted against the security of a guarantee or similar \ninstrument Director of Bank Supervision issued by a bank incorporated \nwithin or outside Sri Lanka other than the bank granting accommodation, \nsubject to the following:\u2013\n (a) The bank that provides the guarantee having a credit rating of AAA to \nA- or equivalent.\n (b) T he amount of accommodation that shall be excluded from the \ncomputation of accommodation being 80 per cent in the event the \ncredit rating of the bank that provides the guarantee is in the rank of \nAAA to AA- or equivalent and 50 per cent in the event the bank\u2019s \ncredit rating is in the rank of A+ to A- or equivalent.\n (c) The aggregate amount of all accommodation that shall be excluded in \nrespect of all such instances not exceeding 100 per cent of the capital \nbase of the licensed commercial bank.\n (d) The licensed commercial bank being satisfied that the credit rating of \nthe bank providing the guarantee has been obtained within 15 months \nof providing accommodation and the accommodation be revised \nimmediately if there is any change in such credit rating.Exclusions of \naccommodations \nfrom maximum \nlimits under \nDirections \n3 and 4.in excess of the \nspecified limits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 117, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  109\n8. The maximum limits of accommodation specified in these Directions shall not \napply to the following persons / institutions.\n (i) The Government of Sri Lanka.\n (ii) The Ceylon Petroleum Corporation and the Ceylon Electricity Board for a \nmaximum period of two years from the date of these Directions.\n (iii) Other licensed banks in respect of accommodation granted with a contractual \nmaturity of less than two years.\n9. The following definitions shall be applicable for the purposes of these  \nDirections.\n (i) Accommodations: As defined and provided for in Section 86 of the Banking \nAct, accommodations shall mean credit exposure and investment exposure \nas specified below.\n (a) Credit exposure shall include all on-balance sheet accommodations such \nas any loan, overdraft or advance inclusive of finance lease, hire purchase \nand reverse repurchase agreements against debt securities and all  \noff-balance sheet accommodations such as any commitment to grant \nany loan, overdraft or advance or such other facility including a \ncommitment to accept a contingent liability.\n (b) Investments exposure shall include all financial investments excluding \ninvestments in equity (only ordinary shares).\n ( ii) Amount of accommodations: The amount of accommodations shall be \nthe total of on-balance sheet accommodations and off-balance sheet \naccommodations.\n ( a) Amount of on-balance sheet accommodations: The amount of  \non-balance sheet accommodations shall mean the total of the \naccommodation limits prevailing at any given time or the total  \noutstanding amount of all accommodations, whichever is \nhigher. In the case of fully drawn term loans, the outstanding \namount of accommodations shall be reckoned as the amount of \naccommodations.\n ( b) Amount of of f-balance sheet accommodations: The amount of  \noff-balance sheet accommodations shall mean the credit equivalent", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 118, "year": 2013}, "type": "Document"}
{"page_content": "off-balance sheet accommodations shall mean the credit equivalent \namount of total of the accommodation limits prevailing at any given \ntime or the outstanding amount of accommodations, whichever is \nhigher.\n (iii) Outstanding amount of accommodations: The outstanding amount of \naccommodations shall be the total of outstanding on-balance sheet \naccommodations and outstanding off-balance sheet accommodations.\n ( a) Outstanding on-balance sheet accommodations: The outstanding \namount of on-balance sheet accommodations shall be the capital \noutstanding.\n ( b) Outstanding of f-balance sheet accommodations: The outstanding  \namount of off-balance sheet accommodations shall be the \ncredit equivalent amount of the outstanding off-balance sheet \naccommodations. Persons/ \nInstitutions \nexempted from \nmaximum limits \nunder Directions \n3 and 4.\nDefinitions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 118, "year": 2013}, "type": "Document"}
{"page_content": "110 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (iv) Credit equivalent amount of off-balance sheet accommodations: The credit \nequivalent amount computed using the credit conversion factors applicable \nto off-balance sheet accommodations in the computation of the Capital \nAdequacy Ratio shall be applicable.\n ( v) Capital Base and Capital Adequacy Ratio: Capital Base and Capital \nAdequacy Ratio appearing in the computation of the Capital Adequacy \nRatio shall be applicable, provided that those shall be as at end of the \npreceding financial year or immediately preceding quarter or other latest \nquarter preceding the applicable quarter, whichever is available, subject to \ncertification by the licensed commercial bank\u2019s external auditor. \n (vi) Credit Rating: The credit rating shall be the credit rating obtained from a \ncredit rating agency listed in the Annex 2 hereto and shall be one that has \nbeen obtained within the past 15 months of providing accommodation.\n10. (1) In instances where the accommodation granted to a customer has to be revised \ndue to a reduction in the applicable accommodation limit, the accommodation \ngranted shall be reduced at the next facility review date or within six months, \nwhichever occurs earlier.\n (2) In the event a merger or acquisition between any institutional customers results \nin existing accommodations exceeding the applicable maximum limits, the \nlicensed commercial bank shall reduce such accommodations to be within the \napplicable maximum limits before expiry of six months from the date of such \nmerger or acquisition.\n11. In the event the accommodation that has been granted to any category of  \ncustomers referred to in paragraphs 2(i) and 2(ii) above as at the date of these \nDirections exceeds the limits, i.e., maximum limits or aggregate limit, specified in \nthese Directions, the licensed commercial bank shall reduce such accommodation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 119, "year": 2013}, "type": "Document"}
{"page_content": "these Directions, the licensed commercial bank shall reduce such accommodation \nto be within the respective limits before the expiry of three months from the date \nof these Directions. \n12. Where the Monetary Board has determined that a licensed commercial bank has \ncontravened these Directions and the determination of such contravention has \nbeen conveyed to the licensed commercial bank, such licensed commercial bank \nshall not pay dividends or repatriate profits until the contravention is rectified and \nsuch rectification is confirmed by the Director of Bank Supervision.\n13. The Banking Act, Direction No.3 of 2007 dated 20 February 2007 of Maximum \nAmount of Accommodation is hereby revoked.Review of \nAccommodation.\nTransitional \nArrangements.\nSteps to secure \ncompliance with \nDirections.\nRevocation \nof Previous \nDirections.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 119, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  111\nAnnex 1\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 7 OF 2007\nMAXIMUM AMOUNT OF ACCOMMODATION\nSpecification \tof\tInfrastructure \tProjects\nAny project that involves in developing or operating and maintaining or developing, operating, \nupgrading and maintaining any infrastructure facility listed below shall qualify for the accommodation \nunder the Direction 6(2) of the above Directions, provided that the accommodation referred to in the \nDirection shall be for the purpose of meeting direct cost of the project which shall not include repayment \nof any accommodation already granted by other banks or financial institutions or meeting the cost of \npurchase of a project already in operation. \n (i) a road, including toll road, a bridge or a rail system;\n (ii) a highway project including other activities being an integral part of the highway project;\n (iii) a port, airport, inland waterway or inland port;\n (iv) a water supply project, irrigation project, water treatment system, sanitation and sewerage system \nor solid waste management system;\n (v) telecommunication services whether basic or cellular, including radio paging, network of trunking, \nnetwork and internet services; \n (vi) an industrial park or special economic zone;\n (vii) generation or generation and distribution of power;\n (viii)  transmission or distribution of power by laying a network of new transmission or distribution \nlines; \n (ix) construction relating to projects involving agro-processing and supply of inputs to agriculture;\n (x) construction of educational institutions and hospitals;\n (xi) any other infrastructure project as may be specified by the Monetary Board from time to time.\nAnnex 2\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 7 OF 2007\nMAXIMUM AMOUNT OF ACCOMMODATION\nList of Credit Rating Agencies Acceptable to the Monetary Board\n1. Fitch Ratings Lanka Ltd.\n2. Lanka Ratings Agency Ltd.\n3. Standard & Poors", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 120, "year": 2013}, "type": "Document"}
{"page_content": "1. Fitch Ratings Lanka Ltd.\n2. Lanka Ratings Agency Ltd.\n3. Standard & Poors\n4. Moody\u2019 s Investors Service\n5. Credit Rating Information Services of India (CRISIL)\n6. Investment Information & Credit Rating Agency (ICRA)\n7. Fitch Ratings India Ltd.\n8. Pakistan International Credit Rating Agency\n9. Rating Agency Malaysia\n10. Japan Credit Rating Agency Ltd.\n11. Any other credit rating agency as may be accepted by the Monetary Board from time to time.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 120, "year": 2013}, "type": "Document"}
{"page_content": "112 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka in terms of  \nSection 46(1) of the Banking Act, No.30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board / \nGovernor of the Central Bank of Sri Lanka\nColombo\n27 September 2010\nBANKING ACT DIRECTION NO. 3 OF 2010\nAMENDMENTS TO DIRECTIONS ON CLASSIFICATION OF LOANS AND ADV ANCES,\nINCOME RECOGNITION AND PROVISIONING FOR\nLICENSED COMMERCIAL BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Sections 46(1) and 46 A of the Banking Act, No. 30  \nof 1988, last amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues the \nfollowing Directions replacing Directions No. 6(1)(I) of the Banking Act, Direction No.3 of 2008  \ndated 8 May 2008 issued by the Monetary Board. \n6(1)(I)  General Pr ovisions\n Banks shall maintain general provisions in the following manner:\n (i) Commencing 01 January 2012, 0.5% of total outstanding of on-balance sheet PLAs as \nreferred to in Direction 3(4) above and total outstanding of special mention on-balance \nsheet credit facilities as referred to in Direction 4(6)(I) above net of interest in suspense \nthat has been debited to the respective accounts.\n (ii) For this purpose banks shall reduce the existing general provision requirement of  \n1% to 0.5% at a rate of 0.1% per quarter during the five quarters commencing 01 October \n2010.\n (iii) Banks are exempted from maintaining a general provision in respect of credit facilities \nsecured by cash deposits, gold or Government Securities with the same bank. Banks shall, \nfor this purpose, meet the following conditions to be eligible for the exemption:\n (a) Bank shall have the right to take legal possession of such securities in the event of \ndefault, insolvency or bankruptcy of borrower.\n (b) All documentation used in such collateralised transactions shall be binding on all", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 121, "year": 2013}, "type": "Document"}
{"page_content": "(b) All documentation used in such collateralised transactions shall be binding on all \nparties and be legally enforceable in all relevant jurisdictions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 121, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  113\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka in terms of Section 46(1) \nof the Banking Act, No.30 of 1988, as amended. \nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\n08 May 2008.\nDIRECTIONS\nBANKING ACT DIRECTION NO.3 OF 2008\nCLASSIFICATION OF LOANS AND ADV ANCES, INCOME RECOGNITION AND\nPROVISIONING\nIn the exercise of the powers conferred by Sections 46(1) and 46 a of the Banking Act, No.30 of 1988, last \namended by the Banking Act, No.46 of 2006, the Monetary Board hereby issues Directions as follows:\n1(1) These Directions may be cited as the Banking Act, Direction No.3 of 2008. \nThe Sections referred to in these Directions will be those of the Banking \nAct, No.30 of 1988, last amended by the Banking Act, No.46 of 2006.\n2(1) In terms of Section 46(1) of the Banking Act, in order to ensure the \nsoundness of the banking system, the Monetary Board is empowered to \nissue Directions to licensed commercial banks regarding the manner in \nwhich any aspect of the business of such banks is to be conducted.\n2(2) In terms  of Section 46 a of the Banking Act, the Monetary Board is \nempowered to require both general and specific provisions relating to bad \nand doubtful debts, to be made by licensed commercial banks.\n3(1) The following definitions shall be applicable for the purposes of these \nDirections.\n3(2) T otal credit facilities shall mean on-balance sheet credit facilities and  \noff-balance sheet credit facilities as specified below:\n3(2)(I)  On-balance sheet credit facilities:\n   On-balance sheet credit facilities shall mean Overdrafts, Term \nloans, Block loans, Packing credits, Pledge loans, Revolving loans, \nBills financed, Discounting facilities, Hire purchase loans, Leasing \nfacilities, Trust receipts, Pawning advances, Credit card facilities,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 122, "year": 2013}, "type": "Document"}
{"page_content": "facilities, Trust receipts, Pawning advances, Credit card facilities, \nReverse repurchase facilities, Lending for debt instruments under \nstand by credit lines and other instruments of a similar nature.\n3(2)(II)  Of f-balance sheet credit facilities:\n   Off-balance sheet credit facilities shall mean a commitment to accept \ncontingent liabilities, and include guarantees, bonds, warranties, \nletters of credit and acceptances. Citation.\nEmpowerment \nunder Sections \n46(1) and 46 a of \nthe Banking Act.\nDefinitions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 122, "year": 2013}, "type": "Document"}
{"page_content": "114 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n3(3) Borrower shall mean individuals, single companies, the Government of Sri \nLanka, public corporations, statutory bodies, firms, associations of persons \nand any other institutions.\n3(4) Performing loans and advances (PLA) shall mean all credit facilities other \nthan non-performing loans and advances (NPL) classified in terms of \nDirection 3(5).\n3(5) NPL  shall mean bad and doubtful debts as referred to in Section 46 a of \nthe Banking Act. For this purpose, all credit facilities, excluding exempted \ncredit facilities referred to in Direction 4(2), are classified as non-performing \non the following basis:\n3(5)(I)  Based on period\n (i) Overdrafts:\n ( a) I f the outstanding balance has remained in excess of the \nsanctioned limit continuously for a period of 90 days or \nmore; or\n ( b) In cases where a borrower has several current accounts  \nwith overdraft limits with the bank, the daily outstanding \naggregate balance on all such accounts shall be considered \nas the outstanding balance for the purposes of Direction \n3(5)(I)(i)(a) above.\n ( ii) Credit facili ties repayable in monthly installments: when  \n3 consecutive installments, principal and/or interest, have not \nbeen paid.\n (iii) Credit facilities repayable in quarterly/half yearly installments: \nwhen an installment is not paid within 90 days from the due \ndate.\n ( iv) Credit facilities repayable in one installment at the end of a  \nspecified period or on a due date (bullet payments): when the \npayment is not made within 90 days from the end of the agreed \nperiod or the due date.\n ( v) Credit cards: when the minimum payment is in arrears for   \n90 days from the due date.\n3(5)(II)  Based on potential risk\n   In addition to the classification requirements for NPL  as set out \nin Direction 3(5)(I), banks shall classify PLA as NPL where full \nrecoverability in accordance with the agreed terms is in doubt due to", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 123, "year": 2013}, "type": "Document"}
{"page_content": "recoverability in accordance with the agreed terms is in doubt due to \ncircumstances affecting the repayment capacity.\n3(6) New c redit facility shall mean any credit facility granted to borrowers \nwith the involvement of cash/ fund movements. A facility granted for the \ncapitalisation of accrued and unpaid interest or to convert an overdraft to a \nterm loan shall not be considered as a new credit facility.\n4(1) Classification of performing and non-performing credit facilities:\n  Banks shall classify all credit facilities granted to a borrower, for monitoring \nand risk mitigation purposes, into the two categories of (a) performing loans Classification of \ncredit facilities.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 123, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  115\nand advances and (b) non-performing loans and advances, as specified in \nDirections 3(4) and 3(5) above.\n4(2) Exempted credit facilities:\n  When classifying credit facilities as NPL under Direction 4(1) above, credit \nfacilities secured on cash deposits shall be exempted. Banks shall, for this \npurpose, meet the following conditions to be eligible for the exception: \n (i) Banks  shall have the right to take legal possession of such cash \ndeposit, in the event of default, or insolvency or bankruptcy of \nborrower.\n ( ii)  All documentation used in cash collateralised transactions shall \nbe binding on all parties and legally enforceable in all relevant \njurisdictions. A duly signed lien in the bank\u2019s favour and a letter of \nset-off shall be available.\n (iii) Such cash deposit shall be set-of f against the credit facilities within \n3 months from the date on which the credit facilities would have \notherwise been classified as non-performing.\n ( iv)  During the period referred to in Direction 4(2)(iii) above, if the  \noutstanding exceeds the deposit, such excess shall be classified as \nnon-performing.\n4(3) The availability of security or net worth of the borrower/guarantor shall not \nbe considered in the application of Direction 3(5) except as permitted by \nDirection 4(2) above.\n4(4) Classification of rescheduled credit facilities:\n  When rescheduling occurs before a credit facility is classified as NPL,  \nthe rescheduled credit facility shall be classified as non-performing when, \nin aggregate, the period of time the credit facility was in arrears before \nrescheduling and after rescheduling exceeds the time period specified in \nthe Direction 3(5) in respective credit facilities. In the case of capitalisation \nof accrued and unpaid interest, banks shall classify a credit facility created \nby way of capitalisation of accrued and unpaid interest as NPL in terms of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 124, "year": 2013}, "type": "Document"}
{"page_content": "by way of capitalisation of accrued and unpaid interest as NPL in terms of \nDirections 3(5) and 4(5) and categorise as required by Direction 4(6).\n4(5) Classification of multiple credit facilities granted to a single borrower:\n (i) Banks shall classify all credit facilities extended to a borrower as \nNPL, when one or more credit facilities has/have been classified \nas NPL in terms of Direction 3(5) and if the aggregate amount \noutstanding of such NPL exceeds 30% of the total credit facilities \nextended to such borrower. Banks are required to comply with this \nDirection commencing January 1, 2009. \n ( ii)  In the computation of the percentage threshold as specified in  \nDirection 4(5)(i) above, banks shall exclude all accrued interest \ncredited to an interest in suspense account from both numerator and \ndenominator.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 124, "year": 2013}, "type": "Document"}
{"page_content": "116 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n4(6) Categorisation of non-performing credit facilities:\n  Banks shall categorise NPL, which are classified in terms of Directions  \n3(5) and 4(5) above, into the four categories mentioned below based on  \n(a) the period which the credit facilities have remained non-performing and \n(b) the potential risk of credit facilities. However, multiple credit facilities \ngranted to a single borrower, which are classified in terms Direction 4(5), \nshall be categorised as follows:\n (i) Facilities classified in terms of Direction 3(5), shall be categorised as \nper Directions 4(6)(I) to 4(6)(IV). \n (ii) Other faciliti es of such borrower shall initially be categorised into \nthe \u201cSpecial Mention\u201d category. Subsequent categorisation of such \nfacilities shall be in terms of Directions 4(6)(I) to 4(6)(IV). \n4(6)(I)  \u201cSpecial Mention\u201d credit facilities: \n ( i) The period which the credit facilities have remained non-per -\nforming.\nFacility Type Determinant\nOverdrafts Exceeds the sanctioned limit for a \ncontinuous period of 90 days or more \nbut less than 180 days.\nCredit facilities, \nrepayable in monthly \ninstallments3 installments or more but less than  \n6 installments, principal and/or interest \nare due and unpaid.\nCredit Cards The minimum payment is in arrears for \n90 days or more but less than 120 days \nfrom the due date.\nOther credit facilities The payments are in arrears for 90 days \nor more but less than 180 days from the \ndue date.\n4(6)(II)  Sub-standard credit facilities: \n ( i) The period which the credit facilities have remained non-per -\nforming.\nFacility Type Determinant\nOverdrafts Exceeds the sanctioned limit for a \ncontinuous period of 180 days or more \nbut less than 360 days.\nCredit facilities, \nrepayable in monthly \ninstallments6 installments or more but less than  \n12 installments, principal and/or interest \nare due and unpaid.\nCredit Cards The minimum payment is in arrears for", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 125, "year": 2013}, "type": "Document"}
{"page_content": "are due and unpaid.\nCredit Cards The minimum payment is in arrears for \n120 days or more but less than 180 days \nfrom the due date.\nOther credit facilities The payments are in arrears for 180 \ndays or more but less than 360 days \nfrom the due date.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 125, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  117\n (ii) The potential risk of credit facilities:\n  Where the situation of the borrower makes it uncertai n that part or \nthe entirety of the facility will be repaid and involves more than \nnormal risk of loss due to unsatisfactory debt servicing record or \nfinancial condition of the borrower, insufficiency of collateral or \nany other factors which give rise to some doubts as to the ability \nof the borrower to comply with the present repayment terms.\n4(6)(III)  Doubtful credit facilities: \n ( i) The period which the credit facilities have remained non-\nperforming.\nFacility Type Determinant\nOverdrafts Exceeds the sanctioned limit for a \ncontinuous period of 360 days or more \nbut less than 540 days.\nCredit facilities, \nrepayable in monthly \ninstallments12 installments or more but less than  \n18 installments, principal and/or interest \nare due and unpaid.\nCredit Cards The minimum payment is in arrears for \n180 days or more but less than 240 days \nfrom the due date.\nOther credit facilities The payments are in arrears for 360 \ndays or more but less than 540 days \nfrom the due date.\n (ii) The potential risk of credit facilities:\n  Where there is a high risk of partial default or where full collection \nis improbable and there is a high risk of default.\n4(6)(IV)  Loss credit facilities: \n ( i) The period which the credit facilities have remained non-\nperforming.\nFacility Type Determinant\nOverdrafts Exceeds the sanctioned limit for a \ncontinuous period of 540 days or more.\nCredit facilities, \nrepayable in monthly \ninstallments18 installments or more principal and/or \ninterest are due and unpaid.\nCredit Cards The minimum payment is in arrears for \n240 days or more.\nOther credit facilities The payments are in arrears for 540 \ndays or more.\n (ii) The potential risk of credit facilities:\n  Where the situation of the borrower makes it virtually certain that", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 126, "year": 2013}, "type": "Document"}
{"page_content": "Where the situation of the borrower makes it virtually certain that \nthe facility will not be repaid, as in the following circumstances:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 126, "year": 2013}, "type": "Document"}
{"page_content": "118 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (a) The customer is in a weak financial position or the ability of \nthe customer to earn income is low, which indicates that the \ncustomer may not be able to service the debt.\n(b) The business of the customer has become uncertain or the  \ncustomer has used the funds obtained for purposes other than \nfor which they were meant.\n(c) The customer is deceased  and there are no assets to repay the \ndebt.\n(d) The customer has ceased or dissolved his business and is in debt \nto other creditors with preferential rights over the whole of the \ncustomer\u2019s assets, where the said creditors\u2019 total claims exceed \nthe value of the customer\u2019s assets.\n (e) The customer \u2019s business is under liquidation.\n (f) The bank has filed a bankruptcy suit against the customer or \nhas applied for participation in property with other creditors \nwho have filed for bankruptcy, where the parties have agreed to \nrestructure the debt with approval from the Court.\n (g) The bank has applied for participation in property with other \ncreditors who have sued the debtor.\n (h) The bank is unable to contact or find the borrower .\n4(7) Reclassification of credit facilities:\n4(7)(I)  Re-classification of NPL  as PLA:\n  Banks shall reclassify NPL as PLA, if interest and principal in arrears \nare paid by the borrower in relation to classified NPLs.\n4(7)(II)  Re-classification of rescheduled NPL  as PLA:\n  The NPL  accounts which have been subjected to rescheduling, whether \nin respect of principal installment or interest amount, would be eligible \nto be upgraded to the PLA category only after the specified periods \nin respect of following category, subject to satisfactory performance \nduring such period. \nRescheduled NPL in Upgrade to the PLA\nSpecial mention \ncategoryPeriod of 90 days after the date when \nfirst payment of interest or of principal, \nwhichever is earlier, falls due under the \nrescheduled terms.\nSub-standard and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 127, "year": 2013}, "type": "Document"}
{"page_content": "whichever is earlier, falls due under the \nrescheduled terms.\nSub-standard and \nDoubtful categoriesPeriod of 180 days after the date when \nfirst payment of interest or of principal, \nwhichever is earlier, falls due under the \nrescheduled terms.\nLoss category Period of 360 days after the date when \nfirst payment of interest or of principal, \nwhichever is earlier, falls due under the \nrescheduled terms.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 127, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  119\nThe amount of specific provision made earlier, in respective of \nrescheduled NPL of above categories, could also be reversed after the \nperiod specified above. \n4(8) Granting of new credit facilities:\n  Banks shall not grant new credit facilities for repayment of NPL in the name \nof the same borrower or any party, unless the credit facility so created is also \nclassified as NPL and categorised into the same category of the repaid NPL \nhad been categorized under Direction 4(6). The reclassification of such NPL \nas PLA shall be subject to Directions (4)(7)(I) and 4(7)(II).\n5(1) Banks shall recognise interest on an account which has been classified as \nNPL as income, as and when the interest is collected by the bank, if it is \ncollectedon a cash basis.\n5(2) Ba nks shall suspense all interest accrued but uncollected from the date \na credit facility is classified as NPL and credit such accrued interest to \nthe \u201cInterest in Suspense Account\u201d and debit such accrued interest to the \n\u201cInterest Receivable Account-NPL\u201d.\n5(3) Banks shall continue the present practice of debiting the overdraft/credit \ncard facilities classified as NPL with interest receivable and crediting to \nInterest in Suspense Account.\n5(4) At the time of classifying the credit facilities as NPL, bank shall reverse the \naccrued interest and credit the same to Interest in Suspense Account. The \nreversal of unearned income identified after the close of a financial year \ncould be accounted for in the financial year in which the advances were \nidentified as NPL.\n6(1) Banks shall maintain (a) General provisions and (b) Specific provisions, for \ncredit risk mitigation purposes.\n6(1)(I)  General Provisions\n  Banks shall maintain general provisions in the following manner:\n (i) 1% of total outstanding of on-balance sheet PLAs as referred to \nin Direction 3(4) above and total outstanding of special mention", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 128, "year": 2013}, "type": "Document"}
{"page_content": "in Direction 3(4) above and total outstanding of special mention \non-balance sheet credit facilities as referred to in Direction 4(6)(I) \nabove, net of interest in suspense that has been debited to the \nrespective accounts. \n (ii) Banks shall have a general provision of 0.7 per cent of total credit \nfacilities as specified in Direction 6(1)(I)(i) above by 30.06.2008 \nand, thereafter, make an incremental provision of 0.1 per cent \nevery quarter till 31.03.2009. In effect, banks shall meet the total \nrequirement of 1 per cent not later than 31.03.2009.\n ( iii) Banks are exempted from maintaining a general provision in  \nrespect of credit facilities secured by cash deposits, gold or \nGovernment Securities with the same bank. Banks shall, for \nthis purpose, meet the following conditions to be eligible for the \nexemption: Recognition of \nInterest on NPL.\nProvisions for \ncredit facilities.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 128, "year": 2013}, "type": "Document"}
{"page_content": "120 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (a) Bank shall have the right to take legal possession of such \nsecurities, in the event of default, insolvency or bankruptcy \nof borrower.\n (b) All documentation used in such collateralised transactions \nshall be binding on all parties and be legally enforceable in \nall relevant jurisdictions. \n6(1)(II)  Specific Provisions\n  Ba nks shall maintain specific provisions, as per the credit facilities \ncategorised in accordance with Direction 4(6), on the amount \noutstanding, net of realisable security value as specified in Direction \n7(1) and interest suspensed in the event of such interest being debited \nto the credit facility as per the following: \nCategories of Non-performing \nCredit FacilitiesMinimum Specific \nProvisioning Requirement\nSubstandard\n   Credit card \n   Others 25%\n20%\nDoubtful 50%\nLoss 100%\n6(2) In respect of any credit facilities falling within the ambit of Direction 4(8), \nbanks shall maintain specific provisions as follows:\n ( i)  Where credit facilities are applied for the repayment of the capital  \nsum outstanding, provisions shall be maintained at a level not less \nthan what would have been required to be maintained under Direction \n6(1)(II) at the time of repayment of the NPL. \n ( ii)  Where credit facilities  are applied for the repayment of interest, \nprovision shall be maintained at 100% of the outstanding facility.\n (iii) Where credit facilities are applied for the repayment of capital and \ninterest (e.g., in the case of an overdraft), provisions for capital and \ninterest shall be provided for in accordance with Directions 6(2)(i) and \n6(2)(ii).\n7(1) V aluation of security for provisioning purposes shall be as specified below.\n7(1)(I)  Primary Mortgage over Immovable Property \n ( i) T he value of security is based on progressive discounts on the \nforced sale value (FSV) of immovable property and on a current \nvaluation report as specified below. Valuation of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 129, "year": 2013}, "type": "Document"}
{"page_content": "valuation report as specified below. Valuation of \nSecurity.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 129, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  121\n (ii) The progressive discounts shall be as follows:\nItem% of FSV of immovable property \nthat can be considered as the value \nof security\nFreehold PropertyLeasehold \nProperty \nAt the first time of \nProvisioning 75 60\nPeriod in the Loss Section\nLess than 12 months 75 60\nMore than 12 but less \nthan 24 months60 50\nMore than 24 but less \nthan 36 months50 40\nMore than 36 but less \nthan 48 months40 30\nMore than 48 monthsProperty should be \nreviewed on a regular \nbasis, and discounted \nfurther at the discretion \nof the bank\u2019s manage-\nment.Nil\n (iii) Current external professional valuation report:\n  The valuation report shall meet the following conditions.\n (a) Banks shall obtain a current external professional valuation \nreport in respect of a facility/ies where the capital outstanding \namount is equal to or more than Rs.5,000,000/- or 0.1% of \nthe bank\u2019s capital base, whichever is less. Capital base shall \nbe the same as that appearing in the computation of the \nCapital Adequacy Ratio subject to certification by the bank\u2019s \nExternal Auditor. \n (b) Such report shall be from an External Independent Valuer. \n  An External Independent Valuer shall be:\n (aa) A  Chartered Valuation Surveyor; or \n (ab) A  Fellow of the Institute of Valuers of Sri Lanka (IVSL) \nwith 5 years experience\n (ac) A  Graduate member of IVSL with 10 years experience\n (ad) An Associate member of IVSL with 20 years \nexperience.\n (c) The period of the valuation report shall be:\n (aa) In respect of credit facil ities granted against residential \nproperty which is occupied by the borrower for \nresidential purposes: a report that is not more than four \nyears old.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 130, "year": 2013}, "type": "Document"}
{"page_content": "122 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (ab) In re spect of credit facilities granted for all other \npurposes: a report that is not more than three years \nold.\n (iv) Current internal valuation report: \n  The valuation report shall meet the following conditions.\n ( a) Banks shall obtain a current internal valuation report in  \nrespect of a credit facility/ies where the capital outstanding \namount is less than Rs.5,000,000/- or 0.1% of the bank\u2019s \ncapital base, whichever is less.\n ( b) I t shall be a current internal assessment of the value of \nproperties mortgaged for such credit facilities, carried out \nby an independent officer who has not been involved in the \ncredit decision and signed by a senior officer of the bank.\n ( c) A  current internal assessment is defined as an assessment \nthat is not more than two years old.\n7(1)(II)  Mortgages other than Primary Mortgages \n  Mortgages other than primary mortgages over immovable property will \nqualify for the above purpose subject to complying with the conditions \nin Direction 7(1)(I) above and if such property is mortgaged to the \nsame bank.\n7(1)(III)  Deposit of Title Deeds of Property with an Undertaking to Mortgage\n  No value shall be assigned until a property mortgage is executed in \nfavour of the bank.\n7(1)(IV)  Assignment over Life Insurance Policies \n  90 per cent of the surrender value shall be considered as value of  \nsecurity, provided confirmation of surrender value from the insurer is \navailable and the assignment in favour of the bank is duly registered.\n7(1)(V)  Secured on Gold\n  The market price of gold, subject to an adequate insurance cover .\n7(1)(VI)  Assignment of Shares\n (i) Quoted \n (a) 90 percent of the latest market price \n ( b) If trading has been s uspended (other than temporary \nsuspension), the net realisable tangible asset value, as per \nthe latest audited financial statements (not more than 18", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 131, "year": 2013}, "type": "Document"}
{"page_content": "the latest audited financial statements (not more than 18 \nmonths old), is to be used, provided an auditor\u2019s certificate \nevidencing the value per share is available. No value shall be \ngiven if appropriate financial statements/certificates are not \navailable and if sales are temporarily suspended.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 131, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  123\n (ii) Unquoted\n  V alue may be given, provided the shares are marketable. \nAppropriate value may be determined on the basis of 75 per \ncent of the net tangible asset value per share as certified by the \ncompany\u2019s auditors.\n7(1)(VII)  Mortgage over Plant, Machinery and Equipment\n  V alue based on an external valuation report or, in the absence of \nsuch valuation, the net book value calculated by using a 20 per cent \ndepreciation rate on the straight-line basis taking into account the date \nof acquisition and the acquisition price shall be applicable.\n7(1)(VIII)  Mortgage over Motor Vehicles \n  Based on an external valuation report or , in the absence of such \nvaluation, the net book value calculated by using a 25 per cent \ndepreciation rate on the straight line basis taking into account the date \nof original registration and the acquisition price on that date, would be \napplicable.\n7(1)(IX)   Pledge over Stocks/Goods under the Bank\u2019 s Control\n  50 per cent of the market value determined on a case-by-case basis may \nbe applicable.\n7(1)(X)   Hypothecation of Stock-in-T rade\n  30 per cent of the current value of stocks provided that the level of \nstock-in-trade is closely monitored by the bank.\n7(1)(XI)   Quoted Debentures \n (i) 90 per cent of the latest market price\n (ii) If trading has been suspended (other than temporary suspension), \nthe net realisable tangible asset value, as per the latest audited \nfinancial statements (not more than 18 months old), is to be \nused, provided an auditor\u2019s certificate evidencing the value \nper share is available. No value shall be given if appropriate \nfinancial statements/certificates are not available and if sales are \ntemporarily suspended.\n7(1)(XII)   Guarantees\n (i) Licensed Banks \u2013 incorporated locally or outside Sri Lanka\n  Eligible value of guarantee is based on a rating given by an eligible", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 132, "year": 2013}, "type": "Document"}
{"page_content": "Eligible value of guarantee is based on a rating given by an eligible \ncredit rating agency recognition under the Direction issued on \nmaintenance of capital adequacy ratio (Basel II), as follows:\nBank\u2019s credit rating Value of security\nAAA to AA- or equivalent 80%\nA+ to A- or equivalent 50%", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 132, "year": 2013}, "type": "Document"}
{"page_content": "124 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (ii) Government Guarantee\n  Full value.\n7(1)(XIII)   Other Types of Security\n  As specifically approved by the Director of Bank Supervision on a  \ncase-by-case basis.\n8(1) Banks incorporated or established within Sri Lanka shall have a well-designed \nwrite-off/write down policy established by the Board of Directors, delineating \nthe approach, authority, accountability for negligence and inappropriate follow-\nup, independent review and audit, continuous monitoring, reporting, etc . This \npolicy should aim at recovering maximum salvage value through enforcement \nof collateral / guarantees, etc.\n  Banks, incorporated outside Sri Lanka, are required to follow write-off/write \ndown policy duly laid down by their head office.\n9(1) Ba nks shall segregate all credit facilities (a) classified as non-performing  \n(b) rescheduled (c) written off/written down from other credit facilities to \nfacilitate close follow-up action and to monitor recoveries.\n10(1)  Banks shall submit the information on classification of loans and advances to \nthe Central Bank of Sri Lanka on a monthly basis, in accordance with reporting \nformat and instructions at Annex attached hereto. The returns for a given period \nshould be submitted to the Central Bank on or before the 15th day of the month \nfollowing the month to which the information relates.\n11(1)  The following Direction s and Circulars issued to licensed commercial banks are \nhereby revoked:\n ( i) Directions on Suspension of interest on non-performing advances and  \nclassification of bad and doubtful advances for provisioning purposes \n(Schedule I) and valuation of securities for provisioning purposes (Schedule \nII) dated 22 August 1997, issued under Section 46A of the Banking Act, as \namended.\n (ii) Circular letter dated 15 August 2003 amending Direction 11(1)(i) above.\n (iii) Circular letter dated 13 July 2004 on criteria for selection of Valuers.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 133, "year": 2013}, "type": "Document"}
{"page_content": "(iii) Circular letter dated 13 July 2004 on criteria for selection of Valuers.\n (iv) Circular letter dated 8 September 2004 on classification of bad and doubtful \nadvances for provisioning purposes (classification of medium and long-term \nproject loans).\n (v) Amendment to Direction  11(1)(i) dated 15 December 2004 on valuation of \nsecurities for provisioning purposes relating to the requirement to obtain a \ncurrent professional valuation report.\n (vi) Circular letter dated 29 March 2006 on reversal of unearned income and \nclassification of advances as non-performing.\n (vii) Direction dated 6 Decem ber 2006 on the requirement to maintain a general \nprovision for advances.Write Off/Write \ndown of  \nnon-performing \ncredit facilities.\nSegregation of \nnon-performing \ncredit facilities.\nReporting \nRequirement.\nRevocation \nof Previous \nDirections and \nCirculars.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 133, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  125\nAnnex\nLicensed Commercial Banks\nBanking Act Direction No. 3 of 2008\nClassification \tof\tLoans\tand\tAdvances, \tIncome\tRecogntion \tand\tProvisioning\nReporting Format\nName of Bank:\nAs at: DD/MM/YYYY\n Amount in \u2019000\nCredit FacilitiesPerforming \nLoans and \nAdvances \n(PLA)Categorisation of Non-performing \nLoans and Advances (NPL) Total \nNPLsTotal \nCredit \nFacilitiesSpecial \nMentionSub-\nstandardDoubt-\nfulLoss\nOn-balance Sheet Credit Facilities\nCheques purchased\nImport bills\nExport bills\nOverdrafts\nCredit card \nShort-term loans\nMedium and long-term loans\nHousing loans\nStaff loans\nRe-scheduled loans\nLease rentals (net)\nLoans against debt securities\nPawning advances\nLoans to Banks and Financial \nInstitutions\nOther credit exposures\nInterest receivables\nLoans and Advances (gross)\nSuspended Interest (-)\nSpecific provisions (-)\nGeneral provisions (-)\nLoans and Advances (net)\nValue of Security\nOff-balance Sheet Credit Facilities\nGuarantees\nBonds\nLetters of Credit\nAcceptances\nInterest Receivables\nLoans and Advances (gross)\nSuspended Interest (-)\nSpecific provisions (-)\nGeneral provisions (-)\nLoans and Advances (net)\nValue of Security", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 134, "year": 2013}, "type": "Document"}
{"page_content": "126 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Sections 46(1) and  \n76(J)(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n04 April 2013\nBANKING ACT DIRECTION NO. 1 OF 2013\nEXPOSURE TO THE STOCK MARKET BY\nLICENSED COMMERCIAL BANKS AND\nLICENSED SPECIALISED BANKS\nIn the exercise of the powers conferred by Sections 46(1) and 76J(1) of the Banking Act, No. 30 \nof 1988, last amended by the Banking (Amendment) Act, No. 46 of 2006, the Monetary Board hereby \nissues the following Directions on Exposure to Stock Market by Licensed Commercial Banks and \nLicensed Specialised Banks (hereinafter referred to as Licensed Banks), having reviewed the exposures \nof Licensed Banks to the stock market and decided to require Licensed Banks to adopt appropriate risk \nmanagement standards to mitigate any potential risks at prudent levels with a view to promoting the \nsafety and soundness of the banking system.\n1. These Directions may be cited as the Banking Act, Directions No. 1 of 2013.\n2. A  Licensed Bank may extend margin trading facilities on shares to customers/\ninvestors, provided that:\n (i) the Licensed Bank shall have internal limits in respect of:\n(a) individual customer/investor margin trading exposure based on the \nmarket value of such customer\u2019s/investor\u2019s share portfolio subject to \nany statutory limits in place; and\n(b) aggregate mar gin trading exposures based on the total outstanding \namount of loans and advances granted by a licensed bank.\n (ii) all shares purchased from margin trading facility shall be under pledge to \nthe Licensed Bank providing margin trading facility.\n3.1 A  Licensed Bank may issue guarantees for the purpose of purchase of shares \nfrom Initial Public Offerings not exceeding fifty percent of the value of such", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 135, "year": 2013}, "type": "Document"}
{"page_content": "from Initial Public Offerings not exceeding fifty percent of the value of such \nInitial Public Offering.\n3.2 The guarantees issued against cash deposits shall be exempted from the above \nlimit, provided that: \n (i) the cash deposit is not less than the value of the guarantee;\n (ii) the cash deposit is not financed from any loans from the bank; andCitation.\nInternal limits on \nMargin trading \non Shares.\nLimit on issue \nof guarantees \nfor purchase \nof shares.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 135, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  127\n (iii) the Licen sed Bank has the right to take possession of such cash deposits \nin the event of default of commitments by the customer.\n4. The Board of Directors of Licensed Banks incorporated in Sri Lanka and the \nHead Office/Regional Office of the branches of banks incorporated outside \nSri Lanka shall formulate a Board/Head Office/Regional Office approved risk \nmanagement policy, guidelines and internal controls on their exposures to \nstock market activities including prudential limits for margin trading as per 2(i) \nabove and assess risk exposures, such as credit, liquidity and concentration with \nappropriate risk management information on an on-going basis.\n5. Every Licensed Bank shall spread margin trading facilities among a reasonable \nnumber of customers with diversified portfolios of shares to mitigate risky \nconcentrations.\n6. Every Licensed Bank shall report to the Director of Bank Supervision details \nof exposure to the stock market in accordance with the reporting format at  \nAnnex A on or before the 15th day of the month following each quarter.\n7. The following Banking Act Directions are hereby revoked:\n (i) Banking Act Direction No. 5 of 2011, dated 26 August 2011 on Exposure \nto Stock Market and Banking Act, Direction No. 11 of 2011, dated  \n16 December 2011 on Amendments to Direction on Exposure to Stock \nMarket issued to Licensed Commercial Banks; \n (ii) Banking Act Direction No. 6 of 2011, dated 26 August 2011 on Exposure  \nto Stock Market and Banking Act, Direction 12 of 2011, dated  \n16 December 2011 on Amendments to Direction on Exposure to Stock \nMarket issued to Licensed Specialised Banks.Role of Board \nof Directors.\nControl on \nConcentrations.\nReporting.\nRevocation of \nDirections.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 136, "year": 2013}, "type": "Document"}
{"page_content": "128 Directions, Determinations, and Circulars issued to Licensed Commercial BanksTo  :  Director of Bank Supervision, Central Bank of Sri Lanka\nName of Licensed Bank :  \nQuarter ended  : \nQuarterly Statement of Exposure to the Stock Market\nA.  Exposure to the Stock Market\nItemOn Balance Sheet Exposure Off Balance Sheet Exposure\nTotal \nExposure\n(h) = (d + g)Margin \nTrading \nFacilities\n(a)Other loans \ngranted for \npurchase of \nlisted shares\n(b)Others (i)\n(c)Sub Total \n(d) =\n(a + b + c)Total \nvalue of \nguarantees \nissued\n(e)Under-writing \nand other \ncommitments, \ncredit lines, etc .\n(f)Sub Total \n(g) = (e + f)\nAmount outstanding (Rs. mn)\nAs a % of outstanding amount of  \ntotal loans and advances\nB.   Guarantees issued for purchase of shares at IPO\nName of IPO (i)Size of \nIPO (j)Fully cash backed\n guarantees \n(Rs. Mn) (k)Guarantees issued \nwithout cash deposits \n(Rs. mn) (l)Total value of guarantees issued \n(Rs. mn) \n(m) = (k + l)\nTotal\nNote : (i)  if any, please provide details separately.\nThis statement should be submitted to the Bank Supervision Department by the 15th day of the month following end of each quarter. Please e-mail to \nbanksup@cbsl.lk or fax to 2477711Annex  A", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 137, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  129\nBANKING ACT\nDeterminations made by the Monetary Board of the Central Bank of Sri Lanka under section \n17a(1)(a) and (1)(b) of the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, \nNo.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n22 August 1997\nDETERMINATION\nBy virtue of the provisions of section 17 a(1)(a) and (1)(b) of the Banking Act, No.30 of 1988 \nas amended by Banking (Amendment) Act, No.33 of 1995, the Monetary Board has determined that \na licensed commercial bank shall not acquire or hold shares in any company other than a listed public \ncompany, and\n (i) shareholding acquired by such bank in any such listed public company shall not be in excess of \nten percent of its capital funds :\n  Provided that such acquisition or holding of shares shall not exceed twenty percent of the paid \nup capital of such listed public company.\n (ii) the aggregate amount invested in the shares of listed public companies excluding companies \nwhich are subsidiaries of the bank, shall not exceed thirty percent of its capital funds.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 138, "year": 2013}, "type": "Document"}
{"page_content": "130 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBANKING ACT\nDetermination made by the Monetary Board of the Central Bank of Sri Lanka under Section 47(3), \n(4), (5) and (6) of the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.2 \nof 2005.\nSgd. Sunil Mendis\nGovernor\nColombo\n11 February 2005.\nDETERMINATION\n1. The Monetary Board, by virtue of the provisions of section 47(3), (4), (5) and (6) of the Banking \nAct, has approved the following as security to be obtained by a licensed commercial bank in granting \naccommodation to a director or to a close relation of such director or to any concern in which director \nhas a substantial interest, as the case may be:\n (a) Sir Lanka Government Guarantees;\n (b) Bank Guarantees;\n (c) Guarantees of International Financial Institutions; such as the World Bank, IMF, IFC, ADB, \nUSAID etc. \nIn the case of accommodation secured by items ( a), (b) or ( c) above, the accommodation granted \nshould not exceed 100 per cent of the guarantee.  \n (d) Government or Central Bank Securities provided that the accommodation granted would not \nexceed 90 per cent of the face value or market value, whichever is lower of such securities;\n (e) Cash Deposits in any commercial bank held under lien to the order of the lending bank provided \nthat the accommodation granted would not exceed 90 per cent of such cash deposits;\n (f) Life Insurance Policie s issued in Sri Lanka and assigned to the lending bank provided that the \naccommodation granted would not exceed 75 per cent of the surrender value of such policy;\n (g) Immovable property held on a freehold basis and on which a primary mortgage has been taken \nby the lending bank provided that the accommodation granted would not exceed 60 per cent of \nthe value of such property.\n (h) Immovable property held on a leasehold basis provided that \u2013 \n (i) the lease has been granted by a statutory body;\n (ii) the unexpired period of lease is at least 50 years;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 139, "year": 2013}, "type": "Document"}
{"page_content": "(ii) the unexpired period of lease is at least 50 years;\n (iii) there is no prohibition on the mortgage of the leasehold rights contained in the Deed of \nLease, or if the Deed of Lease requires the prior approval of the Lessor for the mortgage of \nthe leasehold rights such approval has been obtained from the Lessor;\n (iv) a primary mortgage has been taken on the leasehold rights by the lending bank; \n  and provided further that the accommodation granted does not exceed 60 per cent of the value of \nsuch property. \n (i) Sh ares of Public Companies quoted on the Colombo Securities Exchange provided that the \naccommodation granted would not exceed 50 per cent of the market value of such shares;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 139, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  131\n (j) Mortgage of Stock-in-Trade provided that the accommodation granted would not exceed 30 per \ncent of the market value of such Stock-in-Trade.\n (k) In the case of a concern where a substantial interest is held by a Banking Institution as defined \nin section 127 of the Monetary Law Act, other than a licensed commercial bank, immovable \nproperty held on a freehold basis and on which a secondary mortgage has been taken by a lending \nbank, provided that the total accommodation granted on the primary mortgage and the secondary \nmortgage does not exceed 60 per cent of the value of such property; and \n (l) Pledge of non-perishable goods of a commercial nature which are readily marketable, excluding \nall manufactured foods and other items with a limited shelf life, provided that the accommodations \ngranted would not exceed 40 per cent of the market value of such goods. \n2. For the purposes of Section 47(5), in respect of accommodation granted by a licensed commercial \nbank to a concern in which a director of such bank has a substantial interest, where the substantial \ninterest held in the concern by such director \u2013\n (i) e xceeds one million rupees but does not exceed 10 per cent of its paid up capital or is the \nexistence of a guarantee or indemnity for a sum less than 10 per cent of that capital, where the \nconcern is a company. \n (ii) Is the existence of a guarantee or indemnity for a sum less than 10 per cent of the total capital \nsubscribed by all its partners, where the concern is a firm. \n  Such security as the licensed commercial bank considers adequate having regard to the  \ncreditworthiness of such concern should be obtained. Such accommodation should be reported \nto the Director, Bank Supervision, within one week of disbursement of such accommodation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 140, "year": 2013}, "type": "Document"}
{"page_content": "132 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOrder published under Section 47(4) of the Banking Act, No. 30 of 1988 as amended by \nBanking (Amendment) Act, No. 2 of 2005\nIn terms of Section 47(4) of the Banking Act, No.30 of 1988 as amended by Banking (Amendment) \nAct, No.2 of 2005, the Monetary Board of the Central Bank of Sri Lanka has approved the following \nlimits in respect of accommodation granted by a licensed commercial bank to a director or to a close \nrelation of such director with effect from 11th February, 2005. \n (a) In the case of accommodation secured by cash or near cash collateral [items ( a) to ( e) of the \nDetermination issued by the Monetary Board in terms of Section 47(3) of the Banking Act, \nNo.30 of 1988 as amended by Banking (Amendment) Act, No.2 of 2005, upto the limit of \nthe security permitted in terms of the said Determination. \n (b) In the case of accomm odation secured by other types of approved securities, upto Rupees \nFive Hundred Thousand (Rs.500,000/-).\n (c) In the case of accommodation by way of issue of a credit card, upto Rupees Five Hundred \nThousand (Rs.500,000/-), provided that such accommodation is on the same terms and \ncondition as for other customers of the respective bank. \nSgd. Sunil Mendis\nGovernor\nColombo\n11 February 2005.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 141, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  133\nDeterminations made by the Monetary Board of the Central Bank of Sri Lanka under Section 47(3), (4), \n(5) and (6) of the Banking Act, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\n02 September 2009.\nBANKING ACT, DETERMINATION NO.3 OF 2009\nLEASE-BACKED TRUST CERTIFICATES/LEASE RECEIV ABLES\nAS APPROVED SECURITY FOR ACCOMMODATION TO ANY DIRECTOR OR\nCLOSE RELATION OF A DIRECTOR OR TO ANY CONCERN\nIN WHICH THE DIRECTOR HAS SUBSTANTIAL INTEREST\n1. This Determination may be cited as the Banking Act, Determination No. 3 of \n2009. The Sections referred to in this Determination will be those of the Banking \nAct, No. 30 of 1988, last amended by the Banking Act, No. 46 of 2006. \n2. In terms of Section 47(3), (4), (5) and (6) of the Banking Act the Monetary \nBoard shall approve any security to be given by any director, or a close relation \nof a director or to any concern in which the director has substantial interest, in \nthe grant of  accommodation to such parties by a licensed commercial bank.\n3. The following new Determination will be inserted immediately after 1( l) of \nthe Determination issued in terms of Section 47(3), (4), (5) and (6) dated 11 \nFebruary 2005.\n 1(m) Lease-backed trust certificates/lease receivables provided that\u2013\n (i) The total accommodation granted on the lease-backed trust  \ncertificates/lease receivables shall not exceed 50 per cent of the \nvalue of such lease backed trust certificates/lease receivables.\n (ii) The total accommodation granted on the lease-backed trust  \ncertificates/lease receivables shall not exceed 50 per cent of the \naggregate amount of the total outstanding accommodation granted \nto the individual company.\n (iii) Lease-backed trust certificates/lease receivables shall be based on \nthe un-encumbered (performing) lease portfolio.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 142, "year": 2013}, "type": "Document"}
{"page_content": "the un-encumbered (performing) lease portfolio.\n (iv) Lease-backed trust certificates/lease receivables shall be mort-\ngaged to the lending bank.\n (v) The lending bank should be a registered establishment under the \nFinance Leasing Act, No. 56 of 2000. Approved Security.Citation.\nEmpowerment \nunder Sections \n47(3), (4), (5) \nand (6).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 142, "year": 2013}, "type": "Document"}
{"page_content": "134 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Supervision Department\n31 December 2004\nTo : All Licensed Commercial Banks\n       Licensed Specialised Banks;\n       Approved Auditors\nDear Sirs,\nACCOUNTING FOR PROPERTIES ACQUIRED BY FORECLOSURE OF\nCOLLATERAL  / PART SETTLEMENT OF DEBT\nIt has been observed that the accounting treatment adopted by some banks with respect to \nimmovable property acquired by foreclosure of collateral from defaulting customers or which have \ndevolved on the banks as part settlement of debt, leads to a misrepresentation of the bank\u2019s assets and \nthe level of non performing advances of the bank.\n2. In order to create a uniform practice among the banks in accounting for such assets, and \nto avoid misrepresentation of the level of non performing advances, all banks are hereby informed to \nadhere to the following procedure in accounting for such property;\n2.1 Immovable property acquired by foreclosure of collateral from defaulting customers, or \nwhich have devolved on the banks as part settlement of debt should not be accounted for as investment \nproperty or as part of the assets of the bank. Such property should be recorded on a memorandum \nbasis.\n2.2 The related facility should remain classified in the books of the bank until such property is \ndisposed of and the proceeds realized by the bank.\n3. Y our attention is drawn to section 48 a of the Banking Act, No.30 of 1988, as amended by \nAct, No.33 of 1995, which requires banks to dispose of property acquired by foreclosure of collateral \nfrom defaulting customers or which have devolved on the banks as part settlement of debt, at the \nearliest opportunity.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 143, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  135\nRef. No. : 02  / 17 / 800 / 008 / 001\nBank Supervision Department\n05 January 2009\nTo :  Chief Executive Officers of all State Banks\nESTABLISHMENT OF A REVOLVING FUND TO GRANT LOANS TO\nACQUIRE PROPERTY TO THE STATE SECTOR EMPLOYEES\nHis Excellency the President, at the discussions held on 21 October 2008 with the state sector \nemployees union, has directed the Central Bank to inform all state banks to establish a Revolving \nFund for the purpose of granting loans to acquire property, to state sector employees. Accordingly, we \nrequest all state banks to accede to the above.\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 144, "year": 2013}, "type": "Document"}
{"page_content": "136 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 600 / 0026  / 001\nBank Supervision Department\n12 June, 2013\nTo :  The CEOs of all Licensed Commer cial Banks\nFINANCIAL ACCOMMODATION TO FINANCE COMPANIES\nWe write to inform you that the applicability of the Circular issued under Ref. No. BS/13/89 dated \n20 March 1989 on the above subject is hereby revoked.   \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 145, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  137\nRef. No. : 02  / 17 / 800 / 0006  / 01\n11 March 2010\nDirections to Licensed Commercial Banks\n  appointed as Authorised Dealers\nDear Sir/Madam,\nPREPAYMENT OF IMPORT BILLS\n Licensed commercial banks appointed as authorised dealers are hereby informed that the  \nOperating Instructions issued under Ref. No.02/17/800/0006/01 dated 31/10/2008 on the above subject \nare hereby withdrawn.\nYours faithfully,\n Controller of Exchange  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 146, "year": 2013}, "type": "Document"}
{"page_content": "138 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 800 / 0006  / 01\n31 October 2008\nInstructions to Licensed Commercial Banks\n  Appointed as Authorised Dealers\nDear Sirs,\nPREPAYMENT OF IMPORT BILLS\n The licensed commercial banks who are authorised dealers are informed that until further notice, \nthey should not effect pre-payment of import bills and that such bills should be honoured as agreed to in \nthe contract entered into with the supplier at the time of placing the import order.\nYours faithfully,\n Controller of Exchange  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 147, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  139\nRef. No. : 02  / 04 / 004 / 0009  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n17th August, 2001\nTo :  All Licensed Commer cial Banks who are \nAuthorized Dealers in Foreign Exchange\nDear Sirs,\nPREPAYMENT OF IMPORT BILLS\nWe refer to our circular dated 29th January 2001 on the above subject, in terms of which licensed \ncommercial banks who are Authorized Dealers were informed that they should not effect pre-payment \nof import bills and that such bills should be honoured on the date of maturity as agreed to in the \ncontract entered into with the supplier at the time of placing the import order.\nCommercial banks who are Authorized Dealers are hereby informed that this requirement is \nwithdrawn with effect from Monday, 20th August 2001. However, a commercial bank/Authorized \nDealer may use his discretion for prudential reasons to reject any prepayment of an import bill, without \nreferring to us.\nYours faithfully,\n Controller of Exchange  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 148, "year": 2013}, "type": "Document"}
{"page_content": "140 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 05 / 009 / 0100  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n05 September, 2001\nTo :  All Licensed Commer cial Banks\nRECOVERY OF ACCOMMODATION TO EXPORTERS\nWe refer to our circulars dated 22nd January, 2001, 29th January, 2001, 16th February, 2001 and \n30th March, 2001 on the above subject.\nAs agreed at the Bank Managers\u2019 meeting held on 23rd August, 2001, licensed commercial banks \nmay use their judgment and discretion to extend the credit period granted to exporters who experienced \ndelays in dispatching their documents due to interruption of flights in July by a maximum of 7 days. \nSgd, P.T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 149, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  141\nRef. No. : 02  / 05 / 009 / 0100  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n30th March, 2001\nTo :  All Licensed Commer cial Banks\nRECOVERY OF ACCOMMODATION TO EXPORTERS\nWe refer to our circulars 01/01/002/0034/001 dated 22nd January, 2001 and 02/05/009/0100/001 \ndated 29th January, 2001 and 16th February, 2001 on the above subject.\nSome licensed commercial banks have sought further clarifications on the contents of the above \ncirculars. Accordingly, we furnish the following clarifications;\n1. Circulars will apply to credit granted to finance all types of export orders irrespective of the \nterms of payments which can be on sight, on deferred payment terms supported with letters of \ncredit or other terms inclusive of bills on collection or on consignment basis. All such export \ncredit should be recovered only out of export proceeds, and enhanced rates of interest should \napply, if there is any delay in recovery of credit beyond the periods specified in the previous \ncirculars.\n2. There may be instances where export credit requested may not be identified with a particular \nexport order with specific terms of payments. Also, some customers may negotiate for credit \nto finance imports of raw materials or other needs which are directly connected with export \nbusiness, although it may be difficult to identify such credit with specific export orders. In \nsuch cases, banks are requested to apportion such credit among export orders or shipments \nof the particular exporter and enhanced rates of interest should apply if there is any delay in \nrecovery of the apportioned credit beyond the periods specified in the previous circulars.\n3. Certain instances have also been reported where some customers repay their export credit out \nof rupee funds on the grounds that export proceeds are brought and kept in their foreign cur -", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 150, "year": 2013}, "type": "Document"}
{"page_content": "of rupee funds on the grounds that export proceeds are brought and kept in their foreign cur -\nrency accounts with banks. However, this would not conform to the method of recovery of \nexport credit stipulated in our circulars. Banks are requested to recover export credit only out \nof export proceeds, which should be surrendered to banks in sufficient amounts to settle in \nfull the export credit.\nAll banks are requested to refer queries, if any, to Director, Bank Supervision Department, for any \nfurther clarifications on the contents of these circulars.\nSgd.  J M T B Jayasundara\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 150, "year": 2013}, "type": "Document"}
{"page_content": "142 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 05 / 009 / 0100  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n16th February, 2001\nTo :  All Licensed Commercial Banks\nRECOVERY OF ACCOMMODATION TO EXPORTERS\nI refer to our Circulars 01/01/002/0034/001 dated 22nd January, 2001 and 02/05/009/0100/001 \ndated 29th January, 2001, in which procedures agreed on the above subject were conveyed by us. Since \nthen, some banks and exporters have requested an extension of the maximum period of 90 days granted \nfrom the date of shipment to settle export credit out of export proceeds, without being subjected to \nenhanced interest rates, on the ground that it is customary for certain exports to be made on 120 days \ndeferred payment terms. They have cited, as an example, tea exports to Russia where, in the normal \ncourse of business, a period exceeding 90 days would be necessary for settlement of export credits.\n2. Having considered these representations, it has now been decided that licensed commercial banks \nmay use their judgement and discretion to enhance the period granted to settle export credit out of \nexport proceeds up to 120 days from the date of shipment in respect of exports where it is customary to \ngrant 120 days deferred payment terms to buyers. Accordingly, enhanced rates of interest applicable on \naccommodation in respect of such exports will be as follows.\n (i) 1,000 basis points per annum, where there is a delay of not more than 30 days beyond the \n120 days or lesser period decided by the banks from the date of shipment; and\n (ii) an additional 200 basis points per annum for every 30 days delay thereafter.\n This will come into ef fect from Monday 19th February, 2001.\n3. The following clarifications on the contents of the two Circulars referred to above are also made \nfor your information.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 151, "year": 2013}, "type": "Document"}
{"page_content": "for your information.\n (i) In t he event the agreed payment period of the export bill/order connected with the \naccommodation exceeds 90 days or the period decided by the banks under the paragraph \n2 above, enhanced interest rates would apply for the period beyond 90 days or the period \ndecided by the banks, as the case may be, from the date of shipment. \n (ii) Where export credits are not recovered within 90 days or the period decided by banks under \nthe paragraph 2 above, enhanced interest rates would apply to all accommodation granted \nto such exporters by way of purchasing/discounting bills, pre-shipment/post-shipment \ncredit as well as other loans and overdraft facilities. In the event credit facilities such as \noverdrafts cannot be identified with a specific export bill/order, such credit facilities may \nbe apportioned among export bills/orders of the customer concerned for the purpose of \napplying enhanced interest rates. \n (iii) Enhanced interest rates would apply to export credit facilities in rupees as well as in foreign \ncurrencies granted by both Domestic Banking Units and Foreign Currency Banking Units.\n (iv) Enhanced interest rates would not apply to credit facilities granted against export bills \nnegotiated prior to 22nd January, 2001. However, enhanced interest rates would apply to", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 151, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  143\nsuch credit facilities if they are not recovered out of export proceeds within the agreed \npayment period of the export bill/order.\n (v) The banks may permit exemption from enhanced interest rates in respect of credit facilities \nwhich will be granted against export bills which have been supported by Letters of Credit \nopened prior to 22nd January, 2001. However, enhanced interest rates would apply if such \nexport credits are not recovered within the agreed period out of export proceeds.\n4.   The reporting format has now been changed as given in Annex. Please use the new format to \nreport to the Bank Supervision Department monthly the details of accommodation and enhanced \ninterest. In particular, please note that the credit settlement period of the normal 90 days or the \nenhanced 120 days should be indicated in column 2 of the Annex.\nSgd,  P.T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 152, "year": 2013}, "type": "Document"}
{"page_content": "144 Directions, Determinations, and Circulars issued to Licensed Commercial Banks Credit  Date  Amount  Rate of  Tenor Overdue  No. of  Enhanced  Amount  Enhanced\n Settlement  Granted  Granted  Interest   Amount  Days  Interest  Outstan-  Interest\n Period    (%)   overdue  Amount  ding Amount\n        Char ged  Char ged\n (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) Annex \nINTEREST CHARGED ON OVERDUE EXPORT CREDIT FACILITIES* FOR THE MONTH OF \u2026\u2026\u2026\u2026\u2026\u2026\u2026\nName of the Bank: \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nSignature of Authorized Officer\nName and Seal of Bank Date: \u2026\u2026\u2026\u2026\u2026\u2026\u2026.(Amounts in Sri Lanka Rupees \u2019000)\nName of Customer\n(1) Export Bills Finance  Other Export \n (Discounted/Negotiated)  Credit Facilities**\nNotes\n* Include export credits in rupees as well as in foreign currencies granted by both DBUs and FCBUs.\n** All export credits other than bills financing such as short term loans and overdrafts granted to finance export \nbusiness identified separately with or apportioned among export bills/orders.\nPlease send the duly completed form to Bank Supervision Department, Central Bank of Sri Lanka, Fax 477711.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 153, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  145\nRef. No. : 02  / 05 / 009 / 0100  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1\n29th January, 2001\nTo :  All Licensed Commer cial Banks\nRECOVERY OF ACCOMMODATION TO EXPORTERS\nAt the meeting of Bank Managers held on 26 January 2001 the Bank Managers sought \nclarifications with regard to the contents of the Circular No. 01/01/002/0034/001 of 22nd January 2001 \non the above subject. The agreements reached at the meeting are set out below.\n(A) Settlement of Export Credit out of Export proceeds\n The Bank Managers raised the issue as to whether in all instances export credit should be settled \nout of proceeds of the relevant exports. It is agreed that export credit (including overdraft granted \nfor export purposes) is granted on the basis that repayment would be made out of export proceeds \nand that, therefore, the enhanced interest rates specified in the circular would apply where there is \nfailure to settle the export credit out of export proceeds within 90 days of the shipment of goods \nunder the export order.\n(B) Applicability of the Circular to Off-shore Banking Units\n The Bank Managers also raised the issue as to whether the requirements of the circular would \napply to off-shore banking units as well. It was agreed that the rationale underlying the \nrequirements of the circular would apply equally to credit granted by both domestic units and  \noff-shore units of banks which are part of a single licensed commercial bank and that, therefore, \nits requirements would apply to settlement of export credit granted by both such units.\n(C) Applicability of the Circular to Overdrafts\n The Bank Managers raised the question of the settlement of overdrafts out of export proceeds. \nIt was agreed that the overdraft facilities granted for export purposes should be settled out of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 154, "year": 2013}, "type": "Document"}
{"page_content": "It was agreed that the overdraft facilities granted for export purposes should be settled out of \nexport proceeds within 90 days of the shipment of goods and the failure to do so would attract the \nenhanced interest rates specified in the circular.\n Licensed commercial banks are required to abide by the agreements reached at the Bank  \nManagers\u2019 meeting.\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 154, "year": 2013}, "type": "Document"}
{"page_content": "146 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 01  / 01 / 002 / 0034  / 001\nDepartment of Bank Supervision\n22nd January, 2001\nTo :  All Licensed Commer cial Banks\nRECOVERY OF ACCOMMODATION TO EXPORTERS\nAs discussed at the Bank Managers\u2019 meetings of 22nd December 2000 and 18th January 2001 \nand the meeting of Sri Lanka Forex Dealers\u2019 Association on 24th November 2000, it has been agreed \nthat the delays in the settlement of accommodation granted by licensed commercial banks for financing \nexport orders, can cause problems for the prudential management of the banks and that there is a need \nto adopt a uniform practice in this regard by all the banks.\n2. Therefore, with a view to securing the early settlement of financial accommodation granted \nto exporters on the basis of export orders, licensed commercial banks are required to observe the \nfollowing procedures with effect from 23 January 2001.\n(a) Licensed commercial banks should make every endeavour to ensure the repatriation of \nexport proceeds in time against export orders made through them.\n(b) In doing so, licensed commercial banks should ensure that their borrowers settle in full the \naccommodation granted to finance export orders out of export proceeds within a period of \n90 days from the date of shipment of goods in respect of which the accommodation has been \ngranted.\n (c) In order to achieve the above objectives, the rate of interest applicable on such  \naccommodation, where the borrower does not repay export proceeds in time, shall be \nenhanced as follows:\n (i) 1,000 basis points per annum, where there is a delay of not more than 30 days beyond \nthe 90 days from the date of shipment; and\n (ii) an additional 200 basis points per annum for every 30 days delay thereafter.\n3. Licensed commercial banks are hereby requested to submit monthly  reports to the Director of \nBank Supervision (DBS) on the details of such accommodation which has not been settled within the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 155, "year": 2013}, "type": "Document"}
{"page_content": "Bank Supervision (DBS) on the details of such accommodation which has not been settled within the \nspecified period in the format given in the Annexure.\n4. Each monthly report should be submitted to DBS on or before the end of the second week of \nthe subsequent month. Accordingly, the first report providing the aforementioned details in respect of \nJanuary 2001 should reach DBS on or before 16th February 2001.\n Chief Accountant  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 155, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  147\n Date  Amount  Rate of  Maturity or  Overdue  No. of Days  Enhanced\n Granted  Granted  Interest (%)  Expiry Date  Amount  overdue  Interest Rate (%) Annexure \nINTEREST CHARGED ON OVERDUE EXPORT FACILITIES FOR THE MONTH OF \u2026\u2026\u2026\u2026\u2026\u2026\u2026\nName of the Bank: \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nSignature of Authorized Officer\nName and Seal of BankDate: \u2026\u2026\u2026\u2026\u2026\u2026\u2026.(Amounts in SL Rupees)\nName of Customer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 156, "year": 2013}, "type": "Document"}
{"page_content": "148 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 600 / 0002  / 001\nBank Supervision Department\n30 January 2009\nTo :  All  Licensed Commer cial Banks and\n Licensed Specialised Banks\nDear Sir  / Madam,\nCONCESSIONS GRANTED TO TOURISM INDUSTRY\nIn view of the major setback in global economic activities and their impact on the tourism \nindustry, the Monetary Board has requested all licensed commercial banks and licensed specialised \nbanks to grant the following concessions to those institutions in the tourism industry, that wish to avail \nthemselves of such concessions:\n (i) Grant a moratorium of 6 months from January 2009 to June 2009, in respect of outstanding credit \nfacilities to tourist hotel companies and the holding companies of such hotel companies, provided \nthat the hotel companies concerned retain their employees at levels prevailing as at December \n2008. \n (ii) Recover the capital and interest falling due during the moratorium period, from January 2010 \nonwards in thirty-six equal installments and a concessionary rate of interest be charged for this \nfacility.\n (iii) W aive the penal interest imposed on any defaulted credit facilities taken by the tourist hotel \ncompanies, and the holding companies of such hotel companies. \n (iv) Continue to maintain any non-performing loans in the same category for provisioning purposes, \nduring the six-month moratorium period. \nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 157, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  149\nRef. No. : 02  / 17 / 600 / 0002  / 001\nBank Supervision Department\n02 March 2009\nTo :  Chief Executive Offivers of\n all Licensed Commer cial Banks\nDear Sir  / Madam,\nRELIEF PACKAGE FOR THE TEA SECTOR\nThe Ministry of Finance and Planning by its Circular Letter dated 12 January 2009 has informed \nlicensed commercial banks (LCBs) of a relief package for the tea sector. In this regard, the Government \nwill provide a 100 percent Treasury Guarantee, subject to conditions including that such loans are \nsecured on existing mortgages or any other security available with the respective banks.  \nIn the event an LCB grants accommodation to a director of the bank or a close relation of such \ndirector or any concern in which a director has a substantial interest, the Banking Act requires the LCB \nto obtain securities approved by the Monetary Board. \nIn view of the above, the Monetary Board approved of the following in relation to security to be \nobtained by an LCB in granting accommodation to a director of the bank or a close relation of such \ndirector or any concern in which a director has a substantial interest, under the relief package for the \ntea sector:\nThe unexpired period of lease of immovable property held on leasehold basis referred \nto in paragraph 1(h)(ii) of the Determination dated 11 February 2005, issued in terms \nof Section 47(3), (4), (5) and (6) of the Banking Act be reduced to a period of at least \n25 years for this purpose.\nYours faithfully\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 158, "year": 2013}, "type": "Document"}
{"page_content": "150 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 800 / 007 / 001\nBank Supervision Department\n03 March 2009\nTo :  CEOs of Licensed Commer cial Banks and\n Licensed Specialised Banks\nDear Sir  / Madam,\nGRANTING CREDIT FACILITIES TO PRIV ATE SECTOR\nIt has been brought to our notice that some banks have informed their customers that the Central \nBank has required banks to curtail credit to their customers.  \nThe recent trends show that growth in credit to the private sector has decelerated significantly.  \nInflation and inflation expectations are also moderating. In view of these developments and to mitigate \nthe negative consequences of the global financial turmoil on the domestic economy, the Central Bank has \nalso taken several measures to ease conditions in the domestic financial markets.\nAccordingly, you may take appropriate measures to expand credit to the private sector, based on the \nevaluation of credit risk of the customers.  \nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 159, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  151\nOrder made by the Monetary Board of the Central Bank of Sri Lanka under Section 101(1) of the \nMonetary Law Act, No. 58 of 1949, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n12 March 2012.\nMONETARY LAW  ACT, ORDER NO. 1 OF 2012\nCEILING ON CREDIT GROWTH OF LICENSED BANKS\nIn view of the higher than desired increase in credit extended by licensed banks and its impact \non the monetary aggregates and inflation, the Monetary Board in the exercise of powers conferred by  \nSection 101(1) of the Monetary Law Act, No. 58 of 1949, as amended, hereby issues Orders No. 1 of \n2012 as follows:  \n1. The credit growth of a licensed bank in the year 2012 shall not exceed   \n18 per cent of the total outstanding of credit as at end of year 2011 or  \nRs. 800 million, whichever is higher. Provided however, that a licensed bank \nmay grant credit in the year 2012 in excess of 18 per cent or Rs. 800 million, \nup to 23 per cent of the total outstanding of credit as at end of year 2011 or  \nRs. 1,000 million, whichever is higher, where corresponding funds are raised \nfrom overseas sources.  \n2. The following definitions shall be applicable for the purposes of this Order .\n  i. \u201cCredit\u201d shall mean all on-balance sheet rupee credit facilities such as any \nloan, overdraft or advance inclusive of finance leases, hire purchase and \ntrade finance. \n ii. \u201cOutstanding amount of credit\u201d shall mean:\na. In  the case of overdrafts and credit card receivables, the total \nof outstanding amount after deducting all accrued interest of all  \nnon-performing overdrafts and credit card receivables.\nb. I n the case of other loan and advances (other than overdrafts and \ncredit card receivables), the total of capital outstanding amount after \ndeducting all accrued interest on performing and non-performing loans \nand advances.Credit growth \nlimits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 160, "year": 2013}, "type": "Document"}
{"page_content": "and advances.Credit growth \nlimits.\nDefinitions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 160, "year": 2013}, "type": "Document"}
{"page_content": "152 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02/04/004/0005/001\nCentral Bank of Sri Lanka\nBank Supervision Department\nTo : All Licensed Commer cial Banks and\n all Licensed Specialised Banks\nGUIDELINES ON THE GRANT OF FACILITIES FOR THE ISSUE OF\nCOMMERCIAL PAPER AND OTHER FORMS OF PROMISSORY NOTES\nAll Licensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) are hereby \nrequired to observe the following guidelines when they provide accommodation for the issue of \nCommercial Paper and other forms of Promissory Notes (CP/PN) by their corporate customers by \naccepting, endorsing, guaranteeing, underwriting or purchasing such CP/PN, or where they support the \nissue of such instruments by acting as issuing/paying agents, dealers, or by authenticating signatures of \nthe issuers.\n1. Form of Commercial Paper/Promissory Notes \u2013  CP/PN shall take the form of a usance promissory \nnote negotiable by delivery or endorsement and delivery, in accordance with the Bills of Exchange \nOrdinance.\n2. Eligibility Criteria \u2013  The LCBs and LSBs shall observe the following criteria when supporting the \nissue of CP/PN referred to above:\n 2.1 The issuing corporate customers should not be LCBs, LSBs or Finance Companies.\n 2.2 All existing credit facilities enjoyed by the issuing company with any LCB/LSB should be \n\u201ccurrent\u201d in terms of the Central Bank\u2019s Directions on Non-Performing Advances issued under \nSection 46A and Section 76J(I) of the Banking Act for LCBs and LSBs, respectively.\n 2.3 In the case of providing accommodation, the issuing company should have an approved stand-\nby credit line from the LCB/LSB supporting the issue, to the full redemption value, which \nshould be specifically reserved for the purposes of redemption of such CP/PN. Such credit line \nshould be for a period longer than the maturity date of CP/PN.\n  OR\n  An \u2018investment grade rating\u2019  by a Rating Agency approved by the Central Bank of Sri Lanka.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 161, "year": 2013}, "type": "Document"}
{"page_content": "OR\n  An \u2018investment grade rating\u2019  by a Rating Agency approved by the Central Bank of Sri Lanka.\n  \u201cfull redemption value\u201d refers to the amount of the principal, interest and any other \ncharges which is payable upon redemption of such CP/PN.\n3. Pr ocedures \u2013  A LCB's/LSB's support for the issue of CP/PN does not require the prior approval of \nthe Central Bank of Sri Lanka. However, in supporting the issue of these instruments, LCBs/LSBs \nshall ensure that:\n 3.1 The company intending to issue such CP/PN submits to LCBs/LSBs \u2013\n (a) A  written request indicating the nature of support applied for in respect of each issue \nof CP/PN;\n (b) Com prehensive financial information which would include company profiles and \nfinancial data including a projected cash flow statement;\n (c) The value of CP/PN already issued and outstanding;\n (d) Board resolution for the issue of CP/PN concerned.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 161, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  153\n 3 .2  The LCBs/LSBs should also ensure that the company profiles and financial data are made \navailable to investors upon request.\n 3.3 An adequate appraisal of the financial condition of the issuer is carried out and due caution is \nexercised before lending the support of the LCB/LSB. For this purpose, the LCB/LSB should, \namong other things, obtain a report from the Credit Information Bureau (CRIB).\n 3.4 The CP/PN are printed on good quality security paper incorporating adequate security features, \nthat necessary precautions have been taken to keep documents in safe custody, preventing \naccess by unauthorised persons.\n 3.5 The issue of CP/PN is completed within a period of 14 calendar days from the date of issue. \nThus, any unsold portion of the issue after the 14 day cannot be issued.\n 3.6 Each single issue of CP/PN should have the same maturity date.\n 3.7 The issuing company should discharge the obligations on the CP/PN on the date of maturity. \nNo grace period shall be given to the issuer in this regard.\n 3.8 The CP/PN shall contain the following minimum information/features:\n (a) The description of debt instrument should be clearly printed on it;\n (b) Name of the issuing company;\n (c) Serial number;\n (d) Place of payment (of interest and principal);\n (e) Date of issue;\n (f) Amount (in words and figures);\n (g) Date of maturity;\n (h) Names of the issuing and paying agents;\n (i) If the repayment of principal and payment of interest are guaranteed, name of the  \nguarantor;\n (j) Signatures of authorised signatories of the issuing company\n (k) W here the LCB/LSB does not accept any obligation for the payment on the  \nCP/PN, as when it only authenticates the signature, such fact should be conspicuously \nstated on the CP/PN;\n (l) The counterfoil of CP/PN should also contain the information at ( a) to (k). In the case \nof (j), the signature/initials of the respective signatories.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 162, "year": 2013}, "type": "Document"}
{"page_content": "of (j), the signature/initials of the respective signatories.\n (m) Adequate space should be provided for endorsements on the reverse of the CP/PN.\n3.9 (a) The LCB\u2019s/LSB\u2019s accounts in respect of CP/PN should be in conformity with \napplicable/accepted accounting practices and non fund based support for CP/PN \nshould be recorded and reported as off-balance sheet items.\n (b) The LCB\u2019s/LSB\u2019s obligations/commitments on CP/PN shall be reported in the statutory \nreturns submitted to the Central Bank of Sri Lanka.\n (c) Details of the LCB/LSB support for the issue of CP/PN outstanding monthly, shall be \nreported to the Director of Bank Supervision in a monthly statement as in the annexed \nformat. This statement shall be submitted by the 15th of the following month, duly \ncertifying that the obligations of the LCB/LSB under the different categories of issue, \nas recorded in the General Ledger, are correctly reflected in the statement. A \u2018nil\u2019 \nstatement should be sent if there are no outstanding balances.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 162, "year": 2013}, "type": "Document"}
{"page_content": "154 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n 3.10 The LCBs/LSBs supporting the issue of CP/PN should conform to all legal requirements.\n 3.1 1  Roll-over of CP/PN should be considered as a new issue.\n4. Prudential Requir ements of the Central Bank\n 4.1 All credit facilities extended, and commitments made, by LCBs/LSBs relating to the issue of \nCP/PN will be treated as accommodation granted to the issuing company and shall be subject \nto directions issued from time to time under the Banking Act and to all prudential guidelines \nissued by the Central Bank.\n5. These Guidelines shall be ef fective from 05 January 2001.\n6. Guidelines to Licensed Commercial Banks in Sri Lanka on the grant of facilities for the issue of \nCommercial Paper dated 05.06.1995 are hereby rescinded.\n7. Any clarifications/queries with regard to these Guidelines should be addressed to the Director of \nBank Supervision. \nSgd. P. T. Sirisena\nDirector of Bank Supervision\n05 January 2001", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 163, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  155\n(Amounts in Rupees Thousands)  \n Name of  Legal Status  Type of  Amount  Amount  Date of  Date of  Rate of  Nature of\n Issuing Company  of Issuing  Promissory   of the Issue  Subscribed  Issue  Maturity  Interest (%)  Support \n  Company  Notes Issued  (Face Value)   (YY/MM/DD)  (YY/MM/DD)\n (1) (2) (3) (4) (5) (6) (7) (8) (9)\nWe hereby certify that this statement reflects the value of support extended to the Bank\u2019s customers and that the statement figures tally with the General \nLedger Balances as at the end of the month.\nDate :  Name of Bank :  Authorised Of fcer :* Column (9)\nPlease indicate using the foliowing \nCodes :\nNature of Support  Code\nAccepting  AC\nEndorsing  EN\nGuaranteeing  GT\nUnderwriting  UN\nPurchasing  PR\nIssuing Agent  IA\nPaying Agent  PA\nDealer  DE\nAuthenticating  AUInstructions :\n* Column (2)\nPlease indicate using the foliowing Codes :\nPrivate Company  \u2013  PR\nPublic Unquoted Company  \u2013  PU\nPublic Quoted Company  \u2013  PQ\nPeoples Company  \u2013  PC\n* Column (3) : Please indicate whether Commercial Paper (CP), Promissory Notes (PN), or any other form \n(Please specify)\n* This statement should reach the Director, Bank Supervision Department on or before the 15th of the following \nmonth.\n* A \u2018nil\u2019 statement should be submitted if there are no outstanding amounts.Monthly Statement of Commercial Paper / Promissory Notes\nAs at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 in terms of Guidelines dated 5 January 2001", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 164, "year": 2013}, "type": "Document"}
{"page_content": "156 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 500 / 0540  / 001\nBank Supervision Department\n05 April, 2013\nTo :  The CEOs of all Licensed Commer cial Banks\nDEFINITION OF LIQUID ASSETS UNDER SECTION 86 OF THE  \nBANKING ACT, NO. 30 OF 1988, AS AMENDED\nThe Monetary Board has determined that investments in Gilt Unit Trusts (GUTs) by LCBs  \nshall be treated as liquid assets in terms of item ( g) of the definition of \u201cliquid assets\u201d under Section 86 \nof the Banking Act, No. 30 of 1988, subject to the following conditions.\n(a) GUTs should be open ended mutual funds.\n(b) Underlying investment portfolio of GUTs should always be Sri Lanka Government Securities \n(Treasury bills and Treasury Bonds).\n(c) Only 90% of investments in GUTs should be treated as liquid assets. \nLicensed Commercial Banks are further informed that, the eligible value of the investments in \nGUTs be reported under code number 4.1.2.4.0.0 of the monthly web based return on Statutory Liquid \nAssets Ratio for Domestic Banking Unit (BSD-MF-04-LD).\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 165, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  157\nRef. No. : 02  / 17 / 500 / 0540  / 001\nBank Supervision Department\n26 October, 2012\nTo :  The CEOs of all Licensed Commer cial Banks\nDEFINITION OF LIQUID ASSETS UNDER SECTION 86 OF THE\nBANKING ACT, NO. 30 OF 1988, AS AMENDED\nWe refer to the Circular No. 02/04/002/005/002 dated 31 January 2001 on the above subject and write \nto clarify the following with respect to the requirement therein for Commercial Paper/Promissory Notes to \nbe backed by an approved standby credit line from a licensed commercial bank/licensed specialised bank.   \nA licensed commercial bank could consider 50% of its investments in Commercial Paper/Promissory \nNotes as liquid assets only if such Commercial Paper/Promissory Notes are backed by an approved \nstandby credit line supporting the issue to the full redemption value from another licensed commercial \nbank/licensed specialised bank.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 166, "year": 2013}, "type": "Document"}
{"page_content": "158 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 500 / 0540  / 001\nBank Supervision Department\n15 October, 2012\nTo :  The CEOs of all Licensed Commer cial Banks\nDEFINITION OF LIQUID ASSETS UNDER SECTION 86 OF THE\nBANKING ACT, NO. 30 OF 1988, AS AMENDED\nThe Monetary Board has determined that Reverse Repurchase Agreements in Treasury bills and \nTreasury bonds shall be treated as liquid assets in terms of item ( g) of the definition of \u201cliquid assets\u201d \nunder Section 86 of the Banking Act, No. 30 of 1988.\nLicensed commercial banks may, therefore, take into account the daily outstanding amount of the \nReverse Repurchase Agreements or the market value of the underlying securities held under Reverse \nRepurchase Agreements, whichever is less, in computing their liquid assets ratio.\nLicensed commercial banks are further informed that, the eligible value of the Reverse Repurchase \nAgreements in Treasury bills and Treasury bonds should be reported under code number 4.1.2.4.0.0 \nand 4.1.2.13.0.0, respectively, of the monthly web based return on Statutory Liquid Assets Ratio for  \nDomestic Banking Unit (BSD-MF-04-LD).\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 167, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  159\nMy. No. : 02  / 17 / 800 / 0005  / 01\nBank Supervision Department\n20 August 2008\nTo :  CEOs of all Licensed Commer cial Banks\nDear Sirs,\nDEFINITION OF LIQUID ASSETS \u2013 UNDER SECTION 86 OF THE\nBANKING ACT, No. 30 OF 1988, AS AMENDED\nThe Monetary Board has determined that investment in the International Sovereign Bonds issued \nin 2007 by the Government of Sri Lanka shall be treated as liquid assets in terms of item (g) of the \ndefinition of \u201cliquid assets\u201d under Section 86 of the Banking Act, No.30 of 1988.\nLicensed commercial banks may, therefore, take into account the daily market value of their \ninvestment in the International Sovereign Bonds in computing their liquid assets ratio for the purpose \nof complying with the provisions of Section 21 of the Banking Act.\nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 168, "year": 2013}, "type": "Document"}
{"page_content": "160 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 04 / 002 / 0106  / 001\nBank Supervision Department\n15th August 2002\nTo : All  Licensed Commercial  Banks\nDEFINITION OF LIQUID ASSETS \u2013 UNDER SECTION 86 OF THE\nBANKING ACT NO: 30 OF 1988\nIn exercise of the powers conferred by paragraph ( g) of the definition of \u201cliquid assets\u201d in Section \n86 of the Banking Act, No.30 of 1988 as amended by Banking (Amendment) Act, No.33 of 1995, the \nMonetary Board has determined that Sri Lanka Development Bonds (SLDBs) issued under the Foreign \nLoans Act, No.29 of 1957 shall be liquid assets.\nLicensed Commercial Banks may, therefore, take into account the daily market value of their \ninvestment in SLDBs for the purpose of complying with the provisions of Section 21 of the Banking \nAct, relating to maintaining liquid assets. \nYours faithfully,\nSgd. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 169, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  161\nRef. No. : 02  / 04 / 002 / 0005  / 002\nBank Supervision Department\nCentral Bank of Sri Lanka\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1\n31st January 2001\nTo :  All Licensed Commer cial Banks\nDear Sir  / Madam,\nDEFINITION OF LIQUID ASSETS \u2013 UNDER SECTION 86 OF THE\nBANKING ACT No. 30 OF 1988\nIn exercise of the powers conferred by Item ( g) of the definition of \u201cliquid assets\u201d in Section 86 \nof the Banking Act, No.30 of 1988, the Monetary Board has determined that 50% of the investments \nin Commercial Paper/Promissory Notes, which are backed by an approved standby credit line from \na Licensed Commercial Bank/Licensed Specialised Bank supporting the issue to the full redemption \nvalue or an investment grade rating by a Rating Agency approved by the Central Bank of Sri Lanka, \nand has a remaining maturity of less than 1 year be considered as liquid assets.\nKindly acknowledge receipt of this letter.\nYours faithfully,\nSgd.  P. T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 170, "year": 2013}, "type": "Document"}
{"page_content": "162 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : BS/35/97\nBank Supervision Department\nCentral Bank of Sri Lanka\n8th Floor \u2013 Renuka Building\n41 Janadhipathi Mawatha\nColombo 1.\n15th May 1998.\nTo : All Licensed Commercial Banks\nDear Sir,\nDEFINITION OF LIQUID ASSETS \u2013 UNDER SECTION 86 OF THE \nBANKING ACT NO. 30 OF 1988\nIn exercise of the powers conferred by paragraph ( g) of the definition of \u201cliquid assets\u201d in section \n86 of the Banking Act, the Monetary Board has determined that Treasury Bonds issued under section \n21A of the Registered Stock and Securities Ordinance shall be liquid assets.\nThe commercial banks may, therefore, take into account the Treasury Bonds they hold on their \naccount for the purpose of complying with the provisions of section 21 of the Banking Act relating to \ntheir obligation to maintain the required amount in liquid assets.\nYours faithfully,\nSgd.  Y. A. Piyatissa\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 171, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  163\nRef. No. : BS/14/88  V ol. IV \n24th March, 1997\nSent to :  All 26 Commercial Banks\nDear Sir,\nMONTHLY STATEMENT OF LIQUID ASSETS\nYour attention is drawn to our letter No. BS/14/88 of V ol. II dated 10th April, 1989 on the above \nsubject.\nWe wish to inform you that the Monetary Board of the Central Bank of Sri Lanka has approved of \nthe reporting of the re-discountable value of Treasury Bills held instead of the purchase prices of such \nBills by commercial banks as part of their liquid assets in the monthly liquid assets statements furnished \nto the Central Bank.\nThe re-discountable value referred to above means the value of Treasury Bills arrived at on the basis \nof re-discounting prices determined by the Chief Accountant of the Central Bank of Sri Lanka.\nPlease acknowledge receipt of the letter.\nYours faithfully,\nSgd.  Y. A. Piyatissa\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 172, "year": 2013}, "type": "Document"}
{"page_content": "164 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : BS/14/88  V ol. III\n10th April, 1989\nDear Sir,\nBANKING ACT NO. 30 OF 1988 \nMONTHLY STATEMENT OF LIQUID ASSETS\nAll licensed commercial banks are required, in terms of section 21(2) of the Banking Act, No.30 of \n1988, to submit a monthly return certifying the total liabilities and the volume of liquid assets required \nto be maintained, substantially in the form shown in Appendix I of this notice. Such statement should be \nforwarded before the 15th day of the month following the month to which the statement relates.\nIn view of the fact that the Monetary Board has decided that maintenance of Liquid Assets, in \naccordance with the determination made by the Monetary Board as set out in Paragraph 5 of the notice \ndated 1st March, 1989, would come into operation with effect from 1st April, 1989, the first return  \n(i.e. the return for the month of April) should be forwarded before 15th May, 1989.\nYours faithfully,\nSgd.  P. T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 173, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  165\nAPPENDIX  I\nFrom  :\nTo : Director of Bank Supervision\n  Central Bank of Sri Lanka\nSTATUTORY LIQUID ASSETS\n(Return in terms of section 21(2) of the Banking Act, No. 30 of 1988)\nSri Lanka Rs. (\u2019000)\nA. 1. T otal liabilities excluding contingent liabilities as at the beginning of the  \nfirst working day of the month of \u2026\u2026\u2026\u2026\u2026\u2026\u2026. (base date)  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  Less :\n  (a) Liabilities to the shareholders  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  (b) Liabilities to the Central Bank  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nB. A verage statutory liquid assets for the Month of \u2026\u2026\u2026 (maintenance period)  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  1. Cash  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  2. Balances with licensed commercial banks  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  3. Money at call in Sri Lanka  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  4. T reasury Bills and Securities issued or guaranteed by  \nthe Govt. of Sri Lanka which have a maturity not exceeding one year  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  5. Goods Receipts  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  6. Import Bills  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  7. Export Bills  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  8. Inland Bills  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  9. Cash Items in process of collection  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 10. Balances with banks abroad  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1 1.  T reasury bonds issued under section 21A  \nof the Registered Stock and Securities Ordinance  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  Total Liquid Assets  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nC. Liquid Assets Ratio (B as a % of A)  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nWe / I hereby certify that the above statement is correct and is in accordance with the books of this \nbank.\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nAuthorised Official Signature\nDate : \u2026\u2026\u2026\u2026\u2026\u2026.\nNote :  The base date is the first working day of the month preceding the maintenance period.\n e.g. Liquid assets for April will be based on Liabilities on March 1st.\n The required liquid assets should be maintained for a period (maintenance period ) commencing \non the 1st working day and ending on the last working day of the calendar month following the \nmonth in which the base date occurs.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 174, "year": 2013}, "type": "Document"}
{"page_content": "166 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No : 02  / 04 / 002 / 0005  / 003\nBank Supervision Department\n20 May 2004\nTo : All Licensed Commercial Banks \nDear Sir  / Madam,\nMONTHLY STATEMENT OF LIQUID ASSETS\nFOR THE DOMESTIC BANKING UNIT (DBU) AND\nOFF-SHORE BANKING UNIT (OBU)\n Reference the Determination dated 24.12.2002 and Directions dated 21.01.2003 and 08.10.2003 on \nthe above subject.\n All licensed commercial banks are required to note that they should maintain Statutory Liquid \nAssets of an amount not less than 20% of total liabilities, less liabilities to the Central Bank and to the \nshare holders, in respect of the DBU in Rupees and in respect of the OBU in US dollars, for each month \ncommencing May 2004.\n A ny deficiency in Statutory Liquid Assets in the DBU or in the OBU will be subject to the provisions \nof Section 21(3) of the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act,  \nNo.33 of 1995, and the penalty involved will be payable in Rupees in the case of the DBU and in  \nUS dollars in the case of the OBU.\n Please acknowledge receipt of this letter .\nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 175, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  167\nBank Supervision Department\n8th October 2003\nTo : All Licensed Commercial Banks \nDear Sir  / Madam,\nMONTHLY STATEMENT OF LIQUID ASSETS\nFOR THE OFF-SHORE BANKING UNIT\nFurther to our letter dated 21 January 2003, and the discussion on the above subject at the \nMeeting of the Chief Executive Officers of Licensed Commercial Banks (LCBs) and Licensed \nSpecialised Banks (LSBs), all LCBs are informed as follows:\n1. Monthly Return on Liquid Assets \u2013 Since the liabilities of the Off-shore Banking Unit (OSBU) \nare in foreign currency, the liquid assets for meeting the Statutory Liquid Assets Ratio (SLAR) \nshall also be in foreign currency. A separate return indicating the SLAR for the OSBU in respect of \neach month, computed on the same basis as for the DBU shall be submitted each month.\n2. Placements of the Domestic Banking Unit (DBU) with own OSBU  \u2013 In computing the liquid \nassets ratio of the Domestic Banking Unit, placements of the DBU of a LCB with its own OSBU \nwill be limited to 20%.  The full amount of the placements should be included in the liability base \nof the OSBU.\n3. Liquid Assets of the OSBU \u2013 Banks are required to ensure that the liquid assets included in the \ncomputation fall within the meaning of defined liquid assets. In this regard, the following could be \nconsidered:\n a. Securities/Bonds issued by Foreign Governments maturing within 1 year\n b. Other debt securities and Bonds, maturing within 1 year, which are traded on an exchange, \nor have an investment grade rating, or are backed by a standby credit facility from a banking \ninstitution.\nSuch investments, which are not already defined as liquid assets, could be included with the prior \napproval of the Central Bank of Sri Lanka.\nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 176, "year": 2013}, "type": "Document"}
{"page_content": "168 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 04 / 002 / 0005  / 003\nBank Supervision Department\n21st January 2003\nTo : All Licensed Commercial Banks\nDear Sir/Madam,\nBANKING ACT NO. 30 OF 1988\nMONTHLY STATEMENT OF LIQUID ASSETS FOR THE OFF-SHORE BANKING UNIT\nReference the Circular dated 24 December 2002, regarding the application of the provisions \nunder Section 21(2) of the Banking Act, No.30 of 1988 to the off shore banking business of Licensed \nCommercial Banks, with effect from January 2003. \nIn terms of the provisions of the above Section, all Licensed Commercial Banks are required to \nsubmit a separate monthly return in respect of their off-shore banking business, indicating the total \nliabilities and the volume of liquid assets maintained by the Off-shore Banking Unit. Your attention is \ninvited to the need to maintain the liquid asset in respect of the off-shore banking business in foreign \ncurrency. The return should denominated in US dollars, whilst the liquid asset components and the \nformat of the return would be the same as for the Domestic Banking Unit. In view of the fact that the \ndetermination would come into operation with effect from 31 January 2003, the first return for the \nmonth of January 2003, should be forwarded to the undersigned by 15 February 2003. \nYou are hereby informed that the penalty for any shortfall in the Statutory Liquid Assets Ratio in \nterms of Section 21(3) would also be payable in foreign currency. \nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 177, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  169\nAPPLICATION OF PRUDENTIAL REGULATIONS ON\nOFF-SHORE BANKING UNITS\nDetermination dated 10 April 1989 on Statutory Liquid Assets Ratio issued under Section 21(2) of \nthe Banking Act:\nThe above Determination shall be applicable to all licensed commercial banks in respect of both \nthe domestic banking business and the off-shore banking business on a consolidated basis, with effect \nfrom 01 January 2003.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n24 December 2002", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 178, "year": 2013}, "type": "Document"}
{"page_content": "170 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBANKING ACT\nDirections made by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of \nthe Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995 and Act, \nNo.2 of 2005.       \nSgd. Sunil Mendis\nGovernor\nColombo\n01-03-2006.\nDIRECTION ON THE PRUDENTIAL NORMS FOR CLASSIFICATION, V ALUATION \nAND OPERATION OF THE BANK\u2019S INVESTMENT PORTFOLIO\n1. W ith effect from 31 March 2006, all Licensed Commercial Banks are required to classify their \ninvestment portfolio under two categories: i.e., the Investment Account and the Trading Account. All \nbanks are required to maintain two separate books of accounts for this purpose. \n2. Banks should decide on the category of investment at the time of acquisition and the decision should \nbe documented. Classification is not a free choice but is based on facts and the management\u2019s intent at \nthe date of purchase. Transfers between categories after initial recognition are restricted. \n3. The criteria for classifying and valuation of the bank\u2019 s investment portfolio are as provided below: \nA. Investment Account  \n (a) All securities acquired with the positive  intent  and ability  to hold till maturity  shall be \nclassified under the Investment Account. \n (i) Positive intent cannot be demonstrated if: \n \u2022 the bank has the intent to hold the securities for only an undefined period; or \n \u2022 the bank stands ready to sell the securities in response to changes in market interest \nrates or risks, liquidity needs, changes in the availability of the yield on alternative \ninvestments, changes in financing sources or terms, or changes in foreign currency \nrisk; or \n \u2022 the issuer has a right to settle the securities at an amount significantly below its \namortised cost. \n (ii) The ability to hold the securities to maturity cannot be demonstrated if:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 179, "year": 2013}, "type": "Document"}
{"page_content": "amortised cost. \n (ii) The ability to hold the securities to maturity cannot be demonstrated if: \n \u2022 the bank does not have the financial resources available to continue to finance the \ninvestment until maturity; or\n \u2022 the bank is subject to legal or other constraints that could frustrate its intention to \nhold the securities to maturity. \n (iii) When a bank\u2019s actions cast doubt on its intent or ability to hold investments to maturity, \nthe Central Bank of Sri Lanka shall retain the right to reclassify all or part of the \nInvestment Account as Trading and require appropriate provisioning.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 179, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  171\n (b) All unlisted securities ( eg.: shares, debentures) should generally be classified under the \nInvestment Account. However, government securities will have to be classified based on the \nrules specified under point A(a) above.\n (c) Securities in the Investment Account may be used for repurchase transactions. \n (d) Securities in the Investment Account shall be carried and reported at acquisition cost over \nthe period of redemption. \n (i) Carrying values of interest bearing securities in the Investment Account may be adjusted \nto account for the accretion of discount (or depletion of premium). The adjustments \nshould be amortised annually on a straight-line basis over the period to maturity. \n (ii) All other securities should be maintained at cost. Any impairment in value which is \nconsidered to be permanent should be fully provided for in the Profit & Loss Account \nimmediately. The following conditions should be taken into consideration in deciding on \nwhether there is an impairment of value. \n \u2022 T rack record of dividends/returns \u2013 Non-receipt of dividends/returns for a \nconsecutive period of three years, should be considered as an impairment and the \ninvestment should be classified as non-performing.\n \u2022 Market prices \u2013 A continuously declining trend in market prices, with the investment \nvalue being below cost for over three years should be considered as an impairment \nin value. \n (iii) The Central Bank of Sri Lanka will retain the flexibility to consider specific requests/\nexceptions in this regard. \n (iv) Any impairment in value or losses on the sale of investments held in the Investment \nAccount should be taken to the Profit & Loss Account. \n (e) Sale of securities classified under the Investment Account should only be an insignificant \namount of the investment portfolio and should be limited to circumstances that do not taint", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 180, "year": 2013}, "type": "Document"}
{"page_content": "amount of the investment portfolio and should be limited to circumstances that do not taint \nthe rest of the portfolio. These circumstances are: \n \u2022 if the investment was close enough to maturity or call date so that changes in the market \nrate of interest could not have a significant effect on the investment\u2019s market value; \n \u2022 the sale is made after the entity has collected substantially all of the investment\u2019s original \nprincipal through scheduled payments or prepayments; \n \u2022 the sale was due to an isolated event that was beyond the entity's control, non-recurring \nand could not have been reasonably anticipated. \nB. T rading Account  \n (a) All securities acquired for the specific purpose of trading on a regular basis (at least every \nquarter), to take advantage of the short-term changes in market prices and yields, shall \nbe classified under the Trading Account. The classification of Trading assets is based on \noriginal intention and these are not transferred to the Investment category because intention \nsubsequently changes. \n (b) Securities held in the Trading Account must be revalued or marked to market on a daily \nbasis. In the case of securities for which daily prices are not available, banks are advised to", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 180, "year": 2013}, "type": "Document"}
{"page_content": "172 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nmark to market at least on a weekly basis. Where two-way quotes are published (eg.: Rates \nfor government securities), the middle rate should be adopted. \n (c) Any gains or losses on the sale of investments held in the Trading Account should be taken \nto the Profit & Loss Account. \nC. T ransfer of Securities \nThe transfer of securities between portfolios will generally not be permitted, except under \nspecified circumstances. This is to limit the opportunities to manipulate the recognition of gains \nor losses or to mask changes in market value. \n (a) T ransfer of securities between the Trading Account and the Investment Account must be \njustifiable, documented and authorised. \n ( b) Port folio transfers to or from the Investment Account shall only be undertaken rarely \n(preferably at the beginning of the accounting year), with the approval of the Board \nof Directors, the Assets and Liability Committee or the Investment Committee. The \ncircumstances justifying such transfers are given below: \n (i) A  change in the statutory and regulatory requirements. \n (ii) A  significant increase in the capital requirements that may oblige the Bank to reduce \nits investment holdings. \n (iii) A  major business occurrence that necessitates the transfer of securities to maintain the \nBank\u2019s risk profile. \n ( iv)  Exceptional circumstances such as tight liquidity conditions and extremely  \nvolatility.\n (c) The carrying value of securities transferred from the Trading Account into the Investment \nAccount shall be marked to market prior to the transfer. Therefore, any gains or losses due \nto revaluation would have been recognised in earnings prior to the transfer. The market \nvalue of the securities at the point of transfer into the Investment Account then becomes \nthe \u2018acquisition cost\u2019 for accounting purposes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 181, "year": 2013}, "type": "Document"}
{"page_content": "the \u2018acquisition cost\u2019 for accounting purposes.\n (d) A  statement on portfolio transfers, if any, shall be signed by the Chief Executive Officer \nof the Bank and submitted to the Bank Supervision Department of the Central Bank of Sri \nLanka, on a quarterly basis. \n (e) The Central Bank of Sri Lanka will retain the right to review the statement of portfolio \ntransfers and require the bank to make provisions if considered necessary.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 181, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  173\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of the \nBanking Act, No. 30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\n01 September 2009.\nBANKING ACT, DIRECTION NO.3 OF 2009\nDIRECTIONS ON RISK MANAGEMENT RELATING TO\nFOREIGN EXCHANGE BUSINESS OF LICENSED COMMERCIAL BANKS\nIn the exercise of the powers conferred by Section 46 of the Banking Act, No. 30 of 1988, last amended \nby the Banking (Amendment) Act, No. 46 of 2006, the Monetary Board hereby issues these Directions \nunder provisions of Section 46(1) of the Act in respect of risk management relating to foreign exchange \nbusiness of licensed commercial banks. \n1. Introduction\n1.1 The purpose of these Directions is to standardise and strengthen foreign exchange risk management \nsystems in Licensed Commercial Banks (LCBs) and increase their soundness, thereby strengthening \nfinancial system stability. \n1.2 In the case of financial derivatives, detailed operational guidelines and effective foreign exchange \nrisk management practices have been already set out in the \u201cDirections on Financial Derivative \nProducts\u201d issued by the Director International Operations and the Controller of Exchange, on \n31 July 2009. These Directions shall therefore, be read in conjunction with the above mentioned \nDirections.\n1.3 These Directions shall be ef fective from 01 September 2009.\n1.4 All LCBs shall fully comply with the provisions as set out in this Directions No. 3, on or before  \n31 March 2010.\n2. For eign Exchange Risk Management Policy\n2.1 LCBs shall ensure that policies, procedures, controls and limits are established to identify, measure, \nmonitor and control foreign exchange risks. These policies, procedures and controls in relation to \nforeign exchange risk management shall be:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 182, "year": 2013}, "type": "Document"}
{"page_content": "foreign exchange risk management shall be:\n (i) approved by the Board of Directors;\n (ii) properly documented and drawn up after consideration of the foreign exchange risks associated \nwith different types of products  and processes;\n (iii) circulated among staf f of all relevant departments and units;\n (iv) reviewed by the Board of Directors on a regular basis, at least annually, to ensure that such \npolicies, procedures and controls remain relevant, appropriate and timely.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 182, "year": 2013}, "type": "Document"}
{"page_content": "174 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n2.2 The design of foreign exchange risk management policies, procedures, controls and limits, shall at \nleast cover:\n (i) responsibilities of the Board, senior management and all other staf f involved;\n (ii) risk monitoring and control;\n (iii) approved products;\n (iv) internal and external limits, including system-wide and trading limits;\n (v) risk measurement and reporting;\n (vi) stress testing mechanisms;\n (vii) valuation of foreign currency positions;\n (viii) internal controls and audit;\n (ix) fit and proper criteria for persons engaged in foreign exchange business;\n (x) procedure for the introduction of new products, services and activities; and\n (xi) contingency planning.\n2.3 The foreign exchange risk management policies and procedures shall be supplemented with ethical \nrules and standards, such as a comprehensive Code of Conduct, for adherence by the employees \nengaged in foreign exchange activities.\n3. Responsibilities of the Board and Senior  Management and all other staff involved\n3.1 The Board/senior management shall, take measures to strengthen the foreign exchange risk  \nmanagement systems and their soundness through the following:\n (i) p ut in place Board approved prudent foreign exchange risk management policies and \nconnected procedures and oversee the implementation of the same;\n (ii) duly document related internal control procedures in the form of procedure manuals;\n (iii) review the policies on a regular basis, at least annually , in an appropriate manner;\n (iv) establish an Asset and Liability Management Committee (ALCO) for, inter alia, the \nmanagement of foreign currency denominated assets and liabilities within the risk parameters \napproved by the Board;\n (v) establish, inter alia, a mechanism such as a Middle office, to monitor the foreign exchange \nrisk, on an on going basis, and report the same to the ALCO;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 183, "year": 2013}, "type": "Document"}
{"page_content": "risk, on an on going basis, and report the same to the ALCO;  \n (vi) ensure the establishment of appropriate risk parameters for the ALCO and/or senior \nmanagement in the management of the foreign exchange risk;\n (vii) review the results of periodic stress tests to assess the potential impact of various shocks and \nevaluate the bank\u2019s capacity to withstand stressed situations in terms of profitability, liquidity \nand capital adequacy;\n (viii) formulate an efficient Management Information System for reporting foreign exchange \nrelated activities, with facilities to escalate all exceptional transactions to the Board or the \nsenior management as the case may be;\n (ix) ensure that the Board and senior management fully understand the risks involved;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 183, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  175\n (x) formulate procedures to seek and obtain separate independent professional advice where  \nnecessary, in order to assist the Board of Directors to discharge its duties in this regard;\n (xi) approve the introduction of all new products, services and activities. \n3.2 LCBs shall adhere to the rules applicable to Integrated Risk Management Committees as per the \nrules set out in Direction No. 11 of 2007 on \u2018Corporate Governance for Licensed Commercial \nBanks in Sri Lanka\u2019, since such rules have a general application with regard to the responsibilities \nof the Board and senior management.\n4. Risk Monitoring and Contr ol\n4.1 LCBs shall: \n (i) document the procedures and internal controls to be performed by Front Office, Middle \nOffice and Back Office; \n (ii) establish a system to monitor their foreign exchange risks on an ongoing basis; \n (iii) report such risks on an ongoing basis to the ALCO;  \n (iv) ensure the ef fective segregation of duties and responsibilities on trading, risk management, \nmeasurement, monitoring, settlement, accounting, auditing and legal functions through:\n (a) the physical and functional separation of the Front Office/Trading Room and the \nMiddle/Back Office functions;\n (b) the establishment of a clear understanding of responsibilities and reporting obligations \nto the operating staff;\n (c) the restriction of access to the trading room and each of the identified functional areas \nto authorised personnel only;\n (d) the prevention of the application of undue influence by the Front Office on the Middle/\nBack Office operations;\n (v) approve a list of acceptable instruments, approved brokers, authorised counterparties and \ntheir limits. A proper system should be in place for the establishment of treasury dealing \nlimits for counter parties and regular reviews of such limits;\n (vi) establish a procedure for delegating authority to dealers;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 184, "year": 2013}, "type": "Document"}
{"page_content": "(vi) establish a procedure for delegating authority to dealers;\n (vii) ensure that the prior approval of the Board of Directors/senior management is obtained for \ntransactions in excess of delegated limits;\n (viii) ensure the maintenance of deal blotters and regular independent reconciliation of positions \nof Traders/Front Office with the General Ledger;\n (ix) establish a mechanism to ensure raising of a deal ticket for each and every deal conversation, \nincluding cancelled deals, time stamp all deals, voice record, through a well functioning real \ntime and secured voice recording system, all conversations at the dealing room;\n (x) ensure that the Back Office confirms all dealing transactions prior to issuance of settlement \ninstructions to the counterparties;\n (xi) monitor , on a real time basis, the foreign exchange transactions and positions independent \nof dealing and trading negotiations and implement a mechanism for timely reporting of all \nexceptions, violation of limits to the Board/senior management;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 184, "year": 2013}, "type": "Document"}
{"page_content": "176 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (xii) ensure  that all transactions are executed at current market rates and that off-market or \nhistorical rate rollover transactions are not permitted;\n (xiii) ensure that any irregularities in transactions, such as a large number of offsetting transactions, \nlong outstanding suspense balances, as identified by an independent risk monitoring division, \nare reported promptly to the Board/senior management;\n (xiv) regularly marking-to-market of foreign exchange positions through a division independent \nof Front Office and also independently verify revaluation rates and yield curves;\n (xv) ensure that compensation for traders is in line with the policy of the LCB and market rates, \nand that such compensation levels are designed so as to avoid providing incentives for \nexcessive risk taking or recklessness;\n (xvi) strictly enforce an uninterrupted leave policy and ensure that traders on leave are prohibited \nfrom engaging in any trading or having remote access during this period;\n (xvii) establish a suitable succession plan;\n (xviii) implement restrictive dealing after -hours or off-premises rules for designated dealers.\n5. Framework of Limits\n5.1 LCBs shall establish a comprehensive framework of fixing foreign exchange related limits, \nincluding institution, dealer and transactions level to effectively manage foreign exchange risk \nexposures, at different levels of seniority.\n5.2 These limits shall be:\n (i) properly documented and approved by the Board of Directors;\n (ii) reasonable, and based on need after considering the funding, scale of business, risk tolerance \npolicy, the degree of market proficiency and the experience and position of the dealer;\n (iii) reviewed at least annually or more frequently as appropriate, considering the overall risk \ntolerance levels, relative excess volatility in foreign currencies, counterparty risk rating or \nmarket conditions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 185, "year": 2013}, "type": "Document"}
{"page_content": "market conditions.\n5.3 T he respective limits structure recommended for foreign exchange operations shall include the \nfollowing:\n (i) open position limits on the aggregate of all currencies, both intra-day and overnight;\n (ii) open position lim its for individual currencies to which banks have material exposures, both \nintra-day and overnight; \n (iii) limits for personnel involved in foreign exchange dealings, based on their experience and \nexpertise;\n (iv) limits for all counterparties covering the settlement and credit risks;\n (v) stop loss and/or management action trigger limits;\n (vi) country limits;\n (vii) forward foreign exchange mismatch limits;\n (viii) separate limits for the operations of the domestic banking unit and the off-shore banking \nunit;\n (ix) maturity mismatch gap limits, under dif ferent time buckets, against all major currencies.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 185, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  177\n6. Risk Measur ement and Reporting \n6.1 LCBs shall ensure the following with respect to the measurement and reporting of foreign exchange \nrisk.\n (i) Regular reporting to Board/senior management/ group or parent companies, where necessary.\n (ii) Ensuring senior management\u2019s active involvement and responsibility for foreign exchange \nrisk reporting.\n (iii) Linking the foreign exchange risk reporting system to the bank\u2019s core systems and ensuring \nthe reconciliation thereafter with the core data.\n (iv) Ensuring that reports are clear and unambiguous, highlight key information and in particular \nset out breaches or exceptions.\n6.2 LCBs shall also ensure that the risk measurement and reporting systems have the ability to:\n (i) independently assess and evaluate all foreign exchange risk by maturity, on both gross and net \nbasis, arising from all assets and liabilities and off-balance sheet positions, including foreign \nexchange options, preferably by the Middle Office;\n (ii) apply generally accepted financial models or methods for measuring risks and the conduct of \nregular stress testing and scenario analysis;\n (iii) maintain accurate and timely data on current positions;\n (iv) monitor the foreign exchange counterparty credit risk and settlement risk on a real time basis \nto ensure that limits are not exceeded;\n (v) document the assumptions, parameters and limitations on which the measurement systems are \nbased, with any material changes to the assumptions being documented, well supported and \napproved by Board/senior management;\n (vi) maintain an accurate, reliable, informative and timely Management Information System \nwhich includes indicators on market risk as well as operational risks arising from foreign \nexchange operations.\n7. Str ess Testing \n7.1 LCBs shall m easure their vulnerability to losses arising from foreign exchange operations by", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 186, "year": 2013}, "type": "Document"}
{"page_content": "7.1 LCBs shall m easure their vulnerability to losses arising from foreign exchange operations by \nconducting regular stress tests. Banks shall evaluate their capacity to withstand market or bank \nspecific stressed situations in terms of profitability, liquidity and capital adequacy. \n7.2 The stress tests shall cover the major currencies to which the bank is exposed to and take into \naccount the effect of any possible large exchange rate or interest rate movements. \n7.3 The stress tests shall be commensurate with the nature of the bank\u2019 s portfolio and risks involved.\n8. V aluation of Foreign Currency Positions\n8.1 LCBs shall have systems in place to independently value their foreign currency positions on a \nregular basis. In this regard, the following practices shall be adopted.\n (i) Net Open Position arising from customer and other trading activities shall be calculated on an \nongoing basis. In the calculation of Net Open Position the following should be noted.\n\u2013 All unsettled spot transactions should be included.\n\u2013 All outstanding forward transactions should also be included.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 186, "year": 2013}, "type": "Document"}
{"page_content": "178 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n\u2013 Net foreign exchange position in other foreign exchange contracts, such as currency  \noptions, futures etc. should also be included separately.\n\u2013 Exposure indicated against each currency should be considered ignoring signs to arrive at \ngross exposure.\n\u2013 The Net Open Positions of domestic banking unit and the of f-shore banking unit should \nbe calculated separately.\n (ii) Account for revaluation profit and loss on their foreign exchange position on a regular basis \nor at least on a monthly basis.\n (iii) Cl early document the policy on exchange rates for valuation. Preferably, day end closing \nmid market rates should be used. Ideally, these rates should be obtained, by staff other than \nauthorised dealing personnel, or, as a minimum, independently verified. \n (iv) Revalue forward transactions at the prevailing mid-market rate for the outstanding period to \nsettlement.\n (v) Revalue other appropriate foreign exchange related contracts through the Middle Office/Back \nOffice on a \u201cmark to market\u201d basis.\n (vi) Not depend upon valuations provided by their counterparties.\n9. Internal Contr ols and Independent Audit\n9.1 LCBs shall ensure that the Internal Audit Departments of LCBs conduct periodic reviews, at \nleast annually, of internal controls and risk management processes on foreign exchange business \nto ensure their integrity, accuracy and reasonableness, as well as compliance with the prescribed \nprocesses. The reviews shall ensure effective control over foreign exchange positions, including \nthe accuracy and completeness of recording transactions; effective segregation of duties; accurate \nreporting of excesses of limits and other exceptions; compensation; all relevant internal controls are \nin place; and all established procedures are adhered to. \n9.2 The audit of the operations shall be carried out on a risk evaluation/assessment basis. All high risk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 187, "year": 2013}, "type": "Document"}
{"page_content": "areas shall be audited by the internal auditors on a regular basis. The audit shall ensure that the \noperating procedures are adequate to minimize settlement risk.\n9.3 The audit shall ensure the adequacy and accuracy of management information reports regarding the \nforeign exchange risk management activities.\n9.4 LCBs shall respond promptly to any findings relating to violations of established procedures and \nensure that recommendations by the internal or external auditors are effectively implemented.\n9.5 Internal audit and other risk control units shall be adequately staffed and possess sufficient expertise \nand authority for reviewing the foreign exchange trading business.\n10. Criteria to Assess the Fitness and Propriety of Persons Engaged in Foreign Exchange \nBusiness \n10.1 In order that a person qualifies to be considered fit and proper to be attached to a Front Office, \nMiddle Office or Back Office of an LCB in relation to the foreign exchange business of LCBs, the \nfollowing criteria must be fulfilled. For purposes of this Direction, such persons are described as \n\u201cpersons engaged in foreign exchange business\u201d. Non-compliance with any one of the criteria as \nset out herein, shall disqualify a person from being appointed/assigned or continuing in foreign \nexchange business in any capacity.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 187, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  179\n10.2 The following criteria shall apply to determine the fitness and propriety .\n (i) A  person engaged in foreign exchange business shall possess the following professional \nqualification/s:\n (A) In the case of a Dealer;\n (a) The Dealing Certificate offered by the Financial Market Association (Association \nCambiste Internationale \u2013 ACI), or \n (b) A  Certificate in respect of a foreign exchange dealing course conducted by the \nCenter for Banking Studies of the Central Bank of Sri Lanka, or \n (c) Any other professional qualification acquired or possessed in respect of foreign \nexchange dealing acceptable to the Monetary Board. The Monetary Board may \ngrant such approval on a case-by-case basis.\n (B) In the case of others engaged in Middle/Back Office work;\n (a) The Operations Certificate offered by the Financial Market Association (Association \nCambiste Internationale \u2013 ACI), or\n (b) A  Certificate in respect of a foreign exchange dealing/operations course conducted \nby the Center for Banking Studies of the Central Bank of Sri Lanka, or \n (c) Any other professional qualification acquired or possessed in respect of foreign \nexchange operations acceptable to the Monetary Board. The Monetary Board may \ngrant such approval on a case-by-case basis.\n (ii) A  person engaged in foreign exchange business as at 01 September 2009, (the day on which \nthese Directions come into force) will be required to obtain the relevant qualifications as \nspecified in 10(2)(i) above, on or before 31 August 2012. \n (iii) A  person engaged in foreign exchange business, shall undergo continuous training through \nparticipation in training programmes that are appropriate and sufficient for the functions or \nactivities they are involved in/are expected to be involved in, and conducted by appropriate \nprofessional, academic or educational institutions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 188, "year": 2013}, "type": "Document"}
{"page_content": "professional, academic or educational institutions.\n (iv) A  person engaged in foreign exchange business shall not have been found guilty by any \nregulatory authority or supervisory authority, professional association, any Commission of \nInquiry, tribunal or other body established by law in Sri Lanka or abroad, to the effect that \nsuch person has committed or been connected with the commission of, any act which involves \nfraud, deceit, dishonesty or any other improper conduct.\n (v) A  person engaged in foreign exchange business shall not have been found guilty, after being \nsubject to an investigation or inquiry consequent upon being served with notice of a charge \ninvolving fraud, deceit, dishonesty, any other similar criminal activity or improper conduct by \nany regulatory authority or supervisory authority, professional association, any Commission \nof Inquiry, tribunal or other body established by law, in Sri Lanka or abroad.\n (vi) A  person engaged in foreign exchange business shall not have been convicted by any Court in \nSri Lanka or abroad in respect of a crime committed in connection with financial management \nor of any offence involving moral turpitude.\n (vii) A  person engaged in foreign exchange business shall not be an undischarged insolvent nor \nhave been declared a bankrupt in Sri Lanka or abroad.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 188, "year": 2013}, "type": "Document"}
{"page_content": "180 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (viii) A  person engaged in foreign exchange business shall not have failed to satisfy any judgment \nor order of any Court whether in Sri Lanka or abroad, or to repay a debt.\n (ix) A  person engaged in foreign exchange business shall not have been declared to be of unsound \nmind by a Court of competent jurisdiction in Sri Lanka or abroad. \n (x) A  person engaged in foreign exchange business shall not have been removed or suspended by \nan order of a regulatory or supervisory authority from serving in a licensed bank or any other \nfinancial institution in Sri Lanka or abroad.\n10.3 All persons engaged in foreign exchange business shall submit a Declaration to the Director of \nBank Supervision, through the Chief Executive Officers of the respective banks, certifying that all \ncriteria set out in 10.2 above are complied with.\n11. Intr oduction of New Products, Services and Activities\n11.1 LCBs shall ensure that a clear policy is in place in relation to the introduction of new foreign \nexchange products, services and activities.\n11.2 The introduction of all new products/services/activities shall be recommended by the ALCO and \napproved by the Board.\n11.3 The procedure in introducing new products and services shall be in writing and approved by the \nBoard. The review notes to the Board seeking approval must be duly signed by relevant officials of \nTreasury, Front Office, Middle Office, Back Office, Legal and Accounts, which clearly specifies and \nidentifies the trading process, evaluation of inherent risks and returns, valuation, legal implications, \nrecording and reporting formats. Special attention must also be given to the compatibility of the \nnew service/product with the bank\u2019s core activities, risk profile and expertise.\n12. Contingency Planning\n12.1 LCBs shall have a contingency plan in place to ensure continuity of the foreign exchange settlement", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 189, "year": 2013}, "type": "Document"}
{"page_content": "operations, as part of the overall business continuity plan of the bank, in the event the main site \nbecomes unusable.\n12.2 Such contingency plan shall be: \n (i) in line with the BCP Guidelines No. 01 of 2006 issued by the Payments and Settlements \nDepartment of the Central Bank of Sri Lanka on 29 March 2006;\n (ii) documented and approved by the Board;\n (iii) tested and reviewed at least annually .\n12.3 LCBs shall ensure that a system is in place to ensure timely access to key information on payments \nmade, received or payments in process.\n13. Other  Requirements\n13.1 LCBs shall ensure the availability of job descriptions duly signed and accepted by each dealer and \nhis superior.\n13.2 All foreign exchange dealers shall accept and be guided by the Model Code of the Association \nCambiste Internationale (ACI Model Code). In the event of any ambiguity or conflict, the terms of \nthese Directions shall prevail over the ACI Model Code.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 189, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  181\n13.3 L CBs shall submit to the Director of Bank Supervision, the particulars of persons engaged in \nforeign exchange business employed by such LCBs on 01 September 2009, being the date of these \nDirections, as per the attached format. Any changes in personnel or in the particulars provided shall \nbe informed to the Director of Bank Supervision within a period not exceeding one week from such \nchange.\n13.4 L CBs are advised to evaluate their policies and risk management practices relating to foreign \nexchange operations in line with these Directions. Any gaps shall be addressed on a priority basis \nto ensure compliance with these Directions by 31 March 2010, except where extended compliance \ndates have been specifically provided for in this Direction.\nPERSONS ENGAGED IN FOREIGN EXCHANGE BUSINESS\nNameDate\nof\nBirthAcademic / \nEducational \nQualifi-\ncationsProfessional\nQualifi-\ncationsDate of \nJoining\nthe \nBank Experience in \nForeign Exchange \nBusiness\n(dates and \npositions held)Membership\nin Sri Lanka\nForex\nAssociation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 190, "year": 2013}, "type": "Document"}
{"page_content": "182 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of the \nBanking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n18 September 2012\nBANKING ACT DIRECTION NO. 1 OF 2012\nFOREIGN EXCHANGE TRADING ACTIVITIES OF\nLICENSED COMMERCIAL BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 46(1) of the Banking Act, No. 30 of 1988,  \nlast amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues the following \nDirections on Foreign Exchange Trading Activities of Licensed Commercial Banks. \n1(1) These Directions may be cited as the Banking Act, Direction No. 1 of 2012 .\n2(1) These Directions shall be applicable to:\n (i) Licensed commercial banks authorised to engage in foreign exchange \ntrading activities.\n (ii) \u201cAuthorised Persons\u201d, who are: \n(a) Persons described as \u201cpersons engaged in foreign exchange  \nbusiness\u201d as per the Banking Act, Directions No. 3 of 2009 on \nRisk Management Relating to Foreign Exchange Business of \nLicensed Commercial Banks dated September 1, 2009; and \n(b)\t Persons \tdetermined \tas\tOfficers\tPerforming \tExecutive \tFunctions \t\nin licensed commercial banks and who are involved in foreign \nexchange trading activities, in terms of Determination No. 3 of \n2010 made by the Monetary Board on Assessment of Fitness and \nPropriety\tof\tOfficers\tPerforming \tExecutive \tFunctions \tin\tLicensed\t\nCommercial Banks dated November 24, 2010. \n (iii) All rupee/foreign currency trading activities in the market for CASH, \nTOM, SPOT, FORWARD, SWAPS and other permitted foreign \nexchange derivative transactions.\n3(1) In order to maintain the smooth functioning and integrity of the market,   \nall licensed commercial banks and/or Authorised Persons shall:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 191, "year": 2013}, "type": "Document"}
{"page_content": "all licensed commercial banks and/or Authorised Persons shall: \n (i) Undertake foreign exchange trading activities that are based on  \nunderlying transactions only. For the purpose of these Directions, an \nunderlying transaction shall mean a current account transaction or a \npermitted capital account transaction, in terms of the Exchange Control \nAct, No. 24 of 1953, effected on the following basis: Citation.\n \nScope and \nApplicability.\nMarket practices \nand procedures \nto be followed.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 191, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  183\n(a) Purchase of foreign currency from non-commercial bank customers \nsuch as exporters, foreign currency account holders, and persons \nsending inward foreign currency remittances;\n(b) Sale of foreign currency to non-commercial bank customers  \nsuch as importers and persons who are permitted by law to make \noutward remittances in foreign exchange for approved purposes;\n (ii) Purchase and/or sell foreign currency subject to the limit of the  \nrespective net open positions of the licensed commercial bank;\n(iii) Adhere to the net open position at the end of each day , and also be \nwithin\tthe\tintra-day\tnet\topen\tposition\tlimit\tspecified\tfrom\ttime\tto\ttime\t\nby the Director of International Operations Department; \n (iv) Use clear and precise market terminology which is understood by all \ncounterparties, at all times;\n (v) Determine any annual performance-linked remunerations of the  \nAuthorised Persons engaged in foreign exchange trading activities, \nwith the annual performance assessment;\n (vi) Establish claw back arrangements for pay-outs of performance-linked \nremunerations;\n (vii) Ensure all remuneration payments are based on a documented  \nremuneration policy and avoid making any ad-hoc payments outside \nthe pre-determined remuneration structures.\n3(2) In order to maintain the smooth functioning and integrity of the market, any \nlicensed commercial bank and Authorised Person shall not:\n (i) Un dertake any transaction for the purpose of concealing foreign \nexchange \tp ositions \tincluding\ttransferring \tprofits\tand\tlosses,\twhich\t\nmay undermine the integrity of the foreign exchange market;\n (ii) Engage in manipulative or deceptive conduct, or any other form of  \nconduct which would give other users of the foreign exchange market, \na false or misleading impression as to the prevailing market conditions, \nincluding price, supply or demand;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 192, "year": 2013}, "type": "Document"}
{"page_content": "including price, supply or demand;\n (iii) Pressurise any other licensed commercial bank or Authorised Person by \nduress, inducement, threat or promise, for information or action.\n3(3) W hen quoting price/rates in the foreign exchange market, all licensed \ncommercial banks and Authorised Persons shall: \n (i)\t Ensure\ta\tclear\tdistinction \tbetween\tfirm\tand\tindicative \tquoted\tprices;\n (ii) Set the relevant rates in a Foreign Exchange Swap transaction based on \nthe prevailing market rates.\n3(4) When quoting price/rates in the foreign exchange market, any licensed  \ncommercial bank and Authorised Person shall not: \n (i)\t Make\tquotes\twith\tthe\tintention\tof\tdistorting \tthe\texchange \trates;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 192, "year": 2013}, "type": "Document"}
{"page_content": "184 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (ii)\t Make\tquotes\twhere\tthe\tlicensed\tcommercial \tbank\tor\tAuthorised \t\nPerson has no intention of honouring, and merely to mislead market \nparticipants.\n3(5) When making transactions, all licens ed commercial banks and Authorised \nPersons shall:\n (i) T ransact directly through the electronic platform, telephone, e-mail, \nfacsimile or through a money market broker recognised by the Central \nBank of Sri Lanka; \n (ii) Maintain records of the foreign exchange trading activities so as to  \nensure a clear audit trail;\n (iii) Update interbank foreign exchange transactions in the on-line system \nof the Central Bank of Sri Lanka, within the time prescribed by the \nDirector of International Operations Department of the Central Bank \nof Sri Lanka;\n (iv) Ma intain and preserve documentary evidence, electronically or \notherwise, of the underlying transactions of customers on all foreign \nexchange trading activities for a period of six years, and forward such \ndocuments to the International Operations Department of the Central \nBank\tof\tSri\tLanka,\tas\tand\twhen\trequired;\n (v) D isclose the profit generated through interbank foreign exchange \ntransactions \tseparately \tin\tthe\taudited\tfinancial\tstatements.\n3(6) When making transactions, any licensed commercial bank and Authorised \nPerson shall not enter in to transactions with the intention of manipulating the \nmarket.\n3(7) In respect of foreign exchange derivative transactions, in addition to these \nDirections, licensed commercial banks and Authorised Persons shall comply \nwith the Directions on Financial Derivative Products issued on August 1, \n2009.\n3(8) In settle ment of foreign exchange transactions, licensed commercial banks \nshall:\n (i) Use the Society for World-wide Inter-bank Financial Telecommuni-\ncations (SWIFT) System;\n (ii) Ensure the minimizing of operational errors while preventing any  \ngridlock in the Real Time Gross Settlement (RTGS);", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 193, "year": 2013}, "type": "Document"}
{"page_content": "gridlock in the Real Time Gross Settlement (RTGS);\n (iii) Ef fect such transactions through NOSTRO Accounts only.\n3(9) If and when an interbank transaction is to be cancelled, such cancellation may \nbe carried out only in exceptional circumstances and where all institutions to \nthe trade agree to such cancellation. Provided, however, that:\n (i) Both licensed commercial banks shall act in a reasonable manner in \nsuch a situation;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 193, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  185\n (ii) Both licensed commercial banks shall separately report full details of \nsuch cancelled interbank transaction, on the date of such cancellation, \nto the Director of International Operations Department of the Central \nBank of Sri Lanka.\n3(10)  Licensed commercial banks shall engage in foreign exchange trading  \nactivities within the specified premises during the normal working hours \n(8.00 a.m. to 5.00 p.m.) on bank working days subject to Direction 3(11) \nhereof.\n3(11)  Foreign exchange trading activities after hours and/or of f-premises,  \nif undertaken, shall be undertaken in accordance with the formulated policy \nas established by the licensed commercial bank, which policy shall set out,  \nthe procedure for such foreign exchange trading activities, which shall \ninclude:\n (i) Names of Authorised Persons permitted to engage in such foreign \nexchange trading activities;\n (ii) T ransaction limits;\n (iii) Establishment of the internal control system to ensure prompt recording \nand\tconfirmation \tof\tall\tafter-hours\tand\toff-premises \tforeign\texchange \t\ntrading activities.\n4(1)  In order to preserve the integrity of the market, Authorised Persons shall:\n (i) Exercise skill, care and diligence, and act in good faith;\n (ii) E xercise due care when in possession of non-public price sensitive \ninformation;\n (iii)\t Preserve \tconfidentiality \tas\trequired\tby\tSection\t77\tof\tthe\tBanking\tAct;\n (iv) Comply with the Directions and established procedures when routinely \nsharing information with other counterparties.\n4(2)  In order to preserve the integrity of the market, any Authorised Person shall \nnot:\n (i) Deal on his own account, or on the account of the licensed commercial \nbank which he represent, or induce another party to deal on the basis \nof such information, when in possession of non-public price sensitive \ninformation;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 194, "year": 2013}, "type": "Document"}
{"page_content": "of such information, when in possession of non-public price sensitive \ninformation;\n (ii)\t Enter\tin\tto\tany\ttransaction\twhich\tmay\tlead\tto\tconflict\tof\tinterest,\tor\t\ninsider trading, or front running;\n (iii) W illfully spread rumors or disseminate false or misleading information.\n4(3)  Authorised Persons shall adhere to any Code of Ethical Conduct issued by \ntheir institution so as to conduct themselves with integrity and uphold the \nhighest standard of professionalism. \n4(4)  Licensed commercial banks shall implement internal policies and procedures \nin order to prohibit any form of market misconduct.Ethics, standards \nof conduct to \nbe followed and \npractised, and \nthe knowledge \nlevels that need \nto be maintained.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 194, "year": 2013}, "type": "Document"}
{"page_content": "186 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n4(5)  Licensed commercial banks and Authorised Persons shall, wherever not \nspecifically mentioned in these Directions, be governed by the International \nCode of Conduct and Practice for the Financial Markets (ACI Model \nCode) issued and revised from time to time by ACI \u2013 The Financial Market \nAssociation.\n4(6)  In order to ensure that the Authorised Persons are properly equipped to handle \ntheir responsibilities, licensed commercial banks shall: \n (i) Ensure that a high level of awareness and understanding of market  \npractices and conduct is provided to Authorised Persons in their \ninstitutions;\n (ii) E nsure that the professional knowledge of the Authorised Persons \nin their institutions is maintained and systematically updated and \nupgraded; \n (iii) Ensure that Authorised Persons in their institutions obtain the necessary \nqualifications \tas\tset\tout\tin\tDirection \t10.2\tof\tthe\tBanking\tAct,\tDirection \t\nNo. 3 of 2009 on Risk Management Relating to Foreign Exchange \nBusiness of Licensed Commercial Banks, issued on September 1, \n2009.\n4(7)  In the effort to control the practices of entertainment, granting of gifts and \nfavours, licensed commercial banks shall:\n (i) Formulate policies which protect against the receipt of unacceptable \nentertainment, gifts or favours by any of the Authorised Persons in their \ninstitutions, or persons connected to such Authorised Persons;\n (ii) Establish internal value thresholds for acceptance or grant of gifts  \nand/or\tentertainment, \tthe\tacceptable \tfrequency \tand\ta\tsystem\twhereby\t\nAuthorised \tPersons\tin\ttheir\tinstitutions \tare\trequired\tto\tdisclose\tall\tsuch\t\ngifts, favours and entertainment, as and when it exceeds the applicable \nestablished internal thresholds;\n (iii) Ensure that Authorised Persons in their institutions do not solicit gifts \nof any kind, and are under compulsion to immediately notify the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 195, "year": 2013}, "type": "Document"}
{"page_content": "of any kind, and are under compulsion to immediately notify the \nmanagement of the licensed commercial bank, if any unusual favours \nare offered to them by any other institution or person;\n (iv) Ensure that Authorised Persons in their institutions do not make or \narrange bets or indulge in gambling of any kind, in relation to foreign \nexchange transactions with any person.\n4(8)  In order to ensure recording of telephone conversations, licensed commercial \nbanks shall: \n (i) Establish internal policies with regard to the appropriate data and  \ntape recording of trading conversations and the retention of such \ndiscussions, and ensure compliance thereof; \n (ii) Adopt appropriate policies to restrict the usage of mobile phones in \nthe dealing rooms, so as to ensure that mobile phones are not used to \ncircumvent the telephone recording system;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 195, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  187\n (iii) Ensure that access to tapes in use or in store, is strictly controlled \nand are not tampered with.\n5(1)  In the event any licens ed commercial bank and/or Authorised Person fails to \ncomply with these Directions, the Monetary Board may, after an investigation \ncarried out, take any one or more of actions as it may consider necessary, \nincluding:\n (i) Reprimanding any Authorised Person who has been in non-compliance \nwith these Directions.\n (ii) Directing the licensed commercial bank to remove any Authorised \nPerson, who has been in non-compliance with these Directions, \nfrom performing any function in relation to foreign exchange trading \nactivities in the respective licensed commercial bank.\n (iii) Re ducing the Net Open Foreign Exchange Position limits of the  \nnon-compliant licensed commercial bank.\n5(2)  In the event any licens ed commercial bank and/or Authorised Person fails to \ncomply with these Directions, and the Director of Bank Supervision of the \nCentral Bank of Sri Lanka after a preliminary investigation, is of the view that \nthe provisions of the Exchange Control Act, No. 24 of 1953, may have been \nviolated, such licensed commercial bank and/or Authorised Person shall be \nreported to the Controller of Exchange for further investigation and action by \nthe Controller of Exchange. \n6(1)  All licensed commercial banks shall fully comply with these Directions with \neffect from 19 September 2012 except in the case of Directions 3(1)( v), (vi) \nand (vii),\t3(1 1),\t4(5),\t4(7)\tand\t4(8)\twhich\twill\tbe\teffective\tfrom\t1\tNovember \t\n2012 .Sanctions on  \nnon-compliance \nwith these \nDirections.\nTransitional \nProvision.\n( Refer Explanatory Note 2/2012 \u2013 Foreign Exchange Trading Activities / FAQ )", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 196, "year": 2013}, "type": "Document"}
{"page_content": "188 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 600 / 0035  / 001\nBank Supervision Department\n19 September, 2012\nTo :  The CEOs of all Licensed Commer cial Banks\nADOPTION OF THE ACI MODEL CODE BY SRI LANKA\n Chief Executive Officers of Licensed Commercial Banks are hereby informed that the applicability \nof the Circular issued under Ref. No. 105/09/002/0024/001 dated 11 August 2006 for Commercial Banks \non the above subject is revoked with effect from 19 September 2012.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 197, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  189\nRef. No. : 02  /17 / 600 / 0014  / 003\n14 May 2010\nTo :  Chief Executive Officers of Licensed Commer cial Banks\nDECLARATION TO BE SUBMITTED BY\nPERSONS ENGAGED IN FOREIGN EXCHANGE BUSINESS\nAs announced at the monthly meeting of the Chief Executive Officers held on 29 April 2010,  \nit is observed that the Declarations of persons engaged in foreign exchange business furnished by \ncertain licensed commercial banks are not complete and consistent with the requirements of Direction \nNo. 3 of 2009, on Risk Management relating to Foreign Exchange Business. We, therefore, attach \nherewith a format of the Declaration to be submitted by persons engaged in foreign exchange business. \nBanks which have already submitted Declarations largely in line with this format are not required to re-\nsubmit Declarations.\nYours faithfully,\nSgd. (Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nCopy to :  The Secretary-General\n Sri Lanka Banks\u2019  Association (Guarantee) Ltd.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 198, "year": 2013}, "type": "Document"}
{"page_content": "190 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nTo:  Dir ector of Bank Supervision\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration to be submitted by the Persons engaged in Foreign Exchange Business\nin terms of Banking Act, Direction No. 3 of 2009 \non Risk Management relating to Foreign Exchange Business of \nLicensed Commercial Banks \nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( full name)\nholder of National Identity Card No.  / Passport No. \u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026..\u2026\u2026 of\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026. (address) \nbeing a (Buddhist  / Hindu do hereby solemnly, sincerely and truly declare and affirm  / Christian  /\nCatholic  / Muslim make oath and state) as follows :\n1. I am the \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( designation ) of\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 (name \nof bank) which is a licensed commercial bank under the Banking Act, No. 30 of 1988. \n2. I possess the following academic and/or professional qualification  / s in terms of 10.2 ( i) of the \nBanking Act, Direction No.3 of 2009 on risk management relating to foreign exchange business of \nlicensed commercial banks: / [I engaged in foreign exchange business as at 01 September 2009 and \nwill obtain the relevant qualifications as specified in 10(2)(i) of the aforementioned Banking Act, \nDirection on or before 31 August 2012.]\n3. I am in possession of the following qualification  / s in addition to (2) above: \n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n4. The effective experience that I possess in banking, finance, business or administration or of any other \nrelevant discipline is as follows:\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n5. I shall undergo continuous training through participation in training programmes that are appropriate \nand sufficient for the functions or activities they are involved in  / are expected to be involved in, and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 199, "year": 2013}, "type": "Document"}
{"page_content": "conducted by appropriate professional, academic or educational institutions.\n6. I have not been found guilty by any regulatory or supervisory authority, professional association, any \nCommission of Inquiry, tribunal or other body established by law in Sri Lanka or abroad, to the effect \nthat I have committed or have been connected with the commission of, any act which involves fraud, \ndeceit, dishonesty or any other improper conduct.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 199, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  191\n7. I have not been found guilty , after being subject to an investigation or inquiry consequent upon being \nserved with notice of a charge involving fraud, deceit, dishonesty or other similar criminal activity or \nimproper conduct, by any regulatory authority, supervisory authority, professional association, any \nCommission of Inquiry, tribunal or other body established by law, in Sri Lanka or abroad.\n8. I have not been convicted by any Court in Sri Lanka or abroad in respect of a crime committed in \nconnection with financial management or of any offence involving moral turpitude.\n9. I am not an undischar ged insolvent nor have I been declared a bankrupt in Sri Lanka or abroad.\n10. I have not failed, to satisfy any judgment or order of any Court whether in Sri Lanka or abroad, or to \nrepay a debt.\n11. I have not been declared to be of unsound mind by a Court of competent jurisdiction in Sri Lanka or \nabroad.\n12. I have not been removed or suspended by an order of a regulatory or supervisory authority from \nserving in a licensed bank or any other financial institution in Sri Lanka or abroad.\nDECLARATION TO BE FILLED BY THE PERSON ENGAGED IN  \nFOREIGN EXCHANGE BUSINESS\nI am the [affirmant  / deponent] above named and I confirm that the information contained herein are to \nthe best of my knowledge and belief, true and complete and also I undertake to inform of any change of \nany of the above information, within a period not exceeding one week from such change.\nDate : \u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  Signatur e \n  Name : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nTO BE FILLED BY THE CHIEF EXECUTIVE OFFICER \nAny other explanation  / information in regard to the information furnished above and other information \nconsidered relevant for assessing the suitability of the person engaged in the foreign exchange business.\nDate : \u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  Signatur e of Chief Executive Officer  \n  Name : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 200, "year": 2013}, "type": "Document"}
{"page_content": "192 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  /17 / 800 / 0006  / 01\n25 May 2009\nTo :  Instructions to Licensed Commer cial Banks\n Appointed as Authorised Dealers\nFORWARD SALES AND PURCHASE OF FOREIGN EXCHANGE\nAuthorised Dealers are hereby informed that the operating instructions issued under Ref.  \nNo. 02/17/800/0006/01 dated 31/10/2008 and 19/03/2009 on the above subject are withdrawn with \neffect from 25.05.2009.\nYours faithfully,\n Controller of Exchange  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 201, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  193\nRef. No. : 02  / 04 / 004 / 0009  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n16th July, 2001\nInstructions to Licensed Commercial Banks\n Appointed as Authorized Dealers in Foreign Exchange\nDear Sirs,\nFORWARD SALES AND PURCHASES OF FOREIGN EXCHANGE\nFurther to our Operating Instructions dated 29.01.2001 and 19.03.2001 and the clarifications \ncontained in our Operating Instructions dated 14.02.2001 on the above subject.\nThe requirement that a margin of not less than 25 per cent should be obtained from customers \nwhen entering into a forward contract for the sale of foreign exchange is withdrawn, with effect from \n16th July, 2001.\nHowever, for prudential reasons, banks may continue to obtain deposits from customers for \nforward sales of foreign exchange, based on their assessment of customer risk.\nContracts for forward sales and/or purchases will continue to be for a maximum of 180 days and \nonly for the purpose of payments and receipts in foreign exchange in respect of trade in goods and \nservices.\nYours faithfully,\n Controller of Exchange  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 202, "year": 2013}, "type": "Document"}
{"page_content": "194 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 04 / 004 / 0009  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n19th March, 2001\nInstructions to Licensed Commercial Banks \n Appointed as Authorized Dealers in Foreign Exchange\nDear Sirs,\nFORWARD SALES AND PURCHASES OF FOREIGN EXCHANGE\nFurther to our Instructions dated 29.01.2001 and the clarifications contained in our Operating \nInstructions dated 14.02.2001 on the above subject.\nWe wish to inform you that the 50% deposit referred to in sub-item (iii ) of item (3) of the above \nmentioned Instructions dated 29.01.2001 has been reduced with immediate effect to 25% of the value \nof the contract in Sri Lanka Rupees in respect of forward contracts to be entered into with customers \nfor the sale of foreign exchange.\nYours faithfully,\n Controller of Exchange  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 203, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  195\nRef. No. : 02  / 04 / 004 / 0009  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1\n14th Febuary, 2001\nOperationg Instructions to Licensed Commercial Banks \n Appointed as Authorized Dealers in Foreign Exchange\nDear Sirs,\nFORWARD SALES AND PURCHASES OF FOREIGN EXCHANGE\nWe have received inquiries from banks seeking clarifications on the contents of our Operating \nInstructions dated 29th January 2001, on the above subject. Accordingly, the following clarifications \nare made for your information.\n1. The Operating Instructions will not apply to \n (i) Inter -bank forward contracts (local and foreign),\n (ii) Forward contracts where a foreign currency is purchased with another foreign currency ,\n (iii) Purchases of foreign exchange in respect of share trading transactions specified in the item 3 \nin the Operating Instructions No. EC/74/92(C&F) dated 28/07/1992 issued by the Controller \nof Exchange.\n2. Subject to 1( iii) above, forward contracts with customers should be permitted only in respect of \ntrade in goods and services. Forward contracts in respect of capital transactions should not be \npermitted.\n3. In the case of renewal or extension of a contract, the maximum period of forward contract should \nbe 180 days inclusive of the period that has already elapsed. In cases where the period exceeds 180 \ndays, a fresh contract should be entered into which requires a 50 per cent of deposit in case of a \nforward contract for the sale of foreign exchange.\n4. In case of an importer, the margin already obtained in respect of Letters of Credit, if any, should \nnot be treated as the deposit required for a forward contract for the sale of foreign exchange and, \ntherefore, a fresh deposit of 50% of the value of the contract in Sri Lanka rupees is required for the \nforward contract.\n5. The banks may pay interest on the 50% mar gin as a deposit.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 204, "year": 2013}, "type": "Document"}
{"page_content": "forward contract.\n5. The banks may pay interest on the 50% mar gin as a deposit.\n6. The attach ed format should be used in future to report details regarding daily position of forward \ntransactions to the Bank Supervision Department.\nYours faithfully,\n Controller of Exchange  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 204, "year": 2013}, "type": "Document"}
{"page_content": "196 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex\nFORWARD TRANSACTIONS IN FOREIGN CURRENCY\nName of the Authorised Dealer : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \nDate: \u2026\u2026\u2026\u2026\u2026\u2026..\n Outstanding Balance  New Contracts  Total Margin  Total Contracts  Outstanding\n at the beginning  Entered during  Deposit  Matured during  position at the\n of the day  the day  Accepted  the day  end of the day\n (Rs. Mn.)  (Rs. Mn.)  (Rs. Mn.)  (Rs. Mn.)  (Rs. Mn.)\nTotal\nForward\nSales\nTotal\nForward  Not applicable\nPurchases\nI certify that information given above is correct.\nDate: \u2026\u2026\u2026\u2026\u2026\u2026\u2026..  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signature of the Authorised Dealer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 205, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  197\nInstructions to Licensed Commercial Banks Appointed as\n Authorized Dealers in For eign Exchange\nJanuary 29, 2001\nDear Sirs,\nFORWARD SALES AND PURCHASES OF FOREIGN EXCHANGE\nThe Central Bank is concerned that in view of the weaknesses of the forward market in foreign \nexchange in Sri Lanka, licensed commercial banks that are Authorised Dealers under the Exchange \nControl Act (Authorised Dealers) could be undertaking heavy risks by engaging in forward transactions \nin foreign exchange which are unrelated to trade transactions, which would be detrimental to the \ninterests of the depositors of such banks and to the economy. Therefore, in the interest of the depositors \nand to stabilise the foreign exchange market, it is considered necessary to streamline the operations \nin the forward market in foreign exchange, pending the development of an efficient forward market. \nHence, both from a prudential standpoint and from considerations relating to the stability of the foreign \nexchange market, it is desirable that forward foreign exchange contracts by banks with their customers \nshould, for the time being, be in respect of transactions concerning payments and receipts in foreign \nexchange relating to trade in goods and services and for a period reasonably adequate to meet the needs \nof trade transactions.\n2. In view of the foregoing, Authorised Dealers are hereby informed that the authority conferred on \nthem to enter into forward contracts for the sale and/or purchase of foreign exchange for a period up to \n360 days irrespective of the purpose by paragraph B(ii)(a) of Operating Instructions No.EC/41/93(D) \nof 29.03.1993 issued by the Controller of Exchange is hereby withdrawn with immediate effect.\n3. Therefore, without prejudice to the permission granted to Authorised Dealers for the release of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 206, "year": 2013}, "type": "Document"}
{"page_content": "3. Therefore, without prejudice to the permission granted to Authorised Dealers for the release of \nforeign exchange for all current (non-capital) international transactions by Operating Instructions \nNo.EC/06/94 of 18.03.1994 of the Controller of Exchange, and pending the development of an \nefficient forward market in foreign exchange in Sri Lanka, Authorised Dealers shall, with immediate \neffect, comply with the following conditions when entering into forward contracts in foreign exchange \n(including renewal of existing contracts) with their customers, until further notice;\n (i) forward contracts for the sale and/or purchase of foreign exchange should only be for a period \nup to 180 days and only for the purpose of payments and receipts in foreign exchange in \nrespect of trade in goods and services;\n (ii) an Authorised Dealer entering into a forward foreign exchange contract should satisfy himself \nthat the transaction relates to a genuine commercial contract involving trade in goods and \nservices;\n (iii) an Authorised Dealer who enters into a forward contract for the sale of foreign exchange with \na customer should obtain at the time the contract is entered into, a deposit of not less than \n50% of the value of the contract in Sri Lanka rupees, which should be retained until the date \nof performance of the contract;\n (iv) the date of performance  of the forward foreign exchange contract should not be beyond the \ndate of payment or receipt in foreign exchange, as the case may be, in terms of the relevant \ncommercial contract underlying the forward exchange contract; and\n (v) as at present, any cancellation of a forward foreign exchange contract by the customer \nshould be subject to a penalty, at least to fully compensate the loss arising therefrom to the \nAuthorised Dealer.\n4. Details relating to forward transactions in foreign exchange on any day should be reported at the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 206, "year": 2013}, "type": "Document"}
{"page_content": "end of the same day (not later than 6.00 p.m.) to the Director of Bank Supervision on fax No.325824 \nin the form set out in the Annex hereto. Please contact Mr. P. Samarasiri, Deputy Director of Bank \nSupervision on telephone number 344838 for any clarification.\nYours faithfully\n Controller of Exchange  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 206, "year": 2013}, "type": "Document"}
{"page_content": "198 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex\nFORWARD TRANSACTIONS IN FOREIGN CURRENCY\nName of the Authorised Dealer: \u2026\u2026\u2026\u2026\u2026\u2026.  \nDate: \u2026\u2026\u2026\u2026\u2026\u2026..\nOutstanding \nBalances at the \nbeginning of the Day \n(US dollar \nequivalent Mn)Total \nTransactions \nduring the day \n(US dollar \nequivalent Mn)Total \nMargin Deposit \nAccepted \n(SL Rs. Mn)Outstanding \nposition \nat the end of the day \n(US dollar \nequivalent Mn)\nA. Total \nForward \nSales\nB. Total \nForward \nPurchasesNot applicable\nI certify that information given above is correct.\nDate: \u2026\u2026\u2026\u2026\u2026\u2026\u2026..  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signature of the Authorised Officer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 207, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  199\nExplanatory Note: 2/2012\nDirection No.1 of 2012 on Foreign Exchange Trading Activities\nFrequently Asked Questions (FAQs)\nThese Frequently Asked Questions (FAQs) have been developed to assist the licensed commercial banks \n(LCBs) in complying with the Direction No. 1 of 2012 on Foreign Exchange Trading Activities of LCBs \nissued on 19 September 2012 and to clarify the provisions and the potential queries relating to these \nDirections. \nQ1 Is there a real need for another regulation on Foreign Exchange Trading Activities as CBSL \nissued detailed Directions dated 1 September 2009 and agreed to observe ACI model code as \nper circular dated 11 August 2006? \nA1 The purpose of the Direction No. 3 of 2009 dated 1 September 2009, is to standardise and strengthen \nthe foreign exchange risk management in LCBs. The applicability of the circular dated 11 August \n2006 for commercial banks is revoked with effect from 19 September 2012.\nQ2  Does this Dir ection apply only for non-commercial bank customer transactions or can an \nauthorized person carry out inter-bank trading for his own needs? [Direction No. 3(1)( i) and \n(ii)]. \nA2 LCBs  are allowed to carry out inter-bank trading for their own needs, within the NOP limit.\nQ3  What is the underlying transaction for SWAPs as those are commonly used for funding balance \nsheet\tmismatches \tand\tshort\tterm\tliquidity\tdeficits?  Can an Authorised Person buy foreign \ncurrency from the market to cover a usance bill due for settlement in the future? [Direction \nNo. 3(1)(i) and (ii)].\nA3 LCBs are allowed to carry out foreign currency trading activities for market making, future \nsettlements of usance bills and SWAPs transactions for funding balance sheet mismatches and short \nterm liquidity deficits as these transactions constitute underlying transactions.\nQ4\t Will\tenforcing\tthis\tDirection\tsignificantly \treduces\tmarket\tdepth\tand\tliquidity\tand\tthe\tability", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 208, "year": 2013}, "type": "Document"}
{"page_content": "to quote competitive prices to customers? Does this preclude market making or two-way price \nwithout underlying transactions? [Direction No. 3(1)(i)(a)].\nA4 This Direction imposes clarity that will lead to further development in the market and facilitate \nmarket making activities. It will not reduce market depth and liquidity.\nQ5 How and when will CBSL  determine Net Open Position (NOP) limits? [Direction No. 3(1)( iii)].\nA5 Banks should comply with the existing NOP  limits. However, the Director of International \nOperations Department of CBSL will determine the NOP limits from time to time considering the \ndevelopments in the foreign exchange market.\nQ6  How and when CBSL  determine intra-day position limits and whether the intra-day limit will \nbe\tsufficiently \tlarge\tenough\tto\taccommodate \tlarge\tcustomer \ttransactions \tfor\tinternational \t\ntrade\tand\tequity/\tfixed\tincome\tinvestment? \t[Direction \tNo.\t3(1)( iii)].\nA6 The Director of International Operations Department of CBSL will determine the intra-day position \nlimits from time to time considering the size and the behavior of the transactions.\nQ7 Is it not discriminatory to make claw back arrangements applicable only to dealers? Shouldn\u2019t \nit be established for pay-outs of performance based, unvested and deferred awards rather \nthan for remuneration and rewards paid out in cash? [Direction No. 3(1)(vi)].\nA7  LCBs may develop remuneration policies for the bank covering the basis, scope, acceptable vesting \nperiod and the coverage of the claw back arrangements.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 208, "year": 2013}, "type": "Document"}
{"page_content": "200 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nQ8 Ar e the following provisions of the Directions relating to the smooth functioning and the \nintegrity of the market vague and ambiguous as they cover routine functions? [Direction No. \n3(2)(i), (ii) and (iii)].\n(a) Undertake any transaction for the purpose of concealing foreign exchange positions \nincluding \ttransferring \tprofits\tand\tlosses,\twhich\tmay\tundermine \tthe\tintegrity\tof\tthe\t\nforeign exchange market;\n(b) Engage in manipulative or deceptive conduct, or any other form of conduct which would \ngive other users of the foreign exchange market, a false or misleading impression as to \nprevailing market conditions, including price, supply or demand;\n(c) Pressurise any other licensed commercial bank or Authorised Person by duress, \ninducement, threat or promise, for information or action.\nA8 This Regulation is aimed at further improving the smooth functioning and integrity of the foreign \nexchange trading activities in Sri Lanka.\nQ9 Some times dealers quote wide bid/offer rate to avoid inter-bank transactions. Would this \nbe construed to be a distortion of market rates? If so, this will lead to loss of market making \nactivity and liquidity in the market. [Direction No. 3(4)(i) and (ii)].\nA9 Y es. Quoting wide bid/offer rate to avoid inter-bank transactions will distort the market rates. \nHence, off market rates cannot be accepted.\nQ10 Does CBSL  maintain a list of approved brokers? [Direction No. 3(5)( i)].\nA10 CBSL  has disclosed in its web site a list of Money Brokering Institutions recognised by CBSL.\nQ11 \u201cWhen making transactions, LCBs and Authorised Persons shall not enter into transactions \nwith the intention of manipulating the market\u201d. Would there be a time limit for making these \nclaims or can they be applied retrospectively without a time bar? [Direction No. 3(6)].\nA11 Claims can be applied without a time bar .", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 209, "year": 2013}, "type": "Document"}
{"page_content": "A11 Claims can be applied without a time bar .\nQ12  Under  what circumstances does the CBSL envisage the requirement for cancellation of a deal? \nDoes this lead to more relaxed attitude and a practice of cancelling deals at will? [Direction \nNo. 3(9)].\nA12 CBSL  does not encourage cancellation of deals. However, only in exceptional circumstances a \ndeal can be cancelled provided that both licensed commercial banks  to the trade agree to such \ncancellation.\nQ13 Although CBSL requires adopting appropriate policies to restrict the usage of mobile phones \nin the dealing rooms, so as to ensure that mobile phones are not used to circumvent the \ntelephone \tr ecording \tsystem,\tit\tis\tdifficult\tto\tentirely\tfool-proof\tusage\tof\tmobile\tto\tcircumvent\t\nthe recording system. [Direction No. 4(8)(ii)].\nA13 Banks should have a mechanism to ensure that all the deal conversations are recorded.\nIssued on 26 September 2012.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 209, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  201\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) and  \n76(J)(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n21 December 2012\nBANKING ACT DIRECTION NO. 2 OF 2012\nOUTSOURCING OF BUSINESS OPERATIONS OF\nA LICENSED COMMERCIAL BANK AND\nA LICENSED SPECIALISED BANK\nIn the exercise of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act, No. 30  \nof 1988, last amended by the Banking (Amendment) Act, No. 46 of 2006, the Monetary Board hereby \nissues the following Directions on Outsourcing of Business Operations of a Licensed Commercial Bank \nand a Licensed Specialised Bank, respectively (hereinafter referred to as a Licensed Bank).\n1(1) These Directions may be cited as the Banking Act, Directions No. 2 of 2012. \n2(1) An \u2018outsourcing arrangement\u2019 is an agreement between a licensed bank and \na third party \u2018service provider\u2019, whereby the service provider performs an \nactivity, function or process connected with the operations of a licensed bank. \n2(2) \u2018Service provider\u2019 includes the  Head Office, parent institution, another \nbranch or related company of a Licensed Bank, or an unrelated institution, \nwhether located in Sri Lanka or elsewhere.\n2(3) These Directions shall not apply to outsourced arrangements that are not  \ndirectly related to the provision of financial services such as Mail, Courier \nservices, Catering of staff, Housekeeping and janitorial services, Security \nof premises, Printing services ( e.g., Application forms, brochures etc.), \nRecruitments on contract and temporary basis and Communication services.\n2(4) Outsourcing arrangem ents shall be entered into only with service providers \nwho have specialised resources and skills to perform the related activities.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 210, "year": 2013}, "type": "Document"}
{"page_content": "who have specialised resources and skills to perform the related activities.\n2(5) Outsourcing arrangements shall not be entered into with a service provider \nof which the majority of the ownership is held by employees and/or close \nrelatives of an employee of the respective licensed bank.\n2(6) Every Licensed Bank that decides to outsource its functions/operations shall \ncomply with Directions 3 to 9 below.\n3(1) A  Licensed Bank may outsource its functions/operations other than the \nfollowing functions/operations or activities:Citation.\nOutsourcing \u2013 \ndefinition and \napplicability.\nFunctions or \nactivities that can \nbe outsourced.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 210, "year": 2013}, "type": "Document"}
{"page_content": "202 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (i) Services associated with acceptance of deposits and withdrawals  \nexcluding the agency arrangements approved under the provisions of \nsection 12(1)(b) of the Banking Act.\n (ii) Assets and Liabilities management \n (iii) Compliance function\n (iv) Customer due diligence and Know Your Customer (KYC) procedures\n (v) T reasury functions, foreign exchange trading and management\n (vi) Risk Management\n (vii) Strategic planning and decision-making\n (viii) Sanctioning of loans except where the basis of approval has been  \npreviously approved by the Board\n (ix) Internal Audit Function subject to Directions 3(2) and 3(3) below\n (x) Information Technology (IT) related services subject to Directions \n3(4) and 3(5) below.\n3(2) A  Licensed Bank shall not outsource its Internal Audit Function other than in \nkeeping with the following:\n (i) A Licensed Bank may outsource its Internal Audit Function, where \nthe size of the bank and the extent of the risks do not justify the \ninternal audit function to operate with a full time internal audit staff.\n (ii) A Licensed Bank may outsource certain activities or specialised areas \nof its internal audit function such as branch and/or department audits, \nInformation System (IS) audits, where the bank is in a position to \njustify\tthe\tcost\tsavings,\timproved \tefficiency \tand\tbetter\tmanagement \t\nof resource constraints.\n3(3)  The outsourcing of the internal audit function or activities as per 3(2)( i) and  \n3(2)(ii) above shall be subject to the following conditions:\n (i) The responsibility and control of the outsourced audit assignments \nin the case of 3(2)(ii) above shall continue to be with the Head of \nInternal Audit.\n (ii)\t The\tselection\tof\taudit\tfirms\tor\tstaff\tshall\tbe\tmade\tfrom\tthe\tpanel\tof\t\nexternal auditors approved by the Central Bank of Sri Lanka (CBSL) \nother than the bank\u2019s own external auditor.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 211, "year": 2013}, "type": "Document"}
{"page_content": "other than the bank\u2019s own external auditor.\n (iii) Any such appointment as per 3(3)( ii) above shall be made after a \n\u201ccooling\tof f\u201d \tperiod\tof\t2\tyears\tif\tsuch\taudit\tfirm\tor\tstaff\thad\tbeen\t\npreviously engaged in the external audit assignment of the bank.\n (iv) The internal audit service provider shall not perform any management \nfunction\tor\tact,\tdirectly\tor\tindirectly ,\tin\ta\tcapacity\tequivalent \tto\tthat\t\nof a member of management or an employee of the bank.Outsourcing of \nInternal Audit.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 211, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  203\n (v) The internal audit service provider shall not provide consultancy  \nservices to a function or activity of the bank it is expected to audit or \nvice versa  within a period of 2 years.\n (vi) The Head of Internal Audit shall ensure that, whenever practicable, \none or more members of the bank\u2019s internal audit staff are also \ninvolved in the bank\u2019s internal audit related work of the internal audit \nservice provider with the view to gather the relevant knowledge to \nperform such work by themselves in the future.\n (vii) The Licensed Bank shall be able to provide the internal audit plan, \nfollow-ups, reports and related working papers, etc., to CBSL as and \nwhen\trequired.\n3(4)  A  Licensed Bank may outsource the following IT and business processing \nfunctions:\n (i) Application/Systems development, testing, maintenance and support \n (ii) T echnology infrastructure management, maintenance and support, \nHelp Desks\n (iii) Maintenance and support to data centre operations \n (iv) Network administration \n (v) Disaster recovery support services \n (vi) Data entry operations\n (vii) Database maintenance and support\n (viii) Data warehousing\n (ix) Statements printing\n (x) Electronic banking systems ( e.g., Internet banking, Mobile banking \nand Tele-banking) development, maintenance and support\n (xi) W eb hosting and maintenance\n (xii) Credit/Debit/A TM card printing. \n3(5)  A  Licensed Bank shall ensure in its security policies, procedures and controls \nthat a service provider exercises a high standard of care and diligence to \nprotect the confidentiality and security of banks\u2019 sensitive information \nespecially relating to customers, hardware, operating systems and application \nsoftware.\n4(1) A  Licensed Bank shall have a comprehensive policy to guide the assessment \nas to how its operations are to be outsourced. The policy shall contain at least \nthe following:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 212, "year": 2013}, "type": "Document"}
{"page_content": "as to how its operations are to be outsourced. The policy shall contain at least \nthe following:\n (i) The placing of overall responsibility on the Board of Directors or  \nthe Audit Committee and senior management for the outsourcing of \nactivities and for the formulation of policy therefor. Outsourcing \nof Information \nTechnology.\nOutsourcing \nPolicy.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 212, "year": 2013}, "type": "Document"}
{"page_content": "204 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (ii)\t A\tframework \tfor\tidentification\tand\teffective\tmanagement\tof\trisks\tthat\t\ncould arise from outsourcing of activities.\n (iii)\t Cost-benefit \tanalysis\ton\teach\tactivity\tor\tfunction\tor\tprocess\tto\tbe\t\noutsourced.\n (iv) T ender procedures to be followed for the procurement of outsourced \nservices.\n (v) Setting up of a monitoring and control unit in the event of having \nseveral outsourcing arrangements.\n (vi) A  framework to conduct KYC and due diligence process on the \nservice provider.\n (vii) A  procedure to assess the service provider\u2019s capacity, capability \nand mode/basis of payment to perform the obligations under the \noutsourcing arrangement.\n (viii) A  format of the legally binding contract/agreement for outsourcing \narrangement which should include at least the following:\n (a) Service standards,\n (b) Rights, responsibilities and expectations of all parties, \n (c) Dispute resolution mechanism, \n (d)\t Confidentiality \tand\tsecurity\tof\tinformation, \t\n (e) T ermination of contract, \n (f) Subcontracting, if involved, and \n (g) Business continuity management.\n (ix)\t A\tspecific\tcontingency \tplan\tto\tbring\tthe\toutsourced \tactivity\tback\t\nin-house in an emergency situation which could arise due to service \nprovider\u2019s inability to provide, and the costs, time and resources that \nwould be involved.\n (x) A  framework for cross-border outsourcing, taking into account the \ndifferences in country environments.\n (xi) Limits on maximum exposure to a single service provider both in  \nterms of value and the number of contracts.\n5(1) A  Licensed Bank shall ensure that the bank\u2019s Business Continuity Plan (BCP) \ncontains all relevant operations including outsourcing arrangements. \n5(2) A  Licensed Bank shall ensure that the service provider has a satisfactory BCP \nand performs regular tests on its BCP. \n6(1) A  Licensed Bank shall have a specifically designated unit/division at the Head", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 213, "year": 2013}, "type": "Document"}
{"page_content": "6(1) A  Licensed Bank shall have a specifically designated unit/division at the Head \nOffice to handle all outsourcing arrangements. A Licensed Bank incorporated \noutside Sri Lanka shall have the designated unit/division at the local Head \nOffice.Business \nContinuity \nManagement.\nMonitoring & \nControl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 213, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  205\n6(2) The monitoring unit s hall handle complaints, maintain records of such \ncomplaints and carry out periodic supervision over outsourced activities.\n6(3) A  Licensed Bank shall establish an effective management information \nsystem that would on a regular basis provide information such as the type of \noutsourced service activity, costs, volume, deliverables and expiry or renewal \ndates of the contracts, the complaints, and the financial and operational \nconditions of the service providers. \n7(1) A  Licensed Bank shall be responsible for submitting transactions reports and \nsuspicious transactions reports to the Financial Intelligence Unit (FIU) in \nrespect of its customer transaction activities, even if such activities are under \noutsourced arrangements. \n8(1)  A  Licensed Bank shall ensure that marketing and recovery personnel \nemployed by the service providers are properly trained to handle their \nresponsibilities with care and prudence. \n9(1) A  Licensed Bank shall inform the proposed outsourcing arrangements during \na particular calendar year to CBSL by 31 January of that year for concurrence. \n9(2) A  Licensed Bank shall use the format annexed to this Direction for its \nreporting requirements at 9(1) above to CBSL.\n10(1)  The Banking Act Directions No. 7 of 2010 on Outsourcing of Business \nOperations of Licensed Commercial Banks and the Banking Act Directions \nNo. 8 of 2010 on Outsourcing of Business Operations of Licensed Specialised \nBanks, issued on 02 November 2010 are hereby revoked.Reporting to \nFIU.\nOutsourcing \narrangements \nrelating to \nMarketing & \nRecovery.\nReporting \nRequirements.\nRevocation of \nprevious Directions", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 214, "year": 2013}, "type": "Document"}
{"page_content": "206 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex\nBusiness Operations that are to be Outsourced during the year \u2026\u2026\u2026\u2026..\nName of the Bank : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026...\nActivity/Function/\nProcess\nto be OutsourcedName of the \nService ProviderAddressDate of \nCommence-\nmentPeriodNo. of persons \ninvolved/\nauthorisedDeliverables/\nServicesCost \n(per annum)\n1.\n2.\n3.\n4.\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n CEO / CCO / GM  Compliance Officer\nDate : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  Date : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 215, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  207\nRef. No. : 02  / 04 / 004 / 0012  / 001\n08 October 2008\nTo CEOs of all Licensed Banks\nUSE OF BANKING SYSTEM BY INSTITUTIONS AND PERSONS\nNOT AUTHORISED TO ACCEPT DEPOSITS\n A number of institutions and persons, that are not authorised to accept deposits from the public, \nare mobilising funds from the public in the guise of offering investment products/schemes.  We find that \nsuch institutions and persons have used the banking system for their operations and that some banks have \naccommodated these transactions without identifying the legality of these transactions or the potential \nrisks.  \n As you are aware, permitting these institutions and persons to use the banking system to resort to \nsuch practices can tarnish the image of your institution and thereby weaken public confidence in the \nbanking system. \n In this regard, we wish to draw your attention to the Circulars on Customer Due Diligence dated \n3 December 2001 and Know Your Customer Procedures dated 19 January 2007 issued by the Director \nBank Supervision and Know your Customer and Customer Due Diligence Rules issued by the Director, \nFinancial Intelligence Unit dated 18 May 2007. We wish to emphasise that special attention should be \npaid to strengthen Customer Due Diligence and Know Your Customer Procedures and to comply with \nsuch Circulars/Rules to ensure that sources of income and movement of funds are monitored, as required \nin these instructions.\nYours faithfully,\n H A Karunaratne  B D W A Silva\n Dir ector of Financial Intelligence Unit  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 216, "year": 2013}, "type": "Document"}
{"page_content": "208 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 800 / 0007  / 01\nBank Supervision Department \n06 November 2008\nTo: The CEOs of All Licensed Commercial Banks and\n       Licensed Specialised Banks \nDear Sirs,\nREGULATIONS MADE UNDER THE PUBLIC SECURITY ORDINANCE\nPROSCRIPTION OF TAMIL REHABILITATION ORGANISATION\n We write to inform you that His Excellency the President has promulgated Emergency (Proscription \nof Tamil Rehabilitation Organisation) Regulations, No. 9 of 2007 on December 26, 2007 proscribing the \nTamil Rehabilitation Organisation in Sri Lanka. A copy of the relevant Extraordinary Gazette  No.1529/13 \ndated December 26, 2007 is attached herewith for your information.\n In this regard, w e wish to draw your special attention to Regulation 3 of these Regulations and advise \nyou to refrain from carrying out any transactions with the above proscribed organisation.\nYours faithfully,\nActg. Director of Bank Supervision\nEncl:\ncc: Secretary-General / SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 217, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  209\nPART I : SECTION (I) \u2013 GENERAL\nGovernment Notifications\nCF 1/64\nTHE PUBLIC SECURITY ORDINANCE (CHAPTER 40)\nREGULATIONS made by the President under Section 5 of the Public Security Ordinance \n(Chapter 40).\nMahinda  Rajapaksa ,\nPresident.\nColombo,\n26th December, 2007.\nREGULATIONS\n1. These regulations may be cited as the Emer gency (Proscription of Tamil Rehabilitation Organization) \nRegulations, No.9 of 2007.\n2. For the purposes of ensuring public security, for the preservation of public order and for upholding \nthe Rule of Law, the Organization styled as the \u201cTamil Rehabilitation Organization\u201d is hereby \nproscribed.\n3. From and after the date of the coming into operation of these regulations, any person who,\u2013\n (a) wears any uniform, dress, symbol or other emblem, which signifies or indicates any association \nwith, or membership of, or adherence to the \u201cTamil Rehabilitation Organization\u201d (hereinafter \nreferred to as the \u201cproscribed organization\u201d) ; or\n (b) summons or attends any meeting of the proscribed organization or participates or engages in \nany activity of, or any activity connected with or related to the said proscribed organization ; \nor", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 218, "year": 2013}, "type": "Document"}
{"page_content": "210 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (c) s upports the proscribed organization, by inviting or exhorting persons to be enrolled as members, \nor by contributing or collecting funds, or by furnishing information or securing any other \nassistance to the said proscribed organization ; or\n (d) harbours, conceals or in any other manner assists any member of the proscribed organization, \nwith intention thereby to prevent, hinder or interfere with the apprehension, trial or punishment \nof such member ; or\n (e) makes, prints, distributes or is in any way connected with or concerned in the making, printing, \ndistribution or publication of any written or printed matter, which is or which purports to be \nprinted, by or on behalf of the proscribed organization or by any member thereof ; or\n (f) communicates or attempts to communicate to any other person in any manner whatsoever, any \norder, decision, declaration or exhortation made or purported to have been made by the proscribed \norganization or by any member thereof, or any information relating thereto, for the purpose of \nadvancing the objectives of the said proscribed organization,\nshall be guilty of an offence and shall on conviction be liable to imprisonment for a period not \nexceeding fifteen years.\n4. (1) Where the Minister is satisfied, after such inquiry as he thinks fit, that any person has custody \nof any money, securities or credits which are being used or which are intended to be used, for \nthe purposes of the proscribed organization, the Minister may by order in writing declare that \nsuch moneys, securities, and credits as are in the custody of such person, or any such moneys, \nsecurities and credits which may come into his custody after the making of such order and any \nother movable or immovable property belonging to the said proscribed organization, shall be \nforfeited to the State.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 219, "year": 2013}, "type": "Document"}
{"page_content": "forfeited to the State.\n (2) The decision of the Minister under paragraph (1) shall be conclusive and shall not be called in \nquestion in any court by way of writ or otherwise.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 219, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  211\nRef. No. : 02  / 04 / 004 / 0012  / 001\nBank Supervision Department\n23rd July 2003\nTo : All Licensed Commercial Banks and\n        Licensed Specialised Banks\nDear Sir  / Madam,\nACCEPTANCE OF CERTIFICATES OF DEPOSIT (CD s)\nFurther to our even numbered letters dated 12 June and 16 June 2003 on the above subject, and \nthe discussions at the monthly meeting of the Chief Executive Officers of Licensed Commercial Banks \n(LCBs) and Licensed Specialised Banks (LSBs).\nAll LCBs and LSBs are hereby informed that the requirement to maintain details pertaining \nto customer identification of persons encashing CDs shall not apply in respect of CDs issued before  \n30 June 2003. \nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 220, "year": 2013}, "type": "Document"}
{"page_content": "212 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 04 / 004 / 0012  / 001\nBank Supervision Department\n16th June 2003\nTo : All Licensed Commercial Banks and\n        all Licensed Specialised Banks\nDear Sir  / Madam,\nACCEPTANCE OF CERTIFICATES OF DEPOSIT\nFurther to our letter No. 02/04/004/0012/001 dated June 12, 2003 on the above subject, all \nlicensed commercial banks and licensed specialised banks are hereby informed that they should satisfy \nthemselves with KYC in respect of customers who invest in CDs with banks, and maintain records of \nadequate details pertaining to customer identification of the persons making investment in CDs with \nthe banks, and of persons encashing the CDs from the banks at the date of maturity. The banks are \nrequested to refrain from advertising the issue of CDs with anonymity.\nThe operating instructions BD/13/93 dated 5/10/1993 issued by the Central Bank on the Scheme \nof Certificates of Deposit will remain effective. \nYours faithfully,\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 221, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  213\nRef. No. : 02  / 04 / 004 / 0012  / 001\nBank Supervision Department\n12th June 2003\nTo : All Licensed Commercial Banks and\n        all Licensed Specialised Banks\nDear Sir  / Madam,\nACCEPTANCE OF CERTIFICATES OF DEPOSIT\nWe refer to the discussions held at the Bank Managers\u2019 meetings on the above subject and the \nneed to adhere to Know-Your-Customer rules (KYC) in respect of acceptance of certificates of deposits \n(CDs).\nAll licensed commercial banks and licensed specialised banks are hereby informed that they may \nsatisfy themselves with KYC in respect of customers who invest in CDs with banks, and maintain \nrecords of adequate details pertaining to customer identification of the persons making investment in \nCDs with the banks, and of persons encashing the CDs from the banks at the date of maturity. The \nbanks are requested to refrain from advertising the issue of CDs with anonymity.\nThe operating instructions BD/13/93 dated 5/10/1993 issued by the Central Bank on the Scheme \nof Certificates of Deposit will remain effective. \nYours faithfully,\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 222, "year": 2013}, "type": "Document"}
{"page_content": "214 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOperating Instruction : BD/13/93  Banking Department\n Central Bank of Sri Lanka\n P O Box 590\n Colombo 1\n October 05, 1993\nTo :  All Commercial Banks\nSCHEME OF CERTIFICATES OF DEPOSIT WITH MATURITY PERIODS\nOF NOT LESS THAN FOUR YEARS\nCommercial banks are hereby informed that they may issue Certificates of Deposits with a maturity \nperiod of not less than four years subject to the following terms and conditions  : \u2013\n(a)  The face value of each Certificate of Deposit shou1d not be less than Rupees One Hundred \nThousand (Rs. 100,000/-). \n(b) The funds mobilized through the Certificates of Deposit should be channelled only for \nlong-term lending for capital investment such as purchase of machinery and equipment and \nconstruction.\n(c) Separate accounts should be maintained in respect of funds mobilized through the Certificates \nof Deposit, long-term lending for capital investment utilizing such funds, and interest earned \non such lending.\n2. For the purpose of mainta ining statutory reserves, the paid-up value of each deposit accepted against \na Certificate of Deposit should be treated \u2013\n (i) as a Time Deposit from the date of receipt of funds up to and including the day before the \ndate on which the deposit becomes payable/encashable whether the day before the date of \nredemption/encashment is a bank holiday or not, and \u2013\n(ii) as a Demand Deposit on and after the date on which the deposit becomes payable until a \ncertificate of Deposit is redeemed by the Bank. \n3. Certificates of Deposit issued for periods of not less than four years, which are not encashed prior to \ntheir maturity dates, are exempted from stamp duty in terms of the Stamp Duty Act as amended by \nthe Stamp Duty (Amendment) Act, No. 29 of 1993\n4. Certificates of Deposit issued for periods of not less than four years, but encashed prior to their dates", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 223, "year": 2013}, "type": "Document"}
{"page_content": "of maturity, are subject to the payment of stamp duty at the point of encashment.  The commercial \nbanks are required to ensure that stamp duty at the prevailing rate is deducted and remitted to the \nCommissioner-General of Inland Revenue in the event of such premature encashment.\n5. Interest accruing to banks on lendings under paragraph 1(b) will be exempted from Turnover Tax.\n6. Any commercial bank which wishes to issue Certificates of Deposit under this Scheme is required to \ninform the Chief. Accountant of the Central Bank of Sri Lanka and obtain the approval of the Central \nBank. \n M. B. Dissanayake\nChief Accountant", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 223, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  215\nBank Supervision Department\n16 June 2006\nTo :  CEOs of All Licensed Banks\nDear Sirs,\nCONDUCT OF NON-GOVERNMENT ORGANIZATIONS (NGOs) ACCOUNTS\nBY LICENSED BANKS\nFurther to our circular dated 31 May, 2006 on the above subject, the attention of all licensed banks \nis drawn to the following:\n\u2022 In order to scrutinize the legitimacy of financial transactions undertaken by NGOs who receive \nfunding assistance from external sources, the Ministry of Finance & Planning has requested \nthe relevant line Ministries to establish a proper monitoring procedure and ascertain the work \nundertaken by them.\n\u2022 Accordingly all licensed banks are requested to obtain a clearance letter from the relevant line \nMinistry and External Resources Department before releasing such funds to the respective \nNGOs, where it is evident that such NGO is operating outside its scope of activity. Copy of \nclearance letter may be forwarded to Central Bank of Sri Lanka.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 224, "year": 2013}, "type": "Document"}
{"page_content": "216 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Supervision Department\n31 May 2006\nTo :  All Licensed Banks\nDear Sirs,\nCONDUCT OF NON-GOVERNMENT ORGANIZATIONS (NGO) ACCOUNTS BY\nLICENSED BANKS\nThe immediate attention of all licensed banks is drawn to the need to observe strict due diligence \nand the \u201cKnow Your Customer\u201d (KYC) Rules with regard to inward remittances and outward transfers \nor withdrawal of funds from accounts operated by NGOs.\nIn this regard the attention of all licensed banks is drawn to the provisions of Section 15  \nsubsection (2) of the Financial Transactions Reporting Act, No.6 of 2006 and Section 3 of the  \nConvention on the Suppression of Terrorist Financing Act, No.25 of 2005 which are annexed for ease of \nreference.\nYours faithfully,\nSgd, Director of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 225, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  217\nSection 15 subsection (2) of the Financial Transactions Reporting Act, No. 6 of 2006 reads as \nfollows:\u2013\n15 (2)  Where the Financial Intelligence Unit has reasonable grounds to suspect that a transaction or \nattempted transaction may\u2014\n(a) involve the proceeds, which are attributable to any unlawful activity ; or \n(b) be connected to the commission of the money laundering offence under the Money \nLaundering Act, No.5 of 2006; or\n(c) be prepara tory to the commission of an offence under the Convention on the Suppression of \nTerrorist Financing Act, No.25 of 2005,\nit may direct the Institution in writing or by telephone to be confirmed in writing within twenty-\nfour hours, not to proceed with the carrying out of that transaction or attempted transaction or any \nother transaction in respect of the funds affected by that transaction or attempted transaction for \na period to be determined by the Financial Intelligence Unit, which may not be more than seven \ndays, in order to allow the Financial Intelligence Unit \u2014\n (i) to make any necessary inquiries concerning the transaction or attempted transaction; and\n (ii) if  the Financial Intelligence Unit deems it appropriate, to consult or advise the relevant law \nenforcement agency in the inquiries.\n  (3)  T he Financial Intelligence Unit may make an ex-parte  application to the High Court of the \nWestern Province,  holden in Colombo, for an extension of the period of time stipulated in \nsubsection (2) setting out the grounds for such application.\n For the purposes of subsection 15 (2) (a) quote above \u201c unlawful activity \u201d interalia includes: \u2013\n (a) .\n (b) any law or regulation  for the time being in force relating to the prevention and suppression \nof terrorism \nHence, in view of the above provisions of law, if there is adequate proof that funds transferred", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 226, "year": 2013}, "type": "Document"}
{"page_content": "Hence, in view of the above provisions of law, if there is adequate proof that funds transferred \nfrom a company to an individual would finance terrorism, it is possible for the FIU to inform the \nBank concerned which holds the funds for the company which proposes to release such funds \nto an individual to carry out any act of terrorism, to suspend the account for a period of 7 days.  \nBefore the expiry of 7 days, the FIU should apply to the High Court of Colombo for an extension \nof the time if the time is insufficient to take in appropriate action to seize the funds in the account.\nFurther, Section 3 of the Convention on the Suppression of Terrorist Financing Act, No.25 of 2005 \nreads as follows:\u2013\n3. (1)  A ny person who, by any means, directly or indirectly, unlawfully and willfully provides or \ncollects funds, with the intention that such funds should be used, or in the knowledge that they \nare to be used or having reason to believe that they are likely to be used, in full or in part, in order \nto commit, \u2013\n (a) an act which constitutes an offence within the scope of, or within the definition of any one \nof the Treaties specified in Schedule I hereto;\n (b) any other act, intended to cause death or serious bodily injury, to civilians or to any other \nperson not taking an active part in the hostilities, in a situation of armed conflict, and the \npurpose of such act, by its nature or context is to intimidate a population or to compel a \ngovernment or an international organization, to do or to abstain from doing any act,\nshall be guilty of the offence of financing of terrorists or terrorist organizations:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 226, "year": 2013}, "type": "Document"}
{"page_content": "218 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nProvided that, for an act to constitute the offence set out above, it shall not be necessary to show \nthat the funds collected were actually used in the commission of an offence.\n(2) Any person who\u2013\n (a) Attempts to commit;\n (b) Aids or abets the commission of; or\n (c) Acting with a comm on purpose with another person or a group of persons, contributes to the \ncommission of,\nthe offence of financing of terrorists or terrorist organizations, shall be guilty of an offence under \nthis Act.\nIn this subsection \u201c abet\u201d has the same meaning as in sections 100 and 101 of the Penal Code.\n(3) Where an offence specified in subsection (1) or subsection (2) of this section is committed \nby a body of persons, then, every member, Director, Manager, Secretary, officer or servant of \nsuch body of persons shall be guilty of such offence, unless it can be proved that the offence \nwas committed without their knowledge or that they exercised all due diligence to prevent the \ncommission of such offence.\n(4) A  person guilty of an offence under subsection (1) or subsection (2) of this section, shall on \nconviction after trial on indictment by the High Court, be punished with imprisonment for a term \nnot less than fifteen years and not exceeding twenty years, and also be liable to a fine.\n4. (1)  On indictment of any person in the High Court, for an offence under this Act, all funds collected \nin contravention of the provisions of section 3, shall, with effect from the date of filing of such \nindictment \u2013\n (a) if such funds are lying in an account with any Bank, be subject to an order of freezing; or\n (b) if such funds are in the possession or control of any person be liable to seizure;\n(2) The freezing or seizure of funds in terms of subsection (1) shall be in force until the conclusion \nof the trial.\n(3) On the filing of indictment, the Attorney-General shall notify the Central Bank of the freezing or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 227, "year": 2013}, "type": "Document"}
{"page_content": "seizure as the case may be.\n(4) The Central Bank shall thereupon take steps to give adequate publicity to the order of freezing or \nseizure as the case may be, as it shall think fit.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 227, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  219\nMy No. : 02  / 04 /004 / 0012  / 001\nYour No. : \nBank Supervision Department\n19 January 2007\nTo : All Licensed Commercial Banks and\n  all Licensed Specialised Banks\nDear Sirs,\nCUSTOMER DUE DILIGENCE \u2013 \u2018KNOW YOUR CUSTOMER\u2019 PROCEDURES\nIn view of the potential risks on the banking and financial system stability that may arise from cross-\nborder financial transactions, all licensed banks shall conduct due diligence on all customers involved in \ncross-border financial transactions and ensure that all requirements under the relevant statutes including \nPrevention of Money Laundering Act, No.5 of 2006, financial Transactions Reporting Act, No.6 of 2006 \nand Convention on the Suppression of Terrorist Finance Act, No.25 of 2005 and the Exchange Control Act,  \nNo.24 of 1953 are complied with.\nAccordingly, the licensed banks shall report any transaction of suspicious nature to the relevant \nauthorities in terms of the above statutes immediately.\nYours faithfully,\nSgd, P. Samarasiri\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 228, "year": 2013}, "type": "Document"}
{"page_content": "220 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Supervision Department\nCentral Bank of Sri Lanka\n3rd December, 2001\nTo :  All Licensed Commer cial Banks and\n Licensed Specialised Banks\nCUSTOMER DUE DILIGENCE \u2013\n\u2018KNOW YOUR CUSTOMER\u2019 PROCEDURES\nYour attention is drawn to the discussion on the above subject at the Bank Managers\u2019 Meetings \nheld in the months of October and November 2001. Please find enclosed a Guideline on Customer Due \nDiligence - \u2018Know Your Customer\u2019 procedures, which set out the minimum criteria to be adopted by \nbanks.\nThese guidelines will be effective immediately.\nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 229, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  221\nRef. No. : 02  / 04 / 004 / 0012  / 001\nBank Supervision Department\nCentral Bank of Sri Lanka\n3rd December, 2001\nTo :  All Licensed Commer cial Banks and\n Licensed Specialised Banks\nGUIDELINES ON CUSTOMER DUE DILIGENCE \u2013\n\u2018KNOW YOUR CUSTOMER\u2019 PROCEDURES\nIn order to prevent the unchecked use of the financial system for money laundering and \ntransactions related to terrorism and subversive activities, it is recommended that all banks follow these \nguidelines on customer identification at the time of opening an account for a prospective customer, \nor before establishing a business relationship with a prospective customer, or thereafter when there is \na material change in the way an account is operated. In addition to minimising the risk of use of the \nbanking system for illicit activities, the adoption of these guidelines will provide protection against \npossible frauds, and enable the timely recognition of suspicious transactions and protect the bank from \nreputational, legal and financial risks.\n1. All banks are encouraged to document their policies on customer acceptance, customer  \nidentification/risk management and monitoring of high risk accounts.\n2. In order to \u2018know their customers\u2019 the banks are expected to:\n (i) Have sufficient information on the identity of the customer .\n (ii) Be satisfied that a prospective customer is who he/she claims to be. If the customer is acting \non behalf of another, sufficient evidence on the identity of both parties should be obtained.\n (iii) Ensure that information obtained in respect of a customer in the normal course of business is \nused effectively for the prevention of money laundering/terrorism funding.\n3.\t Customer \tIdentification\n3.1 Personal Accounts\n The following information should be obtained from all prospective personal customers:\n\u2022 Customer \u2019s name from an original of a document issued by an official authority, preferably", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 230, "year": 2013}, "type": "Document"}
{"page_content": "\u2022 Customer \u2019s name from an original of a document issued by an official authority, preferably \nbearing a photograph of the customer, such as the national identity card, passport or the \ndriving license. The reference number of such document should be recorded by the bank.\n\u2022 Cust omer\u2019s permanent mailing address and supporting evidence which should be \nconfirmed through correspondence.\n\u2022 The authenticity and integrity of an introducer and his own identity should be established \nto the satisfaction of the bank.\n\u2022 I ndependent verification of introducer\u2019s address should be made and filed with the \nmandate.\n3.2 Corporate Customers\n The following documents should be obtained:\n\u2022 Certificate of Incorporation, Memorandum and Articles of Association or Partnership \nAgreement, as appropriate, to establish the legal status of the customer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 230, "year": 2013}, "type": "Document"}
{"page_content": "222 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n\u2022 Resolution by the Board of Directors \n\u2022 Duly completed application form containing authorised specimen signatures\n\u2022 The identity of each director and those authorised to operate the account, should be \nestablished.\n\u2022 For companies, businesses or partnerships registered outside Sri Lanka, similar documents \nshould be obtained, taking into consideration any soft regulatory system in the country of \norigin.\n3.3 In the case of accounts operated by:\n\u2022 A  Power of Attorney\n\u2022 Joint account holders\n\u2022 Partnerships\n\u2022 T rust accounts/Fiduciary accounts\nThe identity should be established in respect of each signatory to the account. \n3.4 More  stringent customer identification policies should be established in the following \ncircumstances:\n\u2022 Accounts opened by post or in any other circumstances where there is no face to face \ncontact with the customer.\n\u2022 In the case of one-off transactions for non-account holders of the bank, in particular where \nsuch transactions involve large amounts of cash, or the receipt of unusually large foreign \nremittances, the customer should be asked to produce documentary evidence of identity, \nand copies of such documents should be retained by the bank.\n\u2022 Where safe custody facilities are made available to non-account holders, identification \nprocedure for non-account holders, as above, should be followed.\n\u2022 In accommodating requests for remittances of funds between accounts using electronic \npayment systems, where such transactions are of a large size, the bank should establish the \nidentity of the sender and ascertain the identity of the recipient.\n4. In instances where the bank cannot establish the true identity of the customer to its satisfaction, it \nshould not commence any business relationship with such customer.\n5. Other  Recommendations\n5.1 In respect of all types of accounts, returned letters and statements should be followed-up.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 231, "year": 2013}, "type": "Document"}
{"page_content": "5.1 In respect of all types of accounts, returned letters and statements should be followed-up.\n5.2 Where after opening an account, the features of the transactions, as known at the time of \nopening of the account changes significantly, causing grounds for suspicion of criminal \nactivity, inquiries should be made with regard to the changes in the financial position and \nnature of activities, which should be recorded. \n5.3 Retention of records: All evidence of identification as set out above should be maintained for \na minimum period of five (05) years even after an account is closed.\n5.4 Where the officer handling the account opening has reasons to believe that a new relationship \nmay expose the bank to significant reputational risk, he may refer such request to an officer of \nhigher authority before opening the account.\n5.5 The internal controller/auditor may be required to ensure compliance with the bank\u2019s policies \non customer acceptance and identification.\nP. T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 231, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  223\nRef. No. : BS/7/87\nBank Supervision Department\nCentral Bank of Sri Lanka\nRenuka Building\n41, Janadhipathi Mawatha\nColombo 1.\n25 March 1997 \nTo : All Commercial Banks\nDear Sir/Madam,\nDISHONOURED CHEQUES\nI wish to draw your attention to the high incidence of cheque returns which has become a serious \nmatter of concern, in view of the impact it would have on the integrity and efficiency of the payment \nsystem.\nThe commercial banks are therefore requested to :\n (a) draw the attention of their customers to the legal consequences that may be encountered in the \nevent of a cheque return,\n (b) Screen the prospective customers before opening current accounts, by calling for information \nfrom other banks about their status.\nYours faithfully,\nSgd. Y. A. Piyatissa\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 232, "year": 2013}, "type": "Document"}
{"page_content": "224 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Supervision Department\n20th October 2003\nTo : All Foreign Bank Branches\nDear Sir,\nINTERNAL AUDIT FUNCTION\nThe Basel Committee on Banking Supervision has continuously emphasised the importance of \nthe internal audit function as a vital component of an efficient internal control mechanism in banks. \nInternal auditing is defined as an \u201cindependent, objective assurance and consulting activity designed to \nadd value and improve an organisation\u2019s operations. It helps an organisation accomplish its objectives \nby bringing a systemic, disciplined approach to evaluate and improve the effectiveness of risk \nmanagement, control, and governance processes\u201d.\nAn effective internal audit function within a bank would be a valuable source of information for \nbank management and supervisors, as it would indicate the quality of the internal control system of the \nbank.\nIn the light of the foregoing, I am directed by the Monetary Board to ensure that all banks have \nan effective internal audit function in place. Accordingly, all branches of Foreign Banks operating in \nSri Lanka are hereby requested to ensure that an Internal Audit Unit of their own is established, or in \nthe absence of the same the Head Office or the Regional Office of such bank carries out an audit of the \nbranch at least annually.\nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 233, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  225\nBank Supervision Department\n13 June 2006\nTo :  CEOs of All Licensed Banks\nDear Sirs,\nPREVENTION OF FRAUDS USING ELECTRONIC CARDS\nRecent reports have highlighted the use of credit cards and ATM cards for fraudulently withdrawing \nlarge sums of money from banks in many countries, especially in the South East Asian region.\nThe Presidential Secretariat, by its letter dated 06 June 2006 has drawn the attention of the Central \nBank to the need to take precautionary measures to avert the possibility of such attempts being made \neven in Sri Lanka, considering the particular danger of terrorist groups using them as a means of creating \na sense of insecurity in a vital sector of the economy.\nAccordingly, Licensed Banks that issue electronic cards to customers should, as soon as is \npracticable take steps to:\n1. Introduce security features such as tamper-proof micro chips for electronic cards, and in the \ninterim-  \n2. T ake appropriate steps to educate their customers with regard to the safety of their electronic \ncards and remind them at regular intervals the steps that should be taken by them, in order to \navoid being victims of fraudulent use of such cards.\n3. Ensure that adequate provision is made annually for the necessary investment in technology .\nThe banks are also encouraged to introduce other relevant security measures in respect of ATM \ncards/machines. It is suggested that CCTV cameras be installed at all ATM outlets in order to enhance \nthe surveillance at ATM outlets.\nYour views on this matter are welcome for discussion at the forthcoming monthly meeting of CEOs \non the 22 June 2006.\nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 234, "year": 2013}, "type": "Document"}
{"page_content": "226 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nSP\nJune 6, 2006\nDeshamanya Sunil Mendis\nGovernor\nCentral Bank of Sri Lanka\nThe recently reported ATM scams in Singapore (Divaina \u2013 25.05.2006) as well as other countries such as \nNew Zealand, indicate the likelihood of such practices spreading across the world.\nIt seems prudent to take precautionary measures to avert the possibility of such attempts being made \neven in Sri Lanka, considering the particular danger of terrorist groups using them as means of creating \na sense of insecurity in a vital sector of the economy.\nAccordingly, it may be worth taking early action to request the banks in the country to take the following \nmeasures and any other, if they have so far not taken any initiatives in this regard.\n1. Expedite the process of introducing tamper-proof micro chip Bank cards (being done in many \ncountries now).\n2. Keep the customers remi nded at regular intervals the steps they should take in order to avoid \nbeing victims of ATM robberies.\nWe hope you would understand that our observations and suggestions are guided by the fact that it is vital \nto reduce the risk of any form of instability that would affect the Banks, their customers or the country.\nSincerely,\nSgd. Lalith Weeratunga\nSecretary to the President", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 235, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  227\nRef. No. : 02  / 19 / 40110072  / 001\nBank Supervision Department\n07 March 2006\nTo : CEOs of all Licensed Commercial Banks\nDear Sir,\nREPORTING OF POST-TSUNAMI REMITTANCES RECEIVED THROUGH\nNGOS AND NON-NGOS TO THE CENTRAL BANK OF SRI LANKA\nWe refer to our circular dated 13 May, 2005 on the above subject and hereby revise the format for \nreporting of the information relating to the above remittances with ef fect from March 1, 2006.\nIn terms of the revised format, the banks are required to furnish the data in two tables attached \nhereto (Table 1 & 2). The new table (Table 2) should contain details of NGOs, respective donors/\nremitters, withdrawals and outstanding account balances on a monthly basis from March 2006 by \nthe 10th of the month following the reporting month. The banks are also requested to furnish the \ninformation in Table 2 for the months of January and February, 2006 on or before 24 March, 2006.\nThe banks are requested to adhere strictly to the \u2018Know Your Customer Guidelines\u2019 and \nimplement adequate systems and controls to monitor all such remittances to ensure that customer due \ndiligence on transactions relating to such remittances is carried out. This is an imperative in the context \nof the Anti-money Laundering legislation that has just been passed by Parliament and which will soon \nbe operative.\nYour continued co-operation in this regard will be greatly appreciated.\nYours faithfully,\nController of Exchange  Director of Bank Supervision\nTable 1\nDonations received by Government, Non-Governmental Organisations (NGOs) and Others (Non-NGOs)\nName of Commercial Bank:- .........................................\nFor the Period:- 26th December 2004 to .........................\nItemTsunami Non-Tsunami\nForeign DonationsLocal \nDonations: \nSri Lankan \nRs.Foreign \nCurrency \nAmountRs. \nEquivalentForeign \nCurrency \nAmountEquivalent \nAmount of \nSri Lankan \nRs.\nDonation Received by", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 236, "year": 2013}, "type": "Document"}
{"page_content": "EquivalentForeign \nCurrency \nAmountEquivalent \nAmount of \nSri Lankan \nRs.\nDonation Received by \nthe Government\nDonations Received by \nNon-Governmental Organisations \n(NGOs) (a)\nDonations Received by \nOthers (Non-NGOs)\nTotal\n(a)  Please provide detailed information as requested in Form 2", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 236, "year": 2013}, "type": "Document"}
{"page_content": "228 Directions, Determinations, and Circulars issued to Licensed Commercial BanksTable 2\nDonations Received by Non-Governmental Organisations (NGOs)\nName of the Bank ....\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\nReporting Month ....\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\nName \nand \nAddress of \nNGO Account \nNo.Branch Remittances Received in Foreign \nCurrencyLocal Donations\nWithdrawals, \nRs.Balance \nas at End \nof Month, \nRs.Foreign \nCurrency \nAmountRs.\nEquivalentDonor / \nRemitter: Name \n& AddressAmount, \nRs.Donor/Remitter: \nName & Address\nNotes:  Please provide above information in respect of donations received during each-reporting month, withdrawals and month-end balances relating to \naccounts maintained by \u201cNGOS\u201d\n Y ou may liaise with Mr. G C A Ariyadasa, Asst. Director, Bank Supervision Department, (Tel. 4277110) in this regard.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 237, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  229\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of the \nBanking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nGovernor\nColombo\n26 December 2007\nDIRECTIONS\nBANKING ACT DIRECTION NO. 11 OF 2007\nCorporate Governance for Licensed Commercial Banks in Sri Lanka\nIn the exercise of the powers conferred by Section 46(1) of the Banking Act, No.30 of 1988, last amended \nby the Banking Act, No.46 of 2006, the Monetary Board hereby issues the following Directions on \nCorporate Governance for Licensed Commercial Banks in Sri Lanka. These Directions may be cited as \nthe Banking Act, Direction No.11 of 2007. The Sections referred to in these Directions will be those of \nthe Banking Act, No. 30 of 1988, last amended by the Banking Act, No.46 of 2006.\n1. Responsibilities and Empowerment under  the Banking Act and the Monetary Law Act \n1(1) In terms of Section 46(1) of the Banking Act, No.30 of 1988 last amended by No.46 of 2006, in \norder to ensure the soundness of the banking system, the Monetary Board has been empowered to \nissue Directions to licensed commercial banks, regarding the manner in which any aspect of the \nbusiness of such banks is to be conducted. \n1(2)  In terms of Section 5 of the Monetary Law Act, No.58 of 1949, the Central Bank of Sri Lanka \nis charged with the duty of securing, as far as possible by action authorised by such Act, the two \nobjectives, namely, (a) economic and price stability and ( b) financial system stability.\n1(3) In terms of Section 10( c) of the Monetary Law Act, the Monetary Board, in the exercise of its \npowers, duties, functions and responsibilities, is empowered to make such rules and regulations \nas the Monetary Board may consider necessary, in relation to any matter affecting or connected \nwith or incidental to the exercise, discharge, or performance of the powers, functions, and duties", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 238, "year": 2013}, "type": "Document"}
{"page_content": "with or incidental to the exercise, discharge, or performance of the powers, functions, and duties \nof the Central Bank of Sri Lanka.\n1(4) Under the provisions of the Monetary Law Act, No.58 of 1949, the supervision of banks has been \nmade a duty of the Central Bank on account of specific reasons as stated in John Exter\u2019s Report \non the Monetary Law Act which states, inter-alia, as follows: \u201cBanking is an economic activity \nwhich affects the public welfare to an unusual degree; it touches in one way or another, almost \nevery phase of a country\u2019 s economic life. Sound banking is essential to healthy and vigorous \neconomic development. Supervision of banks helps to protect the public against mismanagement, \nbank failures, and loss of confidence in the banking system. It helps to protect depositors and  \nstock-holders against loss and frequently enables bank directors and officers to manage the affairs \nof their banks more wisely and intelligently.\u201d\n1(5) Accordingly , in order to enhance the overall banking sector stability which is the fundamental to \nfinancial system stability, the Monetary Board, hereby issues Directions under Section 46(1) of \nthe Banking Act, No.30 of 1988 to improve and sustain the corporate governance processes and \npractices of the licensed commercial banks in Sri Lanka.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 238, "year": 2013}, "type": "Document"}
{"page_content": "230 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n1(6) For purposes of this Direction, Corporate Governance processes and practices shall be deemed to \nbe the management framework that facilitates the conduct of the banking business in a responsible \nand accountable manner so as to promote the safety and soundness of the individual banks, thereby \nleading to the stability of the overall banking sector. \n1(7) The rules of corporate governance as contained in Direction 3 of these Directions have, therefore, \nbeen developed on the basis of certain fundamental principles as set out in Direction 2 of these \nDirections with a view to facilitating the underlying supervisory responsibilities of the Central \nBank and to promote safety and soundness of the banking system.\n2. The Principles upon which the rules of Corporate Governance have been based upon and \ndeveloped are the following: \n The principles set out in this Direction 2 should be referred to for explanatory purposes and/\nor\tfor\tclarification \tpurposes \tonly,\tso\tas\tto\tunderstand \tthe\trationale \tfor\tthe\trules\tas\tcontained \t\nin Direction 3 hereof. Hence, strict compliance under these Directions shall only be in respect \nof the rules that are set out under Direction 3.\n2(1) Principle: The Responsibilities of the Board\n2(1)(i)  The board of directors should assume the overall responsibility and accountability in respect \nof: (a) the management of the affairs of the bank, i.e., conduct of business and maintenance \nof prudent risk management mechanisms; and ( b) the safety and soundness of the bank.\n2(1)(ii)  T owards this end, the board should: ( a) determine the structure of the management of affairs \nof the bank; (b) delegate business operations to key management personnel led by the chief \nexecutive officer designated by the board; (c) assume policy making and risk management \nfor the business; and ( d) ensure the effective role of the key management personnel.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 239, "year": 2013}, "type": "Document"}
{"page_content": "for the business; and ( d) ensure the effective role of the key management personnel.  \nKey management personnel shall mean such key executives of the bank as defined in the \nInternational Accounting Standards. \n2(1)(iii)  The overall responsibility of the board should not be construed as an obligation to undertake \nthe inspection of day-to-day activities, but should rather be understood as an obligation \nto oversee and ensure that the key management personnel are carrying out the day-to-day \nactivities of the bank in a safe and sound manner in accordance with the policies set by the \nboard.\n2(1)(iv)  Directors should understand the business and risk management mechanism of the bank and \ntake objective decisions in the interest of the bank\u2019s depositors, creditors, shareholders and \nother stakeholders. Further, they should ensure that the bank does not act in a manner that is \ndetrimental or prejudicial to the interests of, and obligations to, depositors and creditors.\n2(1)(v)  The board should take the responsibility for compliance with accepted rules of corporate \ngovernance. They should also ensure compliance with all regulatory and supervisory \nrequirements. Further, they should ensure that an effective combination of professionals \nwith practical experience in relevant subjects such as banking, finance, economics, business \nmanagement, human resource management, law, marketing, information technology or any \nother discipline relevant or complementary to banking operations, is available in the bank to \nundertake its operations and discharge its responsibilities. \n2(1)(vi)  The directors should be aware of potential civil and criminal liabilities that may arise from \ntheir failure to discharge their duties diligently. They should also understand that they \nshould act with due care and prudence. In addition, the directors of state owned banks \nshould be aware of the additional liabilities that arise from the status of such banks being", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 239, "year": 2013}, "type": "Document"}
{"page_content": "should be aware of the additional liabilities that arise from the status of such banks being \nstate enterprises and consequently being accountable to the public. It is, therefore, necessary \nthat directors commit sufficient time and energy to fulfilling the board\u2019s responsibilities in \nmanaging the affairs of the bank in a prudent manner.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 239, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  231\n2(2) Principle: The Board\u2019s composition\n2(2)(i)  The board should be composed of a healthy mix of executive directors and non-executive \ndirectors. Some of the non-executive directors should also be independent so that there is \nstrong independent element brought into the decision-making process.\n2(2)(ii)  The board\u2019s composition should ensure a balance of skills and experience as may be deemed \nappropriate and desirable for the requirements of the bank.\n2(2)(iii)  The banking industry worldwide is making tremendous progress and under going rapid \nchange with new innovations, instruments, technologies, products, systems and processes \nbeing introduced regularly. It is vital therefore, that the directors should be persons \nwho would: (a ) be able to keep abreast with these changes, and ( b) provide continuous \ncontribution and guidance to the board decision-making process. \n2(2)(iv)  There s hould be a gradual infusion of new ideas into the board. There should also be \nassurance that the relationships between the directors amongst themselves as well as \nbetween the directors and the key management personnel is at a level that does not suggest \nthe existence of excessive familiarity, undue influence or coercion. In this context, it should \nbe noted that very long-standing relationships could sometimes impair the high sense of \nvalues, independence and objectivity that is needed in the discharge of the duties of a director \nof a bank.\n2(3)  Principle: Criteria to assess the Fitness and Propriety of Directors\n2(3)(i)  In addition to the principles under the board\u2019s composition in Direction 2(2) above, directors \nshould be fit and proper persons in order to be eligible to hold office as directors of a bank \nand no person should serve as a director unless such person is a fit and proper person.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 240, "year": 2013}, "type": "Document"}
{"page_content": "and no person should serve as a director unless such person is a fit and proper person. \n2(3)(ii)  There is strong need for commitment and effective contribution to the prudent management \nof the affairs of the bank. It is very likely that the effectiveness of such commitment and \ncontribution would tend to decrease with advanced age of directors and more particularly,  \nif the age of such director is well beyond the normal age of retirement, as generally accepted \nin the country.\n2(4) Principle: Management functions delegated by the Board\n2(4)(i)  The board should have a formal schedule of matters specifically reserved to it for decision. \nThe board should also give clear directions to key management personnel, as to the matters \nthat should be approved by the board before decisions are made by key management \npersonnel, on behalf of the bank. \n2(5)  Principle: \tThe\tChairman \tand\tthe\tChief\tExecutive \tOfficer\n2(5)(i)  There are two key aspects of the management of every bank, viz., (a) the overall governance \nby the board, and ( b) the day-to-day management of the bank\u2019s business by the CEO, in \nline with board approved strategic objectives, corporate values, overall risk policy and risk \nmanagement procedures. \n2(5)(ii)  There should be a clear division of these responsibilities at the board level and the executive \nmanagement level to ensure a greater balance of power and authority, so that powers are not \nconcentrated in any one individual. \n2(5)(iii)  The board should appoint a chairman as well as a chief executive officer. The division \nof responsibilities between the chairman and chief executive officer should be clearly \nestablished and set out in writing.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 240, "year": 2013}, "type": "Document"}
{"page_content": "232 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n2(6)  Principle: Board appointed Committees \n2(6)(i)  The board should appoint separate board committees for audit, selection, remuneration,  \nintegrated risk management and such other subjects as determined by the Board to ensure its \noversight and control over the affairs of the bank. \n2(6)(ii)  Where the board appoints a committee, it should set out the authority of the committee, \nand in particular, whether the committee has the authority to act on behalf of the board or \nsimply has the authority to examine a particular issue and report back to the board with \nrecommendations. \n2(6)(iii)  Each committee should be chaired by a non-executive director who has some expertise in \nthe relevant subject, and who preferably should be independent too. The majority of the \nmembers of the board committee should consist of non-executive directors with at least one \nindependent director in the committee. If a need arises, professionals from outside may be \ninvited or hired to serve in a committee. Bank staff may be present at the board committees \nfor advice or special assignments, on invitation.\n2(7)  Principle: Related party transactions\n2(7)(i)  The board should ensure that the bank does not engage in transactions with \u201crelated parties\u201d \nin a manner that would grant such parties \u201cmore favourable treatment\u201d than that accorded to \nother constituents of the bank carrying on the same business.\n2(8) Principle: Disclosures\n2(8)(i)  The objective of disclosure is the transparency of information relating to affairs and risk \nmanagement of banks which would help to promote market discipline of the respective \nbanks. \n2(8)(ii)  Since market disclosure is the focus of the Pillar III of the risk management based capital \nstandard known as Basel II recommended by the Basel Committee on Banking Supervision \nat the Bank for International Settlements, (which is the globally accepted body on", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 241, "year": 2013}, "type": "Document"}
{"page_content": "at the Bank for International Settlements, (which is the globally accepted body on \nintroducing international standards on Bank Supervision), the extent of disclosures should \nbe commensurate with the size, ownership structure, systemic importance, risk profile \nand the business model of the bank. Accordingly, it should be noted that the adequate and \ntimely public disclosure of relevant information by banks would facilitate enhanced market \ndiscipline and lead to better and more effective corporate governance.\n2(8)(iii)  Disclosures by banks should generally include disclosures relating to capital adequacy, key \nperformance indicators, business concentrations, transactions with related parties, corporate \ngovernance statements, financial statements, etc., and should be consistent with accounting \nstandards, regulatory requirements as well as with any other information disclosed on \nvoluntary basis. \n3. The following rules of Corporate Governance shall be complied by all licensed commercial \nbanks in Sri Lanka and such compliance shall be as provided for in Direction 3(9)(i) hereof. \n3(1)  The Responsibilities of the Board\n3(1)(i)  The board shall strengthen the safety and soundness of the bank by ensuring the  \nimplementation of the following: \n a) Approve and oversee the bank\u2019s strategic objectives and corporate values and ensure \nthat these are communicated throughout the bank;\n b) Approve the overall business strategy of the bank, including the overall risk policy and \nrisk management procedures and mechanisms with measurable goals, for at least the \nnext three years;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 241, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  233\n c ) Identify the principal risks and ensure implementation of appropriate systems to  \nmanage the risks prudently;\n d) Approve implementation of a policy of communication with all stakeholders, including \ndepositors, creditors, share-holders and borrowers;\n e ) R eview the adequacy and the integrity of the bank\u2019s internal control systems and \nmanagement information systems; \n f ) Identify and designate key management personnel, as defined in the International \nAccounting Standards, who are in a position to: ( i) significantly influence policy;  \n(ii) direct activities; and (iii ) exercise control over business activities, operations and \nrisk management;\n g) Define the areas of authority and key responsibilities for the board directors themselves \nand for the key management personnel;\n h) Ensure that there is appropriate oversight of the affairs of the bank by key management \npersonnel, that is consistent with board policy;\n i) Periodically assess the effectiveness of the board directors\u2019 own governance practices, \nincluding: (i) the selection, nomination and election of directors and key management \npersonnel; (ii) the management of conflicts of interests; and (iii ) the determination of \nweaknesses and implementation of changes where necessary;\n j) Ensure that the bank has an appropriate succession plan for key management personnel; \n k) Meet regularly, on a needs basis, with the key management personnel to review policies, \nestablish communication lines and monitor progress towards corporate objectives;\n l) Understand the regulatory environment and ensure that the bank maintains an effective \nrelationship with regulators;\n m) Exercise due diligence in the hiring and oversight of external auditors.\n3(1)(ii)  The board shall appoint the chairman and the chief executive officer and define and approve", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 242, "year": 2013}, "type": "Document"}
{"page_content": "the functions and responsibilities of the chairman and the chief executive officer in line with \nDirection 3(5) of these Directions.\n3(1)(iii)  The board shall meet regularly and board meetings shall be held at least twelve times a year \nat approximately monthly intervals. Such regular board meetings shall normally involve \nactive participation in person of a majority of directors entitled to be present. Obtaining the \nboard\u2019s consent through the circulation of written resolutions/papers shall be avoided as far \nas possible.\n3(1)(iv)  The board shall ensure that arrangements are in place to enable all directors to include  \nmatters and proposals in the agenda for regular board meetings where such matters and \nproposals relate to the promotion of business and the management of risks of the bank.\n3(1)(v)  The board procedures shall ensure that notice of at least 7 days is given of a regular board \nmeeting to provide all directors an opportunity to attend. For all other board meetings, \nreasonable notice may be given.\n3(1)(vi)  The board procedures shall ensure that a director who has not attended at least two-thirds \nof the meetings in the period of 12 months immediately preceding or has not attended \nthe immediately preceding three consecutive meetings held, shall cease to be a director. \nParticipation at the directors\u2019 meetings through an alternate director shall, however,  \nbe acceptable as attendance. \n3(1)(vii)  The board shall appoint a company secretary who satisfies the provisions of Section 43 of the \nBanking Act No. 30 of 1988, whose primary responsibilities shall be to handle the secretariat \nservices to the board and shareholder meetings and to carry out other functions specified in \nthe statutes and other regulations.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 242, "year": 2013}, "type": "Document"}
{"page_content": "234 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n3(1)(viii)  All directors shall have access to advice and services of the company secretary with a view \nto ensuring that board procedures and all applicable rules and regulations are followed.\n3(1)(ix)  The company secretary shall maintain the minutes of board meetings and such minutes shall \nbe open for inspection at any reasonable time, on reasonable notice by any director. \n3(1)(x)  Minutes of board meetings shall be recorded in sufficient detail so that it is possible to gather \nfrom the minutes, as to whether the board acted with due care and prudence in performing  \nits duties. The minutes shall also serve as a reference for regulatory and supervisory \nauthorities to assess the depth of deliberations at the board meetings. Therefore, the minutes \nof a board meeting shall clearly contain or refer to the following: ( a) a summary of data \nand information used by the board in its deliberations; ( b) the matters considered by the \nboard; (c) the fact-finding discussions and the issues of contention or dissent which may \nillustrate whether the board was carrying out its duties with due care and prudence; ( d) the \ntestimonies and confirmations of relevant executives which indicate compliance with the \nboard\u2019s strategies and policies and adherence to relevant laws and regulations; (e) the board\u2019s \nknowledge and understanding of the risks to which the bank is exposed and an overview of \nthe risk management measures adopted; and ( f) the decisions and board resolutions. \n3(1)(xi)  There shall be a procedure agreed by the board to enable directors, upon reasonable request, \nto seek independent professional advice in appropriate circumstances, at the bank\u2019s expense. \nThe board shall resolve to provide separate independent professional advice to directors to \nassist the relevant director or directors to discharge his/her/their duties to the bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 243, "year": 2013}, "type": "Document"}
{"page_content": "assist the relevant director or directors to discharge his/her/their duties to the bank. \n3(1)(xii)  Directors shall avoid conflicts of interests, or the appearance of conflicts of interest, in their \nactivities with, and commitments to, other organisations or related parties. If a director has a \nconflict of interest in a matter to be considered by the board, which the board has determined \nto be material, the matter should be dealt with at a board meeting, where independent  \nnon-executive directors [refer to Direction 3(2)(iv) of these Directions] who have no material \ninterest in the transaction, are present. Further, a director shall abstain from voting on any \nboard resolution in relation to which he/she or any of his/her close relation or a concern in \nwhich a director has substantial interest, is interested and he/she shall not be counted in the \nquorum for the relevant agenda item at the board meeting.\n3(1)(xiii)  The board shall have a formal schedule of matters specifically reserved to it for decision to \nensure that the direction and control of the bank is firmly under its authority .\n3(1)(xiv)  The board shall, if it considers that the bank is, or is likely to be, unable to meet its obligations \nor is about to become insolvent or is about to suspend payments due to depositors and other \ncreditors, forthwith inform the Director of Bank Supervision of the situation of the bank prior \nto taking any decision or action.\n3(1)(xv)  The board shall ensure that the bank is capitalised at levels as required by the Monetary \nBoard in terms of the capital adequacy ratio and other prudential grounds. \n3(1)(xvi)  The board shall publish in the bank\u2019s Annual Report, an annual corporate governance report \nsetting out the compliance with Direction 3 of these Directions.\n3(1)(xvii)  The board shall  adopt a scheme of self-assessment to be undertaken by each director \nannually, and maintain records of such assessments.\n3(2) The Board\u2019s Composition", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 243, "year": 2013}, "type": "Document"}
{"page_content": "annually, and maintain records of such assessments.\n3(2) The Board\u2019s Composition\n3(2)(i)  The number of directors on the board shall not be less than 7 and not more than 13.\n3(2)(ii)  (A) The total period of service of a director other than a director who holds the position of \nchief executive officer shall not exceed nine years, and such period in office shall be \ninclusive of the total period of service served by such director up to 01 January 2008.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 243, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  235\n  (B) In this context, the following transitional provisions shall apply:\n a) In the event that there is only one director on the board who has served more than \nnine years as at 01 January 2008, he/she shall be deemed to have vacated the office \nas a director as at 31 December 2008. \n b) In the event that there are two or more directors on the board who have served more \nthan nine years as at 01 January 2008, the following provisions shall apply:\n I. Of those directors whose period of service has exceeded nine years, the longest \nserving director, shall be deemed to have vacated office as a Director on  \n31 December 2008. \n II. Thereafter , at the end of each succeeding year, the remaining directors shall \nbe deemed to have vacated office in sequence, at least one director each year, \n(on the basis of the longest to the shortest length of service as a director), \nuntil all directors who have served a period in excess of nine years as at  \n01 January 2008, have been deemed to have vacated office. Provided also, that \nall directors of the bank who have served more than nine years as at 01 January \n2008 shall be deemed to have vacated their office by or before 31 December \n2011.\n c) In the event there are any directors who are due to complete nine years of service \nbetween 01 January 2008 and 31 December 2010, such directors shall also be \ndeemed to have vacated office, in sequence, at least one director each year,  \n(on the basis of the longest to the shortest length of service as a director), after the \ndirectors as set out in Direction 3(2)(ii)(B)(b) have vacated their office as directors. \nProvided, however, that all such directors covered by this sub-direction ( c) shall \nalso be deemed to have vacated their office by or before 31 December 201 1. \n3(2)(iii)  An employee of a bank may be appointed, elected or nominated as a director of the bank", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 244, "year": 2013}, "type": "Document"}
{"page_content": "3(2)(iii)  An employee of a bank may be appointed, elected or nominated as a director of the bank \n(hereinafter referred to as an \u201cexecutive director\u201d) provided that the number of executive \ndirectors shall not exceed one-third of the number of directors of the board. In such an event, \none of the executive directors shall be the chief executive officer of the bank. \n3(2)(iv)  The board shall have at least three independent non-executive directors or one third of the \ntotal number of directors, whichever is higher. This sub-direction shall be applicable from \n01 January 2010 onwards.\n  A  non-executive director shall not be considered independent if he/she: \n a) has direct and indirect shareholdings of more than 1 per cent of the bank;\n b ) currently has or had during the period of two years immediately preceding his/her  \nappointment as director, any business transactions with the bank as described in \nDirection 3(7) hereof, exceeding 10 per cent of the regulatory capital of the bank.\n c) has been employed by the bank during the two year period immediately preceding the \nappointment as director;\n d) has a close relation who is a director or chief executive officer or a member of key \nmanagement personnel or a material shareholder of the bank or another bank. For this \npurpose, a \u201cclose relation\u201d shall mean the spouse or a financially dependant child; \n e)  represents a specific stakeholder of the bank;\n f ) i s an employee or a director or a material shareholder in a company or business \norganization:\n I. which currently has a transaction with the bank as defined in Direction 3(7) of \nthese Directions, exceeding 10 per cent of the regulatory capital of the bank, or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 244, "year": 2013}, "type": "Document"}
{"page_content": "236 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n II. in which any of the other directors of the bank are employed or are directors or \nare material shareholders; or \n III. in which any of the other directors of the bank have a transaction as defined in \nDirection 3(7) of these Directions, exceeding 10 per cent of regulatory capital in \nthe bank; \n3(2)(v)  In the event an alternate director is appointed to represent an independent director, the person \nso appointed shall also meet the criteria that applies to the independent director.\n3(2)(vi)  Non-executive directors shall be persons with credible track records and/or have necessary \nskills and experience to bring an independent judgment to bear on issues of strategy, \nperformance and resources.\n3(2)(vii)  A  meeting of the board shall not be duly constituted, although the number of directors \nrequired to constitute the quorum at such meeting is present, unless more than one half of the \nnumber of directors present at such meeting are non-executive directors. This sub-direction \nshall be applicable from 01 January 2010 onwards. \n3(2)(viii)  The independent non-executive directors shall be expressly identified as such in all corporate \ncommunications that disclose the names of directors of the bank. The bank shall disclose \nthe composition of the board, by category of directors, including the names of the chairman, \nexecutive directors, non-executive directors and independent non-executive directors in the \nannual corporate governance report.\n3(2)(ix)  There shall be a formal, considered and transparent procedure for the appointment of new \ndirectors to the board. There shall also be procedures in place for the orderly succession of \nappointments to the board.\n3(2)(x)  All directors appointed to fill a casual vacancy shall be subject to election by shareholders at \nthe first general meeting after their appointment.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 245, "year": 2013}, "type": "Document"}
{"page_content": "the first general meeting after their appointment.\n3(2)(xi)  If a director resigns or is removed from office, the board shall: ( a) announce the director\u2019s \nresignation or removal and the reasons for such removal or resignation including but not \nlimited to information relating to the relevant director\u2019s disagreement with the bank, if any; \nand (b) issue a statement confirming whether or not there are any matters that need to be \nbrought to the attention of shareholders.\n3(2)(xii)  A  director or an employee of a bank shall not be appointed, elected or nominated as a director \nof another bank except where such bank is a subsidiary company or an associate company of \nthe first mentioned bank.\n3(3) Criteria\tto\tassess\tthe\tfitness\tand\tpropriety \tof\tdirectors \t\n  In addit ion to provisions of Section 42 of the Banking Act, No.30 of 1988, the criteria set out \nbelow shall apply to determine the fitness and propriety of a person who serves or wishes to \nserve as a director of a bank. Non-compliance with any one of the criteria as set out herein shall \ndisqualify a person to be appointed, elected or nominated as a director or to continue as a director.\n3(3)(i)  The age of a person who serves as director shall not exceed 70 years. \n (A) Where a director who is currently serving at a bank is over 70 years of age as at   \n01 January 2008, the following transitional provisions shall apply, subject however to \nthe provisions as set out in Direction 3(2)(ii) hereof. \n a) If a director is over 75 years of age as at 01 January 2008, such director may \ncontinue to serve as a director for a further period that shall not extend beyond", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 245, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  237\n31 December 2008, and shall be deemed to have vacated office on 31 December \n2008;\n b ) If a director is between 70 and 75 years of age as at 01 January 2008, such  \ndirector may continue to serve as a director for a further period that shall not \nextend beyond 31 December 2009, and shall be deemed to have vacated office on  \n31 December 2009.\n(B) Where a director who is currently serving at a bank reaches the age of 70 years, between \n01 January 2008 and 31 December 2009, such director may, subject to the provisions as \nset out in Direction 3(2)(ii) hereof, continue to serve as a director for a further period \nthat shall not extend beyond 31 December 2010 and shall be deemed to have vacated \noffice on 31 December 2010.\n3(3)(ii)  A  person shall not hold office as a director of more than 20 companies/entities/institutions \ninclusive of subsidiaries or associate companies of the bank. Of such 20 companies/entities/ \ninstitutions, not more than 10 companies shall be those classified as Specified Business \nEntities in terms of the Sri Lanka Accounting and Auditing Standards Act, No. 15 of 1995.\n3(4) Management functions delegated by the Board\n3(4)(i)  The directors shall carefully study and clearly understand the delegation arrangements in \nplace. \n3(4)(ii)  The board shall not delegate any matters to a board committee, chief executive officer, \nexecutive directors or key management personnel, to an extent that such delegation would \nsignificantly hinder or reduce the ability of the board as a whole to dischar ge its functions.\n3(4)(iii)  The board shall review the delegation processes in place on a periodic basis to ensure that \nthey remain relevant to the needs of the bank.\n3(5) The\tChairman \tand\tChief\tExecutive \tOfficer\n3(5)(i)  The roles of chairman and chief executive officer shall be separate and shall not be performed \nby the same individual.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 246, "year": 2013}, "type": "Document"}
{"page_content": "by the same individual.\n3(5)(ii)  The chairman shall be a non-executive director and preferably an independent director as \nwell. In the case where the chairman is not an independent director, the board shall designate \nan independent director as the Senior Director with suitably documented terms of reference \nto ensure a greater independent element. The designation of the Senior Director shall be \ndisclosed in the bank\u2019s Annual Report.\n3(5)(iii)  The board shall disclose in its corporate governance report, which shall be an integral part \nof its Annual Report, the identity of the chairman and the chief executive officer and the \nnature of any relationship [including financial, business, family or other material/relevant \nrelationship(s)], if any, between the chairman and the chief executive officer and the \nrelationships among members of the board.\n3(5)(iv)  The chairman shall: ( a) provide leadership to the board; (b) ensure that the board works \neffectively and discharges its responsibilities; and ( c) ensure that all key and appropriate \nissues are discussed by the board in a timely manner.\n3(5)(v)  The chairman shall be primarily responsible for drawing up and approving the agenda for \neach board meeting, taking into account where appropriate, any matters proposed by the \nother directors for inclusion in the agenda. The chairman may delegate the drawing up of the \nagenda to the company secretary.\n3(5)(vi)  The chairman shall ensure that all directors are properly briefed on issues arising at board \nmeetings and also ensure that directors receive adequate information in a timely manner.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 246, "year": 2013}, "type": "Document"}
{"page_content": "238 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n3(5)(vii)  The chairman shall encourage all directors to make a full and active contribution to the \nboard\u2019s affairs and take the lead to ensure that the board acts in the best interests of the bank. \n3(5)(viii)  The chairman shall facilitate the ef fective contribution of non-executive directors in \nparticular and ensure constructive relations between executive and non-executive directors.\n3(5)(ix)  The chairman, shall not engage in activities involving direct supervision of key management \npersonnel or any other executive duties whatsoever. \n3(5)(x)  T he chairman shall ensure that appropriate steps are taken to maintain effective \ncommunication with shareholders and that the views of shareholders are communicated to \nthe board. \n3(5)(xi)  The chief executive officer shall function as the apex executive-in-charge of the day-to-day \nmanagement of the bank\u2019s operations and business. \n3(6) Board appointed Committees\n3(6)(i)  Each bank shall have at least four board committees as set out in Directions 3(6)(ii), 3(6)(iii), \n3(6)(iv) and 3(6)(v) of these Directions. Each committee shall report directly to the board. \nAll committees shall appoint a secretary to arrange the meetings and maintain minutes, \nrecords, etc., under the supervision of the chairman of the committee. The board shall present \na report of the performance on each committee, on their duties and roles at the annual general \nmeeting.\n3(6)(ii)  The following rules shall apply in relation to the Audit Committee:\n a) The chair man of the committee shall be an independent non-executive director who \npossesses qualifications and experience in accountancy and/or audit.\n b) All members of the committee shall be non-executive directors.\n c) The committee shall make recommendations on matters in connection with: ( i) the \nappointment of the external auditor for audit services to be provided in compliance", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 247, "year": 2013}, "type": "Document"}
{"page_content": "appointment of the external auditor for audit services to be provided in compliance \nwith the relevant statutes; (ii) the implementation of the Central Bank guidelines issued \nto auditors from time to time; (iii ) the application of the relevant accounting standards; \nand (iv) the service period, audit fee and any resignation or dismissal of the auditor; \nprovided that the engagement of the Audit partner shall not exceed five years, and that \nthe particular Audit partner is not re-engaged for the audit before the expiry of three \nyears from the date of the completion of the previous term.\n d ) The committee shall review and monitor the external auditor\u2019s independence and \nobjectivity and the effectiveness of the audit processes in accordance with applicable \nstandards and best practices.\n e) The committee shall develop and implement a policy on the engagement of an external \nauditor to provide non-audit services that are permitted under the relevant statutes, \nregulations, requirements and guidelines. In doing so, the committee shall ensure \nthat the provision by an external auditor of non-audit services does not impair the \nexternal auditor\u2019s independence or objectivity. When assessing the external auditor\u2019s \nindependence or objectivity in relation to the provision of non-audit services, the \ncommittee shall consider:\n I. whether the skills and experience of the audit firm make it a suitable provider of \nthe non-audit services; \n I I. wh ether there are safeguards in place to ensure that there is no threat to the \nobjectivity and/or independence in the conduct of the audit resulting from the \nprovision of such services by the external auditor; and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 247, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  239\n III. whether the nature of the non-audit services, the related fee levels and the fee \nlevels individually and in aggregate relative to the audit firm, pose any threat to \nthe objectivity and/or independence of the external auditor. \n f ) The committee shall, before the audit commences, discuss and finalise with the \nexternal auditors the nature and scope of the audit, including: ( i) an assessment of the \nbank\u2019s compliance with the relevant Directions in relation to corporate governance \nand the management\u2019s internal controls over financial reporting; (ii) the preparation \nof financial statements for external purposes in accordance with relevant accounting \nprinciples and reporting obligations; and (iii ) the co-ordination between firms where \nmore than one audit firm is involved.\n g) The committee shall review the financial information of the bank, in order to monitor \nthe integrity of the financial statements of the bank, its annual report, accounts and \nquarterly reports prepared for disclosure, and the significant financial reporting \njudgments contained therein. In reviewing the bank\u2019s annual report and accounts and \nquarterly reports before submission to the board, the committee shall focus particularly \non: (i) major judgmental areas; (ii) any changes in accounting policies and practices; \n(iii) significant adjustments arising from the audit; (iv) the going concern assumption; \nand (v) the compliance with relevant accounting standards and other legal requirements.\n h) The comm ittee shall discuss issues, problems and reservations arising from the interim \nand final audits, and any matters the auditor may wish to discuss including those \nmatters that may need to be discussed in the absence of key management personnel,  \nif necessary.\n i ) The  committee shall review the external auditor\u2019s management letter and the \nmanagement\u2019s response thereto.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 248, "year": 2013}, "type": "Document"}
{"page_content": "management\u2019s response thereto.\n j) The committee shall take the following steps with regard to the internal audit function \nof the bank:\n I. Review the adequacy of the scope, functions and resources of the internal audit \ndepartment, and satisfy itself that the department has the necessary authority to \ncarry out its work;\n II. Review the internal audit programme and results of the internal audit process \nand, where necessary, ensure that appropriate actions are taken on the \nrecommendations of the internal audit department;\n III. Review any appraisal or assessment of the performance of the head and senior \nstaff members of the internal audit department;\n IV . Recommend any appointment or termination of the head, senior staff members \nand outsourced service providers to the internal audit function;\n V . Ensure that the committee is appraised of resignations of senior staff members \nof the internal audit department including the chief internal auditor and any \noutsourced service providers, and to provide an opportunity to the resigning \nsenior staff members and outsourced service providers to submit reasons for \nresigning;\n VI. Ensure that the internal audit function is independent of the activities it audits and \nthat it is performed with impartiality, proficiency and due professional care;\n k ) The committee shall consider the major findings of internal investigations and  \nmanagement\u2019s responses thereto;\n l) The chief finance officer, the chief internal auditor and a representative of the external \nauditors may normally attend meetings. Other board members and the chief executive \nofficer may also attend meetings upon the invitation of the committee. However, at \nleast twice a year, the committee shall meet with the external auditors without the \nexecutive directors being present.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 248, "year": 2013}, "type": "Document"}
{"page_content": "240 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n m) The committee shall have: ( i) explicit authority to investigate into any matter within \nits terms of reference; ( ii) the resources which it needs to do so; ( iii) full access to \ninformation; and ( iv) authority to obtain external professional advice and to invite \noutsiders with relevant experience to attend, if necessary.\n n) The committee shall meet regularly, with due notice of issues to be discussed and shall \nrecord its conclusions in discharging its duties and responsibilities.\n o ) The board shall disclose in an informative way , (i) details of the activities of the \naudit committee; (ii) the number of audit committee meetings held in the year; and  \n(iii) details of attendance of each individual director at such meetings.\n p) The secretary of the committee (who may be the company secretary or the head of \nthe internal audit function) shall record and keep detailed minutes of the committee \nmeetings. \n q ) The committee shall review arrangements  by which employees of the bank may, \nin confidence, raise concerns about possible improprieties in financial reporting, \ninternal control or other matters. Accordingly, the committee shall ensure that proper \narrangements are in place for the fair and independent investigation of such matters \nand for appropriate follow-up action and to act as the key representative body for \noverseeing the bank\u2019s relations with the external auditor.\n3(6)(iii)  The following rule s shall apply in relation to the Human Resources and Remuneration \nCommittee:\n a ) The committee shall determine the remuneration policy (salaries , allowances and \nother financial payments) relating to directors, Chief Executive Officer (CEO) and key \nmanagement personnel of the bank. \n b ) The committee shall set goals and tar gets for the directors, CEO and the key \nmanagement personnel.\n c ) T he committee shall evaluate the performance of the CEO and key management", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 249, "year": 2013}, "type": "Document"}
{"page_content": "c ) T he committee shall evaluate the performance of the CEO and key management \npersonnel against the set targets and goals periodically and determine the basis for \nrevising remuneration, benefits and other payments of performance-based incentives.\n d ) The CEO shall be present at all meetings of the committee, except when matters  \nrelating to the CEO are being discussed.\n3(6)(iv)  The following rules shall apply in relation to the Nomination Committee:\n a) The committee shall implement a procedure to select/appoint new directors, CEO and \nkey management personnel.\n b) The comm ittee shall consider and recommend (or not recommend) the re-election of \ncurrent directors, taking into account the performance and contribution made by the \ndirector concerned towards the overall discharge of the board\u2019s responsibilities.\n c) The committee shall set the criteria such as qualifications, experience and key attributes \nrequired for eligibility to be considered for appointment or promotion to the post of \nCEO and the key management positions. \n d) The committee shall ensure that directors, CEO and key management personnel are fit \nand proper persons to hold office as specified in the criteria given in Direction 3(3) and \nas set out in the Statutes.\n e) The comm ittee shall consider and recommend from time to time, the requirements of \nadditional/new expertise and the succession arrangements for retiring directors and key \nmanagement personnel.\n f ) T he Committee shall be chaired by an Independent Director and preferably be \nconstituted with a majority of Independent Directors. The CEO may be present at \nmeetings by invitation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 249, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  241\n3(6)(v)  The following rules shall apply in relation to the Integrated Risk Management Committee:\n a) The comm ittee shall consist of at least three non-executive directors, chief executive \nofficer and key management personnel supervising broad risk categories, i.e., credit, \nmarket, liquidity, operational and strategic risks. The committee shall work with key \nmanagement personnel very closely and make decisions on behalf of the board within \nthe framework of the authority and responsibility assigned to the committee.\n b ) The committee shall assess all risks, i.e., credit, market, liquidity, operational and \nstrategic risks to the bank on a monthly basis through appropriate risk indicators \nand management information. In the case of subsidiary companies and associate \ncompanies, risk management shall be done, both on a bank basis and group basis.\n c) The committee shall review the adequacy and effectiveness of all management level \ncommittees such as the credit committee and the asset-liability committee to address \nspecific risks and to manage those risks within quantitative and qualitative risk limits \nas specified by the committee.\n d) The committee shall take prompt corrective action to mitigate the effects of specific risks \nin the case such risks are at levels beyond the prudent levels decided by the committee \non the basis of the bank\u2019s policies and regulatory and supervisory requirements.\n e) The comm ittee shall meet at least quarterly to assess all aspects of risk management \nincluding updated business continuity plans.\n f)  The committee shall take appropriate actions against the officers responsible for failure \nto identify specific risks and take prompt corrective actions as recommended by the \ncommittee, and/or as directed by the Director of Bank Supervision.\n g) The comm ittee shall submit a risk assessment report within a week of each meeting to", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 250, "year": 2013}, "type": "Document"}
{"page_content": "g) The comm ittee shall submit a risk assessment report within a week of each meeting to \nthe board seeking the board\u2019s views, concurrence and/or specific directions.\n h) The committee shall establish a compliance function to assess the bank\u2019s compliance \nwith laws, regulations, regulatory guidelines, internal controls and approved policies \non all areas of business operations. A dedicated compliance officer selected from \nkey management personnel shall carry out the compliance function and report to the \ncommittee periodically.\n3(7) Related party transactions\n3(7)(i)  The board shall take the necessary steps to avoid any conflicts of interest that may arise from \nany transaction of the bank with any person, and particularly with the following categories \nof persons who shall be considered as \u201crelated parties\u201d for the purposes of this Direction: \n a) Any of the bank\u2019 s subsidiary companies; \n b) Any of the bank\u2019 s associate companies;\n c) Any of the directors of the bank;\n d) Any of the bank\u2019 s key management personnel;\n e) A  close relation of any of the bank\u2019s directors or key management personnel;\n f) A  shareholder owning a material interest in the bank; \n g) A  concern in which any of the bank\u2019s directors or a close relation of any of the bank\u2019s \ndirectors or any of its material shareholders has a substantial interest.\n3(7)(ii)  The type of transactions with related parties that shall be covered by this Direction shall \ninclude the following:\n a) The grant of any type of accommodation, as defined in the Monetary Board\u2019s Directions \non maximum amount of accommodation,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 250, "year": 2013}, "type": "Document"}
{"page_content": "242 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n b ) T he creation of any liabilities of the bank in the form of deposits, borrowings and \ninvestments,\n c) The provision of any services of a financial or non-financial nature provided to the bank \nor received from the bank,\n d ) The creation or maintenance of reporting lines and information flows between the \nbank and any related parties which may lead to the sharing of potentially proprietary, \nconfidential or otherwise sensitive information that may give benefits to such related \nparties. \n3(7)(iii)  The board shall ensure that the bank does not engage in transactions with related parties \nas defined in Direction 3(7)(i) above, in a manner that would grant such parties \u201cmore \nfavourable treatment\u201d than that accorded to other constituents of the bank carrying on \nthe same business. In this context, \u201cmore favourable treatment\u201d shall mean and include \ntreatment, including the:\n a) Granting of \u201ctotal net accommodation\u201d to related parties, exceeding a prudent percentage \nof the bank\u2019s regulatory capital, as determined by the board. For purposes of this  \nsub-direction:\n I .  \u201cAccommodation\u201d shall mean accommodation as defined in the Banking Act \nDirections, No.7 of 2007 on Maximum Amount of Accommodation. \n II. The \u201ctotal net accommodation\u201d shall be computed by deducting from the total \naccommodation, the cash collateral and investments made by such related parties \nin the bank\u2019s share capital and debt instruments with a maturity of 5 years or \nmore.\n b) Char ging of a lower rate of interest than the bank\u2019s best lending rate or paying more \nthan the bank\u2019s deposit rate for a comparable transaction with an unrelated comparable \ncounterparty;\n c) Providing of preferential treatment, such as favourable terms, covering trade losses \nand/or waiving fees/commissions, that extend beyond the terms granted in the normal \ncourse of business undertaken with unrelated parties;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 251, "year": 2013}, "type": "Document"}
{"page_content": "course of business undertaken with unrelated parties;\n d) Providing services to or receiving services from a related-party without an evaluation \nprocedure; \n e) Maintaining reporting lines and information flows that may lead to sharing potentially \nproprietary, confidential or otherwise sensitive information with related parties, except \nas required for the performance of legitimate duties and functions.\n3(7)(iv)  A  bank shall not grant any accommodation to any of its directors or to a close relation of such \ndirector unless such accommodation is sanctioned at a meeting of its board of directors, with \nnot less than two-thirds of the number of directors other than the director concerned, voting \nin favour of such accommodation. This accommodation shall be secured by such security as \nmay from time to time be determined by the Monetary Board as well.\n3(7)(v)  a) Where any accommodation has been granted by a bank to a person or a close relation \nof a person or to any concern in which the person has a substantial interest, and such \nperson is subsequently appointed as a director of the bank, steps shall be taken by \nthe bank to obtain the necessary security as may be approved for that purpose by the \nMonetary Board, within one year from the date of appointment of the person as a \ndirector. \n  b) Where such security is not provided by the period as provided in Direction 3(7)(v)\n(a) above, the bank shall take steps to recover any amount due on account of any \naccommodation, together with interest, if any, within the period specified at the time of \nthe grant of accommodation or at the expiry of a period of eighteen months from the \ndate of appointment of such director, whichever is earlier.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 251, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  243\n  c) Any director who fails to comply with the above sub-directions shall be deemed to have \nvacated the office of director and the bank shall disclose such fact to the public. \n  d) This sub-direction, however , shall not apply to a director who at the time of the grant of \nthe accommodation was an employee of the bank and the accommodation was granted \nunder a scheme applicable to all employees of such bank.\n3(7)(vi)  A  bank shall not grant any accommodation or \u201cmore favourable treatment\u201d relating to the \nwaiver of fees and/or commissions to any employee or a close relation of such employee or \nto any concern in which the employee or close relation has a substantial interest other than on \nthe basis of a scheme applicable to the employees of such bank or when secured by security \nas may be approved by the Monetary Board in respect of accommodation granted as per \nDirection 3(7)(v) above.\n3(7)(vii)  No accommodation granted by a bank under Direction 3(7)(v) and 3(7)(vi) above, nor any \npart of such accommodation, nor any interest due thereon shall be remitted without the prior \napproval of the Monetary Board and any remission without such approval shall be void and \nof no effect.\n3(8) Disclosures\n3(8)(i)  The board shall ensure that: ( a) annual audited financial statements and quarterly financial \nstatements are prepared and published in accordance with the formats prescribed by the \nsupervisory and regulatory authorities and applicable accounting standards, and that \n(b) such statements are published in the newspapers in an abridged form, in Sinhala, Tamil \nand English.\n3(8)(ii)  T he board shall ensure that the following minimum disclosures are made in the Annual \nReport:\n a) A  statement to the effect that the annual audited financial statements have been prepared \nin line with applicable accounting standards and regulatory requirements, inclusive of \nspecific disclosures.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 252, "year": 2013}, "type": "Document"}
{"page_content": "specific disclosures.\n b) A  report by the board on the bank\u2019s internal control mechanism that confirms that the \nfinancial reporting system has been designed to provide reasonable assurance regarding \nthe reliability of financial reporting, and that the preparation of financial statements for \nexternal purposes has been done in accordance with relevant accounting principles and \nregulatory requirements. \n c ) The external auditor\u2019s certification on the effectiveness of the internal control \nmechanism referred to in Direction 3(8)(ii)(b) above, in respect of any statements \nprepared or published after 31 December 2008.\n d) Details of directors, including names, fitness and propriety, transactions with the bank \nand the total of fees/remuneration paid by the bank.\n e) T otal net accommodation as defined in 3(7)(iii) granted to each category of related \nparties. The net accommodation granted to each category of related parties shall also \nbe disclosed as a percentage of the bank\u2019s regulatory capital. \n f) The aggregate values of remuneration paid by the bank to its key management personnel \nand the aggregate values of the transactions of the bank with its key management \npersonnel, set out by broad categories such as remuneration paid, accommodation \ngranted and deposits or investments made in the bank.\n g ) The external auditor\u2019s certification of the compliance with these Directions in the \nannual corporate governance reports published after 01 January 2010.\n h) A  report setting out details of the compliance with prudential requirements, regulations, \nlaws and internal controls and measures taken to rectify any material non-compliances.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 252, "year": 2013}, "type": "Document"}
{"page_content": "244 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n i) A  statement of the regulatory and supervisory concerns on lapses in the bank\u2019s risk \nmanagement, or non-compliance with these Directions that have been pointed out by \nthe Director of Bank Supervision, if so directed by the Monetary Board to be disclosed \nto the public, together with the measures taken by the bank to address such concerns.\n3(9) Transitional and other general provisions\n3(9)(i)  Compliance with this Direction shall commence from 01 January 2008 onwards and all  \nlicensed commercial banks shall fully comply with the provisions of this Direction by or \nbefore 01 January 2009 except where extended compliance dates have been specifically \nprovided for in this Direction.\n3(9)(ii)  In respect of the banks that have been incorporated by specific statutes in Sri Lanka, the \nboards as specified in such statutes shall continue to function in terms of the provisions of the \nrespective statutes, provided they take steps to comply with all provisions of this Direction \nthat are not inconsistent with the provisions of the respective statutes.\n3(9)(iii)  This Direction shall apply to the branches of the foreign banks operating in Sri Lanka to \nthe extent that it is not inconsistent with the regulations and laws applicable in such bank\u2019s \ncountry of incorporation. The branch of a foreign bank shall also publish its parent bank\u2019s \nannual corporate governance report together with its annual report and accounts of the \nbranch operations in Sri Lanka. \n3(9)(iv)  In the event of a conflict between any of the provisions of this Direction and the Articles of \nAssociation (or Internal Rules) pertaining to any bank, the provisions of this Direction shall \nprevail. However, if the Articles of Association of an individual bank set a more stringent \nstandard than that specified in this Direction, such provisions in the Articles of Association \nmay be followed.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 253, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  245\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of \nthe Banking Act, No.30 of 1988 as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n15 August 2008.\nDIRECTIONS\nBANKING ACT DIRECTION NO. 5 OF 2008\nAMENDMENTS TO DIRECTIONS ON CORPORATE GOVERNANCE FOR\nLICENSED COMMERCIAL BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 46(1) of the Banking Act, No.30 of 1988, last amended \nby the Banking Act, No.46 of 2006 and in terms of the Supreme Court order delivered on July 8, 2008, \nthe Monetary Board hereby issues the following Directions in lieu of Direction No.1 of 2008 dated  \nApril 23, 2008, issued by the Monetary Board of the Central Bank of Sri Lanka. These Directions may \nbe cited as the Banking Act, Direction No.5 of 2008.\n1. The Banking Act Direction No. 1 of 2008 dated April 23, 2008 described as \u201cProvisions regarding \nexecutive directors and transitional provisions for founding directors, incumbent chairmen and \nexecutive directors\u201d, is hereby revoked.\n2. The following new Direction shall replace the present Direction 3(2)(ii) (B) of the Banking Act, \nDirection No.11 of 2007.\n3(2)(ii)  (B)   In this context, the following general exemption shall apply:\nA director who has completed nine years as at January 1, 2008, or who completes such \nterm at any time prior to December 31, 2008, may continue for a further maximum \nperiod of 3 years commencing January 1, 2009.\n3. The following new Direct ion shall replace Directions 3(3)(i)(A) and 3(3)(i)(B) of the Banking Act, \nDirection No.11 of 2007.\n3(3)(i) (A)  In this context, the following general exemption shall apply:\nA director who has reached the age of 70 years as at January 1, 2008 or who would \nreach the age of 70 years prior to December 31, 2008 may continue in office for a further", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 254, "year": 2013}, "type": "Document"}
{"page_content": "reach the age of 70 years prior to December 31, 2008 may continue in office for a further \nmaximum period of 3 years commencing January 1, 2009.\n4. The following new Direction shall be included immediately after Direction 3(3)(ii) of the Banking \nAct, Direction No.11 of 2007.\n3(3)(ii) (A)  In this context, the following general exemption shall apply: \nIf any person holds posts in excess of the limitation as above, such person shall within a \nmaximum period of three years from 1 January 2009 comply with the above-mentioned \nlimitation and notify the Monetary Board accordingly.\n5. The following new Direct ion shall be included immediately after Direction 3(9)(iv) of the Banking \nAct, Direction No.11 of 2007.\n3(9)(v)  If for any reason such as ill health or other incapacity, the Monetary Board considers \nthat exemptions referred to in Directions 3(2)(ii)B, 3(3)(i)A and 3(3)(ii)A should not be \navailed of, such ground may be notified to the person by the Monetary Board, and after \na hearing, the Monetary Board may limit the period of exemption.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 254, "year": 2013}, "type": "Document"}
{"page_content": "246 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of \nthe Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n24 October 2008\nDIRECTIONS\nBANKING ACT DIRECTION NO. 7 OF 2008\nAMENDMENTS TO DIRECTIONS ON CORPORATE GOVERNANCE FOR\nLICENSED COMMERCIAL BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 46(1) of the Banking Act, No. 30 of 1988, last amended \nby the Banking Act, No. 46 of 2006 and in terms of the Supreme Court order delivered on September 1, \n2008, the Monetary Board hereby issues the following Direction amending Direction No. 5 of 2008 dated \nAugust 15, 2008, issued by the Monetary Board of the Central Bank of Sri Lanka. This Direction may be \ncited as the Banking Act, Direction No. 7 of 2008.  \n1. The following new Direction shall replace Direction No. 5 of the Banking Act, Direction No. 5 of \n2008, dated August 15, 2008.\n3(9)(v)  If for any reason such as ill health or any incapacity as provided in the Banking Act, the \nMonetary Board considers that exemptions referred to in Directions 3(2)(ii)B, 3(3)(i)\nA and 3(3)(ii)A should not be availed of, such ground may be notified to the person by \nthe Monetary Board, and after a hearing, the Monetary Board may limit the period of \nexemption.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 255, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  247\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of the \nBanking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n12 April 2013\nBANKING ACT DIRECTION NO. 3 OF 2013\nAMENDMENTS TO DIRECTIONS ON\nCORPORATE GOVERNANCE ISSUED TO\nLICENSED COMMERCIAL BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 46(1) of the Banking Act, No. 30 of 1988,  \nlast amended by the Banking (Amendment) Act, No. 46 of 2006, the Monetary Board hereby issues  \nthe following Directions amending Direction 3(3)( ii) of the Banking Act, Direction No. 11 of 2007,  \ndated 26 December 2007 on Corporate Governance for Licensed Commercial Banks in Sri Lanka.  \n1. This Direction may be cited as the Banking Act, Direction No. 3 of 2013.\n2. The following new Direction shall replace Direction 3(3)( ii) of the Banking Act, Direction No. 11 \nof 2007, dated 26 December 2007.\n\u20183(3)(ii)  A  person shall not hold office as a director of more than 20 companies/entities/institutions \ninclusive of subsidiaries or associate companies of the bank.\u2019", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 256, "year": 2013}, "type": "Document"}
{"page_content": "248 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRequirement of \nthe Framework.Directions issued by the Monetary Board of the Central Bank of Sri Lanka in terms of Sections 46(1) and \n76(J)(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n05 October 2011\nBANKING ACT DIRECTION NO. 7 OF 2011\nINTEGRATED RISK MANAGEMENT FRAMEWORK FOR\nLICENSED BANKS\nIn order to ensure the soundness of the banking system, Sections 46(1) and 76( J)(1) of the Banking \nAct, No. 30 of 1988, last amended by the Banking Act, No. 46 of 2006, empowers the Monetary Board \nto issue Directions to licensed banks regarding the manner in which any aspect of the business of such \nbanks is to be conducted. Accordingly, the Monetary Board issues this Direction to all licensed banks \non integrated risk management as management of risks on banking business operations in an integrated \nmanner would promote the soundness of banks and the banking system. \n1. All licensed banks shall adopt a specific Integrated Risk Management (IRM) \nframework in compliance with guidelines annexed to this Direction in addition \nto risk management principles and rules required in regulatory and supervisory \nprocedures and other market best practices of bank risk management.\n2. The IRM framework which shall be documented shall cover various potential \nrisks, possible sources of such risks, mechanism of management information and \nreporting to identify and monitor such risks, effective measures to control and \nmitigate risks at prudent levels and relevant officers and committees responsible \nfor such control and mitigation.\n3. The IRM framework shall be approved by the Board of Directors (BOD) and \nreviewed and updated at least annually.\n4. Through the IRM framework, the BOD shall assess the integrated risk profile", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 257, "year": 2013}, "type": "Document"}
{"page_content": "4. Through the IRM framework, the BOD shall assess the integrated risk profile \nof the bank and its management at least quarterly and be responsible for overall \noversight of the orderly implementation of the IRM framework.\n5. All banks shall implement the IRM framework within 6 months from the date \nof this Direction.\n6. In the event of any material lapses in the IRM framework in the opinion of the \nDirector of Bank Supervision, the fitness and propriety of those who are found to \nbe responsible for such lapses will be re-assessed under the relevant provisions \nof the Banking Act. Nature of the \nFramework.\nOversight of \nthe Borad.\nSteps to secure \nCompliance.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 257, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  249\nAnnexure\nINTEGRATED RISK MANAGEMENT SYSTEMS IN BANKS\nA. Integrated Risk Management\n1. Introduction\n1.1 Banks are exposed to various risks during their business operations. Under the Basel II  \nframework, the major categories of risks are credit, market and operational risks. However, the \nbanks are also facing other risks such as liquidity, interest rate, foreign exchange rate, legal, \nregulatory, reputational etc. All these risks are highly interdependent.\n1.2 Risk management is a complex function, which requires specialised skills and expertise.  \nInternationally, banks have been moving towards the use of sophisticated models for measuring \nand managing risks in an integrated manner with a view to ensuring a comprehensive Internal \nCapital Adequacy Assessment Process (ICAAP) under Pillar 2 of the Basel II framework. \n1.3 The capital adequacy ratio prescribed by the Central Bank of Sri Lanka (CBSL) under the Pillar \n\u2013 I of the Basel II framework is the regulatory minimum level, which addresses only credit, \nmarket and operational risks on an average basis. Thus, the need for banks to have their own \nassessment of various integrated risk exposures and maintain adequate capital as a cushion for \nsuch risks has become an urgent necessity.\n1.4 The objec tive of these guidelines is to encourage banks to develop integrated risk management \ntechniques for monitoring and managing their risks and to assure CBSL that adequate capital is \nheld to meet various risks to which they are exposed.\n2. Integrated Risk Management oversight\n2.1 Board and Senior Management \u2013  The responsibility of understanding the risks assumed by \nthe bank and ensuring that the risks are appropriately managed should be vested with the Board \nof Directors (BOD). The Board should: \n (a) Ensure that the bank has established a robust and pervasive risk culture and clear policies", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 258, "year": 2013}, "type": "Document"}
{"page_content": "(a) Ensure that the bank has established a robust and pervasive risk culture and clear policies \nthat define risk management as the responsibility of each bank\u2019s senior management, \nsubject to the oversight of the Board.\n (b) Establish risk limits based on risk appetite of the bank.\n (c) Ensure that the Senior Management of the bank:\n i . establishes an integrated framework in order to assess and appropriately manage  \nvarious risk exposures of the bank;\n i i. develops a system to monitor the bank\u2019s risk exposures and to relate them to the \nbank\u2019s capital;\n i ii. e stablishes a method to monitor the bank\u2019s compliance with internal policies, \nparticularly with regard to risk management; and\n iv . ef fectively communicates all relevant policies and procedures throughout the bank.\n (d) Adopt and support strong internal controls. \n2.2 Integrated Risk Management Committee (IRMC) \u2013 The overall risk management should \nbe assigned to an independent Integrated Risk Management Committee (IRMC) of the BOD, \nestablished as per Rules 3(6)(v) of the Banking Act Directions Nos.11&12 of 2007 on Corporate \nGovernance for Licensed Banks in Sri Lanka with the responsibilities stated therein. \n2.3 Internal Audit \u2013  Integrated risk management policies and procedures as well as the \nfunctionalities at various levels of the risk management function should be reviewed by", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 258, "year": 2013}, "type": "Document"}
{"page_content": "250 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nthe internal audit function of banks on an on-going basis while the external audit makes an \nindependent review at least on an annual basis.\n2.4 Operational Level \u2013 Risk management in operational areas viz. front office, loan origination \nfunction etc. should be confined to the operational procedures and guidelines set forth by the \nBOD and the Senior Management. \n3. Integrated Risk management framework priorities and pr ocesses\n3.1 Given the diversity of balance sheet profile of banks in Sri Lanka, it is neither prudent nor \ndesirable to adopt a uniform framework for management of risks. The architecture of an \nintegrated risk management function should be bank-specific, dictated by the size, complexity \nof functions, operating environment and technical expertise of staff. \n3.2 All relevant factors that present a material source of risk should be incorporated in a   \nwell-developed integrated risk management system. \n3.3 All measurements of risk incorporate both quantitative and qualitative elements, but to the \nextent possible, a quantitative approach should form the foundation of a bank\u2019s measurement \nframework. \n3.4 Quanti tative tools can include the use of large historical databases; when data are scarcer,  \na bank may choose to rely more heavily on the use of stress testing and scenario analyses. \n3.5 Banks should understand when measuring risks that measurement error always exists, and in \nmany cases the error itself is difficult to quantify. In general, an increase in uncertainty related \nto modelling and business complexity should result in a larger capital cushion.\n3.6 Qua ntitative approaches that focus on most likely outcomes for budgeting, forecasting, or \nperformance measurement purposes may not be fully applicable for capital adequacy because \nthe ICAAP under Pillar 2 of the Basel II framework should also take less likely events into \naccount.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 259, "year": 2013}, "type": "Document"}
{"page_content": "account. \n3.7 Stress testing and scenario analysis can be effective in gauging the consequences of outcomes \nthat have low probability of occurrence but would have a considerable impact on safety and \nsoundness of the banks. \n3.8 T o the extent that risks cannot be reliably measured with quantitative tools \u2013 for example, where \nmeasurements of risk are based on scarce data or unproven quantitative methods \u2013 qualitative \ntools, including experience and judgment, may be more heavily utilised. \n3.9 Banks should be cognisant that qualitative approaches have their own inherent biases and  \nassumptions that affect risk assessment; accordingly, banks should recognise the biases and \nassumptions embedded in, and the limitations of the qualitative approaches used. \n4.\t Risk\taggregation \tand\tdiversification \teffects\n4.1 An ef fective risk management system should assess risks across the entire bank. A bank \nchoosing to conduct risk aggregation among various risk types or business lines should \nunderstand the challenges in such aggregation. \n4.2 In addi tion, when aggregating risks, banks should ensure that any potential concentrations \nacross more than one risk dimension are addressed, recognizing that losses could arise in \nseveral risk dimensions at the same time, stemming from the same event or a common set of \nfactors. \n4.3 In considering the possible effects of diversification, management should be systematic and \nrigorous in documenting decisions, and in identifying assumptions used in each level of risk \naggregation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 259, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  251\n4.4 Assumptions about diversification should be supported by analysis and evidence. The bank \nshould have systems capable of aggregating risks based on the bank\u2019s selected framework. \nFor example, a bank calculating correlations within or among risk types should consider data \nquality and consistency, and the volatility of correlations over time and under stressed market \nconditions.\n5. Disclosure \n CBSL strongly considers that the market discipline could play an important role in maintaining \nfinancial system stability. However, market discipline could be achieved only through meaningful \ndisclosures by licensed banks which would also provide a more meaningful picture of the extent and \nnature of various risks that banks are exposed to and of the efficiency of banks\u2019 risk management \npractices.\nB. Cr edit Risk Management\n1. Management Oversight\n The BOD should put in place and periodically review the credit risk strategy and significant credit \nrisk policies of the bank. \n1.1 The strategy shall includee:\n (a) a statement of the bank\u2019 s willingness to grant loans based on the type;\n (b) identification of tar get markets and business sectors; \n (c) preferred levels of diversification and concentration;\n (d) the cost of capital in granting credit and bad debts; and\n (e) the cyclical aspects and the resulting shifts in the composition and quality of the loan \nportfolio. This strategy should be viable in the long run and across business cycles. \n1.2 The credit risk policies and procedures shall be consisted with following elements, at a  \nminimum.\n (a) W ritten policies that define target markets, risk acceptance criteria, credit approval \nauthority, credit origination and maintenance procedures and guidelines for portfolio \nmanagement and remedial management.\n (b) Proactive credit risk management practices such as annual/half yearly industry studies and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 260, "year": 2013}, "type": "Document"}
{"page_content": "(b) Proactive credit risk management practices such as annual/half yearly industry studies and \nsingle borrower reviews, periodic credit calls and customer visits that are documented, \nand carry out at least quarterly management reviews of troubled exposures/ weak credits.\n (c) V esting accountability with the business managers for managing risk and, in conjunction \nwith the credit risk management framework, for establishing and maintaining appropriate \nrisk limits and risks arrangement procedures. \n (d) Delegation of lending powers to individual credit officers based upon a consistent set of \nstandards of experience, judgment and ability.\n (e) Requirement for higher level of authority to approve credit limits as risk ratings worsen.\n (f) Requirement for every extension of credit, other than small value consumer/retail loans \nto be approved by at least two authorized credit officers, one of whom must be an officer \nfrom business and another invariably from an independent Credit Risk Management \nDepartment (CRMD).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 260, "year": 2013}, "type": "Document"}
{"page_content": "252 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (g) Requirement for every obligor and facility to be assigned a risk rating.\n (h) Consistent standards for the origination, documentation and maintenance of documents \nfor extensions of credit.\n (i) Consistent approach towards early problem recognition, classification of problem  \nexposures, and remedial action.\n (j)  Emphasis on maintaining a diversified portfolio of risk assets in line with the capital \ndesired to support such a portfolio.\n (k) Credit risk limits by obligor , concentration, industry or geography.\n (l) Responsibility of the credit function to report the comprehensive set of credit risk data into \nthe independent risk system.\n1.3 The credit risk strategy and policy should be approved and periodically reviewed by the BOD. \nThese documents should be effectively disseminated throughout the banking organisation. All \nrelevant personnel should clearly understand the bank\u2019s approach to granting credit and should \nbe held accountable for complying with established policies and procedures. \n2. Risk Management \n2.1 Structure \u2013  In a well functioning integrated risk management framework, credit risk \nmanagement is vested with an independent unit and each bank should, depending on the size \nof the organisation or loan book, constitute a high level Credit Policy Committee (CPC) also \ncalled Credit Risk Management Committee or Credit Control Committee with the following \nresponsibilities:\n (a) The committee should be headed by the Chief Executive Officer (CEO)/General Manager \n(GM) and should comprise Heads of Credit Departments, including Consumer Banking, \nTreasury and CRMD.\n (b) The committee should, inter alia , formulate clear credit policies including standards on \npresentation of credit proposals, financial covenants, rating standards and benchmarks, \ndelegation of credit approving powers, prudent limits on large credit exposures, assets", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 261, "year": 2013}, "type": "Document"}
{"page_content": "delegation of credit approving powers, prudent limits on large credit exposures, assets \nconcentrations and lending to related parties, standards for loan collateral, portfolio \nmanagement, loan review mechanism, risk concentrations, risk monitoring and evaluation, \npricing of loans, provisioning, regulatory/legal compliance, etc. for BOD\u2019s approval.\n (c) The committee will be responsible for the setting up of CRMD which should lay down \nrisk assessment systems, monitor quality of loan portfolio and prudential limits set by \nCPC, identify problems and correct deficiencies, develop management Information \nSystem (MIS) and undertake loan review/audit.\n2.2 Prudential Limits \u2013  Credit risk can be mitigated to a great extent by stipulating prudential risk \nlimits on various risk parameters. Banks should consider stipulating:\n (a) Benchmark financial ratios, with flexibility for deviation in deserving cases. The \nconditions subject to which deviations are permitted and the authority for permitting such \ndeviations should be clearly spelt out in the Credit Policy.\n (b) Single/related party borrower limits, which could even be more stringent than the limits \nprescribed by CBSL, to provide a filtering mechanism. \n (c) Substantial exposure limit, i.e., aggregate of large exposures should not exceed a \npercentage of the Tier \u2013 II capital of the banks, depending upon the degree of concentration \nrisk the bank is exposed to. \n (d) Maximum exposure limits to industry, regions, country, etc. There must also be systems \nin place to evaluate the exposure at reasonable intervals and the limits should be adjusted \nespecially when a particular sector or industry faces a slowdown or other specific problem.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 261, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  253\n (e)  Maturity and currency profile of the loan book, keeping in mind the market risk inherent \nin the balance sheet, risk management capability, liquidity etc.\n2.3 Risk Rating \u2013 Banks should develop a robust internal credit-risk grading system that serves as \na single point indicator of diverse risk factors of counterparty and for taking credit decisions \nin a consistent manner while communicating the default risk associated with an exposure.  \nThe risk rating, in short, should:\n (a) reflect the underlying credit risk of the loan book ; and\n (b) be drawn up in a structured manner, incorporating both quantitative (financial ratios) and \nqualitative standards (industry, payment history, credit reports, management, purpose of \nthe loan, quality of financial information, facility characteristics etc.).\n2.4 Risk Pricing \u2013 Risk pricing is a fundamental tenet of credit risk management. Thus, banks \nshould:\n (a) evolve scientific systems to price the credit risk, which should have a bearing on the \nexpected Probability of Default (PD); and\n (b) establish the maximum expected loss in each product line and linking the capital to this \nloss, thus making it possible to compare products of different risk levels.\n2.5 Portfolio Management \u2013  The need for credit portfolio management emanates from the \npotential adverse impact of concentration of exposures and necessity to optimise the benefits \nassociated with diversification. In this regard, banks should consider the following measures to \nmaintain the portfolio quality:\n (a) Stipulate quantitative ceilings on aggregate exposure in specified rating categories,  \ni.e., certain percentage of total advances in the rating category 1 to 4 or to 6 etc.\n (b) Evaluate the rating-wise distribution of borrowers in various industries, business, personal \nsegments, etc .\n (c) Expos ure to one industry/sector should be evaluated on the basis of overall rating", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 262, "year": 2013}, "type": "Document"}
{"page_content": "(c) Expos ure to one industry/sector should be evaluated on the basis of overall rating \ndistribution of borrowers within the sector/group. In cases where portfolio exposure to \na single industry/segment is performing badly or the concentration of borrowers is in \nthe lower notches of ratings, the bank may increase the quality standards for the specific \nindustry or group.\n (d) T arget rating-wise volume of loans, probable defaults and provisioning requirements \nas a prudent planning exercise. For any deviation/s from the expected parameters,  \nan exercise for restructuring the portfolio may immediately be undertaken and if \nnecessary, the entry-level criteria could prudently be enhanced to insulate the portfolio \nfrom further deterioration.\n (e) Undertake rapid portfolio reviews, stress tests and scenario analyses when the external \nenvironment undergoes rapid changes (rise in oil prices, global/country specific \nslowdowns, international/market risk events, extreme liquidity conditions, war situation \netc.). \n (f) Introduce discriminatory time schedules for review/renewal of borrower exposures.  \nLower rated borrowers whose financials show signs of weakness should be subject to \nrenewal control twice/thrice a year. \n2.6 Risk models \u2013 Credit risk models offer banks a framework for quantifying, aggregating and \nmanaging risk across geographical and product lines in a timely manner. Therefore, banks \nshould evaluate the utility of various models with suitable modifications to the environment \nin Sri Lanka and build up adequate internal expertise and databases to facilitate the models \nutilisation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 262, "year": 2013}, "type": "Document"}
{"page_content": "254 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n2.7 Loan Review Mechanism (LRM) \u2013  LRM is an effective tool for constantly evaluating the \nquality of the loan book and bringing about qualitative improvements in credit administration. \nIn this regard, banks should formulate a loan review policy under the review of BOD, annually. \nThe policy should, inter alia , address:\n (a) Qualification \tand\tIndependence \t\u2013 Loan Review Officers should be independent in \nreporting to the BOD and have sound knowledge of the credit appraisal, lending practices \nand loan policies of the bank. \n (b) Frequency and Scope of Reviews \u2013  Reviews of high value loans should be undertaken \nusually within three months of sanction/renewal, or more frequently when factors indicate \na potential for deterioration in the credit quality. The scope of the review should cover all \nperforming loans above a cut-off limit. At least 30% \u2013 40% of the loan portfolio should \nbe subjected to LRM each year to provide reasonable assurance that all major credit risks \nembedded in the balance sheet have been tracked. \n (c) Depth of Reviews \u2013 Loan reviews should focus on: the approval process, accuracy and \ntimeliness of credit ratings assigned by loan officers, adherence to internal policies and \nprocedures, and applicable laws/regulations, compliance with loan covenants, post-\nsanction follow-up, sufficiency of documentation, portfolio quality and recommendations \nfor improving portfolio quality.\n2.8 Risk in Investment banking \u2013 A significant degree of credit risk, in addition to market risk,  \nis inherent in investment banking. Therefore, banks should stipulate entry level minimum \nratings/quality standards, industry, maturity, duration, issuer-wise, etc. limits in investment \nproposals as well, to mitigate the adverse impacts of concentration and risk of illiquidity.\n2.9 Inter-Bank Exposure \u2013  A suitable framework should be evolved to provide a centralised", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 263, "year": 2013}, "type": "Document"}
{"page_content": "2.9 Inter-Bank Exposure \u2013  A suitable framework should be evolved to provide a centralised \noverview on the aggregate exposure to other banks. Bank-wise exposure limits could be set on \nthe basis of external or internal ratings.\n2.10 Risk in Off-balance sheet exposure \u2013  Mechanics involved in the assessment of non-funded \nlines should be similar to the assessment of funded lines. Utmost care must be taken whilst \nextending these facilities. Banks should, therefore, evolve adequate frameworks for managing \ntheir exposure in off-balance sheet products such as Forex forward contracts, forward rate \nagreements, swaps, options, futures etc . as a part of credit appraisal, limits and monitoring \nprocedures.\nC. Market Risk Management\n1. Management Oversight\n The BOD should clearly articulate market risk management policies, procedures, prudential risk \nlimits, review mechanisms and reporting and auditing systems. \n1.1 policies should address the following:\n (a) as sessment of bank\u2019s exposure on a consolidated basis, considering issues related to \ninterest rate, currency, equity price and liquidity risks; and\n (b) ris k measurement systems capture all material sources of market risk and assess the \neffects on bank\u2019s capital.\n1.2 The BOD should ensure that bank\u2019s overall market risk exposure is maintained at prudent levels \nand consistent with the available capital. The operating prudential limits and the accountability \nof line management should also be clearly defined.\n2. Risk Management\n2.1 Structure \u2013 Each bank should establish an organizational set up for market risk management, \nincluding the following:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 263, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  255\n (a) Asset-Liability Management Committee (ALCO) \u2013 The ALCO, consisting of the bank\u2019s \nsenior management, including the CEO/GM must function as the top-end operational unit \nfor managing the balance sheet within the performance/risk parameters laid down by the \nBOD. The ALCO should also articulate the bank\u2019s view on various market variables and \nbase its decisions for future business strategy.\n (b) Middle\tOffice\t\u2013 The banks should set up an independent Middle Office to track the \nmagnitude of market risk on a real time basis. The Middle Office should:\n i. consist of experts in market risk management, economists, statisticians and general \nbankers and may be functionally placed directly under the ALCO; and \n i i. be  separated from the Treasury Department and should not be involved in the  \nday-to-day management of the treasury; \n i ii. appri se the top management/ALCO/Treasury about adherence to prudential/risk \nparameters and also aggregate the total market risk exposures assumed by the bank at \nany point of time.\n2.2 Foreign Exchange (Forex) Risk \u2013  Forex risk could be mitigated through fixing appropriate \nlimits on open positions, gaps, adopting risk measurement methods and monitoring exposures. \nIn this regard, the banks are encouraged to adopt the following measures:\n (a) Fix appropriate limits (even less than the limits set by CBSL) depending upon the capital \nposition, overall risk profile and risk management capabilities.\n (b) Fix appropriate limits on individual and aggregate gaps on major currencies, linked to \ncapital.\n (c) Adopt the Value at Risk (VaR) technique to measure the risk associated with exposures.\n (d) Monitor Forex risk exposures with the preparation of the statement of Maturity of Assets \nand Liabilities (MAL) (Attachment -1), statement of Sensitivity of Assets and Liabilities \n(SAL) (Attachment \u2013 2) and statement of Forex Position (FXP) (Attachment \u2013 3).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 264, "year": 2013}, "type": "Document"}
{"page_content": "(SAL) (Attachment \u2013 2) and statement of Forex Position (FXP) (Attachment \u2013 3).\n (e) Ensure clear-cut and well-defined division of responsibility between front, middle and \nback offices.\n2.3 Foreign Currency Liquidity Risk Management \u2013 In running multi currency balance sheets, \nand particularly when domestic currency assets are funded with foreign currency liabilities, \nbanks are exposed to another layer of complexity to liquidity management. Banks should, \ntherefore, be vigilant in creating understandable currency mismatches to avoid liquidity crises. \nD. Operational Risk Management\n1. Management Oversight\n An effective operational risk management strategy requires that BOD should recognise that \noperational risk is distinct and controllable, and should put in place appropriate risk management \npolicies, procedures and practices and an independent audit and review mechanism.\n1.1 BOD should put in place well defined policies on operational risk management. These policies \nand procedures should be based on common elements across business lines or risks. The policy \nshould address:\n (a) product review processes; \n (b) business involved; \n (c) risk management; and \n (d) internal control functions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 264, "year": 2013}, "type": "Document"}
{"page_content": "256 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n2. Risk Management\n2.1 Structure \u2013 Taking into account institution-specific factors, banks should consider establishing \nan independent bank-wide Operational Risk Committee or Unit under Integrated Risk \nManagement Committee (IRMC) or Chief Risk Officer, with the following responsibilities:\n (a) Establish consistent definitions for operational risk across business units.\n (b) Develop policies, procedures and practices.\n (c) Report and review risk exposures.\n (d) Oversee and ensure the integrity of risk management procedures.\n (e) Allocate and maintain economic capital.\n (f) Develop strategies for risk mitigation techniques.\n2.2 Risk Measurement \u2013 Since, there is no uniformity of approach in measuring operational risk in \nthe banking system, and a number of breakdowns in internal controls and corporate governance \nevidenced lately, need for more advanced techniques for allocating capital in this regard has \nbecome an important issue. Therefore, during the measurement of operational risks, banks \nshould:\n (a) Consider both internal factors (such as complexity of structure, nature of activities, quality \nof personnel, organisational changes and employee turnover) and external factors (such as \nfluctuating economic conditions, changes in the industry and technological advances) that \ncould adversely affect the banks\u2019 stated objectives.\n (b) Make clear distinction between controllable and uncontrollable operational risk events.\n (c) Assess their operational activities against a menu of operational risk events ( i.e., internal \nand external frauds, employment practices and work place safety, clients, products and \nbusiness practices, damage to physical assets, business distribution and system failures, \nexecution, delivery and process management, etc.).\n (d) Review key risk indicators such as failed trades, staf f turnover rates, frequency and/or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 265, "year": 2013}, "type": "Document"}
{"page_content": "(d) Review key risk indicators such as failed trades, staf f turnover rates, frequency and/or \nseverity of errors and omission to track the magnitude of risk concerns, with thresholds or \nlimits set on key risk indicators.\n (e) Develop simple benchmarks based on an aggregate measure of business activity such \nas gross revenue, fee income, operating costs, total assets adjusted for off-balance sheet \nexposures or a combination of these variables, in the event the bank does not have so far \nevolved any scientific methods for quantifying the risk.\n (f) Carry out  Business Impact Analysis (BIA) with its Recovery Time Objectives (RTO) \nunder the proposed Business Continuity and Disaster Recovery Plan.\n2.3 Risk Monitoring \u2013 The operational risk monitoring system should:\n (a) Focus on operational performance measures such as volume, turnover, settlement facts, \ndelays and errors.\n (b) Monitor operational loss directly with an analysis of each occurrence and description of \nthe nature and causes of the loss.\n (c) Integrate internal controls into the bank\u2019s operations and produce regular reports to the \nSenior Management.\n (d) Undertake compliance reviews by the Internal Audit and the Risk Management \nDepartment, separately.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 265, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  257\n2.4 Internal Control \u2013  Banks should adopt well-established internal control systems, which \ninclude segregation of duties, clear management reporting lines and adequate operating \nprocedures in order to mitigate operational risks. As per Directions Nos. 3(8)( ii)(b)&(c) of the \nBanking Act, Direction Nos. 11 & 12 of 2007 on Corporate Governance for licensed banks:\n (a) a report by the Board should be included in the Annual Report on the bank\u2019s internal \ncontrol mechanism that confirms that the financial reporting system has been designed \nto provide reasonable assurance regarding the reliability of financial reporting and that \nthe preparation of financial statements for external purposes has been done in accordance \nwith relevant accounting principles and regulatory requirements; and\n (b) the external auditor\u2019s certification on the effectiveness of the internal control mechanism \nreferred to in ( a) above, in respect of any statements prepared or published.\n A  proper internal control system should:\n (a) promote ef fective and efficient operation;\n (b) provide reliable financial information;\n (c) safeguard assets;\n (d) minimise the operating risk of loss from irregularities, fraud and errors;\n (e) ensure ef fective risk management systems; and\n (f) ensure compliance with relevant laws, regulations and internal policies.\n2.5 Risk Mitigation Techniques \u2013  Risk mitigation techniques or tools should be used to contain \nthe severity of operational risk events. Investment in appropriate information technology under \nBusiness Continuity and Disaster Recovery Plan is also important for risk mitigation. \n2.6 Insurance Policies \u2013 Innovative insurance policies could be used to externalise the risk of \u2018low \nfrequency and high severity losses\u2019, which may occur as a result of events such as errors and \nomissions, physical loss of securities, frauds and natural disasters.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 266, "year": 2013}, "type": "Document"}
{"page_content": "omissions, physical loss of securities, frauds and natural disasters.\n2.7 Outsourcing \u2013  Banks should establish sound policies for managing risks associated with \noutsourcing activities in line with the Banking Act, Directions Nos. 7 & 8 of 2010 on \nOutsourcing of Business Operations.\n2.8 Contingency Plan \u2013 An enterprise-wide contingency plan should be in place to handle failures \nand switch to alternative service providers at short notice.\nE. Liquidity Risk Management\n1. Management Oversight\n(a) Managing liquidity is no longer purely the responsibility of the treasury function. Effective \noversight by the BOD and the Senior Management is a critical element of the liquidity risk \nmanagement process. \n(b) The ALCO should be mandated to execute liquidity management policies, procedures and \npractices approved by the BOD, effectively. \n(c) The BOD should, however, periodically monitor the liquidity profile to assess the liquidity risk \nmore frequently where significant funding concentrations have been observed.\n2. Risk Management\n2.1 Structure \u2013 Liquidity risk management could either be centralized or decentralized, or a \ncombination of the two. The structure should be commensurate with the size and complexity of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 266, "year": 2013}, "type": "Document"}
{"page_content": "258 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nthe bank\u2019s operations. It should be flexible while ensuring that the liquidity strategy approved \nby the BOD can be effectively implemented.\n2.2 Liquidity Measurement \u2013  Liquidity measurement is a difficult task and can be measured \nthrough stock or flow approaches. \n (a) Stock Approach \u2013 Under the stock approach, liquidity is measured in terms of key ratios \nwhich portray the liquidity stored in the balance sheet. Banks should calculate and analyse \nfollowing ratios during their risk management process:\n i. Net loans to total assets\n ii. Loans to customer deposits\n iii. Liquid assets to short-term liabilities\n iv . Lar ge liabilities (minus) temporary investments to earning assets (minus) temporary \ninvestments, where large liabilities represent wholesale deposits which are market \nsensitive and temporary investments which are those maturing within one year and \nthose investments which are held in the trading book and are readily sold in the \nmarket.\n v . Purchased funds to total  assets, where purchased funds include the entire  \ninter-bank and other money market borrowings, including certificates of deposits and \ninstitutional deposits.\n vi. Commitments to total loans, where the commitment in the nature of Letter of Credits \n(LCs), guarantees and acceptances.\n (b) Flow approach \u2013  Banks should prepare a statement of Maturities of Assets and Liabilities \n(MAL) placing all cash inflows and outflows in the time bands according to the residual \ntime to maturity. A format for the MAL is attached. (Attachment \u2013 1). The time bands may \nbe distributed as under: \n i. Up to one month\n ii. Over one month and up to 3 months\n iii. Over 3 months and up to 6 months\n iv . Over 6 months and up to 9 months\n v . Over 9 months and up to 1 year\n vi. Over 1 year and up to 3 years\n vii. Over 3 years and up to 5 years\n viii. Over 5 years", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 267, "year": 2013}, "type": "Document"}
{"page_content": "vi. Over 1 year and up to 3 years\n vii. Over 3 years and up to 5 years\n viii. Over 5 years\n  (Assumptions to be made \u2013  Some of the assets and liability items like overdraft, savings \nand current deposits etc., lack any definite contractual maturity. Similarly, a part of \ntime deposits are also rolled over on maturity while the consumer loans are topped-up \nat frequent intervals. Thus, while determining the likely cash inflows/outflows, banks \nshould make a number of assumptions according to the behaviour of assets and liabilities. \nAt least, assumptions should be validated, bi-annually. Such assumptions may be  \nfine-tuned, over a period, to facilitate near reality predictions about future behaviour of \non/off-balance sheet positions).\n (c) Net funding requirement \u2013 \n i. The difference between cash inflows and outflows in each time band, the excess or \ndeficit of funds, becomes a starting point for a measure of a bank\u2019s future liquidity \nsurplus or deficit, at a series of points in time.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 267, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  259\n ii. While the mismatches up to one year would be relevant as these provide early warning \nsignals of impending liquidity problems, the main focus should be on mismatches up \nto three months. \n iii. Banks, however, are expected to fix prudential mismatch limits appropriate to the \nsize, complexity and financial conditions across all time bands. \n iv . The liquid ity position should be measured in all major currencies in which banks deal \nat both individual and aggregate levels. Banks which are reliant on short-term funding \nshould, however, concentrate primarily on managing their liquidity in the very  \nshort-term horizons and preferably on a day-to-day basis.\n (d) Alternate Scenarios \u2013 \n i. Banks should evaluate liquidity profile under different stress situations, viz. normal \nsituation, bank specific crisis and market crisis scenarios. \n ii. Under each scenario, banks should account for any significant positive or negative \nliquidity swings that could occur on account of factors that are both internal (bank \nspecific) and external (market-related). \n i ii. In this regard, banks must assign the timing of cash flows for each type of asset \nand liability by assessing the probability of the behaviour of those cash flows under \nalternative scenarios. \n iv . For each funding source, banks would have to decide whether a liability would be  \n(a) repaid in full at maturity, (b) gradually run off over the next few weeks or  \n(c) virtually certain to be rolled over or available, if tapped.\n (e) Contingency Plan \u2013 \n i. Banks should prepare liquidity contingency plans to measure their ability to withstand \nbank-specific or market crisis scenarios. \n ii. The blue-print for assets sales, market access, capacity  to restructure the maturity and \ncomposition of assets and liabilities should be clearly documented and alternative", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 268, "year": 2013}, "type": "Document"}
{"page_content": "composition of assets and liabilities should be clearly documented and alternative \noptions of funding in the event of the bank\u2019s failure to raise liquidity from existing \nsources should be clearly articulated. \n i ii. Liquidity from CBSL, as the lender of last resort, should not be reckoned for  \ncontingency plans. \n iv . A vailability of back-up liquidity support in the form of committed lines of credit, \nreciprocal arrangements, liquidity support from other external sources, liquidity of \nassets etc. should also be clearly established.\nF. Inter est Rate Risk Management\n1. Management Oversight\n Management of interest rate risk should be one of the critical components of market risk management \nof banks. The BOD should clearly articulate interest rate risk management policies, procedures, \nreview mechanisms and reporting systems.\n Policies and prudential limits should include the following.\n(a) Clear policies with regard to volume, maximum maturity, holding period, duration, position \nlimits, stop loss, rating standards, etc. for classifying securities in the trading book.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 268, "year": 2013}, "type": "Document"}
{"page_content": "260 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n(b) Bank-wide VaR exposure limits to the trading portfolio (including Forex derivatives and \ncommodities, if any, etc .).\n(c) Loss making tolerance limits for trading book.\n2. Risk Management\n2.1 Forms of Risk \u2013  The Net Interest Income (NII) or Net Interest Margin (NIM) of banks are \ndependent on the movements of interest rates. Any mismatches in the cash flows (fixed rate \nassets or liabilities) or re-pricing dates (floating rate assets or liabilities) expose banks\u2019 NII \nor NIM to variations. As financial intermediaries, banks encounter interest rate risk in many \nforms:\n (a) Gap or Mismatch Risk\n (b) Basis Risk\n (c) Embedded Option Risk\n (d) Y ield Curve Risk\n (e) Price Risk\n (f) Reinvestment Risk\n (g) Net Interest Position Risk\n2.2 Measuring Risk \u2013 Before the interest rate risk (IRR) is to be managed, same should be \nidentified and quantified. In this regard, banks need to adopt an IRR measurement system which \nshould:\n (a) Address all material sources of interest rate risk including gap or mismatch, basis,  \nembedded option, yield curve, price, reinvestment and net interest position risks, \nexposures associated with assets, liabilities and off-balance sheet positions.\n (b) T ake into account the specific characteristics of each individual interest rate sensitive \nposition.\n (c) Capture the full range of potential movements in interest rates, in detail.\n (d) Use dif ferent techniques, ranging from the traditional maturity Gap Analysis (to measure \nthe interest rate sensitivity of earnings), Duration (to measure interest rate sensitivity of \ncapital), Simulation and VaR.\n (e) Match on a daily basis the potential loss in Present Value Basis Points (PVBP) vis-\u00e0-vis \nprudential limits for trading book.\n (f) Undertake scenario analysis with specific possible stress situations by linking hypothetical,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 269, "year": 2013}, "type": "Document"}
{"page_content": "(f) Undertake scenario analysis with specific possible stress situations by linking hypothetical, \nsimultaneous and related changes in multiple risk factors present in the trading portfolio \nto determine the impact of moves on the rest of the portfolio.\n (g) Adopt VaR as an analytical tool for measuring and managing currency risk in the Banking \nBook.\n2.3 Measuring Techniques \u2013 \n (a) Maturity Gap Analysis \u2013 The simplest analytical technique for calculating IRR exposure \nbegins with Maturity Gap analysis that distributes interest rate sensitive assets, liabilities \nand off-balance sheet positions into a number of pre-defined time-bands according to  \ntheir residual term to maturity (fixed rate) or residual term for their next re-pricing \n(floating rate). Gaps may be identified in the following time bands:\n i. Up to one month\n ii. Over one month and up to 3 months", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 269, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  261\n iii. Over 3 months and up to 6 months\n iv . Over 6 months and up to 1 year\n v . Over 1 year and up to 2 years\n vi. Over 2 years and up to 3 years\n vii. Over 3 years and up to 4 years\n viii. Over 4 years and up to 5 years\n ix. Over 5 years and up to 7 years \n x. Over 7 years and up to 10 years \n xi. Over 10 years and up to 15 years \n xii. Over 15 years and up to 20 years \n xiii. Over 20 years \n xiv . Non-sensitive \n  V arious items of rate sensitive assets and liabilities and off-balance sheet positions may be \nclassified in line with their sensitivity to interest rates. A reporting format for Sensitivity of \nAssets and Liabilities (SAL) for interest rate sensitive assets and liabilities is also attached \n(Attachment \u2013 2).\n (b) Duration Gap Analysis \u2013  Matching the duration of assets and liabilities, instead of \nmatching the maturity or re-pricing dates, is a more effective way to protect the economic \nvalues of banks from exposure to IRR than the simple gap model.\n (c) Simulation \u2013 Simulation is a popular tool among banks to gauge the effect of market \ninterest rate variations on reported earnings/economic values over different time zones. \nSimulation techniques attempt to overcome the limitation of gap analysis and duration \napproach by computer modelling the bank\u2019s interest rate sensitivity.\nG. Str ess Testing\n1. Management Oversight\n(a) BOD or a committee formed under the Board with delegated authority should put in place a \n\u2018Stress Testing Framework\u2019 as a part of integrated risk management system with approved \n\u2018Stress Testing Policy\u2019, procedures to be followed and the methodology to be adopted.\n(b) BOD and the Senior Management should regularly review the results of stress tests, including \nmajor assumptions that underpin them.\n(c) BOD and Senior Management should put in place appropriate fall-back mechanisms for", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 270, "year": 2013}, "type": "Document"}
{"page_content": "(c) BOD and Senior Management should put in place appropriate fall-back mechanisms for \nmitigating tail-end risks, considering an organised approach to manage extreme systemic risks.\n1.1 Stress Testing Policy should include the following aspects:\n (a) Frequency and procedure for identifying the principal risk factors, which affect the bank\u2019s \nportfolio and required to be stressed.\n (b) Methodology for constructing stress tests.\n (c) Procedure for setting the stress tolerance limits. \n (d) Process of monitoring the stress loss limits.\n (e) Necessary remedial/trigger actions to be taken at various risk levels as revealed by the \nstress tests.\n (f) Delegation of authority to ensure timely execution of remedial/trigger action.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 270, "year": 2013}, "type": "Document"}
{"page_content": "262 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n1.2 Roles and responsibilities of the persons involved in the exercise must be defined by well \nconstituted organisational structure and they should be independent.\n1.3 An effective Management Information System (MIS) is necessary to ensure flow of information \nto take necessary measures to avoid certain difficult conditions by the Senior Management.\n2. Fr equency of Stress Testing \n Banks may apply stress tests at varying frequencies dictated by their respective business \nrequirements, relevance and cost. In general, stress tests on market-sensitive portfolios should be run \nmore frequently (eg.: daily, weekly). These may include trading portfolios in marketable securities, \nforeign exchange and interest rate exposures. Other portfolios which are less volatile in nature could \nbe stress-tested at longer intervals ( eg.: monthly, quarterly). Further, ad-hoc  stress tests may be \nwarranted when there are any special circumstances. \n3. Scope of Str ess Tests \n Stress testing can and should be applied to the full range of material risks that a bank runs both at \nbusiness unit level and on an aggregated group basis. Stress testing can be commonly used for interest \nrate, equity, liquidity, foreign exchange, credit and market instruments. Further, it is also important to \nintroduce stress testing for operational risk. There are three different hypothetical scenarios that can \nbe used in stress testing:\n(a) Major Level Shocks: It involves large shocks to all the risk factors and is also defined for \nseparately for each risk factor.\n(b) Moderate Level Shocks: It involves medium level shocks and the level is defined for each risk \nfactor separately.\n(c) Minor Level Shocks: It involves small shocks to risk factors. \n4. Methodology and Calibration of Shocks\n4.1 Credit Risk\n Stress test for credit risk assesses the impact of increase in the level of non-performing loans of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 271, "year": 2013}, "type": "Document"}
{"page_content": "the bank on Capital Adequacy Ratio (CAR). This involves three types of shocks, namely;\n (a) T ype One deals with the increase in the Non-Performing Loans (NPLs) and the respective \nprovisioning. \n (b) T ype Two deals with the negative shift in the NPL categories and hence the increase in \nrespective provisioning. \n (c) T ype Three deals with the fall in the Forced Sale Value (FSV) of mortgaged collateral. \n4.2 Liquidity Risk\n Stress test for liquidity risk evaluates the resilience of the banks towards the fall in liquid  \nliabilities. The ratio \u201cliquid assets to liquid liabilities\u201d should be calculated before and after \nthe shocks by dividing the liquid assets with liquid liabilities. They include cash and balances \nwith banks, call money lending, lending under repo and investment in government securities.  \nLiquid liabilities include deposits and borrowings. \n4.3 Equity Price Shock\n Stress test for equity price risk assesses the impact of the fall in the stock market index.   \nThe impact of resultant loss should be calculated after shocks on current market value of all the \non-balance sheet and off-balance sheet securities listed on stock exchanges including shares, \nmutual funds, etc. and it should be calibrated in terms of the CAR.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 271, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  263\n4.4 Exchange Rate Risk\n Stress test for exchange rate assesses the impact of change in exchange rate on the value of \nequity. To model direct foreign exchange risk, only, the overall Net Open Position (NOP) of the \nbank including the on-balance sheet and off-balance sheet exposures should be given adverse \nshocks. The overall NOP is measured by aggregating the sum of net short positions or the sum \nof net long positions, whichever is greater regardless of sign. The impact of the respective \nshocks should be calibrated in terms of the CAR. The revised CAR should be calculated after \nadjusting total loss from the risk-weighted assets of the bank.\n4.5 Interest Rate Risk\n I nterest rate risk is the potential that the value of the on-balance sheet and the off-balance \nsheet positions of the bank would be negatively affected with the change in the interest rates.  \nThe vulnerability of an institution towards the adverse movements of the interest rate can be \ngauged by using duration gap analysis. Banks should follow the under mentioned steps in \ncarrying out the interest rate stress tests.\n (a) Estimate the market value of all on-balance sheet rate sensitive assets and liabilities of the \nbank to arrive at market value of equity.\n (b) Calculate the durations of each class of asset and the liability of the on-balance sheet \nportfolio.\n (c) Arrive at the aggregate weighted average duration of assets and liabilities.\n (d) Calculate the duration gap by subtracting aggregate duration of liabilities from that of \nassets.\n (e) Estimate the changes in the economic value of equity due to change in interest rates on \non-balance sheet positions along the three interest rate changes.\n (f) Ca lculate surplus/(deficit) on off-balance sheet items under the assumption of three \ndifferent interest rate changes, i.e., 1%, 2%, and 5%.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 272, "year": 2013}, "type": "Document"}
{"page_content": "different interest rate changes, i.e., 1%, 2%, and 5%.\n (g) Estimate the impact of the net change (both for on-balance sheet and off-balance sheet) in \nthe market value of equity on the CAR.\n (h) Market value of the assets or liabilities should be assessed, by calculating its present value \ndiscounted at the prevailing interest rate. The outstanding balances of assets and liabilities \nshould be taken along with their respective maturity or reprising period, whichever is \nearlier.\n4.6 Interpretation of Stress Testing Results\n (a) Before interpretation of stress testing results, it is important to the banks to be aware of \nits limitations as stress testing is influenced by the judgment and experience of the risk \nmanagers designing the stress tests. Therefore, the effectiveness of the stress tests will \ndepend upon whether banks have identified their major risks and they have chosen the \nright level of stress/stress scenarios.\n (b) Senior Management should review the results of the various stress tests and report to the \nBoard. It is important to document the results of each of the sensitivity tests and scenario \nanalysis undertaken and should also document, as part of the details of those tests and \nanalyses, the key assumptions including the aggregation of the results. These should be \npreserved for a considerable period as mentioned in the policy document. \n4.7 Review & Update\n (a) Regular review  and updating is important to ensure effectiveness of the stress testing \nprogramme of the bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 272, "year": 2013}, "type": "Document"}
{"page_content": "264 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (b) Such review should be done at least once a year or more frequently if the portfolio or the \nenvironment changes are significant. Following should be covered in the review process. \n i. The integrity of the management information system.\n ii. Completeness and accuracy of the data used.\n iii. Consistency , timeliness and reliability of data sources.\n iv . The approval process for the stress testing programme.\n v . Integration of stress testing into risk management.\n vi. Interpretation of stress testing results.\nH. Disclosur e Requirements\n1. Principles\n1.1 Banks should adopt a formal disclosure policy approved by the BOD that addresses the bank\u2019s \napproach for determining what disclosures to be made and internal controls over the disclosure \nprocess. \n1.2 Banks should implement a process for assessing the appropriateness of their disclosures,  \nincluding validation and frequency of them.\n1.3 In order to enhance the role of market discipline, banks should take into account the following \nnorms to improve their disclosure practices.\n (a) A  balance between quantitative and qualitative disclosures - Disclosures should be \nconsistent with banks\u2019 own risk management practices. \n (b) Banks should endeavour to disclose information about inter -period exposures \u2013 \nparticularly in the form of high, median and low observations \u2013 which could provide a \nmore meaningful view of licensed banks\u2019 risk profile than period end data alone. \n1.4 Banks should decide relevant disclosures based on the materiality concept. \n1.5 Qual itative disclosures such as bank\u2019s risk management objectives and policies, reporting \nsystems and definitions set out here should be made at least bi-annually . \n2. Disclosur e Requirements\n2.1 Risk Exposure and Assessment\n (a) General Qualitative Disclosure Requirement\n  For each separate risk area viz. credit, market, operational, liquidity etc.. Licensed banks", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 273, "year": 2013}, "type": "Document"}
{"page_content": "For each separate risk area viz. credit, market, operational, liquidity etc.. Licensed banks \nshould describe their risk management objectives and policies, including:\n \u2013 strategies and policies;\n \u2013 structure and nature of the relevant risk management function;\n \u2013 scope and nature of risk reporting and/or management system;\n \u2013 policies for hedging and/or mitigating risk and strategies and processes for monitoring \nthe continuing effectiveness of hedges / mitigants.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 273, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  265\nTable - 1\nCredit Risk \u2013 General Disclosures\nQualitative \nDisclosures(a) Definition of past due and  impaired (for LKAS 32 & 39 purposes).\n(b) Description of approaches followed for specific and general loan loss provisioning \nand statistical methods. \n(c) Discussion of the bank\u2019 s credit risk management policy.\n(d) Policies and processes for, and an indication of the extent to which the bank makes \nuse of, on-balance sheet and off-balance sheet netting.\n(e) Policies and processes for  collateral valuation and management.\n(f) A  description of the main types of collateral taken by the bank.\n(g) Main types of guarantor/c redit derivative counterparty and their creditworthiness.\n(h) Information about (market or credit) risk concentrations within the mitigation taken.\nQuantitative \nDisclosures(a) Total gross credit risk exposures, plus average gross exposure over the period broken \ndown by major types of credit exposure.\n(b) Geographic distribution of exposures, broken down in significant areas by types of \ncredit exposure.\n(c) Industry or counter -party type distribution of exposures, broken down by major types \nof credit exposure.\n(d) Residual contractual maturity breakdown of the whole credit portfolio, by major types  \nof credit exposure.\n(e) By major industry or coun terparty types:\n   \u2013 Amount of past due loans and if available impaired loans, provided separately , \n   \u2013 Specific and general loan loss provisioning, and\n   \u2013 Char ges for specific loan loss provisions and charges-offs during the reporting \nperiod.\n(f) Amount of past due loans and, if available, impaired loans provided separately broken \ndown by significant geographic area including the amount of specific and general loan \nloss provisions related to each geographical area.\n(g) Reconciliation of changes  in the provisions for loan losses/impairment.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 274, "year": 2013}, "type": "Document"}
{"page_content": "266 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nTable - 2\nMarket Risk \u2013 General Disclosures\nQualitative \nDisclosures (a) The general qualitative di sclosure requirement described in Para 2.1( a) above.\n(b) Dif ferentiation between holdings on which capital gains are expected and those \ntaken under other objectives including for relationship and strategic reasons.\n(c) Discussion of important policies covering the valuation and accounting of equity \nholdings in the Banking Book. This includes the accounting techniques and \nvaluation methodologies used, including key assumptions and practices affecting \nvaluation as well as significant changes in these practices.\nQuantitative\nDisclosures(a) Interest rate risk, including Interest Rate Sensitivity Gap Analysis of local and \nforeign currency denominated assets and liabilities in the format given in Attach -\nment \u2013 1&2.\n(b) Equity position risk \u2013 \n\u2022 V alue disclosed in the balance sheet of investments, as well as the fair value \nof those investments; for quoted securities, a comparison to publicly quoted \nshare value where the share price is materially different from fair value.\n\u2022 T ypes and nature of investments, including the amount that can be classified \nas:\n\u2013 Publicly traded; and\n\u2013 Privately held.\n\u2022 The cumulative realised gains (losses) arising from sales and liquidations in \nthe reporting period.\n\u2022 T otal unrealised gains (losses).\n\u2022 T otal latent revaluation gains (losses).\n\u2022 Any amounts of the above included in Tier 1 and/or Tier 2 capital.\n(c) Foreign exchange risk, including statements of foreign exchange position   \n(Attachment \u2013 3), Maturity Gap Analysis of foreign currency denominated assets \nand liabilities. \n(d) Commodity risk.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 275, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  267\nTable - 3\nOperational Risk \u2013 General Disclosures\nQualitative \nDisclosures (a) The general qualitative di sclosure requirement described in Para 2.1( a) above.\n(b) Description of the use of insurance for the purpose of mitigating operational risk.\n(c) Details of activities that have been outsourced together with parties and basis for \npayment for such services. \n(d) Details of investment in appropriate information technology, if any, and other risk \nmitigation techniques taken during the reporting period. \n(e) Details of due diligence te sts of third party service providers. \n(f) Details of a contingency p lan in place to handle failure situations.\nQuantitative \nDisclosures(a) Major operational viz. system or human, failures and financial losses incurred by \nthe bank due to such failures during the reporting period.\n \nTable - 4\nLiquidity Risk \u2013 General Disclosures\nQualitative \nDisclosures (a) The general qualitative di sclosure requirement described in Para 2.1( a) above.\n(b) Details of a liquidity contingency plan in place to bridge unforeseen liquidity \ndifficulties. \nQuantitative \nDisclosures(a) T rends in the following indicators: \n\u2022 Net loans to total assets\n\u2022 Loans to customer deposits\n\u2022 Liquid assets to short term liabilities\n\u2022 Lar ge liabilities (minus) temporary investments to earning assets (minus) \ntemporary investments\n\u2022 Purchased funds to total assets. \n\u2022 Commitments to total loans.\n(Please refer to  Section 1.4 of Appendix for definitions)\n(b) Maturities of Assets and Liabilities (MAL) in the format given in Attachment-1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 276, "year": 2013}, "type": "Document"}
{"page_content": "268 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAttachment 1\nMaturities of Assets and Liabilities (MAL)\n(Currency ..................) *\nHeads of Accounts Upto 1 \nmonth1\u20133 months 3\u20136 months 6\u20139 months 9\u201312 months 1\u20133 years 3\u20135 years Over 5 years\nSr. Item\nA Inflows\n1.Cash on hand\n2,Deposits with CBSL\n3.Balances due from Head Office, Affiliates and Own Branches\n4.Balances due from Other Banks\n5.Investments (Net of provisions)\n6.Bills of Exchange\n7.Overdraft\n8.Loans and Advances\n9.NPLs\n10. Net Inter-Branch Transactions\n11. Other Assets\n12. Lines of credit committed from institutions\n13. Other \u2013 Please Specify ,\nTotal (a) xx xx xx xx xx xx xx xx\nB Outflows\n1.Demand Deposits\n2.Savings Deposits\n3.Balances due to Head Office / Affiliates / Own Branches\n4.Balances due from Other Banks\n5.Time Deposits\n6.Certificates of Deposits, Borrowings and Bonds\n7.Net Inter-branch Transactions\n8.Bills Payable\n9.Interest Payable\n10.Provisions other than for loan losses and depreciation in the \nvalue of investment portfolio\n11. Other Liabilities\n12. Lines of credit committed to institutions\n13. Unutilized portion of Overdraft, Loans and Advances\n14. Letters of Credit / Guarantees / Acceptances\n15. Repo / Bills Rediscounted / Swaps / Forward contracts\n16. Other \u2013 Please Specify\nTotal (b) xx xx xx xx xx xx xx xx\nGap = (a) - (b) xx xx xx xx xx xx xx xx\nCumulative Gap xx xx xx xx xx xx xx xx\nCumulative Liabilities xx xx xx xx xx xx xx xx\nCumulative gap as a % of cumulative liabilities x% x% x% x% x% x% x% x%\n* Separate returns for LKR, USS and all other major currencies should be prepared.( \u2026\u2026 Million )", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 277, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  269\nAttachment 1 (A)\nMaturities of Assets and Liabilities\nGuidelines \ton\tClassification \tof\tAssets\tand\tLiabilities \tinto\tTime\tBands\nSr. Heads of Accounts Details sought\nAInflows\n1.Cash on Hand Up to one-month time band.\n2.Deposits with CBSL While the excess balance in the Clearing Account over the \nrequired statutory reserves could be placed under the \u2018up to  \none-month\u2019 time band, the statutory reserve against deposit should \nbe distributed amongst various time bands, corresponding to the \nbehavioral maturity profile of deposits. \n3.Balances due from the Head \nOffice,\tAffiliates \tand\town\t\nbranches Demand balances may be placed under the \u2018up to one-month\u2019 \ntime band, all other balances should be distributed across the time \nbands as per the respective residual maturities.\n4.Balances due from Other \nBanksRespective maturity time bands.\n5.Investments \n(Net of provisions)Respective residual maturities. Investment \u2018held-for-trading\u2019 may \nbe placed in the first three time bands, on the basis of liquidity \nprofile of the instruments, irrespective of their residual maturities.\n6.\n7.\n8.Advances (performing)\n(a) Bills of Exchange and \npromissory notes\n(b) Overdraft\n(c) Loans and Advances  \n(a) Respective residual maturities bands. \n(b) 7.5% each of the outs tanding should be distributed under  \none-month, 1-3 months, 3-6 months, 6-9 months, and  \n9-12 months time bands, respectively and the balance 62.5%, \nbeing the core component, should be shown equally under  \n1-3 years, 3-years and over 5 years time bands, respectively.  \n(c) Respect ive residual maturities. However, 50% of the consumer \nloans, including credit cards, should be shown under over  \n5 years time band. The balance amount of 50% should be \nshown under respective time bands, on the basis of residual \nmaturities.\n9.NPLs 25% and 75% of the balances, net of reserved interest and specific", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 278, "year": 2013}, "type": "Document"}
{"page_content": "maturities.\n9.NPLs 25% and 75% of the balances, net of reserved interest and specific \nloan loss provisions should be shown in the 9-12 months and over \nfive years time bands, respectively.\n10. Net Inter-Branch \nTransactionsUp to one-month time band.\n11. Other Assets As per pattern of cash flows. However, intangible assets and assets \nnot representing cash receivables should be shown in over five \nyears time band.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 278, "year": 2013}, "type": "Document"}
{"page_content": "270 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nSr. Heads of Accounts Details sought\nBOutflows \t\n1.Demand Deposits 75% of the balances in demand deposits should be distributed \nunder the first five time bands, at the rate of 20%, 20%, 15%, \n10% and 10%, respectively and the balance of 25% in over 5 \nyears time band. \n2.Savings Deposits 25% of the saving deposits should be distributed equally under \none-month, 1-3 months, 3-6 months, 6-9 months, and 9-12 \nmonths, respectively, and the balance of 75%, being the core \ncomponent, should be shown equally under 1-3 years, 3-5 years \nand over 5 years time bands, respectively. \n3.Balances \tdue\tto\tHead\tOffice/\nAffiliates/Own \tBranchesRespective residual maturity time bands.\n4.Balances due to other Banks Respective residual maturity time bands.\n5.Time Deposits 30% of the time deposits from individual depositors and pension \nfunds, irrespective of their residual maturities, should be shown \nunder over 5 years time band. The balance amount of 70% \nshould be shown under respective time bands, on the basis of \nresidual maturities. \n6.Certificates \tof\tDeposits, \t\nborrowings and Bonds \n(including subordinated debts)Respective residual time bands. Where call/put options are \nbuilt into the issue structure of any instrument/s, the call/put \ndate/s should be reckoned as the residual maturity date/s and \nthe balance should be shown in the respective residual maturity \ntime bands.\n7.Net Inter-branch Transactions Up to one month time band.\n8.Bills Payable Up to one month time band.\n9.Interest Payable Respective residual maturity time bands.\n10. Provisions other than for loan \nlosses and depreciation in the \nvalue of investment portfolioRespective residual maturity time bands depending on the \npurpose.\n11. Other Liabilities Respective maturity time bands. Items not representing cash \npayables ( i.e., income received in advance etc.) should be placed \nover 5 years time band.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 279, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  271\nSr. Heads of Accounts Details sought\nCContingent \tLiabilities/Lines \tof\tcredit\tcommitted/available \tand\tother\tin-flows\t&\tout-flows\n12. Lines of Credit Committed \nto institutions and other \nborrowersUp to one month time band\n13. Unutilized portion of \nOverdraft, Loans and \nAdvancesProbable disbursements should be shown in the respective time \nbands on the basis of historical databases.\n14. Letters of credit /guarantees /\nacceptancesProbable funding obligations should be shown in the respective \ntime band on the basis of past experiences.\n15. Repo / Bills Rediscounted / \nSwaps / Forward contracts \n(LKR against Other \nCurrencies)Respective maturity bands.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 280, "year": 2013}, "type": "Document"}
{"page_content": "272 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAttachment 2\nSensitivity of Assets and Liabilities (SAL)\n(Currency*) \nName of Bank  : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nPeriod Ended  : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nNo. Assets and OBSUp to\n1 month1 \u2013 3\nmonths3 \u2013 6\nmonths6 \u2013 12\nmonths1 \u2013 2\nyears2 \u2013 3\nyears3 \u2013 4\nyears4 \u2013 5\nyears5 \u2013 7\nyears7 \u2013 10\nYears10 \u2013 15\nyears15 \u2013 20\nyearsOver\n20 yearsNon\nSensitiveTotal\n1. Cash on Hand\n2. Deposits with CBO\n3. Balances due from HO / Affiliates / Branches\n4. Balances due from Other Banks\n5. Investments\n6. Bills of Exchange and Promissory Notes\n7. Overdrafts\n8. Loans and Advances\n9. Non Performing Loans\n10. Fixed Assets\n11. Net Inter-branch Transactions\n12. Accrued Interest\n13. Other Assets\n14. Reverse Repos\n15. FRAs\n16. Swaps\n17. Futures\n18. Options\n19. Others (Specify)\nTotal\nLiabilities and OBS\n1. Demand Deposits\n2. Savings Deposits\n3. Time Deposits\n4. Other Deposits\n5. Balances due to HO / Affiliates / Branches\n6. Balance due to other Banks\n7. Certificate of Deposits\n8. Other Borrowings\n9. Net Inter-branch Transactions\n10. Bills Payable\n11. Interest Payable\n12. Provisions (others)\n13. Capital\n14. Reserves\n15. Retained Earnings\n16. Subordinated Debts\n17. Other (Specify)\n18. Repos\n19. FRAs\n20. Futures\n21. Swaps\n22. Options\nTotal \nGap \n*  Separate returns for LKR, US$ and all other major currencies should be prepared.( \u2026\u2026 Million )", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 281, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  273\nSensitivity of Assets and Liabilities\nGuidelines \ton\tClassification \tof\tAssets\tand\tLiabilities \tinto\tTime\tBands\nSr. Heads of Accounts Rate Sensitivity and Time Band\nAInflows\n1.Cash on Hand Non-sensitive\n2.Deposits with CBSL Non-sensitive\n3.Balances \tdue\tfrom\thead\toffice,\t\nAffiliates \tand\tOwn\tbranches \tInterest payable portion is sensitive and should be shown \nunder the time band corresponding to the remaining term \nto maturity or repricing. The non-interest paying portion is \nnon-sensitive.\n4.Balances due from Other Banks Interest payable portion is sensitive and should be shown \nunder the time band corresponding to the remaining term \nto maturity or repricing. The non-interest paying portion is \nnon-sensitive.\n5.Investments (Net of provisions)\n(a) Fixed rate/Zero coupons.\n(b) Floating rate\n(c) Shares and investments in \nunits(a) Se nsitive and should be shown under the time band \ncorresponding to residual term to maturity.\n(b) Se nsitive and should be shown under the time band \ncorresponding to residual term to maturity.\n(c) Non-sensitive.\n6.\n7.\n8.Advances (performing)\n(a) Bills of Exchange and pr om-\nissory notes\n(b) Overdraft/loans (Fixed \nrates)\n(c) Overdraft/ Loans and \nAdvances (Floating rates)   \n(a) Sensitive on maturity . \n(b) S ensitive and should be shown under the time bands \ncorresponding to the interim and final cash flows.  \n(c) Se nsitive and should be shown under the time band \ncorresponding to the interim and final cash flows.\n9.NPLs\n(a) Special mentioned\n(b) Substandard\n(c) Doubtful\n(d) Loss(a) Over 1-2 years time band\n(b) Over 3-5 years time bands\n(c) Over 5 years time band\n(d) Non-sensitive\n10. Fixed Assets Non-sensitive\n11. Net Inter-Branch Transactions Non-sensitive\n12. Accrued interest Non-sensitive\n13. Other Assets \n(a) Leased assets\n(b) Other(a) Sensitive on interim and final cash flows. The amount \nshould be distributed to the respective maturity bands", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 282, "year": 2013}, "type": "Document"}
{"page_content": "should be distributed to the respective maturity bands \ncorresponding to the cash flows. \n(b) Non-sensitive\n14. Reverse repos, Swaps, (Buy/sell), \nand bills discountedSensitive on maturity.Attachment  2(A)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 282, "year": 2013}, "type": "Document"}
{"page_content": "274 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n15.\n16.\n17.FRAs\nFutures\nOptionsThese instruments should be treated as a combination of loan \n(assets) and short (liabilities) positions. The maturity of a \nFuture or a FRA will be the period until delivery or exercise \nof the contract. The corresponding positions should undergo \nchanges with passage of time.\nSwaps should be treated as two notional positions with \nrelevant maturities. For e.g. an interest rate swap under \nwhich a bank is receiving floating rate of interest and paying \nfixed will be treated as long floating rate position of maturity \nequivalent to the period until the next interest fixing and a \nshort position of maturity equivalent to the residual life of \nthe swap.  \nThe notional underlying of the given option should be placed \nunder the respective time band. \nSr. Heads of Accounts Rate Sensitivity and Time Band\n1.Demand Deposits Non-sensitive\n2.Savings Deposits Sensitive and reprices when interest rate is reset.\n3.\n4.\n7.Time Deposits,\nCertificate \tof\tDeposits, \tand\t\nOther DepositsSensitive and reprices on maturity. The amounts should be \ndistributed to different time bands on the basis of remaining \nterm to maturity. However, in case of floating rate term \ndeposits, the amounts should be shown under the time band \nwhen deposits contractually become due for repricing.\n5.Balances \tdue\tto\tHead\tOffice\t/\t\nAffiliates/Own \tBranchesInterest payable portion is sensitive and should be shown \nunder the time band corresponding to the remaining term \nto maturity or repricing. The non-interest paying portion is \nnon-sensitive.\n6.Balances due to other Banks Interest payable portion is sensitive and should be shown \nunder the time band corresponding to the remaining term \nto maturity or repricing. The non-interest paying portion is \nnon-sensitive.\n8.Borrowings\n(a) Fixed rate borr owings\n(b) Floating rate borr owings\n(c) Zer o Coupon borrowings", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 283, "year": 2013}, "type": "Document"}
{"page_content": "8.Borrowings\n(a) Fixed rate borr owings\n(b) Floating rate borr owings\n(c) Zer o Coupon borrowings\n(d) Borr owings from CBSL(a) Sensitive and reprices on maturity. The amounts should \nbe distributed to different time bands on the basis of \nremaining term to maturity.\n(b) Se nsitive and reprices when interest rate is reset. The \namounts should be distributed to the appropriate time \nbands, coinciding with the contracted repricing date.\n(c) Sensitive and reprices on maturity. The amounts should \nbe distributed to the respective maturity bands.\n(d) Up to one month time band.\n9.Net-inter branch transactions Non-sensitive\n10. Bills Payable Non-sensitive", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 283, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  275\n11. Interest Payable Non-sensitive\n12. Provisions Non-sensitive\n13. Capital Non-sensitive\n14. Reserves Non-sensitive\n15. Retained earnings Non-sensitive\n16. Sub-ordinated debts Please refer to Item (8) above.\n17. Reverse Repos, and other \nderivatives instrumentsReprices only on maturity and should be distributed to \nrespective maturity bands.\nSr. Heads of Accounts Details sought\nCContingent \tLiabilities \t/\tLines\tof\tcredit\tcommitted \t/\tavailable \tand\tother\tinflows\t&\tout\tflows\n3.Lines of Credit Committed to \ninstitutions and other borrowersUp to one month time band.\n4.Unutilized portion of Overdraft, \nLoans and Advances.Probable disbursements should be shown in the respective \ntime bands on the basis of historical databases.\n5.Letters of credit / guarantees / \nacceptancesProbable funding obligations should be shown in the \nrespective time band on the basis of past experiences.\n6.Repo / Bills Rediscounted / \nSwaps / Forward Contracts \n(LKR against other currencies)Respective maturity bands.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 284, "year": 2013}, "type": "Document"}
{"page_content": "276 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n(Rs. million)Attachment 3\nForeign Exchange Position\nBank  : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nAs at end of  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 :  \nCurrency\n(1)Spot Forward (a)Net\nOpen\nPosition\n(8)Net \nposition \nin other \nexchange \ncontracts \n(b)\n(9)Overall \nexposure \nin respec-\ntive foreign \ncurrency\n(10)Overall \nexposure in \nSri Lankan \nrupees(d)\n(11)Assets\n(2)Liabilities\n(3)Net\n(4) = (2) - \n(3)Assets\n(5)Liabilities\n(6)Net\n(7) = (5) - \n(6)\nUS Dollars\nPound Sterling\nEuro\nJapanese Yen\nIndian Rupee\nAustralian Dollar\nCanadian Dollar\nOther currencies(c)\nTotal Exposure (e)\nTotal capital funds as per the latest audited financial statements\nTotal exposure as a % of total capital funds as per the latest audited financial statements (should not exceed 30%) X%\n(a) Unsettled tom and spot transactions also should be included under  forward operations\n(b) Report the net for eign exchange position in other foreign exchange contracts such as currency options, futures etc.\n(c) The Sri Lankan rupee equivalent of other  currencies should be shown under column 11. \n(d) Column 1 1 should show the Sri Lankan rupee equivalent of column 10.\n(e) The exposur e indicated against each currency in column 11 should be added ignoring signs to arrive at exposure under (e).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 285, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  277\nDeterminations made by the Monetary Board of the Central Bank of Sri Lanka under  \nSection 44A of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n24 November 2010\nBANKING ACT, DETERMINATION NO. 3 OF 2010\nASSESSMENT OF FITNESS AND PROPRIETY OF  \nOFFICERS PERFORMING EXECUTIVE FUNCTIONS IN\nLICENSED COMMERCIAL BANKS\n1. This Determination may be cited as the Banking Act, Determination No.3 \nof 2010. The Sections referred to in this Determination will be those of the \nBanking Act, No. 30 of 1988, as amended.  \n2.1 In terms of Section 44A of the Banking Act, officers of a licensed commercial \nbank performing executive functions as may be determined by the Monetary \nBoard shall be fit and proper persons. Section 42(2) of the Act shall apply in \ndetermining whether officers performing executive functions are fit and proper \npersons.\n2.2 In addition, criteria s et out in the Direction No.11 of 2007 on Corporate \nGovernance for Licensed Commercial Banks in Sri Lanka will also be \napplicable.\n3. Officers holding following designations  / positions are determined as officers \nperforming executive functions in a licensed commercial bank:\n (i) Additional General Manager \n (ii) Senior Deputy General Manager \n (iii) Deputy General Manager \n (iv) Assistant General Manager\n (v) Chief Operating Officer \n (vi) Chief Risk Officer\n (vii) Chief Accountant\n (viii) Chief Financial Officer\n (ix) Chief Internal Auditor\n (x) Compliance Officer\n (xi) Head of Treasury\n (xii) Head of Legal\n (xiii) Head of Information Technology\n (xiv) Board SecretaryCitation.\nEmpowerment.\nOfficers \nPerforming \nExecutive \nFunctions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 286, "year": 2013}, "type": "Document"}
{"page_content": "278 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (xv) Officers serving as consultants  / advisor to the Board or bank\n (xvi) Any other officers falling under the definition of section 3(1)( i)(f) of the \nBanking Act Direction No. 11 of 2007 on Corporate Governance for \nLicensed Commercial Banks in Sri Lanka.\n4.1 Fitness and propriety of such officers performing executive functions shall be \nassessed and decided by the Director of Bank Supervision as has been provided \nfor in the Banking Act and be applicable to those officers:\n (i) currently in office,\n (ii) at the time of appointment on a permanent or contract basis,\n (iii) at the time of renewal of employment contracts, and\n (iv) at any other time where there are supervisory concerns in respect of any \nofficer as may be determined by the Director of Bank Supervision.\n4.2 Each bank shall obtain from the respective officers an affidavit and a declaration \nas in Annex I and Annex II, respectively, and submit to the Director of Bank \nSupervision. \n4.3 In addition, at the time of first appointment of an officer, a letter from the former \nemployer immediately preceding the appointment (if the former employer is \nnot a licensed bank in Sri Lanka) regarding the level of performance of duties \nassigned to him  / her in the particular institution should be submitted to the \nDirector of Bank Supervision.\n4.4 In the case of expatriate officers appointed to branches of banks incorporated \noutside Sri Lanka (foreign banks), a letter obtained from the home country \nregulator with regard to any supervisory concerns on the suitability of such \nofficers should be submitted.\n4.5 W ith respect to officers, currently performing executive functions, banks shall \nobtain and submit affidavits and declarations to Director of Bank Supervision \nbefore 31 December 2010.Procedure to \nbe followed in \nassessing the \nfitness and \npropriety.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 287, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  279\nAnnex I\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nAffidavit \tto\tbe\tsubmitted \tby\tofficers\tperforming \texecutive \tfunctions \tin\t \nLicensed Commercial Banks in terms of Section 44 A of the Banking Act \nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( full name)\nholder of National Identity Card No.  / Passport No. \u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026..\u2026\u2026..\u2026\u2026..\u2026\u2026\u2026\u2026\u2026\u2026 of\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. (address) \nbeing a (Buddhist  / Hindu do hereby solemnly, sincerely and truly declare and affirm  / Christian  / Catholic  /\nMuslim make oath and state) as follows :\n1. I am the [affirmant  / deponent] above named and I am the \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( designation ) \nof\n \u2026 \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. ( name \nof bank) which is a commercial bank licensed under the Banking Act, No. 30 of 1988. \n2. I [affirm  / state] that I possess the following academic and  / or professional qualification  / s: \n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n3. I [af firm  / state] that the ef fective experience that I possess in banking, finance, business or \nadministration or of any other relevant discipline is as follows:\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n4. I [affirm  / state] that there is no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or \nabroad, to the effect that I have committed or have been connected with the commission of, any act \nwhich involves fraud, deceit, dishonesty or any other improper conduct.\n5. I [affirm  / state] that I am not subject to an investigation or inquiry consequent upon being served \nwith notice of a charge involving fraud, deceit, dishonesty or other similar criminal activity, by any \nregulatory authority, supervisory authority, professional association, any Commission of Inquiry,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 288, "year": 2013}, "type": "Document"}
{"page_content": "regulatory authority, supervisory authority, professional association, any Commission of Inquiry, \ntribunal or other body established by law, in Sri Lanka or abroad.\n6. I [affirm  / state] that I have not been convicted by any Court in Sri Lanka or abroad in respect of \na crime committed in connection with financial management or of any offence involving moral \nturpitude.\n7. I [affirm  / state] that I am not an undischarged insolvent nor have I been declared a bankrupt in Sri \nLanka or abroad.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 288, "year": 2013}, "type": "Document"}
{"page_content": "280 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n8. I [affirm  / state] that I have not failed, to satisfy any judgment or order of any Court whether in Sri \nLanka or abroad, or to repay a debt.\n9. I [affirm  / state] that I have not been declared by a Court of competent jurisdiction in Sri Lanka or \nabroad, to be of unsound mind.\n10. I [affirm  / state] that I have not been removed or suspended by an order of a regulatory or supervisory \nauthority from serving in a licensed bank or any other financial institution or corporate body, in Sri \nLanka or abroad.\n11. I [affirm  / state] that I have not been a Director, Chief Executive Officer or held any other position of \nauthority in any bank or financial institution \u2013 \n (i) Whose license has been suspended or cancelled; or\n (ii) Which has been wound up or is being wound up, or which is being compulsorily liquidated; \nwhether in Sri Lanka or abroad.\n12. I [affirm  / state] that to the best of my knowledge I am a fit and proper person to hold office as \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. (designation ) of a licensed commercial bank \nin terms of the provisions of section 44 A of the Banking Act. \nThe averments contained \nherein were read over to \nthe [affirmant/deponent] \nwho having understood \nthe contents hereof and \nhaving accepted same as \ntrue, affirmed/swore to and \nplaced his/her signature at \nColombo on this \u2026\u2026\u2026 day \nof \u2026\u2026\u2026\u2026\u2026\u2026\u2026..\n                            JUSTICE OF THE PEACEAffix Stamps\nas applicable\nBefore me", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 289, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  281\nAnnex II\nName of Bank:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration \tto\tbe\tsubmitted \tby\tofficers\tperforming \texecutive \tfunctions \t\t\nin Licensed Commercial Banks in terms of the Banking Act \n(with enclosures as appropriate as of \u2026\u2026\u2026\u2026\u2026\u2026\u2026.)\n1. Personal Details \n 1.1 Full name:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.2 NIC / Passport number:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.3 Date of birth :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.4 Permanent address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.5 Present address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n2. Appointment to the Bank\n 2.1 Date of appointment to the present position: \n  (please attach a certified copy of the appointment letter)\n 2.2 Designation :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 2.3 Local or expatriate :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n3. Personal Details of Close Relations in terms of Section 86 of the Banking Act \n 3.1 Full name of spouse :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 3.2 NIC / Passport number :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \n 3.3 Names of dependant children :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nFull name NIC/ Passport number\n3.3.1\n3.3.2\n3.3.3\n3.3.4\n4. Backgr ound and Experience\n Name/s of licensed bank/s, its subsidiaries in terms of the Banking Act and associates if any, in which \nhe / she is or has been employed as an officer performing executive functions:\nName of the institution Period of office Designation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 290, "year": 2013}, "type": "Document"}
{"page_content": "282 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n1/ \u201cBusiness transaction\u201d shall mean any accommodations, borrowings, investments and deposits.5. Shar eholdings in Banks and their Related Companies\n Share ownerships in licensed banks, their subsidiaries and associates if any , presently held: \nName of the institution No. of shares Percentage holding\n6. Business Transactions 1/ \n Any business transaction the officer performing executive functions presently has with the bank and \nits subsidiaries and associates if any.\nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-\nperforming)Type and \nvalue of \ncollateral \n(Rs. mn)% of Bank\u2019 s \nregulatory \ncapital\nLimit Out-standing\nAccommodations\nInvestments\nDeposits\n7. Appointment, Shar eholdings and Business Transactions of Close Relations \n7.1 Any close relations presently employed as officers performing executive functions in licensed \nbanks their subsidiaries and associates if any.\nName of the bank Full name of the close relation Position held", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 291, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  283\n7.2 Direct or indirect share ownership in the bank, its subsidiaries and associates if any, presently \nheld by any close relation.\nFull name of the close relationNo. of Shares Percentage holding\nDirect Indirect Direct Indirect\n7.3 Any business transaction, the close relation currently has with the bank, its subsidiaries and \nassociates if any. \nFull name \nof the close \nrelationNature of \nbusiness \ntransactionDate of \ntran-\nsaction Limit\nas at \n\u2026\u2026\u2026\u2026\u2026 \n(Rs. mn)Out-\nstanding as \nat \n\u2026\u2026\u2026\u2026\n(Rs. mn)Type and \nvalue of \ncollateral \n(Rs. mn)% of \nBank\u2019 s \nregulatory \ncapital \n8. Any other explanation/info rmation in regard to the information furnished above and other information \nconsidered relevant for assessing the suitability of the officer performing executive functions in the \nbank. \nDECLARATION:\nI confirm that the above information is to the best of my knowledge and belief true and complete.  \nI undertake to keep the bank fully informed, as soon as possible, of all events, which take place \nsubsequently, which is relevant to the information provided above.\nI state that I am not prevented by any Statute from being appointed to the above post. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signatur e of Officer Performing Executive Functions in the Bank\nTO BE FILLED BY THE CHIEF EXECUTIVE OFFICER\n1. Any other explanation  / information in regard to the information furnished above and other information \nconsidered relevant for assessing the suitability of the person performing executive functions in the \nbank.\n2. I confirm that, in terms of Section 44 A of the Banking Act, the officer referred to above is fit and proper \nto carry out executive functions of the bank. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signatur e of Chief Executive Officer\n and the official stamp", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 292, "year": 2013}, "type": "Document"}
{"page_content": "284 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOur Ref. : 02  / 17 / 600 / 0036  / 001\nBank Supervision Department\n17 July 2012\nTo : Chief Executive Officers of \n       all locally incorporated licensed banks\nDear Sir / Madam,\nSPECIAL PAYMENTS  / BENEFITS TO DIRECTORS AT THEIR RETIREMENT\nHaving\tobserved\tthat\texorbitant\tspecial\tpayments \t/\tbenefits\thave\tbeen\tmade\tin\tthe\tform\tof\tgratuity\t\nto\tretiring\tdirectors\tof\tsome\tbanks\tand\tthat\tsuch\tpayments \t/\tbenefits\tare\tnot\tprudent\tin\tterms\tof\tgood\t\ngovernance, \tthe\tMonetary \tBoard\thas\tdecided\tto\trequire\tlicensed\tbanks\tto\tobtain\tprior\tapproval\tof\t\nshareholders \tfor\tany\tspecial\tpayments \t/\tbenefits\tmade\tto\tbank\tdirectors\tat\ttheir\tretirement \tin\taddition\tto\t\nnormal remuneration.\nAccordingly, \tall\tlocally\tincorporated \tlicensed\tbanks\tare\trequested \tto:\t\t\n(1) i ncorporate such special payments  / benefits to its directors at their retirement to the  \nremuneration policy;\n(2)\t obtain \tprior\tapproval\tof\tthe\tshareholders \tfor\tany\tspecial\tpayments \t/\tbenefits\tmade\tto\tdirectors\t\nat their retirement in addition to normal remuneration;\n(3)\t ensure \tthat\tall\tspecial\tpayments \t/\tbenefits\tare\textended\ton\tarm\u2019s\tlength\tbasis;\tand\n(4)\t disclose \tseparately \tthe\taggregate \tvalue\tof\ttotal\tspecial\tpayments \t/\tbenefits\tmade\tto\tretiring\t\ndirectors\tduring\tthe\trespective \tfinancial\tyear\tin\tthe\tAnnual\tReport.  \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nCc :  Chairmen of all locally incorporated licensed banks", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 293, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  285\nRef. No. : 02  / 17 / 550 /002 / 003\nBank Supervision Department\n29 March 2012\nTo : CEOs of all Licensed Banks and\n Panel of Qualified Auditors\nDear Sir  / Madam,\nDISCLOSURES IN ANNUAL REPORTS \nBANKING ACT DIRECTIONS ON CORPORATE GOVERNANCE\nWe write to inform you that, the Monetary Board has approved of accepting the following as \nsubstitutes for compliance with the Directions 3(8)( ii)(c) and 3(8)(ii)(g) of the Banking Act, Directions \nNo. 11 and 12 of 2007. \nDirection Disclosure Requirements Substitute Disclosure Requirements \n3(8)(ii)(c) The external auditor\u2019s \ncertification on the \neffectiveness of the internal \ncontrol mechanism reported \nby the board of directorsThe Assurance Report issued by the auditors under \n\u201cSri Lanka Standard on Assurance Engagements \nSLSAE 3050 \u2013 Assurance Reports for Banks on \nDirectors\u2019 Statements on Internal Control\u201d.\n3(8)(ii)(g) The external auditor\u2019s \ncertification of the compliance \nwith Corporate Governance \nDirections in the annual \ncorporate governance reports \npublished in the annual reportA confirmation by the Board of Directors in its Annual \nCorporate Governance Report that all the findings \nof the \u201cFactual Findings Reports\u201d of auditors issued \nunder \u201cSri Lanka Related Services Practice Statement \n4750\u201d have been incorporated in the Annual Corporate \nGovernance Report, provided that auditors confirm to \nthe Director of Bank Supervision to this effect.\nAccordingly, you are required to adhere to the above requirements.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 294, "year": 2013}, "type": "Document"}
{"page_content": "286 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 600 /0017  / 001\nBank Supervision Department\n27 August 2010\nTo : CEOs of all Licensed Banks;\nDear Sir  / Madam,\nAPPOINTMENT OF DIRECTORS\nReference our letter No. 02/04/002/0012/002 dated 31 March 2005 on the above subject.\nWe enclose herewith a revised declaration, which incorporates additional information, to enable the \nlicensed banks to ascertain compliance with the provisions of the Direction on Corporate Governance by \nDirectors of banks.\nPlease replace Annex 2 of the letter under reference with the revised declaration effective from \n01.09.2010.\nYours faithfully,\nSgd, (Mrs.)T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nc.c. -  Mr . Upali De Silva\n Secretary General \u2013 Sri Lanka Banks\u2019  Association\n Level 8, Ceylinco House \n No. 69, Janadhipathi Mawatha\n Colombo 01.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 295, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  287\nAnnex 2\nName of Bank:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration to be submitted in terms of Section 42 of the Banking Act \nby persons proposed to be appointed  / elected  / nominated as a Director of\na Licensed Bank\n(with enclosures as appropriate as of \u2026\u2026\u2026\u2026\u2026\u2026\u2026.)\n1. Personal Details \n 1.1 Full name:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.2 NIC / Passport number:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.3 Date of birth :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.4 Age :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.5 Permanent address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.6 Present address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.7 Occupation :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n2. Appointment as a Dir ector of the Bank\n 2.1 Date of initial appointment as a Director to the Board of Directors of the bank :  \u2026\u2026\u2026\u2026\u2026\u2026\n2.2 Nature of the appointment (Executive Director  / Independent Director  / Non-independent  \nDirector  /Non-executive Director  / Alternate Director). :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n3. Personal Details of Close Relations 1/ in terms of Section 86 of the Banking Act \n 3.1 Full name of spouse :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 3.2 NIC / Passport number :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 3.3 Names of dependant children :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nFull name NIC/ Passport number\n3.3.1\n3.3.2\n3.3.3\n3.3.4\n4. Backgr ound and Experience\n4.1 Name/s of Licensed Bank/s, its subsidiaries 2/ in terms of the Banking Act and associates if any, \nin which he  / she is or has been a member of the Board of Directors:\nName of the institution Period of office\n1/ \u201cClose relation\u201d shall mean the spouse or financially dependant children.\n2/ \u201cSubsidiary\u201d as defined by Section 17(3) of the Banking Act.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 296, "year": 2013}, "type": "Document"}
{"page_content": "288 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n4.2 Names of entities in which he/she presently is a Director:\n4.2.1  Names of specified business entities in terms of the Sri Lanka Accounting and Auditing \nStandards Act, No. 15 of 1995.\n(a)\n(b)\n(c)\n(d)\n4.2.2  Names of other institutions  / entities\n(a)\n(b)\n(c)\n(d)\n4.3 Name/s of Licensed Bank/s, its subsidiaries 2/ and associates if any, in which he  / she is or has \nbeen employed as an officer performing executive functions:\nName of the institution Position  / Designation Period of office\n5. Shar eholdings in Banks and their Related Companies\n5.1 Direct or indirect share ownerships in licensed banks, their subsidiaries 2/ and associates if any, \npresently held:  \nName of the institutionNo. of Shares Percentage holding\nDirect Indirect Direct Indirect\n2/ \u201cSubsidiary\u201d as defined by Section 17(3) of the Banking Act.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 297, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  289\n6. Business Transactions 3/ \n6.1 Any business transaction the Director  / proposed Director currently has  / had with the licensed banks, \ntheir subsidiaries 2/ and associates if any, and finance and leasing companies registered with Central \nBank of Sri Lanka during the last two years immediately preceding the appointment as Director.\nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-performing)Type and \nvalue of \ncollateral \n(Rs. mn)% of \nBank\u2019 s \nregulatory \ncapital Limit Outstanding\nAccommodations\nBorrowings\nInvestments\nDeposits\n6.2 Any business transaction  the Director  / proposed Director currently has  / had during the last two \nyears immediately preceding the appointment as Director, with \u201crelated parties\u201d as defined by \nSection 3(7)(i) of the Banking Act, Direction No.11 and 12 of 2007 on Corporate Governance \nfor Licensed Banks in Sri Lanka.\nName \nof the \ninstitutionDate of \ntransac-\ntion Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-\nperforming)Type and \nvalue of \ncollateral \n(Rs. mn)% of \nBank\u2019 s \nregulatory \ncapitalLimit Outstanding\nAccommodations\nBorrowings\nInvestments\nDeposits\n3/ \u201cBusiness transaction\u201d shall mean any accommodations, borrowings, investments and deposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 298, "year": 2013}, "type": "Document"}
{"page_content": "290 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n7. Appointment, Shar eholdings and Business Transactions of Close Relations \n7.1 Any close relation presently appointed as a Director or Chief Executive Officer or a member of \nthe key management of licensed bank/s their subsidiaries and associates if any.\nName of the bank Full name of the close relation Position held\n7.2 Direct or indirect share ownership in licensed banks, its subsidiaries and associates if any , \npresently held by any close relation.\nName of the institutionFull name of the close \nrelationNo. of Shares Percentage holding\nDirect Indirect Direct Indirect\n7.3 Any business transaction, the close relation currently has or had with licensed banks its  \nsubsidiaries and associates if any during the last two years immediately preceding the \nappointment as Director. \nName \nof the \ninstitutionFull name \nof the close \nrelationNature of \nbusiness \ntransactionDate of \ntran-\nsaction Limit\nas at \n\u2026\u2026\u2026\u2026\u2026 \n(Rs. mn)Outstanding \nas at \n\u2026\u2026\u2026\u2026\n(Rs. mn)Type and \nvalue of \ncollateral \n(Rs. mn)% of \nBank\u2019 s \nregulatory \ncapital \n8. Any other explanation  / information in regard to the information furnished above and other information \nconsidered relevant for assessing the suitability of the Director  / proposed Director.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 299, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  291\nDeclaration:\nI confirm that the above information is to the best of my knowledge and belief true and complete.  \nI undertake to keep the bank fully informed, as soon as possible, of all events, which take place \nsubsequently, which is relevant to the information provided above.\nI state that I am not prevented by the Articles of Association of the Company and or by any other Statute \nfrom being appointed to the above post. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signatur e of Director  / Proposed Director\nTo\tbe\tfilled\tby\tthe\tCompany \tSecretary\n1. Any other explanation  / information in regard to the information furnished above and other information \nconsidered relevant for assessing the suitability of the Director  / proposed Director\n2. Submitted to the Board of Directors of the Bank. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signatur e of Company Secretary\n and the official stamp", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 300, "year": 2013}, "type": "Document"}
{"page_content": "292 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 04 / 0012  / 002\nBank Supervision Department\n12 April 2005\nTo : CEOs of all Licensed Commercial Banks and\n       all Licensed Specialised Banks;\nDear Sirs,\nAPPOINTMENT OF DIRECTORS OF BANKS\nI refer to my letter of 31 March 2005 on the above subject, enclosing the affidavit and the declaration \nto be submitted in respect of directors of banks.\nEnclosed please find a fresh affidavit which incorporates the Committee stage amendments to the \nBanking (Amendment) Bill. Please replace the affidavit attached to the above letter with this version.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 301, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  293\nAffidavit \tto\tbe\tsubmitted \tin\tterms\tof\tSection\t42(2)\tof\tthe\tBanking\tAct\nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. Being a [Buddhist \n/ Hindu solemnly, sincerely and truly declare and affirm / Christian / Catholic / Muslim make oath and \nstate] as follows :\n (a) I am the [af firmant / deponent] above named and I [am a director / have been elected as a \ndirector / have been nominated as a director] of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 which is a licensed \ncommercial bank / licensed specialised bank, licensed under the Banking Act, No.30 of 1988.\n (b) I [af firm/state] that I possess the following academic and / or professional qualifications :\n (c) I [a ffirm/state] that the effective experience that I possess in banking, finance, business or \nadministration or of any other relevant discipline is as follows :\n (d) I [af firm/state] that there is no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or \nabroad, to the effect that I have committed or have been connected with the commission of, any \nact which involves fraud, deceit, dishonesty or any other improper conduct;\n (e) I [af firm/state] that as such I am not subject to any investigation or inquiry consequent upon \nbeing served with notice of a charge involving fraud, deceit, dishonesty or other similar criminal \nactivity, by any regulatory authority, supervisory authority, professional association, Commission \nof Inquiry, tribunal or other body established by law, in Sri Lanka or abroad;\n (f) I [af firm/state] that I have not been convicted by any Court in Sri Lanka or abroad in respect of \na crime committed in connection with financial management or of any offence involving moral \nturpitude;\n (g) I [af firm/state] that I am not an undischarged insolvent nor have I been declared a bankrupt in Sri \nLanka or abroad;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 302, "year": 2013}, "type": "Document"}
{"page_content": "294 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (h) I [af firm/state] that I have not failed, to satisfy any judgment or order of any court whether in Sri \nLanka or abroad, or to repay a debt;\n (i)  I [af firm/state] that I have not been declared by a court of competent jurisdiction in Sri Lanka or \nabroad, to be of unsound mind;\n (j) I [af firm/state] that I have not been removed or suspended by an order of a regulatory or \nsupervisory authority from serving as a director, Chief Executive Officer or other officer in any \nbank or financial institution or corporate body, in Sri Lanka or abroad;\n (k) I [af firm/state] that I have not been a director, Chief Executive Officer or held any other position \nof authority in any bank or financial institution \u2013\n (i) whose license has been suspended or cancelled; or\n (ii) which has been wound up or is being wound up, or which is being compulsorily liquidated; \nwhether in Sri Lanka or abroad.\n (l) I [affirm/state] that to the best of my knowledge I am a fit and proper person [to hold office as \na director / to be appointed, nominated or elected as a director] of a licensed commercial bank / \nlicensed specialised bank in terms of the provisions of Section 42 of the Banking Act as amended \nby Banking (Amendment) Act, No. 2 of 2005.\nThe averments contained herein  ]\nwere read over to the [affirmant/deponent  ]\nwho having understood the contents  ]  \nhereof and having accepted same as  ] Before me\ntrue, affirmed/swore to and placed  ]\nhis / her signature at Colombo  ]\non this \u2026\u2026\u2026\u2026\u2026\u2026 day  ]\nof \u2026\u2026\u2026\u2026\u2026\u2026  ] \n                                                              JUSTICE OF THE PEACE", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 303, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  295\nRef. No. : 02  / 04 / 002 / 0012  / 002\nBank Supervision Department\n31 March 2005\nTo : The CEOs of all Licensed Commercial Banks (Domestic) and\n all Licensed Specialised Banks\nDear Sirs,\nAPPOINTMENT OF DIRECTORS OF BANKS\n(SECTION 42 OF THE BANKING ACT, NO.30 OF 1988 AS AMENDED)\n In terms of Section 42(1) of the Banking Act a person who is to be appointed, elected or \nnominated as a director of a licensed commercial bank or who continues as a director of such bank \nmust be a fit and proper person to hold such office and should not be prevented from doing so by the \nprovisions of the Banking Act or by any other written law. The Act also sets out specific matters to be \ntaken into consideration in determining whether a person is fit and proper .  \n Further , in terms of Section 42(4) of the Act, all banks are required to notify the Director \nof Bank Supervision, details of proposed/appointed/elected/nominated directors for approval under \nSection 42(5). Boards of licensed commercial banks should ensure that adequate information relating \nto any person who is to be appointed, elected or nominated to the Board of Directors is made available \nto the Board before such appointment, election or nomination takes place. Furthermore, it is necessary \nthat relevant information in respect of current directors should also be available to the Board of \nDirectors.  \n For this purpose we annex hereto a draft affidavit to be obtained from all directors and \npersons nominated for election or appointment as directors of the bank or to be nominated to \nthe Board. In addition to the affidavit, a declaration may also be obtained from such person to \nenable the bank to ascertain compliance by directors of the bank with other provisions of the \nAct. For this purpose a draft declaration as in Annex 2 may be used. The Secretary of each", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 304, "year": 2013}, "type": "Document"}
{"page_content": "Act. For this purpose a draft declaration as in Annex 2 may be used. The Secretary of each \nbank shall submit a copy of the affidavit and the declaration in respect of each such person to \nbe appointed, to the Director of Bank Supervision, together with the information specified in  \nsub-section (4) of Section 42, by the bank when approval for appointment, election or nomination of a \ndirector is sought. \n W ith respect to current directors, the declaration and affidavit should be obtained and copies \nfurnished to the Central Bank in respect of each director holding office, by 30 April 2005. Thereafter, \nthe declaration and affidavit should be obtained and copies furnished to the Central Bank annually, \nbefore the Annual General Meeting of the respective bank in respect of every continuing director.\nYours faithfully,\nSgd, Director of Bank Supervision\ncc \u2013 Mr . Upali De Silva\n Secretary-General \u2013 Sri Lanka Bankers\u2019  Association\n Level 8, Ceylinco House, 69, Janadhipathi Mawatha\n Colombo 01.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 304, "year": 2013}, "type": "Document"}
{"page_content": "296 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAffidavit to be submitted in terms of Section 42(2) of the Banking Act\nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. Being a [Buddhist \nsolemnly, sincerely and truly declare and affirm / Christian / Catholic make oath and state / Muslim \nmake oath and state] as follows :\n (a) I am the [af firmant / deponent] abovenamed and I [am a director / have been elected as a director \n/ have been nominated as a director] of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 which is a licensed \ncommercial bank / licensed specialized bank, licensed under the Banking Act, No.30 of 1988.\n (b) I [af firm / state] that I possess the following academic and/or professional qualifications :\n (c) I [af firm / state] that the effective experience that I possess in banking, finance, business or \nadministration or of any other relevant discipline is as follows :\n (d) I [af firm / state] that there is no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or \nabroad, to the effect that I have committed or have been connected with the commission of, any \nact which involves fraud, deceit, dishonesty or any other improper conduct;\n (e) I [af firm / state] that as such I am not subject to any investigation or inquiry in Sri Lanka or \nelsewhere by any regulatory authority, or supervisory authority, professional association, any \nCommission of Inquiry, tribunal or other body established by law in Sri Lanka or abroad, that I \nhave committed or have been connected with the commission of, any act which involves fraud, \ndeceit, dishonesty or any other improper conduct;\n (f) I [af firm / state] that I have not been convicted by any Court in Sri Lanka or abroad in respect of \na crime committed in connection with financial management or of any offence involving moral \nturpitude;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 305, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  297\n (g) I [affirm / state] that I am not an undischarged insolvent nor have I been declared a bankrupt in \nSri Lanka or abroad;\n (h) I [af firm / state] that I have not failed, to satisfy any judgment or order of any court whether in Sri \nLanka or elsewhere, or to repay a debt;\n (i)  I [af firm / state] that I have not been declared by a competent court in Sri Lanka or abroad, to be \nof unsound mind;\n (j) I [af firm / state] that I have not been removed or suspended by an order of a regulatory or \nsupervisory authority from serving as a director, Chief Executive Officer or other officer in any \nbank or financial institution or corporate body, in Sri Lanka or abroad;\n (k) I [af firm / state] that I have not been a director, Chief Executive Officer or held any other position \nof authority in any bank or financial institution \u2013\n (i) whose license has been suspended; or\n (ii) which has been wound up or is being wound up, or which is being compulsorily liquidated; \nwhether in Sri Lanka or elsewhere.\n (l) I [af firm / state] that to the best of my knowledge I am a fit and proper person [to hold office as \na director  / to be appointed, nominated or elected as a director] of a licensed commercial bank / \nlicensed specialised bank in terms of the provisions of Section 42 of the Banking Act as amended \nby Banking (Amendment) Act, No. 2 of 2005.\nThe averments contained herein  ]\nwere read over to the [affirmant/deponent  ]\nwho having understood the contents  ] \nhereof and having accepted same as  ] Before me\ntrue, swore to and placed his/her signature  ]\nat Colombo on this \u2026\u2026\u2026\u2026\u2026\u2026 day  ]\nof \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  ] \n    JUSTICE OF THE PEACE", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 306, "year": 2013}, "type": "Document"}
{"page_content": "298 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex 2\nName of Bank: \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration to be submitted in terms of Section 42 of the Banking Act \nby persons proposed to be / appointed / elected / nominated as a Director of a Licensed Bank\n(with enclosures as appropriate as of \u2026\u2026\u2026\u2026\u2026\u2026\u2026.)\n1. Personal Details \n1.1 Full name:   \n1.2 NIC No. / Passport No.:  \n1.3 Permanent Address:\n1.4 Present Address:\n1.5 Occupation:\n2. List of close r elations in terms of Section 86 of the Banking Act:\n2.1 Name in full of spouse:\n NIC No./Passport No. :\n2.2 Names of dependent children:\n  Full Name     NIC No. / Passport No.\n1.  \n2.  \n3.  \n4.  \n3. List of entities in which director / prospective director has a substantial interest in terms of Section \n86 of the Banking Act", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 307, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  299\n4. Name/s of Licensed Bank/s in which he / she is or has been a member of the Board of Directors \n(give details of period during which such office was held)\n5. Accomodation, if any, presently availed by him / her or by his close relations at 2 above, and by \nentities at 3 above from the bank, and collateral\nDeclaration:\nI confirm that  the  above information is to the best of my knowledge and belief true and complete. \nI undertake to keep the bank fully informed, as soon as possible, of all events  which take place \nsubsequently which are relevant to the  information provided above.\nSignature:\nDate:                                       \nAny other explanation / information in regard to the information furnished above and other information \nconsidered relevant for assessing the suitability of the proposed / appointed director.\nRemarks of Board of Directors of the Bank\nDate:                                                                                 Signature of Company Secretary", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 308, "year": 2013}, "type": "Document"}
{"page_content": "300 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 550 / 002 / 002\nBank Supervision Department\n03 January 2011\nTo : Chief Executive Officers of \n Branches of For eign Banks\nDear Sir,\nDISCLOSURES IN TERMS OF THE\nBANKING ACT DIRECTION ON CORPORATE GOVERNANCE\nAll branches of foreign banks are requested to adhere to the following with respect to Directions \n3(8) and 3(9) of the Banking Act Direction No. 11 of 2007 on Corporate Governance:\n (i) Direction 3(8)( ii) \u2013 All disclosures except on Direction 3(8)( ii)(d) are required to be \nsubmitted along with annual audited financial statement to the Director of Bank Supervision.\n(a) Directions 3(8)( ii)(b) and (h) \u2013 The required reports shall be prepared by the Board of \nDirectors or the Head of the Office supervising  Sri Lankan operations.\n(b) Direction 3(8)( ii)(g) \u2013 The bank shall submit a copy of the parent bank\u2019s annual \ncorporate governance report to the Director of Bank Supervision.\n (ii) Direction 3(9)( iii) \u2013 A summary of the parent bank\u2019s annual corporate governance report \nshall be published in the press in Sinhala, Tamil and English along with the publication of \nannual audited financial statements.\nWe hereby withdraw the Circular dated 29 December 2010 issued on the above subject.\nYours faithfully,\n(Mrs). T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 309, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  301\nRef. No. : 02  / 17 / 550 /002 / 003\nBank Supervision Department\n24 December 2010\nTo : CEOs of all Licensed Commer cial Banks;\n Licensed Specialised Banks, and\n Auditors conducting Bank Audits\nDear Sir  / Madam,\nREQUIREMENTS UNDER \nTHE CORPORATE GOVERNANCE DIRECTION\nWe write to inform you that the Institute of Chartered Accountants of Sri Lanka (ICASL) has issued \nguidelines on the internal control mechanism and annual corporate governance report to be followed \nby banks in relation to Directions 3(8)(ii) (b), (c) and (g) of the Corporate Governance Direction dated \n26.12.2007 issued by the Central  Bank of Sri Lanka.\nPlease find the guidelines in the website of the ICASL.  The link is as follows:\nhttp://www.icasrilanka.com/Technical/Central%20Bank%20Internal%20Control%20-%20\n         Final%20printed%20uploaded.pdf\nYours faithfully,\nN W G R D Nanayakkara\nAddl. Director of Bank Supervision\nc.c. -  President\n Institute of Chartered Accountants of Sri Lanka\n 30A  Malalasekera Mawatha\n Colombo 7.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 310, "year": 2013}, "type": "Document"}
{"page_content": "302 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 600 / 0017  / 001\nBank Supervision Department\n08 August 2011\nTo : CEOs of Licensed Commer cial Banks\nDear Sirs,\nASSESSMENT OF FITNESS AND PROPRIETY OF\nCHIEF EXECUTIVE OFFICERS OF\nLICENSED COMMERCIAL BANKS\nIn terms of Section 44 A of the Banking Act, Chief Executive Officers (CEOs) of Licensed \nCommercial Banks (LCBs) are required to be fit and proper persons to perform executive functions in a \nLCB. \nAccordingly, we enclose herewith formats for the affidavit and the declaration to be submitted by \nthe CEOs of LCBs and a guidance note to duly complete such affidavits and the declarations.\nAnnex I  :  Affidavit to be submitted by CEOs of LCBs\nAnnex II  :  Declaration to be submitted by CEOs of LCBs\nAnnex III  :  Guidance Note\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 311, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  303\nAnnex I\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nAffidavit \tto\tbe\tsubmitted \tby\tChief\tExecutive \tOfficers\tof\t \nLicensed Commercial Banks in terms of Section 44 A of the Banking Act \nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( full name)\nholder of National Identity Card No.  / Passport No. \u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026..\u2026\u2026..\u2026\u2026..\u2026\u2026\u2026\u2026\u2026\u2026 of\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. (address) \nbeing a [Buddhist  / Hindu do hereby solemnly, sincerely and truly declare and affirm  / Christian  / Catholic  /\nMuslim make oath and state] as follows :\n(a) I am the [affirmant  / deponent] above named and I am the [ Chief Executive Officer  / proposed Chief \nExecutive Officer] of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026. (name of bank ) which is a commercial bank, licensed under the Banking Act, No. 30 \nof 1988. \n(b) I [affirm  / state] that I possess the following academic and  / or professional qualification/s: \n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(c) I [af firm  / state] that the ef fective experience that I possess in banking, finance, business or \nadministration or of any other relevant discipline is as follows:\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(d) I [affirm  / state] that there is no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or \nabroad, to the effect that I have committed or have been connected with the commission of, any act \nwhich involves fraud, deceit, dishonesty or any other improper conduct.\n(e) I [affirm  / state] that I am not subject to an investigation or inquiry consequent upon being served \nwith notice of a charge involving fraud, deceit, dishonesty or other similar criminal activity, by any", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 312, "year": 2013}, "type": "Document"}
{"page_content": "regulatory authority, supervisory authority, professional association, any Commission of Inquiry, \ntribunal or other body established by law, in Sri Lanka or abroad.\n(f) I [affirm  / state] that I have not been convicted by any Court in Sri Lanka or abroad in respect of \na crime committed in connection with financial management or of any offence involving moral \nturpitude.\n(g) I [affirm  / state] that I am not an undischarged insolvent nor have I been declared a bankrupt in Sri \nLanka or abroad.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 312, "year": 2013}, "type": "Document"}
{"page_content": "304 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n(h) I [affirm  / state] that I have not failed, to satisfy any judgment or order of any Court whether in Sri \nLanka or abroad, or to repay a debt.\n(i) I [affirm  / state] that I have not been declared by a Court of competent jurisdiction in Sri Lanka or \nabroad, to be of unsound mind.\n(j) I [affirm  / state] that I have not been removed or suspended by an order of a regulatory or supervisory \nauthority from serving as a director, Chief Executive Officer or other officer in any licensed bank or  \nfinancial institution or corporate body, in Sri Lanka or abroad.\n(k) I [affirm  / state] that I have not been a Director, Chief Executive Officer or held any other position of \nauthority in any bank or financial institution \u2013 \n (i) whose license has been suspended or cancelled; or\n (ii) which has been wound up or is being wound up, or which is being compulsorily liquidated;\nwhether in Sri Lanka or abroad.\n(l) I [affirm  / state] that to the best of my knowledge I am a fit and proper person [to hold office as a Chief \nExecutive Officer  / to be appointed as a Chief Executive Officer] of a licensed commercial bank in \nterms of the provisions of Section 76 H read with Section 44 A of the Banking Act. \nThe averments contained \nherein were read over to \nthe [affirmant  / deponent] \nwho having understood the \ncontents hereof and having \naccepted same as true, \naffirmed  / swore to and \nplaced his  / her si gnature at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\u2026 on this\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 day of\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\nJUSTICE OF THE PEACE  / \nCOMMISSIONER FOR OATHSAffix Stamps\nas applicable\nBefore me", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 313, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  305\nAnnex II\nName of Bank:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration \tto\tbe\tsubmitted \tby\tChief\tExecutive \tOfficers\tof\t\t\nLicensed Commercial Banks in terms of Section 44 A of the Banking Act \n(with enclosures as appropriate as of \u2026\u2026\u2026\u2026\u2026\u2026\u2026.)\n1. Personal Details \n 1.1 Full name:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.2 NIC / Passport number:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.3 Date of birth :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.4 Permanent address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.5 Present address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n2. Appointment to the Bank\n 2.1 Date of appointment : \n  (please attach a certified copy of the appointment letter)\n 2.2 Designation :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 2.3 Local or expatriate :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n3. Backgr ound and Experience\n Name/s of licensed bank/s, its subsidiaries in terms of the Banking Act and associates if any, in \nwhich he  / she is or has been employed as Chief Executive Officer, Director or an officer performing \nexecutive functions:\nName of the institution Period of office Designation\n4. Shar eholdings in Banks and their Related Companies\n Share ownerships in any licensed banks, their subsidiaries and associates, if any , presently held: \nName of the institution No. of shares Percentage holding", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 314, "year": 2013}, "type": "Document"}
{"page_content": "306 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n5. Business Transactions1/ \n Any business transactions the Chief Executive Officer  / proposed Chief Executive Officer presently \nhas with the bank and its subsidiaries and associates, if any.\nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-performing)Type and \nvalue of \ncollateral \n(Rs. mn)% of Bank\u2019 s \ncapital\nLimit Out-standing\nAccommodations\nInvestments\nDeposits\n6. Personal Details of Close Relations in terms of Section 86 of the Banking Act \n 6.1 Full name of spouse :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 6.2 NIC / Passport number :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 6.3 Names of dependant children :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nFull name NIC / Passport number\n6.3.1\n6.3.2\n6.3.3\n6.3.4\n7. Appointments, Shar eholdings and Business Transactions of Close Relations \n7.1 A ny close relations presently employed as Chief Executive Officers, Directors or officers \nperforming executive functions in any licensed banks, their subsidiaries and associates, if any.\nName of the bank Full name of the close relation Position held\n1/ \u201cBusiness transaction\u201d shall mean any accommodations, investments and deposits and in the case of \nforeign banks, only the business transactions with Sri Lankan operations.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 315, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  307\n7.2 Direct or indirect share ownership in the bank, its subsidiaries and associates, if any, presently \nheld by any close relation.\nFull name of the close relationNo. of Shares Percentage holding\nDirect Indirect Direct Indirect\n7.3 Any business transaction, the close relation currently has with the bank, its subsidiaries and \nassociates, if any. \nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-performing)Type and \nvalue of \ncollateral \n(Rs. mn)% of Bank\u2019 s \nregulatory \ncapital\nLimit Out-standing\nAccommodations\nInvestments\nDeposits\n8. Any other explanation  / information in regard to the information furnished above and other  \ninformation considered relevant for assessing the suitability of the Chief Executive Officer  / proposed \nChief Executive Officer  of the bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 316, "year": 2013}, "type": "Document"}
{"page_content": "308 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDECLARATION:\nI confirm that the above information is to the best of my knowledge and belief true and complete.  \nI undertake to keep the bank fully informed, as soon as possible, of all events, which take place \nsubsequently, which is relevant to the information provided above.\nI state that I am not prevented by any Statute from being appointed as the Chief Executive Officer of \nLicensed Commercial Bank. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signature of Chief Executive Officer  / \n Proposed Cheif Executive Officer\nTO BE FILLED BY THE CHAIRMAN / REGIONAL HEAD (in the case of foreign banks)\n1. Any other explanation  / information in regard to the information furnished above and other   \ninformation considered relevant for assessing the suitability of the Chief Executive Officer  / proposed \nChief Executive Officer of the bank.\n2. I confirm that, in terms of Section 76 H read with Section 44 A of the Banking Act, No. 30 of 1988, \nthe officer referred to above is fit and proper to carry out functions of the Chief Executive Officer of \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 . \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signature of the Chairman / Regional Head\n and the official stamp", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 317, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  309\nAnnex III\nGUIDANCE TO DULY COMPLETE THE AFFIDA VITS AND \nDECLARATIONS TO BE SUBMITTED BY CHIEF EXECUTIVE OFFICERS OF\n LICENSED COMMERCIAL BANKS\nA. PURPOSE OF  OBTAINING AFFIDA VITS AND DECLARATIONS\n\u2022 T he purpose of obtaining affidavits and declarations of Chief Executive Officers (CEOs) of \nLicensed Commercial Banks (LCBs) is to enable the Bank Supervision Department to assess the \nfitness and propriety of such officers in terms of the provisions of the Banking Act. Accordingly, \nthe Bank Supervision Department requires comprehensive information to evaluate the experience, \nqualifications, integrity and compliance with other requirements specified in the Banking Act, to \nassess the suitability of the CEOs of the LCBs.\n\u2022 Further , these should be legally binding documents in the event of any dispute. \n\u2022 This guidance is issued to ensure that sufficient information is provided by banks for assessing the \nfitness and propriety of the CEOs.\nB. AFFIDA VITS\n1. It is preferable that the affidavit is prepared as a fresh document, based on the format provided by the \nBank Supervision Department, so as to avoid inclusion of unnecessary words. However, if the given \nformat is filled, all alterations, erasures and interlineations should be initialed by the Commissioner \nfor Oaths.\n2. Academic/professional qualifications\n\u2022 Relevant qualification should be mentioned clearly with:\n \u2013 Qualification obtained \n \u2013 Name of the Institution/University\n \u2013 Y ear of obtaining the qualification \n \u2013 Name of the Professional body where he/she is a member\n3. Ef fective experience should include:\n\u2022 Institution\n\u2022 Designation\n\u2022 Period\n4. Complete all blank spaces and clauses appropriately. ( Eg., Name in full, NIC No. / Passport No., \nAddress, Chief executive officer/proposed chief executive officer, Name of the Bank, etc.)\n5. Appropriate words should be used based on the religion of the person", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 318, "year": 2013}, "type": "Document"}
{"page_content": "5. Appropriate words should be used based on the religion of the person\n5.1 Delete/strike out inappropriate words\nEg. \n\u2022 Buddhist/Hindu:  affirm/affirmant/solemnly , sincerely and truly declare and affirm.\n\u2022 Christian/Catholic/Muslim:  deponent/state/make oath and state/ swear .\n\u2022 If a person refrains/objects to disclose his/her religion:   affirm/affirmant/solemnly, sincerely \nand truly declare and affirm. In this event, a confirmation should be submitted by the officer \nstating that: \n\u2013 he/she is an atheist or belongs to a religion not mentioned in this affidavit;   or\n\u2013 he/she objects to disclosing his/her religion.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 318, "year": 2013}, "type": "Document"}
{"page_content": "310 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n5.2 If the inappropriate words are stricken out, the Commissioner for Oaths/Justice of the Peace \nshould place his initials immediately after all such amendments.\n6. If the person is a foreigner and signs the affidavit while overseas:\n\u2013 signature of the person should be attested by a Commissioner for Oaths or an equivalent in the \ncountry in which he places his signature.\n\u2013 a ttestation should be made in front of the Sri Lankan High Commissioner in the respective \ncountry.\n7. Affix a stamp for a sum of Rs.25/- and the signature of the person. In the case of future affidavits, \nthe denomination of the stamp should be changed according to the value applicable as at the date of \nsigning the affidavit.\n8. Attest by a Commissioner for Oaths/Justice of the Peace immediately after the signature of the person \nat \u2018Before me\u2019.\nC. DECLARATIONS\n1. Declarations:\n\u2013 should be duly completed : All the sections (1-8) should be completed (full name, date etc.) and \nirrelevant sections stated as Not applicable/nil/none or cancelled out.\n\u2013 should be signed and dated.\n2. The last section should be completed, dated and signed with official stamp/seal by the Chairman/ \nRegional Head (in the case of foreign banks). If there is no comment it should be stated as Not \napplicable/nil/none.\n3. T erms of appointment (including designation, date of appointment, duties, responsibilities and \nremuneration package) should be attached.\nD. INTERPRET ATION  \n1. \u201cClose relation\u201d means spouse or dependent child.\n2. \u201cBusiness Transaction\u201d shall means any accommodations, investment and deposits and in the case \nof foreign banks, only the business transactions with Sri Lankan operations.\n3. \u201cAccommodation\u201d means any loan, overdraft or advance or such other facility as may be determined \nby the Monetary Board or any commitment to grant any loan, overdraft or advance or such other", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 319, "year": 2013}, "type": "Document"}
{"page_content": "by the Monetary Board or any commitment to grant any loan, overdraft or advance or such other \nfacility as may be determined by the Monetary Board, including a commitment to accept a contingent \nliability.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 319, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  311\nExplanatory Note: 1  / 2012\nBank Supervision Department\nAUTHORITY OF THE MONETARY BOARD\nTO ISSUE DIRECTIONS TO LICENSED BANKS REAFFIRMED BY THE\nCOURT OF APPEAL\nThe Monetary Board of the Central Bank of Sri Lanka (CBSL) issued Directions on corporate \ngovernance \tto\tlicensed\tbanks\ton\t26\tDecember \t2007.\tThe\tDirections \twere\tissued\tin\tterms\tof\tthe\tBanking\t\nAct\trequiring, \tinter alia, \tfitness\tand\tpropriety\tof\tbank\tdirectors,\tlimiting\tthe\tage\tof\ta\tdirector\tof\ta\tbank\t\nto\t70\tyears,\tthe\tterm\tof\toffice\tof\ta\tdirector\tto\tbe\tnot\tmore\tthan\t9\tyears,\tetc.\nConsequent \tto\tissuing\tthese\tDirections, \tthe\tauthority\tof\tthe\tMonetary \tBoard\tof\tthe\tCBSL\tto\t \nissue such Directions was challenged in the Court of Appeal CA (Writ) Application No. 330 /2008 by  \nK.C. Vignarajah, the Petitioner. \nAs per the Court of Appeal judgment of the above action delivered on 28 March 2012, it was held \nthat, inter-alia , the Banking Act, No. 30 of 1988 falls within the category of legislation referred to as \nAdministrative Legislation, and that a necessary aspect of such legislation is one of delegating powers \nto an extraneous body of persons to act at Parliament\u2019s bidding. The Court further held that, accordingly,  \nthe Banking Act is a Primary Legislation for the purpose of providing for any aspect of banking business \nand of business of such banks and includes the right to control the existing systems and functions of banks, \nand therefore that the Monetary Board has been delegated with the power to make directions which had the \napproval, licence or stamp of a legislative power. On that basis, the Court of Appeal ruled that Direction \nNo.11\tof\t2007\ton\tCorporate \tGovernance \tof\t26\tDecember \t2007\tis\twithin\tthe\tpowers\tprescribed \tin\tthe\t\nBanking Act, No. 30 of 1988, as amended.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 320, "year": 2013}, "type": "Document"}
{"page_content": "312 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nMy No. : 02  / 17 / 800 / 0005  / 01\nBank Supervision Department\n20 August 2008\nTo : CEOs of all Licensed Commercial Banks\nDear Sirs,\nPERMITTING LICENSED COMMERCIAL BANKS TO TRADE IN\nTHE INTERNATIONAL SOVEREIGN BONDS ISSUED IN 2007 BY\nTHE GOVERNMENT OF SRI LANKA\n This is to inform you that the Monetary Board of the Central Bank of Sri Lanka with the \nconcurrence of the Minister of Finance and Planning has authorised, in terms of the provisions of the \nBanking (Off-shore Banking Scheme) Order 2000 made under sections 23, 25 and 26 of the Banking \nAct, No.30 of 1988 as amended, for licensed commercial banks (LCBs) to invest in the international \nsovereign bonds issued by the Government of Sri Lanka in 2007, in the secondary market.\nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 321, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  313\nRef. No. : 02  / 17 / 600 / 0034  / 001\nBank Supervision Department\n08 November, 2011\nTo :  The CEOs of all Licesed Commer cial Banks\nAMENDMENT TO BANKING ACT,\nOFF-SHORE BANKING SCHEME ORDER, 2000\n T his is to inform you that the Clause 5 of the Banking Act (Off-Shore Banking Scheme),  \nOrder 2000 dated 7 April 2000 made under Sections 23, 25 and 26 of the Banking Act, No. 30 of 1988 \nhas been amended.\n The Banking Order , No. 2 of 2011 on the above mentioned amendment is attached.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 322, "year": 2013}, "type": "Document"}
{"page_content": "314 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOrder made by the Monetary Board of the Central Bank of Sri Lanka with the approval of the Minister, \nmade under Sections 23, 25 and 26 of the Banking Act, No. 30 of 1988, as amended.\nSgd. K G D D Dheerasinghe\nSenior Deputy Governor\nCentral Bank of Sri Lanka\nColombo\n08 November, 2011.\nBANKING ACT, ORDER NO. 2 OF 2011\nBANKING (OFF-SHORE BANKING BUSINESS SCHEME) ORDER\nCitation. 1. This Order may be cited as the Banking Act, Order No.2 of 2011. The Sections \nreferred to in this Order will be those of the Banking Act, No.30 of 1988,  \nas amended.\n2. T he following new Clause replaces the Clause 5 in the Banking (Off-Shore \nBanking Business Scheme) Order, 2000, dated 7th April 2000.\n5. An account maintained by a non-resident in an   \noff-shore unit shall be credited with funds received on \ninward remittances and fund transfers in any designated \ncurrency from the Domestic Banking Units on all \ncurrent account transactions falling under the general \nor specific permission of the Controller of Exchange.\u2019Amendment to \nClause 5 in the \nBanking  \n(Off-shore  \nBanking  \nBusiness) Order, \n2000 issued on \n7th April 2000.\u2018Permitted \ndeposits in an \naccount of a \nnon-resident.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 323, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  315\nRef. No. : 02  / 17 / 600 / 0009  / 002\nBank Supervision Department\n27 October, 2011\nTo :  The CEOs of all Licesed Commer cial Banks\nDESIGNATED FOREIGN CURRENCIES\n This is to inform you that the Monetary Board of the Central Bank of Sri Lanka, with the approval  \nof the Minister, has specified the Chinese Renminbi as a designated currency for foreign exchange \ntransactions in both Domestic Banking Units and Off-shore Banking Units of Licensed Commercial Banks.\n Accordingly , the Banking (Off-Shore Banking Business Scheme) Order No. 1 of 2008 dated  \n12 September, 2008, made under sections 23, 25 and 26 of the Banking Act, No. 30 of 1988, is hereby \namended to include the Chinese Renminbi as a designated currency.\n The Banking Act, Order No. 1 of 2011 which contains the amended Schedule of Designated Foreign \nCurrencies, is attached.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 324, "year": 2013}, "type": "Document"}
{"page_content": "316 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOrder made by the Monetary Board of the Central Bank of Sri Lanka with the approval of the Minister, \nmade under Sections 23, 25 and 26 of the Banking Act, No. 30 of 1988, as amended.\nSgd. K G D D Dheerasinghe\nSenior Deputy Governor\nCentral Bank of Sri Lanka\nColombo\n27 October, 2011.\nBANKING ACT, ORDER NO. 1 OF 2011\nBANKING (OFF-SHORE BANKING BUSINESS SCHEME) ORDER\nCitation. This order may be cited as the Banking Act, Order No. 1 of 2011. The Sections \nreferred to in this Order will be those of the Banking Act, No. 30 of 1988, as \namended.\nThe foreign currencies set out in the Schedule below in this Order are determined as \nthe Designated Foreign Currencies under the Banking (Off-Shore Banking Business \nScheme) Order.\nThe Schedule in this Order, replaces the Schedule in the Banking (Off-Shore \nBanking Business Scheme) Order No. 1 of 2008, dated 12 September, 2008.\nschedule\nDesignated Foreign Currencies\n 1. Australian Dollar \n 2. Canadian Dollar \n 3. Chinese Renminbi\n 4. Danish Kroner \n 5. Euro \n 6. Hongkong Dollar \n 7. Japanese Yen \n 8. New Zealand Dollar\n 9. Norwegian Kroner\n 10. Pound Sterling\n 11. Singapore Dollar\n 12. Swedish Kroner\n 13. Swiss Franc\n 14. United States DollarDesignated \nForeign \nCurrencies.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 325, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  317\nRef. No. : 02  / 17 / 600 / 0009  / 001\nBank Supervision Department\n12 September, 2008\nTo :  The CEOs of all Licesed Commer cial Banks\n This is to inform you that the Monetary Board of the Central Bank of Sri Lanka, with the approval of \nthe Minister of Finance and Planning, has specified the New Zealand Dollar as a designated currency for \nforeign exchange transactions in both Domestic Banking Units and Off-shore Banking Units of Licensed \nCommercial Banks.\n Accordingly , the Banking (Off-Shore Banking Scheme) Order 2000 dated 7th April, 2000, made \nunder sections 23, 25 and 26 of the Banking Act, No. 30 of 1988, is hereby amended to include the New \nZealand Dollar as a designated currency for off-shore banking business carried out by licensed commercial \nbanks, and to remove the Deutsche Mark, the French Franc and the Netherlands Guilder from the Schedule \nof Designated Foreign Currencies.\n The Banking Act, Order No. 1 of 2008 which contains the amended Schedule of Designated Foreign \nCurrencies, is attached.\nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 326, "year": 2013}, "type": "Document"}
{"page_content": "318 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOrder made by the Monetary Board of the Central Bank of Sri Lanka with the approval of the \nMinister made under Section 23, 25 and 26 of the Banking Act No. 30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\n12 September 2008.\nBANKING ACT, ORDER NO. 1 OF 2008\nBanking (Off-Shore Banking Business Scheme) Order\nCitation.  This order may be cited as the Banking Act Order No. 1 of 2008.  The Sections \nreferred to in this order will be those of the Banking Act No. 30 of 1988, as \namended.\n1. The following foreign currencies set out in the Schedule to this Order are  \ndetermined as the Designated Foreign Currencies under the Banking (Off-Shore \nBanking Business Scheme) Order.\n2. The Schedule referred to in this Order, replaces the Schedule in the Banking \n(Off-Shore Banking Business Scheme) Order 2000, dated 7th April 2000.\nschedule\nDesignated Foreign Currencies\n (i) Australian Dollar\n (ii) Canadian Dollar\n (iii) Danish Kroner\n (iv) Euro\n (v) Hong Kong Dollar\n (vi) Japanese Yen\n (vii) New Zealand Dollar\n (viii)  Norwegian Kroner\n (ix) Pound Sterling\n (x) Singapore Dollar\n (xi) Swedish Kroner\n (xii) Swiss Franc\n (xiii)  United States Dollar\n Designated \nForeign \nCurrencies.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 327, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  319\nRef. No. : 02  / 17 / 800 / 009 / 001\nBank Supervision Department\n23 October 2009\nTo :  CEOs of all  Licensed Commer cial Banks\nDear Sir  / Madam,\nPERMITTING TRANSFER OF FUNDS BETWEEN ACCOUNTS MAINTAINED AT\nTHE DOMESTIC BANKING UNITS AND THE OFF-SHORE UNITS OF \nLICENSED COMMERCIAL BANKS\nWith a view to further deepening and diversifying the government securities market, the Monetary \nBoard has authorised the transfer of funds between Treasury Bill/Bond Investment External Rupee \nAccounts (TIERA), Share Investment External Rupee Accounts (SIERA) and Special Foreign Investment \nDeposit Accounts (SFIDA) maintained in the Domestic Banking Units and the accounts maintained in \nOff-Shore Units of licensed commercial banks. \nAccordingly, the Banking (Off-Shore Banking Scheme) Order 2000 dated 7 April 2000, made \nunder sections 23, 25 and 26 of the Banking Act, No. 30 of 1988, is amended to facilitate such transfers \nbetween the said accounts maintained in the Domestic Banking Units and Off-Shore Units of licensed \ncommercial banks.\nThe Banking Order, No. 1 of 2009 incorporating the above mentioned amendment, is attached. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nActg.  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 328, "year": 2013}, "type": "Document"}
{"page_content": "320 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOrder made by the Monetary Board of the Central Bank of Sri Lanka with the approval of the \nMinister, under sections 23, 25 and 26 of the Banking Act, No. 30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n23 October 2009.\nBANKING ACT, ORDER NO.1 OF 2009\nBANKING (OFF-SHORE BANKING BUSINESS SCHEME) ORDER\n1. This Order may be cited as the Banking Act, Order No.1 of 2009. The Sections \nreferred to in this Order will be those of the Banking Act, No.30 of 1988, as \namended.\n2. The following new clause is hereby inserted immediatl y after Clause 5 and shall \nhave effect as Clause 5 A of the Banking (Off-Shore Banking Business Scheme) \nOrder, 2000 dated on 7 April 2000 :\u2013\n 5A. A ny transfer of funds between Treasury Bill / Bond \nInvestment External Rupee Accounts, Share Invest-\nment External Rupee Accounts and Special Foreign \nInvestment Deposit Accounts of a non-resident, and \naccounts maintained in Off-Shore Units in Sri Lanka by \nsuch non-resident shall be permitted.Citation.\nInsertion of new \nClause 5 A in the \nBanking  \n(Off-shore Banking \nBusiness) Order, \n2000 issued on \n7 April 2000. Permitted \ntransactions with \nthe Domestic \nBanking Unit.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 329, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  321\nBanking Act, No. 30 of 1988 as Last Amended by  \nBanking (Amendment) Act, No.33 of 1995\nBanking (Off-shore Banking Scheme) Order, 2000\nOrder relating to off-shore banking business carried on by licensed commercial banks, made \nunder sections 23, 25 and 26 of the Banking Act, by the Monetary Board, with the approval of the \nMinister.\nSgd. A. S. Jayawardena\nGovernor\nCentral Bank of Sri Lanka\nColombo \n7th April, 2000\nBANKING (OFF-SHORE BANKING SCHEME) ORDER, 2000\n1. This Order may be cited as the Banking (Of f-shore Banking \nScheme) Order, 2000.\n2. (1) An of f-shore unit may, subject to this Order and to any other \nwritten law, carry on all or any of the businesses specified in \nparagraphs (a) to (e) of Section 25 of the Act.\n (2) In accepting any contingent liability under Section 25( c) of \nthe Act, an off-shore unit shall only engage in any or all of the \nfollowing transactions\u2013\n (a) establish, open or advise letters of credit expressed in any \ndesignated foreign currency;\n (b) issue or renew guarantees, indeminities or similar  \nundertakings expressed in any designated foreign \ncurrency;\n (c) acceptances expressed in any designated foreign  \ncurrency.\n3. Funds of an account maintained with an off-shore unit shall not be \nwithdrawable by cheque.\n4. ( 1)  An of f-shore unit may, subject to this Order and any other \nwritten law, engage in off-shore banking business specified in \nparagraph 2 with any one or more of the following residents\u2013\n (a) the Central Bank of Sri Lanka;\n (b) a licensed commercial bank;\n (c) subject to sub paragraph (3), a BOI enterprise;Citation.\nAuthorised Businesses.\nWithdrawal of funds.\nAuthorised Business with \nResidents.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 330, "year": 2013}, "type": "Document"}
{"page_content": "322 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAssets and liabilities of an  \noff-shore unit.\nParticulars of executive officers \nand undertaking.\nBooks etc. off-shore units. (d) any other resident approved by the Monetary Board in the \ninterest of national economy, subject to such conditions as \nthe Monetary Board may impose.\n (2) W ithout prejudice to the rights conferred under this Order on a \nresident specified in subparagraph (1), an off-shore unit may, \nsubject to any other written law, grant loans in any designated \nforeign currency to any resident, being an exporter of goods \nand services from Sri Lanka or to any resident, being a supplier \nof accessories to such exporter as may be approved by the \nMonetary Board and may discount export bills expressed in \nany designated foreign currency for such an exporter.\n (3) An of f-shore unit shall not grant a loan in foreign currency to \na BOI enterprise unless the off-shore unit is satisfied that the \nBOI enterprise has the capacity to repay the loan in foreign \ncurrency.\n5. An account maintained by a non-resident in an off-shore unit shall \nonly be credited with funds received on inward remittances in any \ndesignated foreign currency.\n6. The total assets and liabilities of an off-shore unit shall not exceed \nsuch amount as may be determined by the Monetary Board.\n7. A  licensed commercial bank shall\u2013\n (a) prior to commencem ent of off-shore banking business, furnish \nto the Director of Bank Supervision the names, qualifications \nand banking experience of all executive officers of the  \noff-shore unit of the bank and notify forthwith any changes, if \nany, in such particulars thereafter; and\n (b) in the case of a commercial bank incorporated outside Sri  \nLanka, furnish the Director of Bank Supervision, if required \nby the Monetary Board, a written undertaking from its Head \nOffice stating that such bank shall provide such funds in such", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 331, "year": 2013}, "type": "Document"}
{"page_content": "Office stating that such bank shall provide such funds in such \ndesignated foreign currency as may be necessary to meet \nall obligations and liabilities incurred in carrying on of its  \noff-shore banking business.\n8. Books, other documents and records maintained by the of f-shore \nunit of a licensed commercial bank shall be kept separate from \nother books, documents and records maintained by the bank and the  \noff-shore unit shall, if so required by the Monetary Board, furnish \nthe Central Bank information from such books, documents and \nrecords maintained by the off-shore unit.\n9. In this Order\u2013\n\u201c BOI Enterpri se\u201d means a company with which an agreement has \nbeen entered into by the Board of Investment of Sri Lanka \nunder Section 17 of the Board of Investment of Sri Lanka, Law \nNo. 4 of 1978 and which has been granted approval to transact \nbusiness with any off-shore unit;Permitted deposits in an account \nof a  \nnon-resident.\nInterpretation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 331, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  323\n\u201c designated foreign currency\u201d means the foreign currency set out in \nthe Schedule to this Order;\n\u201c of f-shore unit\u201d means an off-shore unit of a licensed commercial \nbank carrying on off-shore banking business of the bank under \nthis Act and includes any unit which carried on off-shore \nbanking operations under the \u201cForeign Currency Banking \nScheme\u201d established by the Monetary Board;\n\u201c resident\u201d and \u201cnon-resident\u201d shall have the same meaning assigned \nto them in Section 86 of the Banking Act, No. 30 of 1988.\nschedule\nDesignated Foreign Currencies\n 1. Australian Dollar\n 2. Canadian Dollar\n 3. Danish Kroner\n 4. Deutsche Mark\n 5. Euro\n 6. French Franc\n 7. Hongkong Dollar\n 8. Japanese Yen\n 9. Netherland Guilder\n10. Norwegian Kroner\n11. Pound Sterling\n12. Singapore Dollar\n13. Swedish Kroner\n14. Swiss Franc\n15. United States Dollar", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 332, "year": 2013}, "type": "Document"}
{"page_content": "324 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOperating Instructions\nRef. No. : EC  / 04 / 2000 (D)\nDepartment of Exchange Control\nCentral Bank of Sri Lanka\n61 Janadhipathi Mawatha\nP.O. Box 883\nColombo 1.\n7th April, 2000\nTo : All Licensed Commercial Banks\nOFF-SHORE BANKING BUSINESS\n1. Licensed commercial banks are hereby permitted to carry on, subject to these instructions, \noff-shore banking business in accordance with the Banking (Off-shore Banking Scheme) Order 2000 \nissued under the Banking Act, No.30 of 1988 and amended by Banking (Amendment) Act, No.33 of \n1995 (hereinafter referred to as the \u201cOrder\u201d).\n2. Any loan granted under paragraph 4(2) of the Order in any designated foreign currency by \nan off-shore unit of a licensed commercial bank to a resident, being an exporter of goods and services \nfrom Sri Lanka, other than a BOI Enterprise, or to a resident, not being a BOI Enterprise, who is a \nsupplier of accessories to such exporter, shall be in accordance with the instructions to Authorised \nDealers No. ECD/02/97 (C&F) and ECD/03/97 (C&F) dated 03.01.1997 and EC/02/98 (C&F) dated \n31.07.1998* relating to foreign currency loans to direct and indirect exporters issued under the \nExchange Control Act and shall not exceed such limits as may be imposed by the Central Bank of Sri \nLanka and communicated to each licensed commercial bank by the Chief Accountant of the Central \nBank and any reference in  these operating instructions  to Foreign Currency Banking Units shall be a \nreference to Off-Shore  Units.\n3. (a) An accommodation extended to a resident under paragraph 4(1) of the Order, not being \nan exporter or supplier of goods to such an exporter referred to in paragraph 2 of these \ninstructions, by an off-shore unit which is authorised to engage in off-shore banking \nbusiness with such resident under the Order, shall be extended  solely for the operations \nof such resident in Sri Lanka and for no other purpose whatsoever.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 333, "year": 2013}, "type": "Document"}
{"page_content": "of such resident in Sri Lanka and for no other purpose whatsoever.\n (b) An accommodation granted under sub-paragraph ( a) to a resident, being a licensed \ncommercial bank or any other resident approved by the Monetary Board under paragraph \n4(1)(d) of the Order, shall not exceed such amount as may be determined by the Central \nBank.\n4. W here under paragraph 2(2) of the Order or under paragraph 4 of that Order, an  \noff-shore unit is authorised \u2013\n (a) to open, establish, or advise a Letter of Credit, such letter shall be opened, established or \nadvised on behalf of a non-resident or a resident specified in paragraph 4 of the Order; \n (b) to issue or renew a guarantee, indemnity or similar undertaking, such guarantee,  \nindemnity or undertaking shall be given on behalf of a non-resident or a resident specified \nin paragraph 4 of the Order; and \n* and EC/05/2000 of 7th April 2000 and ECD/F/D 1488 of 4th April 2000 [see chapter 15 of Foreign Exchange Manual]", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 333, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  325\n (c) to receive an acceptance, such acceptance shall be received for a non-resident or a \nresident specified in paragraph 4 of the Order.\n5. An of f-shore unit shall, if so required by the Central Bank, furnish to the Central Bank, such \nstatements or returns as may be deemed necessary in respect of any transactions carried on by such  \noff-shore unit under these instructions.\n6. In these instructions, the expressions \u201cBOI Enterprise\u201d, \u201cdesignated foreign currency\u201d,   \n\u201coff-shore unit\u201d, \u201cresident\u201d and \u201cnon-resident\" shall have the same meaning assigned to them in \nparagraph 9 of the Order.  \n7. (a) Previous Operating Instructions and Circulars issued in relation to the Foreign Currency \nBanking Scheme established by the Monetary Board and specified in the Schedule hereto \nare hereby revoked.\n (b) All other Operating Instructions and Circulars in relation to the Foreign Currency  \nBanking Scheme established by the Monetary Board and not revoked by  \nsub-paragraph (a) shall continue in force and any reference in these instructions and \ncirculars to the Foreign Currency Banking Unit shall be read and construed as if it were a \nreference to an Off-Shore  Unit.\n (c) The revocation ef fected by sub-paragraph ( a) shall not affect -\n (i) any of fence committed or any penalty or liability incurred under those instructions \nand circulars prior to the revocation; and\n (ii) any action, proceeding or thing pending or incomplete on the date of  revocation, \nbut every such action, proceeding or thing may be carried on and completed as if \nthose instructions and circulars continue to be in force.\n    \n M. B. Dissanayake   H. A. G. Hettiarachchi\n Chief Accountant  Controller of Exchange\nSchedule\n (1) Circular No. 380 (FCBS 1/79) dated 02.05.1979.\n (2) Circular No. 381 (FCBS 2/79) dated 17.05.1979.\n (3) (FCBS 3/79) and Operating Instructions BC 29/79 dated 28.09.1979.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 334, "year": 2013}, "type": "Document"}
{"page_content": "(3) (FCBS 3/79) and Operating Instructions BC 29/79 dated 28.09.1979.\n (4) (FCBS 4/79) dated 29.10.1979.\n (5) (FCBS 5/79) dated 02.1 1.1979.\n (6) (FCBS 6/79) \u2013 BC/F 1049/79 and Operating Instructions BD 40/79 dated 10.01.1980\n (7) (FCBS 7/80) \u2013 BC/F 1049/79 and Operating Instructions BD 18/80 dated 30.04.1980.  \n (8) (FCBS 8/80) \u2013 BC/F 1049/79 and Operating Instructions BD 21/80 dated 14.05.1980.  \n (9) (FCBS 9/84) \u2013 BC/F 1049/79 and Operating Instructions BD 23/84 dated 13.11.1984.\n(10) (FCBS 10/89) \u2013 BC/F 1049/79 and Operating Instructions BD 01/89 dated 31.01.1989.\n(11) Operating Instructions BD/15/93 dated 24.11.1993.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 334, "year": 2013}, "type": "Document"}
{"page_content": "326 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) of the \nBanking Act, No. 30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n02 September 2009.\nBANKING ACT DIRECTIONS NO.5 OF 2009\nIDENTIFYING, REPORTING, TRANSFERRING AND MAINTAINING \nABANDONED PROPERTY OF LICENSED COMMERCIAL BANKS\nIn the exercise of the powers conferred by Sections 72 to 76 of the Banking Act No. 30 of 1988, last \namended by the Banking (Amendment) Act No. 46 of 2006, the Monetary Board hereby issues these \nDirections under provisions of Section 46(1) of the Act in respect of identifying, reporting, transferring \nand maintaining abandoned property of licensed commercial banks. \n1 These Directions may be cited as the Banking Act Directions No. 5 of 2009. \nThe Sections referred to in these Directions are those of the Banking Act  \nNo. 30 of 1988, last amended by the Banking (Amendment) Act No. 46 of \n2006.\n2(1) In terms of Section 73(1), all licensed commercial banks holding any  \narticles defined as abandoned property in Section 72 of the Banking Act, \nshall submit a report to the Monetary Board on an annual basis, within  \nsix months from the end of each financial year. Licensed commercial banks \nshall report abandoned property in accordance with the format at Annex I. \n2(2) If there is no abandoned property identified by a licensed commercial bank \nduring a financial year, the respective licensed commercial bank shall formally \ncommunicate this fact to the Central Bank of Sri Lanka. Such communication \nwill be considered as a \u2018Nil\u2019 report. \n2(3) Pursuant to filing of the report on abandoned property, licensed commercial \nbanks shall maintain documents necessary to substantiate the information \nsubmitted in the report for a period of at least ten years from the date of \nsubmission.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 335, "year": 2013}, "type": "Document"}
{"page_content": "submitted in the report for a period of at least ten years from the date of \nsubmission.\n3(1) In terms of Section 74 of the Banking Act, all licensed commercial banks shall, \nwithin 30 days of submitting the report required under Direction 2(1) above, \n  (i) publish a notice in Sinhala, Tamil and English daily news papers stating \nthe name of the owner and particulars concerning the property, and\n (ii) dispatch by registered post, a notice containing the particulars of such \nproperty to the owner\u2019s last known address.Citation.\nReporting of \nabandoned \nproperty to the \nMonetary Board.\nPublication of \nthe notice on \nabandoned \nproperty.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 335, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  327\n3(2) All licensed commercial banks shall confirm in writing to the Central Bank of \nSri Lanka of compliance with these requirements, within seven working days \nfrom the date of publishing and despatching such notices.\n4(1) All licens ed commercial banks shall create \u201ccontrol accounts\u201d for abandoned \nproperty, based on the currency, in the banks\u2019 books and shall transfer to \ncontrol accounts all monies reported to the Monetary Board as abandoned \nproperty in accordance with Direction 2(1) above.\n4(2) All licensed commercial banks shall transfer monies that have already been \nreported to the Monetary Board as abandoned property in accordance with the \nCircular dated 2 May 2006, to the \u201ccontrol accounts\u201d referred to in Direction \n4(1) above, within seven working days from the date of this Direction.\n5(1) In terms of Section 73(2) of the Banking Act, the Monetary Board has \ndetermined that licensed commercial banks shall transfer ninety per cent of \nthe monies reported as abandoned property, maintained in Sri Lanka Rupees \n(LKR) in a control account, to a special account in the Central Bank of Sri \nLanka, within forty five calendar days from the date of reporting the abandoned \nproperty each year. \n5(2) Licensed commercial banks shall transfer ninety per cent of monies that have \nalready been reported as abandoned property in accordance with the Circular \ndated 2 May 2006, maintained in LKR, and the interest on such monies \ncalculated up to the date of transfer, to a special account in the Central Bank of \nSri  Lanka, within thirty calendar days from the date of this Direction.\n5(3) Licensed commercial banks shall transfer the monies reported as abandoned \nproperty referred to in Directions 5(1) and 5(2) above to the following account \nin the Central Bank of Sri Lanka, and notify it in writing to the Chief Accountant \nof the Central Bank with a copy to the Director of Bank Supervision.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 336, "year": 2013}, "type": "Document"}
{"page_content": "of the Central Bank with a copy to the Director of Bank Supervision.\n  Name of Account : Abandoned Property of Licensed Commercial Banks\n  Account Number :   4679\n6(1) T en per cent of the monies reported as abandoned property maintained in \nLKR, remaining after the transfer as specified under the Direction 5(1), and \nabandoned property maintained in foreign currency shall be retained in the \n\u201ccontrol accounts\u201d of licensed commercial banks referred to in Direction 4(1) \nabove. These monies shall be utilised to meet any claims on the abandoned \nproperties, upon the licensed commercial banks satisfying themselves of the \nidentity of the claimants.\n6(2) Once a payment is made in terms of Direction 6(1) above, licensed commercial \nbanks shall report it to the Central Bank of Sri Lanka within seven days from \nthe date of such payment, along with relevant information, i.e., details of the \nowner, description of property, date of reporting of such abandoned property, \namount of payment and date of payment. All licensed commercial banks shall \nprepare a report of such repayments on an annual basis and submit the same \nwithin six months of the end of each financial year, in accordance with the \nreporting format at Annex II, along with the report referred to in Direction 2(1) \nabove.Transfer of \nabandoned \nproperty to \u201ccontrol \naccounts\u201d.\nTransfer of monies \nto a special \naccount in the \nCentral Bank.\nRepayment \nof claims.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 336, "year": 2013}, "type": "Document"}
{"page_content": "328 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n6(3) Any claims in LKR made in excess of ten per cent of the funds retained in the \nrespective control account by the licensed commercial bank, will be repaid \nby the Central Bank of Sri Lanka in terms of the provisions of Section 75 of \nthe Banking Act. When any such claim is made, licensed commercial banks \nshall forward the same to the Central Bank of Sri Lanka, along with a letter \ncertifying the identity of the owner of such abandoned property.\n7(1) Licensed commercial banks shall prepare a Safe Deposit Inventory Sheet to \nrecord the details of safe deposit boxes opened. Opening of safe deposit boxes \nshall be carried out in the presence of two responsible officers who are, inter-\nalia, specifically assigned with such task and one of whom should be at least \nat Senior Executive level. All items contained in safe deposit boxes that are \nconsidered to be abandoned, shall be included in the Inventory Sheet without \nexceptions. All items contained in the safe deposit boxes shall be itemised and \nkept in safe custody after opening the safe deposit boxes. No item should be \nsold, destroyed or disposed of.\n7(2) The Inventory Sheet shall be signed by the of ficers mentioned in Direction \n7(1) above. The Safe Deposit Inventory Sheet shall be prepared in accordance \nwith the instructions to these Directions and reporting format at Annex III and \nsubmitted to the Monetary Board within six months of the end of each financial \nyear, along with the report on abandoned property referred to in Direction 2(1) \nabove.\n8 In  view  of  the  introduction  of  this  Direction,  Circular  Letter   \nNo. 02/17/402/0079/001, dated 2 May 2006, titled \u2018Implementation of the \nprovisions of Sections 72 to 76 of the Banking Act on Abandoned Property\u2019 is \nhereby revoked with respect to its applicability to licensed commercial banks \nand without prejudice to anything duly done under or in terms of such Circular", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 337, "year": 2013}, "type": "Document"}
{"page_content": "and without prejudice to anything duly done under or in terms of such Circular \nLetter.Opening of Safe \nDeposit Boxes.\nRevocation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 337, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  329\nAnnex I\nAnnual Financial Return (LKR \u2019000)\nBSD-AF-18-AP-I- Report of Abandoned Property \u2013 Additions during the period\nName of Bank :\nReporting Period:\n* Description of Property\n 1 . C urrent Account\n 2 . Sa vings Account\n 3 . Fi xed Deposit\n 4 . C all Deposit\n 5 . C enificate of Deposits\n 6 . Su ndry Deposit\n 7 . Mi nor Account\n 8 . Cheques\n 9 . B ank Draft\nl0. Pa y Orders / Cash Orders\n11. Sa vings Certificates\n12. Ot hers (Pl. specify)\n** Interest Bearing\n1.  Yes\n2.  No*** Currencies\n1.  LKR\nDesignated Foreign Currencies\n 1 . Au stralian Dollar\n 2 . C anadian Dollar\n 3 . De utche Mark\n 4 . Euro\n 5 . Fr ench Franc\n 6 . Ho ngKong Dollar\n 7 Ja panese Yen\n 8 . Po und Sterling\n 9 . Si ngapore Dollar\n10. Swi ss Franc\n11. Ot hers (Pl. specify)I \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, being first duly sworn, on oath depose and state that I have cause to be prepared and have examined this \nreport consisting of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 pages totaling Rs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026as to property presumed abandoned under the \nprovisions of the Banking Act, No. 30 of 1988, for the period stated above that I am duly authorised by the \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( name of the \nbank ) to exucute this Report and that to the best of my knowledge and belief the Report is true, correct and complete as of said date, excepting for such property \nas has since ceased to be abandoned.\nSignature : \u2026\u2026\u2026\u2026\u2026  Name : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  Designation : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nSworn and placed his/her signature before me on this \u2026\u2026\u2026\u2026 day of \u2026\u2026\u2026\u2026\u2026\u2026 in the year \u2026\u2026\u2026\nSignature : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  Name : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  (18.1.0.0.0.0) (18.2.0.0.0.0) (18.3.0.0.0.0) (18.4.0.0.0.0) (18.5.0.0.0.0) (18.6.0.0.0.0) (18.7.0.0.0.0) (18.8.0.0.0.0) (18.9.0.0.0.0) (18.10.0.0.0.0) (18.11.0.0.0.0) (18.12.0.0.0.0) (18.13.0.0.0.0)(18.14.0.0.0.0):\n(18.11.0.0.0.0)\u2013\n(18.12.0.0.0.0) (18.15.0.0.0.0)(18.16.0.0.0.0): \n(18.14.0.0.0.0)*\n(18.15.0.0.0.0) (18.17.0.0.0.0)\nName \nof \nBranchOwner\u2019s Last \nName with", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 338, "year": 2013}, "type": "Document"}
{"page_content": "(18.14.0.0.0.0)*\n(18.15.0.0.0.0) (18.17.0.0.0.0)\nName \nof \nBranchOwner\u2019s Last \nName with \nOther Names \nin FullLast Known \nComplete \nAddressOwner\u2019s \nIdentifi-\ncation Nos., \nif available \n(NIC, \nPassport \nNo., Date of \nBirth etc.)Description \nof \nProperty*Property \nIdentifi-\ncation No.Interest \nbearing**Last \nActivity \nDateNature \nof \nActivityCurrency*** Amount \nDueAmount \nDeductedDescription \nof \nDeductionNet Amount Ex. Rate Net Amount \nin LKRTerms of \nAgreement \nand Owner\u2019s \nInstruction\n0 0\n0 0\n0 0\n0 0\n0 0\n0 0\nGrand Total \n(18.18 .0.0.0.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 338, "year": 2013}, "type": "Document"}
{"page_content": "330 Directions, Determinations, and Circulars issued to Licensed Commercial BanksAnnex II\nAnnual Financial Return (LKR \u2019000)\nBSD-AF-18-AP-II- Report of Abandoned Property \u2013 Settlements during the period\nName of Bank :\n* Description of Property\n 1 . C urrent Account\n 2 . Sa vings Account\n 3 . Fi xed Deposit\n 4 . C all Deposit\n 5 . C enificate of Deposits\n 6 . Su ndry Deposit\n 7 . Mi nor Account\n 8 . C heques\n 9 . B ank Draft\nl0. Pa y Orders / Cash Orders\n11. Sa vings Certificates\n12. Ot hers (Pl. specify)\n** Interest Bearing\n1.  Yes\n2.  No*** Currencies\n1.  LKR\nDesignated Foreign Currencies\n 1 . Au stralian Dollar\n 2 . C anadian Dollar\n 3 . De utche Mark\n 4 . E uro\n 5 . Fr ench Franc\n 6 . Ho ngKong Dollar\n 7 Ja panese Yen\n 8 . Po und Sterling\n 9 . Si ngapore Dollar\n10. Swi ss Franc\n11. Ot hers (Pl. specify)Reporting Period:\nI \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, being first duly sworn, on oath depose and state that I have cause to be prepared and have examined this \nreport consisting of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 pages totaling Rs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026as to property presumed abandoned under the \nprovisions of the Banking Act, No. 30 of 1988, for the period stated above that I am duly authorised by the \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( name of the bank) \nto exucute this Report and that to the best of my knowledge and belief the Report is true, correct and complete as of said date, excepting for such property as has \nsince ceased to be abandoned.\nSignature : \u2026\u2026\u2026\u2026\u2026\u2026  Name : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  Designation : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nSworn and placed his/her signature before me on this \u2026\u2026\u2026\u2026 day of \u2026\u2026\u2026\u2026\u2026 in the year \u2026\u2026\u2026\u2026\nSignature : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  Name : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  (18.1.0.0.0.0) (18.2.0.0.0.0) (18.3.0.0.0.0) (18.4.0.0.0.0) (18.5.0.0.0.0) (18.6.0.0.0.0) (18.7.0.0.0.0) (18.8.0.0.0.0) (18.9.0.0.0.0) (18.10.0.0.0.0) (18.11.0.0.0.0) (18.12.0.0.0.0) (18.13.0.0.0.0)(18.14.0.0.0.0):\n(18.11.0.0.0.0)\u2013\n(18.12.0.0.0.0) (18.15.0.0.0.0)(18.16.0.0.0.0): \n(18.14.0.0.0.0)*\n(18.15.0.0.0.0) (18.19.0.0.0.0) (18.20.0.0.0.0)\nName \nof \nBranchOwner\u2019s Last", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 339, "year": 2013}, "type": "Document"}
{"page_content": "(18.14.0.0.0.0)*\n(18.15.0.0.0.0) (18.19.0.0.0.0) (18.20.0.0.0.0)\nName \nof \nBranchOwner\u2019s Last \nName with \nOther Names \nin FullLast Known \nComplete \nAddressOwner\u2019s \nIdentifi-\ncation Nos., \nif available \n(NIC, \nPassport No., \nDate of Birth \netc.)Description \nof Property*Property \nIdentifi-\ncation No.Interest \nbearing**Last Activity \nDateNature \nof \nActivityCurrency*** Amount \nDueAmount \nDeductedDescription of\nDeductionNet \nAmountEx. Rate Net Amount in \nLKRYear of \nIdentification \nas Abandoned \npropertyDate of \nsettlement of the \nclaim\n0 0\n0 0\n0 0\n0 0\n0 0\n0 0\n0 0\n0 0\nGrand Total \n(18.18 .0.0.0.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 339, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  331\nAnnex  III\nSafe Deposit Box Inventory Sheet\nName of the Bank :\nPosition as at financial year end :\n(18.1.0.0.0.0) (18.21.0.0.0.0) (18.22.0.0.0.0) (18.23.0.0.0.0) (18.24.0.0.0.0) (18.25.0.0.0.0) (18.26.0.0.0.0) (18.27.0.0.0.0)\nName\nof \nBarnchName of \nBox OwnerBox \nNumberVault \nLocationDate \nDrilledQuantity Detailed \nDescription of \nContentsAny other \nrelevant \ninformation\nWe certify that the above information is true and that no items have been removed or destroyed.\nDate of Inventory :\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n S ignature of Bank Official  Name of Official  Designation\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n S ignature of Bank Official  Name of Official  Designation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 340, "year": 2013}, "type": "Document"}
{"page_content": "332 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nInstructions for completing the Annexures on Abandoned Property\nIn terms of Section 73(1) of the Banking Act\nDetails of the property, as defined in terms of Section 72 of the Banking Act, should be recorded in \nalphabetical order of the owners\u2019 last name, to the extent possible, branch wise and currency wise.\nName of Bank :  Enter the name of the reporting Licensed Commercial Bank.\nReporting Date :  Enter the date as at when the reporting is done \n                             (last calendar day of the financial year).\n(18.1.0.0.0.0) Enter the name of the branch in which the customer account is held.\n(18.2.0.0.0.0) Enter the owner\u2019s last name followed by the first name and middle name/s in \nfull. Enter information that would aid in identification such as Miss, Mr., Mrs., \nafter the middle name.\nIf a single item has two or more owners, the names of all such owners must be \nreported, with the relationship.\nIf your records do not show the name of the owner of an item, enter the owner \nas \u201cunknown\u201d.\n(18.3.0.0.0.0) Enter the complete address available in your records. If no address is available, \nindicate this fact. In the case of several owners, if the address is the same, the \naddress may be entered once and indicated that it is the same for the others.\n(18.4.0.0.0.0) Enter the owner\u2019s National Identity Card No., Passport No., Date of Birth or \nany other information that will assist in identifying the owner. These will be \nessential at the time of paying claims and if known, must be included in the \nreport.\n(18.5.0.0.0.0) Select the description of the item from the list or, if it is not available, enter the \ndescription with sufficient detail.\n(18.6.0.0.0.0) Enter your identification number for each item such as Account No., etc.\n(18.7.0.0.0.0) Select whether the item is interest bearing or not.\n(18.8.0.0.0.0) Indicate the date when the last deposit, withdrawal or contact was made by the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 341, "year": 2013}, "type": "Document"}
{"page_content": "(18.8.0.0.0.0) Indicate the date when the last deposit, withdrawal or contact was made by the \nowner. It could also be the date a dividend became payable, cheque or draft was \nissued, certificate was purchased etc.\n(18.9.0.0.0.0) Indicate the nature of the last activity. E.g. A withdrawal, a deposit to the \naccount etc.\n(18.10.0.0.0.0) Select the currency in which the account is maintained from the list or, if it is \nnot available, enter the relevant currency.\n(18.11.0.0.0.0) Indicate the total amount due to the owner, including all interest, dividends \netc., earned up to the reporting date, without deducting any service charges. In \nthe case of safe deposit boxes or other items held for safekeeping, identify the \ncontents and include the description of any item that has a value. For all safe \ndeposit boxes, include an inventory sheet as in Annex III.\n(18.12.0.0.0.0) Enter the amount of deductions made which should include only any lawful \ncharges.\n(18.13.0.0.0.0) Indicate the nature of any deduction made such as service charges, tax etc.\n(18.14.0.0.0.0) The net amount due after the deductions mentioned.\n(18.15.0.0.0.0) Indicate the exchange rate applicable in the case of any currency other than \nLKR, as at the end date of the reporting period.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 341, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  333\n(18.16.0.0.0.0) The net amount due in LKR.\n(18.17.0.0.0.0) Indicate the terms agreed with the owner, such as interest rate, payment \ninstructions etc., that will be essential in the case of any payment of claims. Also \nindicate any special considerations attached to such property and the date of \nmaturity in the case of term deposits.\n(18.18.0.0.0.0) Total of the net amount due in LKR in (18.16.0.0.0.0).\n(18.19.0.0.0.0) Indicate the year of reporting/identifying the particular property as abandoned \nproperty in reporting to CBSL.\n(18.20.0.0.0.0) Indicate the date of settlement of the claim to the customer.\n(18.21.0.0.0.0) Indicate the full name(s) of the owner(s) including information useful for identifying \nthe owner.\n(18.22.0.0.0.0) Indicate the safe deposit box number.\n(18.23.0.0.0.0) Indicate the place at which the vault containing the safe deposit is located.\n(18.24.0.0.0.0) Indicate the date the safe deposit was opened.\n(18.25.0.0.0.0) Indicate the quantity of items in the safe deposit box.\n(18.26.0.0.0.0) Indicate the nature of each item contained in the safe deposit box.\n(18.27.0.0.0.0) Indicate any other relevant information.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 342, "year": 2013}, "type": "Document"}
{"page_content": "334 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 402 / 0079  / 001\nBank Supervision Department\nMay 02, 2006\nTo :  CEOs of Licensed Commer cial Banks and\n   CEOs of Licensed Specialised Banks\nDear Sirs,\nIMPLEMENTATION OF THE PROVISIONS OF PART IX (SECTIONS 72 TO 76)\nOF THE BANKING ACT ON ABANDONED PROPERTY\nAs intimated to you at the meeting of the CEOs of Licensed Commercial Banks and Licensed \nSpecialised Banks held on 24.11.05, in terms of Section 73(1) of the Banking Act, all licensed \ncommercial banks (LCBs) are hereby required to report \u201cAbandoned Property\u201d referred to in \nSection 72 of the Banking Act in the format determined by the Monetary Board given in Annex 1.  \nIn implementing the provisions of the Banking Act on Abandoned Property LCBs are requested to \nfollow the guidelines at Annex 2.\nThe provisions of the Banking Act do not require the licensed specialized banks (LSBs) to \nreport Abandoned Property. However, the LSBs too are requested to identify the articles that could \nbe considered abandoned as described in Section 72 of the Banking Act and to report them using the \nformat at Annex 1 till such time these provisions are made applicable to LSBs as well.\nThe first Report should contain property that would have been presumed abandoned up to \n31.12.2005.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd. Director of Bank Supervision\nEncl:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 343, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  335\nAnnex 1\nReport of Abandoned Property \nName of Bank          :\nReporting Period      :\nA B C D E F G H I J K L M\nOwner\u2019s\nLast Name\nwith Other Names\nin Full Last\nknown \nComplete\nAddressOwner\u2019s \nIdentification \nNos., if available\n(NIC,\nPassport No.,\ndate of birth etc.)Descrip-\ntion\nof\nPropertyProperty \nIdenti-\nfication \nNumberInterest \nbearing \nYes/NoLast \nActivity \nDateNature\nof \nActivityAmount \nDueAmount \nDeductedDescrip-\ntion\nof\nDeductionAmount Terms of \nAgreement \nand owner\u2019s \ninstructions\n1.             \n2.             \n3.             \n4.             \n5.             \n6.             \n7.             \n8.             \n9.             \n10.              \n11.              \n12.              \nTotal\n                            \nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.., being first duly sworn, on oath depose and state that I have cause to be prepared and have examined \nthis report consisting of \u2026\u2026\u2026\u2026\u2026\u2026\u2026pages totaling Rs \u2026\u2026\u2026\u2026\u2026.. as to property presumed abandoned under the provisions of the Banking Act, No.30 \nof 1988, for the period stated above that I am duly authorised by the ...................................................................... (name of the bank) to execute this Report \nand that to the best of my knowledge and belief the Report is true, correct and complete as of said date, excepting for such property as has since ceased to be \nabandoned.  \nSignature:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026      Name: \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026    Designation:   \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 \n              \nSworn and placed his/her signature before me on this \u2026.. day of\u2026\u2026\u2026  in the year \u2026\u2026         \nSignature:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026      Name: \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 344, "year": 2013}, "type": "Document"}
{"page_content": "336 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex 2\nGuidelines on the implementation of Part IX (Section 72 to 76) of the Banking Act \non Abandoned Property\nThe Central Bank of Sri Lanka has decided to implement the provisions of Part IX of the Banking Act \nwith effect from 31 December 2005. These guidelines establish the procedures for handling such property.\n1.\tIdentification \tof\tAbandoned \tProperty\na. All licensed commercial banks (LCBs) should identify articles presumed to be abandoned property \nas described in Section 72 of the Banking Act. In general abandoned property includes the following \narticles in respect of which no activity has been evidenced for a period of ten years.\n\u2022 Any general deposit (demand, savings or matured time deposit) with an LCB with any interest \nor dividend but excluding any lawful charges.\n\u2022 Any funds paid towards the purchase of shares or other interests in an LCB with any interest or \ndividend but excluding any lawful charges.\n\u2022 Any sum payable on cheques or other instruments for which the LCB is directly liable.\n\u2022 Any intangible personal property and any income or interest thereon held in a fiduciary capacity.\n\u2022 The contents of safe deposit boxes upon which the rental period has expired and of which notice \nhas been sent by registered post to the last known address of the lessee and the lessee has failed \nto respond within three years.\nb. Activity in this regard is evidenced by any action taken by an owner with respect to his property, \nwhich indicates that the owner does not intend his property to be considered abandoned. Such \naction would include a deposit or a withdrawal in the case of a customer account, notification of \nchange of address, payment of a safe deposit rental charge, any other written correspondence, \npresenting the pass book for updating etc.\n2. Filing of the Report on Abandoned Property with the Central Bank of Sri Lanka (CBSL)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 345, "year": 2013}, "type": "Document"}
{"page_content": "2. Filing of the Report on Abandoned Property with the Central Bank of Sri Lanka (CBSL)\na. All LCBs holding any abandoned property should submit a report to CBSL within six months of the \nend of each financial year. The first Report should cover property that would have been presumed \nabandoned up to 31.12.2005. In the case of LCBs whose financial year ends on 31 March, the first \nreport may cover the position as at 31.03.2006.\nb. A ll reporting of abandoned property should be in accordance with the format approved by the \nMonetary Board given at Annex 1. Information should be recorded in alphabetical order of the \nowners\u2019 last name, to the extent possible, and branchwise. Minors accounts should be reported \nseparately. The process of identifying and completing the Report is expected to be automated by \nLCBs.\nc. While the banks should report all property that falls within the definition of abandoned property, if \nthere are special considerations attached to such property, e.g.: the owner having migrated or left the \ncountry for an infinite period with notice to the bank, such special consideration should be reported \nto CBSL.\nd. Where an LCB does not hold any abandoned property to be reported as required by Section 73 \nof the Banking Act, the respective bank is expected to formally communicate it to CBSL. Such \ncommunication will be considered as a \u201cNegative Report\u201d.\ne. Prior to reporting abandoned property to CBSL, the banks should make notification of it to the \nowner of such abandoned property, by registered mail, to the last known address of the owner giving \na reasonable period to respond. Such notice should include a description of the property, a statement \nexplaining the statutory requirements of abandoned property and the intended date that the property \nwill be reported to CBSL if there is no response. In the case of Minors\u2019 accounts where the banks are", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 345, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  337\nof the view that it is not reasonable to consider a particular account as abandoned due to its intrinsic \ncharacteristics, banks need not notify the owners/guardians of such accounts. However, the banks \nshould report all Minors\u2019 accounts that fall within the definition of abandoned property to CBSL \nwith specific mention why they should not be considered as abandoned property . \nf. Pursuant to the filing of a Report on Abandoned Property, a bank should maintain documents \nnecessary to prove information submitted in the Report for a period of at least six years from the \ndate of submitting the Report.\n3. Delivery of Abandoned Property to CBSL\nAny further action to be taken in terms of Subsections (2) and (3) of Section 73 of the Banking Act \nwill be notified to all LCBs in due course.\n4. Publication of Notice of Abandoned Property\na. In accordance with Section 74 of the Banking Act a bank should, within thirty days of submission \nof the Report, required under paragraph 2.a above,\n\u2022 publish a notice in the Sinhala, Tamil and English daily newspapers stating the name of the owner \nand particulars concerning the property; and\n\u2022 should dispatch by registered post, a notice containing particulars of the property to the last \nknown address of the owner.\nb. W ith regard to Minors\u2019 accounts, the procedure stated in paragraph 2 e. above should be followed.\n5. Drilling/Opening of safe deposits\na. T he bank should prepare a Safe Deposit Inventory Sheet to record details of safe deposit \nboxes opened. Opening of the safe custody lockers should be carried out in the presence of \ntwo responsible officers who are, inter-alia, specifically assigned with such task and one of \nwhom should be at least at Senior Executive Level. All items found in safe deposit boxes \npresumed to be abandoned should be included in the Inventory Sheet without exceptions.  \nNo item should be sold, destroyed or disposed.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 346, "year": 2013}, "type": "Document"}
{"page_content": "No item should be sold, destroyed or disposed.\nb. The format at Annex 3 may be used for this purpose. The Inventory Sheet should be signed by the \nstaff conducting the inventory and returned to CBSL along with the Report on Abandoned Property.\nc. All items contained in the safe deposit boxes should be itemised and kept in safe custody after the \ndrilling/opening of safe deposit boxes.\n6. The costs\nThe banks should attempt to comply with these guidelines in the most cost efficient manner. These \ncosts should be charged to the owners of abandoned property only if it has been made known to the \ncustomers in a valid, enforceable and written contract between the bank and the customer, specifying \nthe amount of the fee and the customer is notified of the charging of such fee.\n7. Submission of information by licensed specialized banks (LSBs)\nThe provisions of the Banking Act do not require LSBs to identify and report Abandoned Property. \nHowever, LSBs are requested to identify the articles that could be considered abandoned as described \nin Section 72 of the Banking Act and to report them to CBSL using the format at Annex 1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 346, "year": 2013}, "type": "Document"}
{"page_content": "338 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nInstructions for completing the Report of Abandoned Property at Annex 1\nInformation should be recorded in alphabetical order of the owners\u2019 last name, to the extent possible, and \nbranchwise. A seperate sheet should be used for Minors accounts.\nName of Bank: Enter the name of the reporting bank.\nReporting Date: Enter the date as at when the reporting is done.\nColumn A:  Enter the owner\u2019s last name followed by full first name and full middle name/s.  \nEnter information that would aid in identification such as Miss, Mr., Mrs., after the  \nmiddle name.\n If a single item has two or more owners, the names of all such owners must be reported \nwith the relationship.\n If your records do not show an owner name for an item, enter the owner as \u201cunknown\u201d.\nColumn B:  Enter the complete address available in your records. If no address is available indicate \nso. In the case of several owners if the address is same, the address may be entered once \nand indicated that it is same for others.\nColumn C:  Enter the owner\u2019s National Identity Card No., Passport No., date of birth or any other \ninformation that will assist in identification of an owner. These will be essential in paying \nclaims and if known, they must be included in the Report.\nColumn D:  Enter the description of item with sufficient detail.\nColumn E:  Enter your identification number for each item such as Account No., Cheque No. etc.\nColumn F:  Indicate whether the item is interest bearing.\nColumn G:  Indicate the date when the last deposit, withdrawal or contact was made by the owner.  \nIt could also be the date a dividend became payable, cheque or draft was issued, certificate \nwas purchased.\nColumn H:  Indicate the nature of the last activity .\nColumn I:  Indicate the total amount due to the owner including all interest, dividend, earned up to \nthe reporting date without deducting any service charges.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 347, "year": 2013}, "type": "Document"}
{"page_content": "the reporting date without deducting any service charges.\n In the case of safe deposit boxes or oth er items held for safekeeping, identify the contents \nand include the description of any item that has a value. For all safe deposit boxes include \nan inventory sheet as in Annex3.\nColumn J:  Enter the amount of deductions made which should include only any lawful char ges.\nColumn K:  Indicate the nature of deduction made such as service char ges, tax etc.\nColumn L:  Indicate the net amount due after the deductions mentioned.\nColumn M:  Indicate the terms agreed with the owner such as interest rate, payment instructions etc., \nthat will be essential in case of payment of claims.\n Also indicate any special considerations attached to such property and the date of maturity \nin case of term deposits.\nTotal:  T otal the Column L and enter at the bottom of each page. On the last page enter the page \ntotal and the grand total for the entire Report.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 347, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  339\nAnnex 3\nSafe Deposit Box Inventory Sheet\nName of Bank:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nReporting Year:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nName of Box Owner(s):  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nBox Number: \u2026\u2026\u2026\u2026\u2026\u2026\u2026  Date Drilled: \u2026\u2026\u2026\u2026\u2026\u2026\u2026  Vault Location: \u2026\u2026\u2026\u2026\u2026..\nQuantity Detailed Description of Contents Any other Relevant Information\nWe certify that the above information is true and that no items have been removed or destroyed.\nDate of Inventory:\n --------------------------------  ---------------------------------  ------------------------------\n Signatur e of Bank Official  Name of Official  Designation\n --------------------------------  ---------------------------------  ------------------------------\n Signatur e of Bank Official  Name of Official  Designation\nInstructions for completing the Safe Deposit Box Inventory Sheet at Annex 3\nName of Bank: Enter the name of the reporting bank.\nReporting Date: Enter the date as at the date of reporting.\nName of the Box Owner(s):  Indicate the full name(s) of the owner(s) including information useful for \nowner identification.\nBox Number: Enter the safe deposit box number.\nDate Drilled: Enter the date the safe deposit box was opened.\nVault Location: Indicate where the vault containing the safe deposit is located.\nQuantity & Detailed Description:  Indicate the nature of each item contained in the safe deposit box \nwith the quantities.\nDate of Inventory: The date on which the inventory was taken.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 348, "year": 2013}, "type": "Document"}
{"page_content": "340 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : BS/14/88  V ol. IV\n16 October, 1990\nTo :  All Commercial Banks\nIMPLEMENTATION OF PART V OF BANKING ACT\nAll commercial banks are hereby informed that the Honourable Minister of Finance has announced, \nin the Gazette Extraordinary No.628/10 dated 18th September 1990, 20th September 1990 as the date on \nwhich the provisions of Part V of the Banking Act No.30 of 1988 shall come into operation.\nThe formats to be used by commercial banks in the preparation of Balance Sheets and Profit & Loss \nAccounts specified under section 38(3) of the Banking Act will be forwarded to you shortly.\nYours faithfully,\nSgd.  P. T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 349, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  341\nRef. No. : BS/38/90\nBank Supervision Department\nCentral Bank of Sri Lanka\n8th Floor \u2013 Renuka Building\n41 Janadhipathi Mawatha\nColombo 1.\n30 April 1998.\nTo : All Licensed Commercial Banks\nDear Sir,\nLIST OF QUALIFIED AUDITORS\nS.38 A OF THE BANKING ACT NO.30 OF 1988 AS AMENDED BY ACT NO.33 OF 1995\nWe refer to section 38 a of the Banking Act, No.30 of 1988 as amended by Act No.33 of 1995 and \nenclose herewith a list of qualified  auditors compiled in accordance with S.38 A(1) of the Act.\nYour attention is drawn to S.38 a (2) and S.39(1) of the Act which requires that the appointment \nof an auditor to audit  the accounts of your Bank from the list transmitted to you under S.38 a(1) by the  \nDirector of Bank Supervision.\nYou are required to comply with this provision when you next appoint an auditor in terms of S.39 \nof the Banking Act, No.30 of 1988 as amended by Act No.33 of 1995.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd.  Y. A. Piyatissa\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 350, "year": 2013}, "type": "Document"}
{"page_content": "342 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nList\tof\tQualified \tAuditors\nS 38 A (1) of the Banking Act, No. 30 of 1988 as amended by Act, No.33 of 1995\n Name  Addr ess\n 1. Ernst & Young  201 De Saram Place\n  P.O. Box 101\n  Colombo 10.\n 2. K P  M G Ford Rhodes Thornton & Co.  32A Sir Mohamed Macan Marker Mawatha\n  P.O. Box 186\n  Colombo 3.\n 3. Pricewaterhouse Coopers  P.O. Box 918\n  100, Braybrooke Place\n  Colombo 2.\n 4. SJMS Associates  2 Castle Lane\n  Colombo 4.\n 5. H L  B Edirisinghe & Co.  45 Braybrooke Street\n  Colombo 2\n 6. B R de Silva & Co.  22/4 Vijaya Kumaratunga Mawatha\n  Colombo 5.\n 7. Kreston MNS & Co.  P.O. Box 210\n  50/2 Sir James Peiris Mawatha\n  Colombo 2.\n 8. BDO Hathy  \u2018Charter House\u2019\n  65/2 \n  Sir Chittampalam A Gardiner Mawatha\n   P.O. Box 962\n  Colombo 2.\n 9. B V Fernando & Co.  78-3 1/1 Rodney Street\n  Colombo 8\n10. T issa Fernando  519/2B Elvitigala Mawatha\n  Colombo 5.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 351, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  343\nRef. No. : BS/38/90\nBank Supervision Department\n8th Floor, Renuka Building \n41, Janadhipathi Mawatha\nColombo 01.\n2nd June, 1998\nDear Sir,\nPREPARATION OF ANNUAL AUDITED ACCOUNTS \u2013 SECTION 38(4)\nOF THE BANKING ACT NO. 30 OF 1988 AS AMENDED BY\nBANKING AMENDMENT ACT NO. 33 OF 1995\nWe refer to Section 38(3) of Part V of the Banking Act in terms of which, the Monetary Board is \nempowered to specify the form of the Balance Sheet and Profit & Loss Account of Licensed Commercial \nBanks in Sri Lanka.\nIn this regard, Licensed Commercial Banks are informed that the Central Bank of Sri Lanka \nhas revised the Prescribed Format for the preparation and publication of Annual Audited Accounts of \nLicensed Commercial Banks by incorporating SLAS 23. The Revised Prescribed Format has already \nbeen sent to you for your comments/observations.\nI wish to advise you that in terms of Part V of the Banking Act, Licensed Commercial Banks are \nrequired to prepare and exhibit their annual audited accounts according to this revised format. The \nrevised Prescribed Format which is effective from 1st January, 1998 is enclosed herewith.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd.  Y. A. Piyatissa\nDirector of Bank Supervision\n(Formats referred to in the Circular are replaced with Circular No. 02/17/900/0001/04 dated 11.02.2013)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 352, "year": 2013}, "type": "Document"}
{"page_content": "344 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 17 / 900 / 0001  / 04\nBank Supervision Department\n11 February, 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nPREPARATION, PRESENTATION AND PUBLICATION OF\nANNUAL AUDITED ACCOUNTS OF BANKS\nWe refer to our previous correspondence and discussions on the above and enclose the new format \nfor the preparation, presentation and publication of annual audited accounts of licenced commercial \nbanks and licensed specialised banks effective from the financial reporting periods beginning on or after \n1 January 2012.\nAccordingly, formats referred to in the Circulars dated 02 June 1998 and 15 December 1999 on \npreparation of annual audited accounts of licensed commercial banks and licensed specialised banks, \nrespectively, are replaced with the format in Annex. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nCopy to :  The Secretary-General, Sri Lanka Banks\u2019  Association (Gurantee) Ltd.\n Panel of Auditors", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 353, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  345\nSPECIFIED FORMAT FOR THE PREPARATION OF \nANNUAL FINANCIAL STATEMENTS OF \nLICENSED COMMERCIAL BANKS \nAND \nLICENSED SPECIALISED BANKS\n Annex", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 354, "year": 2013}, "type": "Document"}
{"page_content": "346 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nFinancial Statements\nTable of Contents\nFinancial Statements\n Income Statement\n Statement of Comprehensive Income\n Statement of Financial Position\n Statement of Changes in Equity\n Statement of Cash Flows\nNotes to the Financial Statements\n 1. Corporate Information\n 2. Accounting Policies\n 3. Segment Information\nIncome Statement\n 4. Net Interest Income\n 5. Net Fee and Commission Income\n 6. Net Gain/(Loss) from Trading\n 7. Net Gain/(Loss) from Financial Instruments Designated at Fair Value through Profit or Loss\n 8. Net Gain/(Loss) from Financial Investments\n 9. Other Operating Income (net)\n10. Impairment for Loans and Other Losses \n11. Personnel Expenses\n12. Other Expenses\n13. T ax Expenses\n14. Earnings Per Share\nStatement of Financial Position: Assets\n15. Analysis of Financial Instruments by Measurement Basis\n16. Cash and Cash Equivalents\n17. Balances with Central Banks\n18. Placements with Banks\n19. Derivative Financial Instruments \n20. Other Financial Assets at Fair Value through Profit or Loss\n21. Loans and Receivables to Banks\n22. Loans and Receivables to Other Customers\n23. Financial Investments - Available-for-Sale\n24. Financial Investments - Held-to-Maturity\n25. Investments in Subsidiaries\n26. Investments in Associates and Joint Ventures\n27. Property , Plant and Equipment\n28. Investment Properties\n29. Goodwill and Intangible Assets\n30. Deferred Tax Assets/Liabilities\n31. Other Assets", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 355, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  347\nStatement of Financial Position: Liabilities\n32. Due to Banks\n33. Derivative Financial Instruments\n34. Other Financial Liabilities at Fair Value through Profit or Loss\n35. Due to Other Customers\n36. Other Borrowings\n37. Debt Securities Issued\n38. Other Provisions\n39. Other Liabilities\n40. Due to Subsidiaries\n41. Subordinated T erm Debts\nStatement of Financial Position: Capital and Reserves\n42. Stated Capital/Assigned Capital\n43. Statutory Reserve Fund\n44. Retained Earnings\n45. Other Reserves\n46. Non-controlling Interests\n \nOff-Balance Sheet Information\n47. Contingent Liabilities and Commitments\nOther Disclosures\n48. Related Party Disclosures\n49. Net Assets Value per Ordinary Share\nStatement of Cash Flows\n50. Non-Cash items included in Profit Before Tax\n51. Changes in Operating Assets\n52. Changes in Operating Liabilities\nOther Disclosure Requirements\n1. Information about the significance of financial instruments for financial position and performance\n2. Information about the nature and extent of risks arising from financial instruments\n3. Other disclosures", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 356, "year": 2013}, "type": "Document"}
{"page_content": "348 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nINCOME STATEMENT\nFOR THE YEAR ENDED  DD MM YYYY\nIn Rupees Million\nNoteBank Group\n20XX 20XX 20XX 20XX\nInterest income\nInterest expenses\nNet interest income 04\nFee and commission income\nFee and commission expenses\nNet fee and commission income 05\nNet gain / (loss) from trading 06\nNet gain / (loss) from financial instruments  \ndesignated at fair value through profit or loss07\nNet gain / (loss) from financial investments 08\nOther operating income (net) 09\nTotal operating income\nImpairment for loans and other losses 10\nNet operating income\nPersonnel expenses 11\nOther expenses 12\nOperating profit/(loss) before value added tax (V AT)\nValue added tax (V AT) on financial services\nOperating profit/(loss) after value added tax (V AT)\nShare of profits of associates and joint ventures\nProfit / (loss) before tax\nTax expenses 13\nProfit / (loss) for the year\nProfit attributable to:\nOwners of the parent\nNon-controlling interests\nEarnings per share on profit 14\nBasic earnings per ordinary share\nDiluted earnings per ordinary share", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 357, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  349\nSTATEMENT OF COMPREHENSIVE INCOME\nFOR THE YEAR ENDED  DD MM YYYY\nIn Rupees Million\nNoteBank Group\n20XX 20XX 20XX 20XX\nProfit / (loss) for the year\nOther comprehensive income, net of tax\nChanges in revaluation surplus\nActuarial gains and losses on defined benefit plans\nGains and losses (arising from translating  \n the financial statements of a foreign operation) \nGains and losses on re-measuring  \n available-for -sale financial assets\nGains and losses on cash flow hedges\nOthers\nShare of profits of associates and joint ventures \nLess:  T ax expense/(income) relating to components \nof other comprehensive income\nOther comprehensive income for the year, net of \ntaxes\nTotal comprehensive income for the year\nAttributable to:\nOwners of the parent\nNon-controlling interests", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 358, "year": 2013}, "type": "Document"}
{"page_content": "350 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nSTATEMENT OF FINANCIAL POSITION\nAS AT  DD MM YYYY\nIn Rupees Million\nNoteBank Group\n20XX 20XX 20XX 20XX\nAssets\nCash and cash equivalents 16\nBalances with central banks 17\nPlacements with banks 18\nDerivative financial instruments 19\nOther financial assets held-for-trading 20\nFinancial assets designated at fair value  \n through profit or loss20\nLoans and receivables to banks 21\nLoans and receivables to other customers 22\nFinancial investments \u2013 Available-for-sale 23\nFinancial investments \u2013 Held-to-maturity 24\nInvestments in subsidiaries 25\nInvestments in associates and joint ventures 26\nProperty, plant and equipment 27\nInvestment properties 28\nGoodwill and intangible assets 29\nDeferred tax assets 30\nOther assets 31\nTotal assets\nLiabilities\nDue to banks 32\nDerivative financial instruments 33\nOther financial liabilities held-for-trading 34\nFinancial liabilities designated at fair value  \n through profit or loss34\nDue to other customers 35\nOther borrowings 36\nDebt securities issued 37\nCurrent tax liabilities\nDeferred tax liabilities 30\nOther provisions 38\nOther liabilities 39\nDue to subsidiaries 40\nSubordinated term debts 41\nTotal liabilities\nEquity\nStated capital/Assigned capital 42\nStatutory reserve fund 43\nRetained earnings 44\nOther reserves 45\nTotal equity  of the owners of the parent  \n Non-controlling interests46\nTotal equity\nTotal equity and liabilities\nContingent liabilities and commitments 47", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 359, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  351\nSTATEMENT OF CHANGES IN EQUITY\nFOR THE YEAR ENDED  DD MM YYYY\nBANK / GROUP \nIn Rupees Million\nStated capital/\nAssigned \ncapitalReserves\nTotal\nNon-controlling interest\nTotal equityOrdinary \nvoting shares\nOrdinary \nnon-voting shares\nAssigned capital\nReserve fund\nRevaluation reserve\nRetained earnings\nOther reserves\nBalance as at DD/MM/YY (Opening balance)  \nTotal comprehensive income for the year  \nProfit/(loss) for the year  \nOther comprehensive income (net of tax)  \nTotal comprehensive income for the year           \nTransactions with equity holders, recognised \ndirectly in equity \nShare issue/increase of assigned capital  \nShare options exercised\nBonus issue  \nRights issue  \nTransfers to reserves during the period  \nDividends to equity holders  \nProfit transferred to head office  \nGain/(loss) on revaluation of Property, Plant and \nEquipment (if cost method is adopted) \nOthers (Please specify)  \nTotal transactions with equity holders           \nBalance as at DD/MM/YY (Closing balance)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 360, "year": 2013}, "type": "Document"}
{"page_content": "352 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nSTATEMENT OF CASH FLOWS\nFOR THE YEAR ENDED  DD MM YYYY\nIn Rupees Million\nNoteBank Group\n20XX 20XX 20XX 20XX\nCash\tflows\tfrom\toperating \tactivities\nProfit before tax\nAdjustment for :\nNon-cash items included in profits before tax 50\nChange in operating assets 51\nChange in operating liabilities 52\nNet gains from investing activities\nShare of profits in associates and joint ventures\nDividend income from subsidiaries and associates \nInterest expense on subordinated debt\nOthers (please specify)\nContribution paid to defined benefit plans\nTax paid\nNet cash generated from operating activities     \nCash\tflows\tfrom\tinvesting \tactivities\nPurchase of property, plant and equipment\nProceeds from the sale of property, plant and equipment\nPurchase of financial investments\nProceeds from the sale and maturity of  \n financial investments\nNet purchase of intangible assets\nNet cash flow from acquisition of investment  \n in subsidiaries and associates\nNet cash flow from disposal of subsidiaries\nProceeds from disposal of associates and joint ventures\nDividends received from investment  \n in subsidiaries and associates\nOthers (please specify)\nNet cash (used in)/from investing activities     \nCash\tflows\tfrom\tfinancing \tactivities\nNet proceeds from the issue of ordinary share capital \nNet proceeds from the issue of other equity instruments\nNet proceeds from the issue of subordinated debt\nRepayment of subordinated debt\nInterest paid on subordinated debt\nDividend paid to non-controlling interest\nDividend paid to the owners of the parent company\nDividend paid to holders of other equity instruments\nOthers (please specify)\nNet\tcash\tfrom\tfinancing \tactivates     \nNet increase/(decrease) in cash & cash equivalents\nCash and cash equivalents at the beginning of the year\nExchange difference in respect of cash & cash equivalent\nCash and cash equivalents at the end of the year", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 361, "year": 2013}, "type": "Document"}
{"page_content": "Cash and cash equivalents at the end of the year     \nNote:  Banks have the option to use one of the two methods specified in LKAS 7  \nfor the preparation of the statement of cash flows", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 361, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  353\nNOTES TO THE FINANCIAL STATEMENTS\nFOR THE YEAR ENDED  DD MM YYYY\n \n1. Corporate information\n2. Accounting policies\n2.1 Basis of preparation\n2.1.1  Statement of compliance\n2.1.2  Presentation of financial statements\n2.2 Basis of consolidation\n2.3 Significant accounting judgments and estimates\n2.3.1  Fair value of financial instruments\n2.3.2  Impairment losses on loans and receivables\n2.3.3  Impairment of available-for -sale investments\n2.3.4  Deferred tax assets\n2.3.5  Pensions obligation\n2.3.6  Others\n2.4 Changes in accounting policy and disclosures\n2.5 Summary of significant accounting policies\n2.5.1  Foreign currency translation\n2.5.2  Financial instruments - initial recognition and subsequent measurement\n2.5.3  Impairment of financial assets and subsequent measurement of financial liabilities\n2.5.4  Impairment of non-financial assets \n2.5.5  Repurchase and reverse repurchase agreements\n2.5.6  Securities lending and borrowing\n2.5.7  Determination of fair value\n2.5.8  Hedge accounting\n2.5.9  Of f-setting financial instruments\n2.5.10  Leasing\n2.5.11  Recognition of income and expenses\n2.5.12  Cash and cash equivalents\n2.5.13  Property , plant and equipment \n2.5.14  Business combination and goodwill\n2.5.15  Intangible assets\n2.5.16  Financial guarantees\n2.5.17  Pension benefits\n2.5.18  Provisions\n2.5.19  Share based payment transactions\n2.5.20  Taxes\n2.5.21  Dividends\n2.5.22  Reserves\n2.5.23  Segment reporting\n2.5.24  Others", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 362, "year": 2013}, "type": "Document"}
{"page_content": "354 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n3. Segment information (as per  SLFRS 8)\n4. Net Inter est Income\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nInterest income\nCash and cash equivalents\nPlacements with banks \nDerivative financial instruments \nOther financial assets held-for-trading\nFinancial assets designated at fair value through profit or loss\nLoans and receivables to banks \nLoans and receivables to other customers\nFinancial investments \u2013 Held-to-maturity\nFinancial investments \u2013 Available-for-sale\nOthers (Please specify)\nTotal interest income\nInterest expenses\nDue to banks \nDerivative financial instruments\nOther financial liabilities at fair value through profit or loss\nDue to other customers\nOther borrowings\nDebt securities issued\nOthers (Please specify)\nTotal interest expenses\nNet interest income\na.  Net Interest Income from Sri Lanka Government Securities\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nInterest income \nLess : Interest expenses\nNet interest income \n5. Net Fee and Commission Income\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nFee and commission income\nFee and commission expenses\nNet fee and commission income", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 363, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  355\nComprising\nLoans\nCards \nTrade and remittances\nInvestment banking\nDeposits\nGuarantees\nOthers (Please specify)\nNet fee and commission income\n6. Net Gain / (Loss) fr om Trading\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nForeign exchange\n From banks\n From others customers\nInterest rates\nEquities\nOthers (Please specify)\nTotal\n7.\t Net\tGain\t/\t(Loss)\tfrom\tFinancial \tInstruments \tDesignated \tat\tFair\tValue\tthrough\tProfit\tor\tLoss\t\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGains on financial assets designated at fair value  \nthrough profit or loss\nLosses on financial assets designated at fair value  \nthrough profit or loss\nGains on financial liabilities designated at fair value \nthrough profit or loss\nLosses on financial liabilities designated at fair value \nthrough profit or loss\nTotal\n8. Net Gain / (Loss) fr om Financial Investments\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nAssets available-for-sale \n Debt securities\n Equities\n Others (Please specify)\nOthers (Please specify)\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 364, "year": 2013}, "type": "Document"}
{"page_content": "356 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n9. Other  Operating Income (net)\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGain / (Loss) on investment properties \nGain / (Loss) on sale of property, plant and equipment\nGain / (Loss) on revaluation of foreign exchange\nRecovery of loans written-off\nOthers (Please specify)\nOther Operating Income (net)\n10. Impairment for  Loans and Other Losses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nLoans and receivables  \n T o banks [Note 21(b)]\n T o other customers [Note 22(c)]\nFinancial investments \n A vailable-for-sale [Note 23(a)]\n Held-to-maturity [Note 24(a)]\nInvestment in subsidiaries [Note 25(a)]\nInvestments in associates and joint ventures [Note 26(a)]\nProperty, plant and equipment [Note 27(c)]\nInvestment properties [Note 28(b)]\nOff-balance sheet exposures [Note 39]\nOthers (Please specify)\nTotal\n11. Personnel Expenses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSalary and bonus\nContributions to defined contribution / benefit plans\nShare based expenses\nOthers\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 365, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  357\n12. Other  Expenses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nDirectors\u2019 emoluments \nAuditors\u2019 remunerations\nNon-audit fees to auditors\nProfessional and legal expenses\nDepreciation of property, plant and equipment\nAmortisation of leasedhold property\nAmortisation of intangible assets\nOperating lease expenses\nOffice administration and establishment expenses\nOthers (Please specify)\nTotal\n13. T ax Expenses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nCurrent tax expense\n Current year\n Prior years\u2019  provision\nDeferred tax expense\n Ef fect of change in tax rates\n T emporary differences\n Prior years\u2019  provision\nTotal\na.  Reconciliation of tax expenses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nProfit\t/\t(loss)\tbefore\ttax\nIncome tax for the period  \n(Accounting profit @ applicable tax rate)\nAdjustment in respect of current income tax of  \nprior periods\nAdd :  T ax effect of expenses that are  \nnot deductible for tax purposes\nLess :  T ax effect of expenses that are  \ndeductible for tax purposes\nTax expense for the period", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 366, "year": 2013}, "type": "Document"}
{"page_content": "358 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nb.  The deferred tax (credit) / charge in the income statement comprise of the following:\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nDeferred tax assets\nDeferred tax liabilities\nOther temporary differences \nDeferred tax (credit) / charge to income statement\n14. Earnings Per  Share\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nNet profit attributable to ordinary equity holders\nAdjust :\n Interest on preference shares\n Interest on convertible bonds\nNet profit attributable to ordinary equity holders adjusted for the ef fect of dilution\nWeighted average number of ordinary shares for basic earnings per share\nEffect of dilution \n Convertible bonds\n Convertible preference shares\n Others\nWeighted average number of ordinary shares adjusted for the effect of dilution\nBasic earnings per ordinary share\nDiluted earnings per ordinary share\n15. Analysis of Financial Instruments by Measur ement Basis\nIn Rupees Million\na. Bank \u2013 Curr ent year (20XX)  \nHFTDesignated\nat fair valueHTMAmortised \ncostAFS Hedging Total\nASSETS\nCash and cash equivalents\nBalances with central banks\nPlacements with banks \nDerivative financial instruments\nOther financial assets at  \n fair value through profit or loss\nLoans and receivables to banks\nLoans and receivables to other  \n customers\nFinancial investments\nTotal financial assets", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 367, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  359\nHFTDesignated\nat fair valueAmortised \ncostHedging Total\nLIABILITIES\nDue to banks\nDerivative financial instruments\nOther financial liabilities at  \n fair value through profit or loss\nDue to other customers\nDebt securities issued\nOther borrowings\nTotal financial liabilities \nHFT  \u2013  Held for trading\nDesignated at fair value  \u2013  Designated at fair value through profit or loss\nAmortised cost  \u2013  Loans and receivables/deposits at amortised cost \nHTM  \u2013  Held-to-maturity \nAFS  \u2013  Available-for-sale \nHedging  \u2013  Instruments of fair value and cash flow hedging \nIn Rupees Million\nb. Bank \u2013 Pr evious year (20XX)  \nHFTDesignated\nat fair valueHTMAmortised \ncostAFS Hedging Total\nASSETS\nCash and cash equivalents\nBalances with central banks\nPlacements with banks \nDerivative financial instruments\nOther financial assets at  \n fair value through profit or loss\nLoans and receivables to banks\nLoans and receivables to other  \n customers\nFinancial investments\nTotal financial assets \nHFTDesignated\nat fair valueAmortised \ncostHedging Total\nLIABILITIES\nDue to banks\nDerivative financial instruments\nOther financial liabilities at  \n fair value through profit or loss\nDue to other customers\nDebt securities issued\nOther borrowings\nTotal financial liabilities", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 368, "year": 2013}, "type": "Document"}
{"page_content": "360 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nc. Gr oup \u2013 Current year (20XX) [as per 15(a) above]   \n  \nd. Gr oup \u2013 Previous year (20XX) [as per 15(b) above]\n16. Cash and Cash Equivalents\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nCash in hand\nBalances with banks\nMoney at call and short notice\nTotal\n17. Balances with Central Banks\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nStatutory balances with central banks\n Central bank of Sri Lanka\n Other Central banks\nNon-statutory balances with central banks\n Central bank of Sri Lanka\n Other central banks\nTotal balances with central banks\n18. Placements with Banks \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 369, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  361\n19. Derivative Financial Instruments\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nInterest rate derivatives\n Interest rate swaps\n Interest rate futures\n Interest rate options\n Others (Please specify)\nForeign currency derivatives\n Currency swaps\n Forward foreign exchange contracts\n Others(Please specify)\nOthers (Please specify)\nTotal\n20.\tOther \tFinancial \tAssets\tat\tFair\tValue\tthrough\tProfit\tor\tLoss\t\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nHeld for trading\n Sri Lanka Government Securities \n  (separately by instrument-wise)\n Equity securities\n Debt securities\n Others (Please specify)\nSub Total\nDesignated at fair value through profit or loss\n Sri Lanka Government Securities \n  (separately by instrument-wise)\n Debt securities\n Equity securities\n Loans and receivables to banks (Note 21)\n Loans and receivables to other customers (Note 22)\n Others (Please specify)\nSub Total\nTotal\na. Financial Assets Held for Trading\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nFinancial assets held for trading pledged as collateral\nOther financial assets held for trading\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 370, "year": 2013}, "type": "Document"}
{"page_content": "362 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n21. Loans and Receivables to Banks \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGross loans and receivables\nLess : Individual impairment \nOf which : Loans and receivables designated at fair value \n     through profit or loss (Note 20)\nNet loans and receivables\na.  Analysis\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nBy product\nLoans and advances\n Overdrafts\n Short-term loans\n Long-term loans\n Securities purchased under resale agreements\n Others (Please specify)\nOthers \n Sri Lanka Government Securities \n  (separately by instrument-wise)\n Others (Please specify)\nGross total\nBy currency\n Sri Lankan Rupee \n United States Dollar\n Great Britain Pound \n Others (Please specify)\nGross total\nb. Movements in Individual Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nIndividual impairment \n Opening balance at DD MM YY\n Char ge / (Write back) to income statement\n W rite-off during the year\n Other movements\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 371, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  363\n22. Loans and Receivables to Other  Customers \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGross loans and receivables\nLess : Individual impairment \n    Collective impairment\nOf which : Loans and receivables designated at fair value \n     through profit or loss (Note 20)\nNet loans and receivables\na.  Analysis\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nBy product\n Loans and advances\n  Overdrafts\n  T rade finance\n  Lease rentals receivable\n  Credit cards\n  Pawning\n  Staff loans\n  T erm loans\n   Short-term\n   Long-term\n  Securities purchased under resale agreements\n  Others (Please specify)\nOthers \n Sri Lanka Government Securities (separately by instrument-wise)\n Others (Please specify)\nGross total\nBy currency\n Sri Lankan Rupee \n United States Dollar\n Great Britain Pound \n Others (Please specify)\nGross total\nBy industry\n Agriculture and fishing\n Manufacturing\n Tourism\n Transport\n Construction\n Traders\n New economy\n Others \nGross total", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 372, "year": 2013}, "type": "Document"}
{"page_content": "364 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nb. Lease r entals receivable (Disclose as per LKAS 17)\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\nc. Movements in Individual and Collective Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nIndividual impairment \n Opening balance at DD MM YY\n Char ge / (Write back) to income statement\n W rite-off during the year\n Other movements\nClosing balance at DD MM YY\nCollective impairment\n Opening balance at DD MM YY\n Char ge / (Write back) to income statement\n Other movements\nClosing balance at DD MM YY\nTotal\n23. Financial Investments \u2013 Available-for-Sale \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSri Lanka Government Securities (separately by instrument-wise)\nEquity securities\nDebt securities\nOthers\nLess : Impairment \nNet Available-for-sale Investments\na.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nWrite-off during the year\nOther movements\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 373, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  365\nb.  Financial Investments \u2013 Available-for-Sale\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nFinancial investments \u2013 Available-for-sale pledged as collateral\nOther financial investments \u2013 Available-for-sale \nTotal\n24. Financial Investments \u2013 Held-to-Maturity \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSri Lanka Government Securities (separately by instrument-wise)\nDebt securities\nOthers\nLess : Impairment \nNet Total\nOf which : Held-to-Maturity investments designated at fair value\n     through profit or loss (Note 20)\nNet Held-to-Maturity Investments\na.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nWrite-off during the year\nOther movements\nClosing balance at DD MM YY\n25. Investments in Subsidiaries\nIn Rupees Million\nBank\n20XX 20XX\nQuoted equity share\nUnquoted equity share\nLess : Impairment \nNet Total\nNote : Please provide details of subsidiaries, separately.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 374, "year": 2013}, "type": "Document"}
{"page_content": "366 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\na.  Movements in Impairment during the year\nIn Rupees Million\nBank\n20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nOther movements\nClosing balance at DD MM YY\n26. Investments in Associates and Joint Ventures\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nAssociates\nUnquoted equity share\nQuoted equity share\nLess : Impairment \nSub Total\nJoint Ventures\nUnquoted equity share\nQuoted equity share\nLess : Impairment \nSub Total\nTotal\nNote : Please provide details of associates and joint ventures separately.\na.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nAssociates\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nOther movements\nClosing balance at DD MM YY\nJoint Ventures\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nOther movements\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 375, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  367\n27. Pr operty, Plant and Equipment\na. Pr operty, Plant and Equipment \u2013 Bank\nIn Rupees Million\nBank 20XXLand \nand Buildings\nLeasehold \nproperties\nComputer \nHardware \nComputer \nSoftware\nOffice\t\nEquipment, \nfurniture and\n\tfittings\nOthers\nTotal\n20XX (Current year)\nCost / fair value\nOpening balance at DD MM YY\nAdditions\nDisposals\nExchange rate variance\nAdjustments \nClosing balance at DD MM YY\nLess : Accumulated depreciation\nOpening balance at DD MM YY\nCharge for the year\nAdditions\nDisposals\nExchange rate variance\nAdjustments\nClosing balance at DD MM YY\nLess : Impairment \nNet book value at DD MM YY\nMarket value at DD MM YY\n20XX (Previous year)\nCost / fair value\nOpening balance at DD MM YY\nAdditions\nDisposals\nExchange rate variance\nAdjustments \nClosing balance at DD MM YY\nLess : Accumulated depreciation\nOpening balance at DD MM YY\nCharge for the year\nAdditions\nDisposals\nExchange rate variance\nAdjustments\nClosing balance at DD MM YY\nLess : Impairment \nNet book value at DD MM YY\nMarket value at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 376, "year": 2013}, "type": "Document"}
{"page_content": "368 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nb.  Property, Plant and Equipment \u2013 Group [as per 27(a) above]\nc.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nExchange rate variance and other adjustments\nClosing balance at DD MM YY\n28. Investment Pr operties\na.  Investment Properties as Cost / fair value\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nCost / fair value\nOpening balance at DD MM YY\nAdditions\nDisposals\nExchange rate variance\nAdjustments \nClosing balance at DD MM YY\nLess : Accumulated depreciation\nOpening balance at DD MM YY\nCharge for the year\nAdditions\nDisposals\nExchange rate variance\nAdjustments\nClosing balance at DD MM YY\nLess : Impairment \nNet book value at DD MM YY\nMarket value at DD MM YY\nb.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nExchange rate variance and other adjustments\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 377, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  369\n29. Goodwill and Intangible Assets\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGoodwill\nOpening balance at DD MM YY\nAdjustments\nLess : Impairment \nSub-total (closing balance at DD MM YY\nOther Intangible Assets\nOpening balance at DD MM YY\nAdjustments\nSub-total (closing balance at DD MM YY\nTotal\n30. Deferr ed Tax Assets / Liabilities\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nDeferred tax assets\nDeferred tax liabilities \nIncome statement\nNet Total\n31. Other  Assets\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nCost\nReceivables\nDeposits and prepayments\nSundry debtors\nOthers (Please specify)\nTotal\n32. Due to Banks\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nBorrowings\nSecurities sold under repurchase (repo) agreements\nOthers (Please specify)\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 378, "year": 2013}, "type": "Document"}
{"page_content": "370 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n33. Derivative Financial Instruments\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nInterest rate derivatives\n Interest rate swaps\n Interest rate futures\n Interest rate options\n Others (Please specify)\nForeign exchange derivatives\n Currency swaps\n Forward foreign exchange contracts\n Others (Please specify)\nOthers (Please specify)\nTotal\n34.\tOther \tFinancial \tLiabilities \tat\tFair\tValue\tthrough\tProfit\tor\tLoss\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nHeld for trading\n Other debt securities\n Due to non-bank customers\n Other financial liabilities\nSub Total\nFair value designated\n Other debt securities\n Due to non-bank customers\n Other financial liabilities\nSub Total\nTotal\n35. Due to Other  Customers\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nTotal amount due to other customers\nLess : Designated at fair value through profit or loss (Note 34)\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 379, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  371\na.  Analysis \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nBy product\n Demand deposits (current accounts)\n Savings deposits\n Fixed deposits\n Other deposits (Please specify)\nTotal\nBy currency\n Sri Lanka rupee \n United State dollar\n Great Britain pound \n Others (Please specify)\nTotal\n36. Other  Borrowings \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSecurities sold under repurchase (repo) agreements\nOthers (Please specify)\nTotal\n37. Debt Securities Issued\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nIssued by the bank (Note 32)\nIssued by other subsidiaries (Note 40)\nTotal\nDue within 1 year\nDue after 1 year\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 380, "year": 2013}, "type": "Document"}
{"page_content": "372 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\na. Details of Debt Securities Issued\nTypeFace \nValue \n(Rupees \nMillions)Interest \nRate and \nRepayment \nTermsIssue \nDateMaturity \nDateBank Group\n20XX 20XX 20XX 20XX\nIssued by the bank\n (i)\n(ii)\nSub Total\nIssued by other subsidiaries \n (i)\n(ii)\nSub Total\nTotal\n38. Other  Provisions \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\n39. Other  Liabilities \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSundry creditors\nInterest payable\nImpairment in respect of off-balance sheet credit exposures (Note 10)\nOther payables\nTotal\n40. Due to Subsidiaries \nIn Rupees Million\nBank\n20XX 20XX\nPlease specify\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 381, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  373\n41. Subordinated Term Debts\nTypeFace \nValue \n(Rupees \nMillions)Interest \nRate and \nRepayment \nTermsIssue \nDateMaturity \nDateBank Group\n20XX 20XX 20XX 20XX\nIssued by the bank\n (i)\n(ii)\nSub Total\nIssued by other subsidiaries \n (i)\n(ii)\nSub Total\nTotal\nDue within 1 year\nDue after 1 year\nTotal\n42. Stated Capital / Assigned Capital\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\n43. Statutory Reserve Fund\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at  DD MM YY\nTransfer during the period\nClosing balance at DD MM YY\n44. Retained Earnings\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at  DD MM YY\nProfit for the year\nTransfers to other reserves\nDividend\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 382, "year": 2013}, "type": "Document"}
{"page_content": "374 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n45. Other  Reserves  \na.  Bank \u2013 Current year (20XX)  \nIn Rupees Million\nOpening balance \nat DD MM YYMovement / \ntransfersClosing balance \nat DD MM YY\nGeneral reserve\nRevaluation reserve\nAvailable-for-sale reserve\nCash flow hedge reserve\nForeign currency translation reserve\nOthers (please specify)\nTotal\nb.  Bank \u2013 Previous year (20XX)  \nIn Rupees Million\nOpening balance \nat DD MM YYMovement / \ntransfersClosing balance \nat DD MM YY\nGeneral reserve\nRevaluation reserve\nAvailable-for-sale reserve\nCash flow hedge reserve\nForeign currency translation reserve\nOthers (please specify)\nTotal\nc.  Group \u2013 Current year (20XX)  [as per 43(a) above]\nd.  Group \u2013 Previous year (20XX)  [as per 43(b) above]\n46. Non-contr olling Interests\nIn Rupees Million\nGroup\n20XX 20XX\nPlease specify\nTotal\n47. Contingent Liabilities and Commitments\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGuarantees\nPerformance bonds\nLetters of credit\nOther contingent items\nUndrawn loan commitments\nOther commitments\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 383, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  375\n48. Related Party Disclosur es\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\n49. Net Assets Value per Ordinary Share\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\n50.\tNon-Cash \titems\tincluded\tin\tProfit\tBefore\tTax\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nDepreciation of property, plant and equipment\nAmortisation of leasehold property\nAmortisation of intangible assets\nImpairment losses on loans and advances \nOther impairment\nAccretion of discounts and amortisation of premiums of investment securities\nCharge for defined benefit plans\nShare based payment expense\nOthers (please specify)\nTotal\n51. Change in Operating Assets\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nChange in derivative financial instruments\nNet increase in debt securities, treasury bills & bonds and \n equity shares held at fair value through profit or loss\nNet increase in loans and advances to banks\nNet increase in loans and advances to customers\nChange in balances with Central Banks\nChange in pre-payments and accrued income\nChange in other assets (please specify)\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 384, "year": 2013}, "type": "Document"}
{"page_content": "376 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n52. Change in Operating Liabilities\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nChange in derivative financial instruments\nChange in deposits from banks, customers and  \ndebt securities issued\nChange in debt securities\nChange in financial liabilities designated at  \nfair value through profit or loss\nChange in accruals and deferred income\nChange in other liabilities (Please specify)\nTotal\nOther Disclosure Requirements\nWhile complying with the disclosure requirements of all applicable Sri Lanka Accounting \nStandards, the following minimum disclosure requirements are applicable for all licensed banks \non\tstandalone \tbasis\tand\ton\tconsolidated \tbasis\tfor\tthe\tfinancial\treporting\tperiods\tbeginning \ton\tor\t\nafter\t01.01.2012 \tand\tshall\tbe\tdisclosed \teither\ton\tthe\tface\tof\tfinancial\tstatements \tor\ton\tthe\tnotes.\n1.\t Information \tabout\tthe\tsignificance \tof\tfinancial\tinstruments \tfor\tfinancial\tposition\tand\t\nperformance\n1.1 Statement of Financial Position \n1.1.1  Disclosures on categories of financial assets and financial liabilities (refer notes to the financial \nstatements).\n1.1.2  Other disclosures\n (i) Special disclosures about financial assets and financial liabilities designated to be measured \nat fair value through profit or loss, including disclosures about credit risk and market risk, \nchanges in fair values attributable to these risks and the methods of measurement. \n (ii) Reclassifications of financial instruments from one category to another .  \n (iii) Information about financial assets pledged as collateral and about financial or non-financial \nassets held as collateral.  \n (iv) Reconciliation of the allowance account for credit losses by class of financial assets. \n (v) Information about compound financial instruments with multiple embedded derivatives. \n (vi) Breaches of terms of loan agreements. \n1.2 Statement of Compr ehensive Income", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 385, "year": 2013}, "type": "Document"}
{"page_content": "(vi) Breaches of terms of loan agreements. \n1.2 Statement of Compr ehensive Income \n1.2.1  Disclosures on items of income, expense, gains and losses (refer notes to the financial statements).\n1.2.2  Other disclosures: \n (i) T otal interest income and total interest expense for those financial instruments that are not \nmeasured at fair value through profit and loss. \n (ii) Fee income and expense.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 385, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  377\n (iii) Amount of impairment losses by class of financial assets.  \n (iv) Interest income on impaired financial assets. \n1.3 Other  disclosures\n1.3.1  Accounting policies for financial instruments \n1.3.2  Information on hedge accounting \n1.3.3  Information about the fair values of each class of financial asset and financial liability, along with: \n (i) Comparable carrying amounts. \n (ii) Description of how fair value was determined. \n (iii) The level of inputs used in determining fair value. \n (iv) Reconciliations of movements between levels of fair value measurement hierarchy, \nadditional disclosures for financial instruments that fair value is determined using level 3 \ninputs. \n (v) Information if fair value cannot be reliably measured. \n2.\t Information \tabout\tthe\tnature\tand\textent\tof\trisks\tarising\tfrom\tfinancial\tinstruments \t\n2.1 Qualitative disclosur es \n2.1.1  Risk exposures for each type of financial instrument \n2.1.2  Management\u2019 s objectives, policies, and processes for managing those risks \n2.1.3  Changes from the prior period\n2.2 Quantitative disclosur es\n2.2.1  Summary of quantitative data about exposure to each risk at the reporting date. \n2.2.2  Disclosures about credit risk, liquidity risk, market risk, operational risk, interest rate risk and \nhow these risks are managed.\n (i) Credit Risk\n(a) Maximum amount of exposure (before deducting the value of collateral), description \nof collateral, information about credit quality of financial assets that are neither past \ndue nor impaired and information about credit quality of financial assets. \n(b) For financial assets that are past due or impaired, disclosures on age, factors considered \nin determining as impaired and the description of collateral on each class of financial \nasset. \n(c) Information about collateral or other credit enhancements obtained or called.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 386, "year": 2013}, "type": "Document"}
{"page_content": "asset. \n(c) Information about collateral or other credit enhancements obtained or called. \n(d) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk \nManagement Framework for Licensed Banks (Section H).\n (ii) Liquidity Risk \n(a) A  maturity analysis of financial liabilities. \n(b) Description of approach to risk management. \n(c) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk \nManagement Framework for Licensed Banks (Section H).\n (iii) Market Risk \n(a) A  sensitivity analysis of each type of market risk to which the entity is exposed.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 386, "year": 2013}, "type": "Document"}
{"page_content": "378 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n(b) Additional information, if the sensitivity analysis is not representative of the entity's \nrisk exposure. \n(c) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk \nManagement Framework for Licensed Banks (Section H).\n (iv) Operational Risk\n  Refer Banking Act, Direction No. 7 of 2011 on Integrated Risk Management Framework \nfor Licensed Banks (Section H).\n (v) Equity risk in the banking book\n(a) Qualitative disclosures\n\u2022 Dif ferentiation between holdings on which capital gains are expected and those \ntaken under other objectives including for relationship and strategic reasons.\n\u2022 Discussion of important policies covering the valuation and accounting of equity \nholdings in the banking book. \n(b) Quantitative disclosures\n\u2022 V alue disclosed in the statement of financial position of investments, as well as \nthe fair value of those investments; for quoted securities, a comparison to publicly \nquoted share values where the share price is materially different from fair value.\n\u2022 The types and nature of investments\n\u2022 The cumulative realised gains/(losses) arising from sales and liquidations in the \nreporting period.\n (vi) Interest rate risk in the banking book\n(a) Qualitative disclosures\n Nature of interest rate risk in the banking book (IRRBB) and key assumptions\n(b) Quantitative disclosures \n The increase / (decline) in earnings or economic value (or relevant measure used \nby management) for upward and downward rate shocks according to management\u2019s \nmethod for measuring IRRBB, broken down by currency (as relevant).\n2.2.3  Information on concentrations of risk \n3. Other  disclosures\n3.1 Capital\n3.1.1  Capital structure\n (i) Qualitative disclosures\n  Summary information on the terms and conditions of the main features of all capital \ninstruments, especially in the case of innovative, complex or hybrid capital instruments.\n (ii) Quantitative disclosures", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 387, "year": 2013}, "type": "Document"}
{"page_content": "(ii) Quantitative disclosures\n(a) The amount of Tier 1 capital, with separate disclosure of:\n\u2022 Paid-up share capital / common stock\n\u2022 Reserves\n\u2022 Non-controlling interests in the equity of subsidiaries\n\u2022 Innovative instruments\n\u2022 Other capital instruments\n\u2022 Deductions from Tier 1 capital", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 387, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  379\n(b) The total amount of Tier 2 and Tier 3 capital\n(c) Other deductions from capital\n(d) T otal eligible capital\n3.1.2  Capital adequacy\n (i) Qualitative disclosures\nA summary discussion of the bank\u2019s approach to assessing the adequacy of its capital to \nsupport current and future activities.\n (ii) Quantitative disclosures\n(a) Capital requirements for credit risk, market risk and operational risk\n(b) T otal and Tier 1 capital ratio", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 388, "year": 2013}, "type": "Document"}
{"page_content": "380 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 05 /006 / 0100  / 002\nBank Supervision Department\n06 June 2011\nTo : CEOs of All Licensed Banks\nDear Sir / Madam,\nDISPLAY OF INTEREST RATES, EXCHANGE RATES, \nSERVICE CHARGES, FEES AND COMMISSIONS\nReference Circular No. 02/05/006/0100/001 dated 28 October 2003 on display of interest rates \nand exchange rates.\nTo further improve the market efficiency by promoting healthy competition among banks, all \nlicensed banks are required to expand the disclosures on interest rates of deposits and lending products, \nexchange rates and to display details of fees, commissions and other service charges in all branches and \nother banking outlets and publish them in banks\u2019 web sites, commencing from 01 August 2011.\nFormats for display of above information are enclosed herewith. Banks may further expand the \nformats given to suit the products and services of each bank.\nAnnex I  :  Format for display of interest rates\nAnnex II  :  Format for display of foreign exchange rates\nAnnex III  :  Format for display of service char ges, fees and commissions\nYours faithfully,\n(Mrs). T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 389, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  381\nAnnex  I\nSuggested format for the Display of Interest Rates\nDescriptionMin. rate\nas at \u2026..Max. rate\nas at \u2026..\nInterest Rates on Deposits\nSavings Deposits\nMinor Savings Deposits\nCall Deposits\nTime Deposits - 1 Year\n    * Interest Payable monthly\n    * Interest Payable at maturity\nNRFC Savings Deposits\n    * US Dollar\n    * Sterling Pound\n    * Euro\n    * Any other currencies\nNRFC Fixed Deposits - 1 Year\n    * US Dollar\n    * Sterling Pound\n    * Euro\n    * Any other currencies\nInterest Rates on Advances\nExport Bill Finance - Rupee Facilities\nImport Bill Finance - Rupee Facilities\nLease Finance\nLending to Small & Medium Scale Industries (SMEs)\nResidential Housing\nPawning\nUS Dollar Loans to Exporters\nOverdrafts\n    * Permanent\n    * Temporary\nPersonal Loans\nVehicle Loans\nCredit Cards \nAgricultural Lending\nRefinance \tSchemes\n  i.  Agriculture & Animal Husbandry\n      * Tea Development Project (Revolving fund)- (TDPRF)\n      * Agro \u2013 Livestock Development Project \n      * Any other\n ii.  Small & Medium Enterprises Sector\n      * Sushana Loan Scheme\n      * Self-Employment Initiative Loan Scheme \n      * Any other\niii. Micro Finance Sector\n    * Poverty Alleviation Microfinance Project (Revolving Fund)  PAMP Scheme\n    * Small Farmers & Landless Credit Project Revolving Fund\n    * Any other", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 390, "year": 2013}, "type": "Document"}
{"page_content": "382 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex  II\nSuggested format for the Display of Foreign Exchange Rates\nExchange RatesRate: Rupees per unit of foreign currency as at \u2026\u2026\u2026\u2026.\nCurrency Travelers Cheques Telegraphic TransfersImport \nBill \nRatesBuying \nRateSelling \nRateBuying \nRateSelling \nRateBuying \nRateSelling \nRate\nAustralian Dollar\nCanadian Dollar\nDanish Kroner\nEuro\nHong Kong Dollar\nJapanese Yen \nNew Zealand Dollar\nNorwegian Kroner\nPound Sterling\nSingapore Dollar\nSwedish Kroner\nSwiss Franc\nUnited States Dollar", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 391, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  383\nAnnex  III\nSuggested format for the Display of Service Charges, Fees & Commissions\nDescription Rs.   as at \u2026\u2026..\nSERVICE CHARGES\nSavings Accounts\nCharges for non-maintenance of account balance as stipulated minimum, etc\u2026\nCurrent Accounts\nCurrent account monthly service charge\nCharges for account statement\nCheque issuing cost\nStop payment order\nReturn cheques due to insufficient funds, etc\u2026\nRemittances\nInward credit to Sri Lanka rupee account\nInward remittance to foreign currency account\nIssue of foreign currency demand draft, pay orders, etc\u2026\nTraveler\u2019s Cheques\nEncashment of Traveler's Cheques\nSale of Traveler's Cheques, etc \u2026\nATMs\nIssuing Fee \nATM cash withdrawal - Own Bank\nATM cash withdrawal - Other Bank, etc\u2026\nCredit Cards - Main Cardholder\nAnnual fee \nLate Payment charges\nInterest charges, etc \u2026\nFEES & COMMISSIONS\nSLIPS Payment Charges\nRTGS Payment Charges\nFacility Arrangement Fees - Overdrafts\n    * Security Backed\n    * Clean Basis\nEarly Settlement Fees\n    * Residential Housing\n    * Vehicle Loans\nCheque Purchase Commission\nLC Commission \n    * LC Opening Fee & Commission\n    * LC Negotiation Charges, etc \u2026\nShipping Guarantees \nBank Guarantees \nAcceptance", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 392, "year": 2013}, "type": "Document"}
{"page_content": "384 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 05 / 006 / 0100  / 001\nBank Supervision Department\n28th October 2003\nTo : All Licensed Commercial Banks and\n        all Licensed Specialised Banks\nDear Sir  / Madam,\nDISPLAY OF INTEREST RATES AND EXCHANGE RATES\nThe Central Bank of Sri Lanka welcomes the efforts made by banks to publish their deposit and \nlending rates. You would no doubt appreciate that adequate market information is vital for improving \nmarket efficiency and in promoting healthy competition.\nAs another step forward in this direction, all licensed commercial banks and specialised banks \nare requested to compile a representative list of their interest rates on deposits and advances and their \nbuying and selling rates for foreign currencies and to display such information to the general public in \nall branches and other banking outlets. You would recall that we agreed at an earlier Bank Managers\u2019 \nMeeting to follow this practice, but it is observed that not all banks adequately do so.\nAll licensed commercial banks and specialised banks are informed that the display of interest \nrates and exchange rates of banks should commence from 1st January, 2004 the latest. A format \nsuggested for the display of information is enclosed herewith.\nPlease forward a copy of the list of interest rates and exchange rates displayed to this Department \nperiodically as and when it is revised.\nYours faithfully,\nDirector of Bank Supervision\nSuggested Format for the Display of Interest Rates and Exchange Rates\nBank \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nInterest Rates on Deposits [per cent per annum]  Rate as at \u2026\u2026\nSavings Deposits\n Fixed Deposits - 12 months\n  Interest payable monthly\n  Interest payable at maturity\n NRFC Savings Deposits - US Dollar\n              - Sterling Pound\n NRFC One Year Fixed Deposits - US Dollar \n                - Sterling Pound\n \nInterest Rates on Advances [per cent per annum]  Rate as at \u2026\u2026", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 393, "year": 2013}, "type": "Document"}
{"page_content": "- Sterling Pound\n \nInterest Rates on Advances [per cent per annum]  Rate as at \u2026\u2026\nExport Bill Finance - Rupee Facilities\nImport Bill Finance - Rupee Facilities\nLease Finance\nLending to Medium Scale Industries (up to 5 years)\nResidential Housing \nPawning\nUS Dollar Loans to Exporters\n Rate : Rupees per unit of Foreign Currency as at \u2026\u2026\u2026\n    Exchange Rates  Currency  Traveller\u2019s Cheques\n Buying Rate  Selling Rate  Buying Rate  Selling Rate\nUS Dollar\nSterling Pound\nYen\nEuro\nAustralian Dollar\nSingapore Dollar\nIndian Rupee", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 393, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  385\nRef. No. : 02  / 04 / 003 / 0401  / 001\nBank Supervision Department\n24 March 2006\nTo :  CEOs of Licensed Commer cial Banks and\n   CEOs of Licensed Specialised Banks\nDear Sirs,\nINADEQUATE  / INCORRECT DISCLOSURES  / PRESS STATEMENTS BY BANKS\nAs intimated to you at the Chief Executive Officers meeting held on 23 March 2006, there have \nbeen several instances where banks have attempted to mislead the public by publishing incorrect \nstatements/data or by not publishing certain aspects of information with regard to non-compliance with \nstatutory regulations. \nSuch attempts by banks to mislead the general public totally negate the efforts of the regulator to \neducate the public on the true state of the banks in the industry, and it would be futile to further enhance \nour efforts in this regard, if immediate action is not taken by the regulator to stop such deception. The \nCentral Bank of Sri Lanka (CBSL) will be faulted for permitting the banks to misrepresent their financial \ncondition to the public.\nIt is incumbent on bank management, in the discharge of their fiduciary responsibility, to project the \ntrue picture of their financial condition to the public.\nTherefore, in the interest of providing accurate information to the public for making informed \ndecisions, all banks are required, in making statements to the press, and in publishing the financial results \nof banks, to ensure that adequate publicity is given to non-compliance, if any, with the prudential ratios \nand the measures being taken by the bank to meet these ratios.\nWhere banks, which are not compliant with regulatory requirements, do not make such disclosures \nto the public in press interviews or statements, the CBSL, as the regulator will be compelled to correct \nsuch information in the public domain.\nYours faithfully,\nSgd, Director of Bank Supervision\nCopy to : Secretary-General, SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 394, "year": 2013}, "type": "Document"}
{"page_content": "386 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. No. : 02  / 04 / 003 / 0401  / 001\nBank Supervision Department\n21 February 2006\nTo :  The CEOs of all Licensed Commer cial Banks and\n   all Licensed Specialised Banks\nDear Sirs,\nPUBLICATION OF AUDITED FINANCIAL STATEMENTS OF BANKS IN THE PRESS\nFurther to the circulars issued with regard to the publication of financial statements of banks in the \npress, dated 30 September 2005 and 26 January 2006.\nConsidering the representations made by the banks with regard to the practical difficulties faced by \nthem with regard to the time period for publication of audited financial statements of banks in the press, \nin order to qualify for exemption from publishing the last quarter unaudited results, all licensed banks \nare informed as follows:\no If the bank publishes its annual audited financial statements within three months from the end \nof the financial year, the requirement to publish the financial statements for the fourth quarter \nin terms of the circular dated 30 September 2005 would not be mandatory.\no The licensed commercial banks incorporated abroad may publish the latest available key  \nperformance indicators relating to the global operations of such bank on a quarterly basis, and \nthe ratios based on audited financial information along with the audited financial statements \nof the parent bank. \no W ith regard to the format for publication of audited financial statements, all banks should use \nthe format issued on 30 September 2005 for the publication of quarterly financial statements.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 395, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  387\nRef. No. : 02  / 04 / 003 / 0401  / 001\nBank Supervision Department\n30 September 2005\nTo : The CEOs of all Licensed Commercial Banks and\n        all Licensed Specialised Banks\nDear Sirs,\nPUBLIC DISCLOSURE BY PUBLICATION OF\nQUARTERLY FINANCIAL STATEMENTS OF BANKS IN THE PRESS\n As discussed at the meeting of the CEOs of LCBs held on 28 July 2005, the format for publication \nof quarterly financial statements in the press has been revised in consultation with the representative of \nbanks, and is attached herewith, along with the suggested Sinhala and Tamil translations.  \n2. T he revision is aimed at increasing the transparency of banking operations, and to align the \npublication requirements with those of other regulators. Accordingly, the formats have been drafted \nincorporating the disclosure requirements of the Securities and Exchange Commission (SEC)(in \nrespect of listed banks) and the Sri Lanka Accounting Standards, as far as possible. In addition, selected \nperformance indicators, including key prudential ratios have been included, as agreed with the banks. \n3. The information published should be in respect of the entire bank, i.e., including the off-shore \nbanking unit and in the case of LCBs incorporated in Sri Lanka, any branches abroad. \n4. The new format contains two parts viz; \n\u2022 Part  I : The format for the summarized balance sheet, income statement, and the statement of \nchanges in equity and reserves and selected performance indicators 1/\n\u2022 Part II :  Instructions for Preparation of Bank Accounts for publication in the press 1/\n5. Balance Sheet information should be reported as at end of the relevant quarter. Comparative figures \nto be published should be based on the audited financial statements for the previous financial year . \n5.1 The reporting period in respect of the income statement should be the cumulative position as at the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 396, "year": 2013}, "type": "Document"}
{"page_content": "end of the relevant quarter in the financial year. Comparative figures should be in respect of the same \nreporting period in the previous financial year. \n5.2 In the case of selected performance indicators, the relevant ratios as at the reporting date should be \nreported while the comparative ratios should be based on the audited financial statements for the previous \nfinancial year. \n6. The publication should be made within two months from the end of each quarter, at least once in \nan English, Sinhala and Tamil newspaper.  If the bank publishes its annual audited financial statements \nwithin two months from the end of the financial year, the requirement to publish the financial statements \nfor the fourth quarter in terms of these instructions would not be mandatory. \n7. The licensed commercial banks incorporated abroad may report information pertaining to the global \noperations of the parent bank, in the column for reporting the information on the Group. Such information \nmay be reported in the currency of the home country or in US Dollars. In view of the heterogeneous", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 396, "year": 2013}, "type": "Document"}
{"page_content": "388 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\ncharacter of group accounts of foreign banks, the banks are requested to make every endeavour to publish \nall items given in the agreed format.  \n8. The disclosure requirements contained herein specify the minimum requirements to be adopted \nby the banks and all banks are encouraged to make additional disclosures for the benefit of the general \npublic. In addition, the banks listed on the Colombo Stock Exchange should comply with any additional \nregulations imposed by the SEC with regard to publication of financial information. \n9. The revised publication format will be effective for publication of banks\u2019 financial statements from \nthe 3rd quarter of 2005 onwards. \n9.1 The codes indicated in the formats are for cross reference with the definitions in the instructions and \nnot for publication.  \n10. The circular dated 30 January 2003 on the publication of quarterly financial statements is hereby \nrescinded.   \n Please acknowledge receipt of this circular .  \nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 397, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  389\nRef. No. : 02  / 04 / 003 / 0401  / 001\nBank Supervision Department\n26 January 2006\nTo : CEOs of all Licensed Banks\nDear Sirs,\nPUBLICATION OF QUARTERLY FINANCIAL STATEMENTS OF BANKS\nIN THE PRESS\nBy circular No. 02/04/003/0401/001 dated 30 September 2005, all banks were informed of the \nrequirements with regard to the publication of quarterly financial statements of banks in the press, which \nwas applicable for the publication of financial statements from the 3rd Quarter of 2005 onwards.\nSeveral discrepancies were observed with regard to the publications in respect of the 3rd Quarter of \n2005. Therefore all banks are informed that they should comply with all the requirements in the above \ncircular. The following points should be noted:\n 1. The time frame for publication is within two months from the end of each quarter .\n 2. The publication should be made in a Sinhala, English and Tamil daily newspaper \u2013 This \nrequirement is to inform the public of the financial condition of the banks and is uniformly \napplicable to all banks. \n 3. The format specified by the circular should be conformed to. If a \u2018 nil\u2019 balance has to be \nreported in respect of an item in the format, such items should be reported as \u2018 nil\u2019, instead \nof deleting the entire row from the format.\n 4. The key performance indicators should be computed according to the definitions provided \nby the BSD.\nWith regard to the publication of accounts by licensed commercial banks incorporated abroad, the \npublication of global accounts is mandatory on an annual basis, while the banks may publish information \nrelating to the latest available period on a quarterly basis. However, all such banks should publish \nquarterly, the selected performance indicators such as capital adequacy ratio, return on assets, return on \nequity, and the non-performing advances ratio of the parent bank for the respective quarter.\nYours faithfully,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 398, "year": 2013}, "type": "Document"}
{"page_content": "Yours faithfully,\nSgd, Director of Bank Supervision\n(Formats referred to in the Circular are replaced with Circular No. 02/17/900/0001/04 dated 11.02.2013)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 398, "year": 2013}, "type": "Document"}
{"page_content": "390 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOur Ref. : 02  / 17 / 900 / 0001  / 04\nBank Supervision Department\n11 February 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nPUBLIC DISCLOSURE BY PUBLICATION OF  \nQUARTERLY FINANCIAL STATEMENTS OF  \nBANKS IN THE PRESS\nWe refer to our previous correspondence and discussions on the above and enclose the  \nnew format for the publication of quarterly financial statements of licensed commercial banks and \nlicensed specialised banks in the press effective from the 1st quarter of 2013.\nAccordingly, format referred to in the paragraph No. 4 of the Circular dated 30 September 2005 \non the above is replaced with the format in Annex.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nCopy to :  The Secretary-General, Sri Lanka Banks\u2019  Association (Gurantee) Ltd.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 399, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  391\nAnnex\nSPECIFIED FORMAT FOR THE PUBLICATION OF \nQUARTERLY FINANCIAL STATEMENTS OF \nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS \nIN THE PRESS\n\u2026\u2026\u2026\u2026.. BANK\nINCOME STATEMENT\nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.\nIn Rupees Thousands\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YY\nInterest income\nInterest expenses\nNet interest income\nFee and commission income\nFee and commission expenses\nNet fee and commission income\nNet gain / (loss) from trading\nNet gain / (loss) from financial instruments  \n  designated at fair value through  \n  profit or loss\nNet gain / (loss) from financial investments\nOther operating income (net)\nTotal operating income\nImpairment for loans and other losses\n Individual impairment\n Collective impairment\n Others\nNet operating income\nPersonnel expenses\nDepreciation and amortisation\nOther expenses\nOperating profit/(loss) \n befor e value added tax (V AT)\nValue added tax (V AT) on financial services", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 400, "year": 2013}, "type": "Document"}
{"page_content": "392 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Group\nFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YY\nProfit / (loss) for the period\nOther comprehensive income, net of tax\nChanges in revaluation surplus\nActuarial gains and losses on  \ndefined benefit plans\nGains and losses  \n(arising from translating the financial \nstatements of a foreign operation) \nGains and losses on re-measuring  \navailable-for-sale financial assets\nGains and losses on cash flow hedges\nOthers\nShare of profits of associates  \nand joint ventures \nLess: T ax expense/(income) relating to \ncomponents of other comprehensive \nincome\nOther comprehensive income for the \nperiod, net of taxes\nTotal comprehensive income for the period\nAttributable to:\nOwners of the parent\nNon-controlling interests\u2026\u2026\u2026\u2026.. BANK\nSTATEMENT OF COMPREHENSIVE INCOME\nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.\nIn Rupees ThousandsOperating profit/(loss)  \n  after value added tax (V AT)\nShare of profits of associates and  \n  joint ventures\nProfit/(loss) before tax\nTax expenses\nProfit/(loss) for the period\nProfit attributable to:\nOwners of the parent\nNon-controlling interests\nEarnings per share on profit\nBasic earnings per ordinary share\nDiluted earnings per ordinary share(Contd.)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 401, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  393\n\u2026\u2026\u2026\u2026.. BANK\nSTATEMENT OF FINANCIAL POSITION\nAS AT \u2026\u2026\u2026\u2026.\nIn Rupees Thousands\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nAssets\nCash and cash equivalents\nBalances with central banks \nPlacements with banks \nDerivative financial instruments\nOther financial assets held-for-trading\nFinancial assets designated at fair value  \n through profit or loss\nLoans and receivables to banks \nLoans and receivables to other customers\nFinancial investments \u2013 Available-for-sale \nFinancial investments \u2013 Held-to-maturity \nInvestments in subsidiaries\nInvestments in associates and joint ventures\nProperty, plant and equipment\nInvestment properties\nGoodwill and intangible assets \nDeferred tax assets\nOther assets\nTotal assets\nLiabilities\nDue to banks \nDerivative financial instruments\nOther financial liabilities held-for-trading\nFinancial liabilities designated at fair value  \n through profit or loss\nDue to other customers\nOther borrowings\nDebt securities issued\nCurrent tax liabilities\nDeferred tax liabilities\nOther provisions\nOther liabilities\nDue to subsidiaries\nSubordinated term debts\nTotal liabilities", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 402, "year": 2013}, "type": "Document"}
{"page_content": "394 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n\u2026\u2026\u2026\u2026.. BANK\nSTATEMENT OF CHANGES IN EQUITY\nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.\nBANK / GROUP  In Rupees Thousands\nStated capital/\nAssigned \ncapitalReserves\nTotal\nNon-controlling interest\nTotal equityOrdinary \nvoting shares\nOrdinary \nnon-voting shares\nAssigned capital\nReserve fund\nRevaluation reserve\nRetained earnings\nOther reserves\nBalance as at DD/MM/YY (Opening balance)  \nTotal comprehensive income for the year  \nProfit/(loss) for the year  \nOther comprehensive income (net of tax)  \nTotal comprehensive income for the year           \nTransactions with equity holders, recognised \ndirectly in equity \nShare issue/increase of assigned capital  \nShare options exercised\nBonus issue  \nRights issue  \nTransfers to reserves during the period  \nDividends to equity holders  \nProfit transferred to head office  \nGain/(loss) on revaluation of Property, Plant and  \nEquipment (if cost method is adopted) \nOthers (Please specify)  \nTotal transactions with equity holders           \nBalance as at DD/MM/YY (Closing balance)           (Contd.)\nEquity\nStated capital/Assigned capital\nStatutory reserve fund\nRetained earnings\nOther reserves\nTotal shareholders\u2019 equity\nNon-controlling interests\nTotal equity\nTotal equity and liabilities\nContingent liabilities and commitments \nMemorandum Information\n Number of Employees\n Number of Branches\nNote: Amounts stated are in net of impairment and depreciation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 403, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  395\n\u2026\u2026\u2026\u2026.. BANK\nSTATEMENT OF CASH FLOWS\nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.\nIn Rupees Thousands\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nDD/MM/YY DD/MM/YY DD/MM/YY DD/MM/YY\nCash\tflows\tfrom\toperating \tactivities\nProfit before tax\nAdjustment for :\nNon-cash items included in profits before tax\nChange in operating assets\nChange in operating liabilities\nNet gains from investing activities\nShare of profits in associates and joint ventures\nDividend income from subsidiaries and associates \nInterest expense on subordinated debt\nOthers (please specify)\nContribution paid to defined benefit plans\nTax paid\nNet cash generated from operating activities     \nCash\tflows\tfrom\tinvesting\tactivities\nPurchase of property, plant and equipment\nProceeds from the sale of property, plant and equipment\nPurchase of financial investments\nProceeds from the sale and maturity of financial \ninvestments\nNet purchase of intangible assets\nNet cash flow from acquisition of investment  \nin subsidiaries and associates\nNet cash flow from disposal of subsidiaries\nProceeds from disposal of associates and joint ventures\nDividends received from investment  \nin subsidiaries and associates\nOthers (please specify)\nNet cash (used in)/from investing activities     \nCash\tflows\tfrom\tfinancing\tactivities\nNet proceeds from the issue of ordinary share capital \nNet proceeds from the issue of other equity instruments\nNet proceeds from the issue of subordinated debt\nRepayment of subordinated debt\nInterest paid on subordinated debt\nDividend paid to non-controlling interest\nDividend paid to shareholders of the parent company\nDividend paid to holders of other equity instruments\nOthers (please specify)\nNet\tcash\tfrom\tfinancing\tactivates     \nNet increase/(decrease) in cash & cash equivalents\nCash and cash equivalents at the beginning of the period\nExchange difference in respect of cash & cash equivalent", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 404, "year": 2013}, "type": "Document"}
{"page_content": "Exchange difference in respect of cash & cash equivalent\nCash and cash equivalents at the end of the period     \nNote:   Banks have the option to use one of the two methods specified in LKAS 7  \nfor the preparation of the statement of cash flows", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 404, "year": 2013}, "type": "Document"}
{"page_content": "396 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n\u2026\u2026\u2026\u2026.. BANK\nANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS\nAS AT \u2026\u2026\u2026\u2026.\nIn Rupees Thousands\na. Bank \u2013 Curr ent period  \nHFTDesignated\nat fair valueHTMAmortised \ncostAFS Hedging Total\nASSETS\nCash and cash equivalents\nBalances with central banks\nPlacements with banks \nDerivative financial instruments\nOther financial assets at  \n fair value through profit or loss\nLoans and receivables to banks\nLoans and receivables to  \n other customers\nFinancial investments\nTotal financial assets \nHFTDesignated\nat fair valueAmortised \ncostHedging Total\nLIABILITIES\nDue to banks\nDerivative financial instruments\nOther financial liabilities at  \n fair value through profit or loss\nDue to other customers\nOther borrowings\nDebt securities issued\nTotal financial liabilities \nHFT  \u2013  Held for trading\nDesignated at fair value  \u2013  Designated at fair value through profit or loss\nAmortised cost  \u2013  Loans and receivables/deposits at amortised cost \nHTM  \u2013  Held-to-maturity \nAFS  \u2013  Available-for-sale \nHedging  \u2013  Instruments of fair value and cash flow hedging \nb. Bank \u2013 Pr evious period as above\nc. Gr oup \u2013 Current period as above\nd. Gr oup \u2013 Previous period as above", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 405, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  397\n\u2026\u2026\u2026\u2026.. BANK\nSELECTED PERFORMANCE INDICATORS (AS PER REGULATORY REPORTING)\nAS AT \u2026\u2026\u2026\u2026.\nItemBank Group\nDD/MM/YY DD/MM/YY DD/MM/YY DD/MM/YY\nRegulatory Capital Adequacy     \nCore Capital (Tier 1 Capital), Rs. \u2019000     \nTotal Capital Base, Rs. \u2019000     \nCore Capital Adequacy Ratio, as % of Risk Weighted Assets \n (Minimum Requirement, 5%)    \nTotal Capital Adequacy Ratio, as % of Risk Weighted Assets  \n (Minimum Requirement, 10%)    \nAssets Quality (Quality of Loan Portfolio)     \nGross Non-Performing Advances Ratio, %  \n (net of interest in suspense)    \nNet-Non Performing Advances, % \n (net of interest in suspense and provision)    \nProfitability     \nInterest Margin, %     \nReturn on Assets (before Tax), %     \nReturn on Equity, %     \nRegulatory Liquidity     \nStatutory Liquid Assets, Rs. \u2019000     \nStatutory Liquid Assets Ratio, %  \n (Minimum Requirement, 20%)    \nDomestic Banking Unit     \nOff-Shore Banking Unit     \nCERTIFICATION:\n \nWe,\tt he\tu ndersigned, \tbeing\tthe\tChief\tExecutive\tofficer\tand\tthe\tFinancial\tController\t/\tCompliance \t\nOfficer\tof\t\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 Bank certify jointly that:\n (a)\t\t the\tabove\tstatements \thave\tbeen\tprepared\tin\tcompliance \twith\tthe\tformat\tand\tdefinitions \t\nprescribed by the  Central Bank of Sri Lanka;\n (b)  the information contained in these statemen ts have been extracted from the unaudited \nfinancial\tstatements \tof\tthe\tbank\tunless\tindicated\tas\taudited.\n (Name )  (Name)\n (Sgd.) Chief Executive Officer   (Sgd.) Financial Controller or Compliance Officer\n Date: DD/MM/YY   Date: DD/MM/YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 406, "year": 2013}, "type": "Document"}
{"page_content": "398 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. : 02  / 17 / 900 / 0001  / 004\nBank Supervision Department\n11 October 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nADDITIONAL QUARTERLY DISCLOSURE\nIN THE PRESS AND ON THE WEBSITES\nReference our Circulars dated 11 February 2013 and 17 September 2013 on Public Disclosure \nby Publication of Quarterly Financial Statements of Banks in the Press and Publication of Financial \nStatements and Other Disclosures on the Websites, respectively.\nEvery bank shall ensure additional disclosures on the following items in their quarterly publications \nin the press and on their respective websites, from 3rd quarter of 2013 as given in Annex.\n1. Loans and receivables to other customers\n2. Loans and receivables to other customers \u2013 By product\n3. Movements in individual and collective impairment during the period for loans and receivables \nto other customers\n4. Dues to other customers \u2013 By product\nAccordingly, you are requested to take necessary measures to comply with the above.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 407, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  399\nAnnex \nADDITIONAL QUARTERLY DISCLOSURES IN THE PRESS AND \nON THE WEBSITES \n1) Loans and Receivables to Other Customers\nIn Rupees Thousand\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nGross loans and receivables\n(Less ):  Individual impairment \nCollective impairment \nNet loans and receivables including those \ndesignated at fair value through profit or loss\n(Less): Loans and receivables designated at fair \nvalue through profit or loss\nNet loans and receivables\n2) Loans and Receivables to Other Customers \u2013 By product\nIn Rupees Thousand\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nBy product-Domestic Currency\nOverdrafts\nTerm loans\nLease rentals receivable\nCredit cards\nPawning\nOther loans (Please specify)\nSub total\nBy product-Foreign Currency\nOverdrafts\nTerm loans\nOther loans (Please specify)\nSub total\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 408, "year": 2013}, "type": "Document"}
{"page_content": "400 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n3) Movements in Individual and Collective Impairment during the period for  \nLoans and Receivables to Other Customers\nIn Rupees Thousand\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nIndividual impairment \nOpening balance at DD/MM/YY\nCharge/(Write back) to income statement\nWrite-off during the year\nOther movements\nClosing balance at DD/MM/YY\nCollective impairment \nOpening balance at DD/MM/YY\nCharge/(Write back) to income statement\nOther movements\nClosing balance at DD/MM/YY\nTotal impairment\n4) Due to Other Customers \u2013 By product\nIn Rupees Thousand\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nBy product-Domestic Currency\nDemand deposits (current accounts)\nSavings deposits\nFixed deposits\nOther deposits (Please specify)\nSub total\nBy product- Foreign Currency\nDemand deposits (current accounts)\nSavings deposits\nFixed deposits\nOther deposits (Please specify)\nSub total\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 409, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  401\nRef. No. : BS  / 62 / 97\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n10th September, 2001\nTo :  All Licensed Commer cial Banks\nDear Sir,\nPUBLIC DISCLOSURE BY PUBLICATION OF BANK ACCOUNTS IN THE PRESS\nYour attention is drawn to our circular No.BS/62/97 dated 29.01.1999 on the above subject.\nIf the audited accounts of banks are published in the newspapers stating that they are audited \nwithout any reference to any audit qualifications, where there are such qualifications, it could mislead \nthe public. Therefore, banks should include a brief description of any audit qualifications when they \npublish the audited accounts in the newspapers. \nFurther, I wish to inform you that banks are expected to publish their annual audited accounts \nin newspapers within six months of the end of their financial year and their half yearly un-audited \naccounts within three months of the end of the half-year.\nYours faithfully\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 410, "year": 2013}, "type": "Document"}
{"page_content": "402 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. Nos. :  02 / 04 / 002 / 0105  / 001\n    &\n 02 / 04 / 002 / 0151  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n20th March, 2001\nTo :  All Licensed Commer cial Banks and\n Licensed Sepcialised Banks\nDear Sir,\nPUBLICATION OF CAPITAL ADEQUACY STATEMENT IN THE ANNUAL REPORT\n You may be aware that the CBSL guidelines permit consolidation of subsidiaries for the \npurpose of computing capital adequacy ratios of banks but have not specified the nature of subsidiaries \nto be consolidated. The CBSL is presently reviewing the policy on consolidation of subsidiaries by \nbanks for capital adequacy purposes.\n It  is observed that there had been no uniformity among banks in presenting the capital \nadequacy statement in their Annual Reports. While few banks publish the statement on a \u2018solo\u2019 basis \nothers present it on a \u2018consolidated\u2019 basis.\n W ith a view to giving a true picture to the readers, it is recommended that the basis of \ncomputation of the capital adequacy and the inclusion of non banking and non-financial subsidiaries \nin the computation of the capital adequacy ratio, be disclosed as a footnote to the capital adequacy \nstatement, if published in the Annual Report of the bank.\nYours faithfully\nP. T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 411, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  403\nBank Supervision Department\n13 February 2006\nTo : The CEOs of all Licensed Commercial Banks\nDear Sirs,\nSUBMISSION OF AUDITED FINANCIAL STATEMENTS BY BANKS\nI wish to draw your attention to Section 38(1) and 38(2) of the Banking Act, No.30 of 1988 as \namended by the Banking (Amendment) Act, No.33 of 1995 and No.2 of 2005, in terms of which:\n 1. All Licensed Commercial Banks (LCB) incorporated or established within Sri Lanka shall \ntransmit within five months after the close of its financial year to the Director of Bank \nSupervision, its audited balance sheet as at the close of the financial year, and its profit \nand loss account for such financial year in respect of its business in and outside Sri Lanka \nincluding its off-shore banking business. \n 2. All LCBs incorporated outside Sri Lanka shall transmit to the Director of Bank Supervision, \nwithin five months after the close of its financial year, its audited balance sheet as at the \nclose of the financial year and its profit and loss account for such financial year in respect \nof its business in Sri Lanka including its off-shore banking business.\nYou are kindly reminded to submit the audited financial statements for 2005, in the prescribed \nformat as per circular No. BS/38/90 of 02.06.98. \nYour attention is also drawn to Section 30(2) of the Banking Act, in terms of which a copy of the \naudited financial statements (OSBU) is required to be submitted. The above format should be used for \nthe submission of the OSBU accounts as well. \nAccordingly, you are advised to transmit the annual audited financial statements for 2005 according \nto the above requirements within the stipulated time frame. \nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 412, "year": 2013}, "type": "Document"}
{"page_content": "404 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nRef. Nos. :  02 / 17 / 800 / 0002  / 002\nBank Supervision Department\n17 September, 2013\nTo :  CEOs of All Licensed Commercial Banks and\n Licensed Specialised Banks\nDear Sir/Madam,\nPUBLICATION OF FINANCIAL STATEMENTS AND  \n OTHER DISCLOSURES ON THE WEBSITES\n As intimated at the Chief Executive Officers meeting held on 28 August 2013, uniform and \nadequate disclosure practices are important for improving market efficiency and promoting healthy \ncompetition. In view of same and to further enhance transparency of banking operations and market \ndiscipline, every bank shall ensure the following publication requirements on their respective websites.\nFrequency Disclosure requirement\nAnnually   (i) Annua l Audited Report/Financial Statements and/or reports based on the require -\nments specified in, \n(a) Circulars dated 02 June 1998 and 1 1 February 2013 issued on preparation \nof annual audited accounts. \n(b) Direction No. 3(8): \u201cDisclosures\u201d of the Banking Act, Directions No. 11 \nand 12 of 2007 on Corporate Governance. \n(ii) In respect of branches of foreign banks, item (i)(b) above shall be in accordance \nwith the requirements specified in the Circular dated 03 January 201 1.\nBi-annually (i) Qualitative disclosures of the bank\u2019s risk management as required under Direction \n1.5 of Item H on Disclosure Requirements of the Guidelines issued under the \nBanking Act, Directions No. 7 of 2011 on the Integrated Risk Management \nFramework. Such publication in the website will be considered as compliance \nwith the respective requirements under the Banking Act, Directions No. 7 of \n2011.\n(ii) Banks may effect appropriate changes to the above requirements in accordance \nwith the Sri Lanka Financial Reporting Standards (SLFRS) and Sri Lanka Ac -\ncounting Standards (LKAS). \nQuarterly Quarterly Financial Statements based on the requirements specified in Circulars", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 413, "year": 2013}, "type": "Document"}
{"page_content": "Quarterly Quarterly Financial Statements based on the requirements specified in Circulars \ndated 30 September 2005, 26 January 2006, 21 February 2006 and 11 February 2013 \nissued on publication on quarterly financial statements in the press.  \nAccordingly, you are required to take necessary measures to comply with the above.\nYours faithfully\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 413, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  405\nRef. No. : BS/38/90\nBank Supervision Department\nCentral Bank of Sri Lanka\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha\nColombo 1.\n20 May 1998 \nTo :  All appr oved External Auditors \n of Licensed Commercial Banks\nDear Sir,\nAs you are aware, the Central Bank of Sri Lanka, as the supervisory authority for licensed \ncommercial banks and specialised banks in Sri Lanka, is charged with the responsibility of ensuring \nthat there is a great degree of consistency of bank audits and standard procedures which can be followed \nby approved auditors. Accordingly, we enclose herewith a set of \u201cGuidelines for External Auditors \nrelating to their statutory duties under Section 39 of the Banking Act, No.30 of 1988, as amended by  \nBanking Act, No.33 of 1995\u201d.\nSince your Firm is on the panel of approved auditors of the Central Bank, you are required to ensure \nthat the audit of licensed commercial banks/licensed specialised banks, are in conformity with these \nguidelines, with effect from the financial year 1998.\nPlease note that wherever the expression \u201clicensed commercial banks\u201d appears in the guidelines,  \nit would also include \u201clicensed specialised banks\u201d.\nPlease acknowledge receipt of this letter and the enclosures.\nYours faithfully,\nSgd.  Y. A. Piyatissa\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 414, "year": 2013}, "type": "Document"}
{"page_content": "406 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nGUIDELINES FOR EXTERNAL AUDITORS RELATING TO THEIR STATUTORY DUTIES \nUNDER SECTION 39 OF THE BANKING ACT NO. 30 OF 1988 \nAS AMENDED BY BANKING ACT NO. 33 OF 1995\n1. In terms of Section 39 of the Banking Act, the Central Bank of Sri Lanka, as the supervisory authority \nfor licensed commercial banks in Sri Lanka, is charged with the responsibility of ensuring that the \naudits of banks are conducted satisfactorily. Accordingly, External Auditors of licensed commercial \nbanks in Sri Lanka are informed of the following guidelines which have been formulated in \nrecognition of the fact that Auditors are specially qualified to undertake :\u2013\n(a) The verification of prudential returns;\n(b) The evaluation of control systems;\n(c) The expression of opinions on provisioning policies; and\n(d) The monitoring of the fiduciary activities of Banks.\n2. The auditing guidelines envisaged by the Central Bank for the audit of licensed commercial banks \nin Sri Lanka do not seek to provide an exhaustive listing of the procedures and practices to be used \nin an audit. Rather, they seek to stress special audit considerations for instance concerning related \nparty transactions, or the risks they assume resulting from the use of electronic data processing and \nelectronic fund transfer systems connected to the specific characteristics of Banks. These guidelines \nacknowledge the audit objectives which are of particular importance in relation to the typical items \nin a Bank\u2019s financial statement and encourage substantive audit procedures for the evaluation of loan \nloss provisions, income recognition, etc . It is hoped that these guidelines will encourage a greater \ndegree of consistency in Bank audits and set standard procedures which can be followed by Auditors \nin Sri Lanka. \n3. W ith a view to ensuring that the interests of depositors are not at risk because of adverse changes in", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 415, "year": 2013}, "type": "Document"}
{"page_content": "the financial position or in the management or other resources of an institution, External Auditors, \nin performing their statutory duties under the Banking Act and in recognizing the dependence of the \nCentral Bank on prudential returns and other information submitted by licensed commercial banks, \nshall ensure :\u2013\n (a) that the institution has not breached, or is in the process of currently breaching, or is likely to \nbreach, the capital ratio set by the Central Bank;\n (b) that the institution has not breached by a material amount for a significant period, or has been \nfrequently breaching by any amount, the liquidity ratio laid down by the Central Bank;\n (c) that the institution holds adequate provisions for bad and doubtful debts, expected losses on \ncontingents and tax liabilities, in accordance with accepted accounting standards;\n (d) that the accounting and other records and systems of control of the institution are commensurate \nwith the size and nature of business, or the way in which the business is structured, organized \nand managed;\n (e) that the business, or a significant component of the business, is not effectively being directed or \nhas been directed for any period of time, by only one individual;\n (f) that there is evidence which calls into question the appropriateness of actions or decisions taken \nby the management which are significant for prudential purposes.\n4. In formulating these guidelines the Central Bank has recognized that in an industry environment \nof high dependence on information technology, auditors should devote sufficient resources to \nassess the soundness of the EDP processes which are vital to the institution\u2019s operations and to the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 415, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  407\neffectiveness of internal EDP controls. External Auditors should accordingly, refer in their annual \nmanagement letters to any shortcomings and imperfections which have come to their attention in the \ncourse of their examination of this specified field. The Central Bank recognizes that the risks which \ncharacterize an EDP environment and the security and control procedures it requires are :\u2013\n(a) Improper disclosure of information;\n(b) Error;\n(c) Fraud;\n(d) Interruption of business due to hardware or software failure;\n(e) Inef fective planning and risks associated with end-user computing operations.\n5. The Central Bank of Sri Lanka would also require auditors, under certain conditions, to discuss \nwith the supervisory authorities the activities of their banking clients. In doing so, the Central Bank \nrecognises that it is important that Auditors act in a manner that will preserve their professional \nrelationship with their client at all times. They would be therefore expected to draw the attention of \nthe Bank\u2019s management immediately in certain situations, reference to which shall be contained in \ntheir annual Management Letter. The situations envisaged in this regard are :\u2013\n (a) Where it has come to the Auditor\u2019s attention that there is an extreme situation, such as evidence \nof imminent financial collapse;\n (b) Where the Auditor has evidence of an occurrence which has led or is likely to lead to a material \ndiminution of the institution\u2019s assets;\n (c) W hen there appears to the Auditor to be a material contravention of one or more of the \nprovisions of the Banking Act or of the regulations, directives, or guidelines issued to licensed \ncommercial banks by the Central Bank;\n (d) When the Auditor forms the opinion that the management has reported financial information \nto the Supervisor which is misleading or when he becomes aware that management has failed,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 416, "year": 2013}, "type": "Document"}
{"page_content": "to the Supervisor which is misleading or when he becomes aware that management has failed, \ndoes not intend to, report something and such failure to report is, or would be, materially \nmisleading; or\n (e) When the Auditor forms the opinion that there has been a significant failure of, or that there \nis significant weakness in, the accounting and other records or internal control systems of the \ninstitution.\n6. The Central Bank believes that these guidelines would require Auditors to enlarge the scope of their \naudit work. The Central Bank expects that only when Auditors become aware in the ordinary course \nof their audit work of such an occurrence that they would expect them to make detailed enquiries \nwith the statutory provisions/directives/regulations/guidelines specifically in mind. These guidelines \ndo not cast an obligation on Auditors to seek out ground for making a report nor do they place an \nobligation on them to conduct their work in such a way that there is reasonable certainty that they \nwill discover a breach of the criteria set out in these guidelines.\n Detailed operational guidelines to auditors are annexed.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 416, "year": 2013}, "type": "Document"}
{"page_content": "408 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nOPERATIONAL GUIDELINES TO EXTERNAL AUDITORS RELATING \nTO THEIR STATUTORY DUTIES UNDER SECTION 39 OF THE BANKING ACT NO. 30 OF 1988 \nAS AMENDED BY BANKING ACT NO. 33 OF 1995\n1. These auditing guidelines on Bank audits are intended to assist the Auditors of Licensed commercial \nbanks in Sri Lanka to comply with generally accepted auditing standards when carrying out their \naudit work and in preparing their report on the financial statements of Banks. These guidelines \nare supplementary to and should be read in conjunction with the Sri Lanka Accounting Standards  \nNos. 23 and 30 and any other relevant Standards referred to therein on the audit of licensed \ncommercial banks in Sri Lanka.\n2. It is particularly important that Auditors of a Bank undertake an audit engagement only after \nconsidering their own competence and the adequacy of their resources (including relevant experience) \nto carry out their duties. In assessing their competence and, resources the Auditors should bear in \nmind the type and range of the Banks activities and the nature of its systems. For example highly \nspecialized computer systems will require different skills from those necessary to evaluate manual \nsystems.\n3. These guidelines have been drawn up in recognition of the fact that the maintenance of adequate \nrecords and systems in a licensed commercial bank is of paramount importance and that an institution \ncannot be regarded as conducting its business in a prudent manner unless it maintains adequate \naccounting and other records as well as adequate systems of control of its business and records to \nenable the business of the institution to be prudently managed and to comply with the duties imposed \non it by or under the statutes relevant to its operations.\n4. These guidelines do not attempt to describe in detail the manner, in which a particular institution", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 417, "year": 2013}, "type": "Document"}
{"page_content": "should maintain its accounting and other records and internal control systems. Rather it emphasizes \nthe need to ensure that the scope and nature of the financial information which the accounting and \nother records must be designed to capture, contain the required information.\nPlanning and Audit\n5. When planning the audit of a Bank, Auditors are required to consider the following :\u2013\n (a) The overall financial environment in which the Bank operates and its type of business;\n (b) The extent of computer systems and the reliance placed on these systems by the Bank;\n (c) The legal framework in which the Bank operates;\n (d) The audit risk involved, the assessment of which is crucial and should be undertaken very \ncarefully, particularly where the circumstances and management of the Bank indicate that the \nengagement is likely to be high risk;\n (e) Key audit areas, in particular, individual areas where there is a high risk of material misstatement. \nThese should be identified at an early stage of audit to ensure that work is concentrated on this \narea;\n (f) The adequacy and scope of the internal audit or inspection function;\n (g) The timing and nature of the audit work to be carried out;\n (h) The use of staf f with adequate training and experience.\n6. Auditors should also consider the following additional matters when planning the audit :\u2013\n (a) Compliance with the requirements of any guidelines issued by the CBSL;\n (b) Any formal communications between the CBSL and the Bank, including all correspondence, \nminutes or notes of meetings relevant to the examination of the accounting and other records, \ninternal control systems and CBSL returns used for prudential purposes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 417, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  409\nScope of Audit \u2013 Accounts and Other Records\n7. The scope and nature of the accounting and other records which are required for the business of a \nBank to be conducted in a prudent manner should be commensurate with the manner in which the \nbusiness is structured, organized and managed, as well as the volume, nature and complexity of its \ntransactions and commitments. Auditors are thus required to ensure that the accounting and other \nrecords of a Bank meet the following general requirements :\u2013\n (a) capture and record on a timely basis and in an orderly fashion every transaction and commitment \nwhich the institution enters into with sufficient information to explain :\u2013\n (i)  its nature and purpose;\n (ii) any asset and/or liability, actual and contingent, which respectively arises or may arise \nfrom it; and \n (iii) any income and/or expenditure, current and/or deferred which arises from it;\n (b) provide details, as appropriate, for each transaction and commitment, showing :\u2013\n (i) the parties, including, in the case of a loan, advance or other credit exposure, whether \nit is sub-participated and if so to whom it is sub-participated;\n (ii) the amount and currency;\n (iii) the contract, rollover , value and settlement or repayment dates;\n (iv) the contracted interest rates of an interest rate transaction or commitment;\n (v) the contracted exchange rate of a foreign exchange transaction or commitment;\n (vi) the contract ed commission or fees payable or receivable together with any other related \npayment or receipt;\n (vii) the nature and current estimated value of any security for a loan or other exposure; the \nphysical location and documentary evidence of such security; and\n (viii) in the case of any borrowing, whether it is subordinated; if secured, the nature and book \nvalue of any asset upon which it is secured;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 418, "year": 2013}, "type": "Document"}
{"page_content": "value of any asset upon which it is secured;\n (c) m aintain the accounting and other records in such a manner that financial and business \ninformation can be extracted promptly to enable management to :\u2013\n (i) monitor the quality of the institution\u2019s assets and safeguard them, including those held \nas custodian;\n (ii) identify , quantify, control and manage its exposures by related counter-parties across \nall products;\n (iii) i dentify, quantify, control and manage its exposures to liquidity risk and foreign \nexchange and other market risks across all products;\n (iv) monitor the performance of all aspects of its business on an up-to-date basis; and\n (v) make timely and informed decisions;\n (d) c ontain details of exposure limits authorized by management which are appropriate to the \ntype, nature and volume of business undertaken. These limits should, where relevant, include \ncounterparty, industry sector, country, settlement liquidity, interest rate mismatch and securities \nposition limits as well as limits on the level of intra-day and overnight trading positions in \nforeign exchange, futures, options, future (or forward) rate agreements (FRAs) and swaps; \nprovide information which can be summarized in such a way as to enable actual exposures to \nbe readily, accurately and regularly measured against these limits;\n (e) contain details of the factors considered, the analysis undertaken and the authorization or  \nrejection by management of a loan, advance or other credit exposure; and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 418, "year": 2013}, "type": "Document"}
{"page_content": "410 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n (f) provide on a memo randum basis details of every transaction entered into in the name of or \non behalf of another party on an agency or fiduciary (trustee) basis where it is agreed that the \ninstitution itself is not legally or contractually bound by the transaction.\nInternal Control Systems\n8. A  system of internal controls in a Bank is deemed to be;\n\u2018the whole system of controls, financial and otherwise, established by management in order to \ncarry on the business of the enterprise in an orderly and efficient manner, ensure adherence \nto management policies, safeguard the assets and secure as far as possible the completeness \nand accuracy of the records.\u2019\n9. In evaluati ng the adequacy of internal control systems in a bank, auditors are required to assess \nthe internal control systems only to the extent that they wish to place reliance on those systems in \narriving at their opinion as to whether the financial statements give a true and fair view. A careful \nevaluation of these systems would include computer based accounting and information systems and \ntheir relationship with the risk of material misstatement in the financial statements will be essential. \nIf the Auditors conclude that they can rely on the system of controls they may be able to limit the \nlevel of substantive tests required to form their opinion on the financial statements.\n10. For the purpose of identifying relevant controls, the principal activities of banks may be classified as \nfollows :\u2013\n (a) loans, advances, trade finance and related income and expense;\n (b) customer accounts, cash, transfer of funds, nostro accounts and related income and expense;\n (c) inter bank deposits and related income and expense;\n (d) d ealing in foreign exchange, futures, options, commodities, bullion and related income, \nexpense, gains and losses;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 419, "year": 2013}, "type": "Document"}
{"page_content": "expense, gains and losses;\n (e) investments, dealing securities and related income, expense, gains and losses; and\n (f) trustee and advisory activities (including portfolio management) and related income and  \nexpense.\n11. The overall audit objective should always be to ensure that the financial statements give a true and \nfair view of the state of the Bank\u2019s affairs at a given date and of the results for the year ended, and \ncomply with statutory and other relevant requirements.\n12. Audit steps likely to be required to satisfy this overall objective, can be identified as follows :\u2013\n (a) to determine the reliability of the bank\u2019 s systems of internal control;\n (b) to ensure that all material balances exist, are complete, and are fairly stated at the balance sheet \ndate;\n (c) to ensure that all income and expenditure, gains and losses are properly accounted for;\n (d) to ascertain the recoverability and hence the realizability at the balance sheet date, of any loans, \ninvestments and other related credit exposures;\n (e) in relation to trustee activities, to ascertain whether controls exist to give reasonable assurance \nthat the bank has fulfilled its fiduciary duties; and\n (f) to ensure that all material commitments and liabilities, contingent or otherwise, are identified, \nprovided for, or adequately disclosed in the financial statements.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 419, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  411\nAutomation\n13. As a result of the large number of transactions undertaken and records held by banks and the need \nfor swift and accurate information processing and retrieval, many banking functions are often highly \nautomated, including : funds transfer systems, the accounting function, the processing and recording \nof retail customer transactions, the dealing room and the supply of dealing and management \ninformation.\n14. The Auditors should assess the extent, nature and impact of automation within the bank and plan and \nperform their work accordingly.\n (a) the required level of technical computer knowledge and skills is likely to be extensive and may \nrequire the auditor to obtain advice and assistance from staff with specialist skills;\n (b) bank audits are particularly suitable for the use of audit software and other types of Computer \nAssisted Audit Techniques; and\n (c) reliance on internal controls for audit purposes is likely to require the evaluation and testing \nof general controls relating to the environment within which computer based systems are \ndeveloped, maintained and operated.\nBranches\n15. Many branches operate a network of branches. The Auditors\u2019 approach to such branches will \nprincipally be determined by the degree of Head Office control over the business and accounting \nfunctions at each branch and by the scope and effectiveness of the bank\u2019s inspection and/or internal \naudit visits. The extent and impact of visits from regulators should also be considered. Where \nbranches maintain separate accounting records, the extent of audit visits and work on each branch \nwill also be dependent on the materiality of, and risks associated with, the operations of each branch \nand the extent to which controls over branches are exercised centrally. Where the branch accounting \nrecords are centralized, the auditors should obtain reasonable assurance that the systems of control", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 420, "year": 2013}, "type": "Document"}
{"page_content": "over branches are operating satisfactorily either by visiting branches, or by ensuring that an adequate \nsystem of branch inspection by internal auditors exists. Particular attention should be paid both to the \ndifficulties of exercising Head Office control and to the differences in nature and degree of risk that \nmay arise in overseas branches. In the case of smaller branches, attention should focussed upon the \nexceptions to a bank\u2019s normal control procedures caused by staffing levels (e.g., the greater difficulty \nof ensuring adequate segregation of duties) and to the consequent need for an increased level of \ncontrol from outside the branch.\nReview of Financial Statements\n16. When reviewing the financial statements of the Bank the Auditor should carry out such a review of \nthe financial statements as is sufficient, in conjunction with the conclusions drawn from the other \naudit evidence obtained, to give him a reasonable basis for his opinion on the financial statements. \nSuch a review should include :\u2013\n (a) Lar ge deposits or loan repayments received shortly before the year end which are repaid or \nre-advanced shortly afterwards. This will require a good deal of judgement to identify any \nwindow-dressing transactions;\n (b) T ransfers between the trading security and investment security portfolios which take advantage \nof different valuation policies;\n (c) The reclassification of hedging and trading transaction/positions to take advantage of different \ntiming of profit and loss recognition;\n (d) The reclassification of assets within liquidity profiles or under balance sheets headings.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 420, "year": 2013}, "type": "Document"}
{"page_content": "412 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\n17. Auditors should consider whether the accounts comply with all relevant statutory requirements, and \nwhether the accounting policies adopted will enable them to express an unqualified opinion on the \nfinancial statement, in respect of the following:\u2013\n (a) loans, advances and trade finance;\n (b) customer accounts, cash, transfer of funds and NOSTRO accounts;\n (c) market deposits;\n (d) foreign exchange, futures, options and commodities dealings;\n (e) investments and dealing securities.\n18. Auditors should ensure that the following controls are compliance tested :\u2013\n (a) Segregation of duties wherever these controls are deemed necessary;\n (b) Physical controls wherever they are deemed necessary;\n (c) Authorization and approval wherever they are deemed necessary;\n (d) Arithmetical and accounting accuracy and controls where they are deemed necessary;\n (e) Supervision controls where they are deemed necessary;\n (f) Substantive tests to prove the adequacy of these controls.\n19. Application and general control over the computer environment would entail :\u2013\n (a) The or ganization of the relevant Bank departments.\n (b) Management review of activities.\n (c) Recompute processing of the transactions.\n (d) Input and processing of transactions by computer .\n (e) Maintenance of computer files of transactions and balances.\n (f) Post processing actions on output and computer systems.\n (g) Reconciliation of computerized records with related assets.\n20. The general controls relating to the development, maintenance and operation of computer systems \nthat are designed to control the following risks :\u2013\n (a) Risks arising in the development and enhancement of new computer systems;\n (b) Risks or errors during data processing, development and amendment to programmes;\n (c) Risks of loss including being unable to continue operation or recover from a breakdown or \ndisaster - business interruption;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 421, "year": 2013}, "type": "Document"}
{"page_content": "disaster - business interruption;\n (d) Risks relating to unauthorized access to the computer system, its application and data files.\n21. Other controls which af fect a number of areas :\u2013\n (a) controls over the authorization and correct recording of :\n (i) nostro transactions; and\n (ii) transactions using funds transfer systems.\n (b) Control over financial planning and budgeting.\n (c) Controls governing the provision of adequate management accounting information.\n (d) Controls over the documentation and communication of :\n (i) accounting policies ; and\n (ii) operational procedures and controls.\n (e) controls over ef fective personnel selection routines.\n (f) Controls over establishing, monitoring and reporting risk.\n (g) Controls over management review of systems, e.g. internal audit.\n (h) Controls over communication with the CBSL  and other regulatory authorities.\n (i) Computer controls.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 421, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  413\nBank Supervision Department\n27 April 2004 \nTo :  All Approved External Auditors \n \nDear Sir,\nGUIDELINES FOR EXTERNAL AUDITORS RELATING TO\nTHEIR STATUTORY DUTIES IN TERMS OF SECTION 39 OF\nTHE BANKING ACT NO. 30 OF 1988 AS AMENDED BY\nTHE BANKING ACT NO. 33 OF 1995\n The Central Bank of Sri Lanka as the Supervisory and regulatory authority of banking institutions  \nstrives continually to mitigate and manage the attendant risks in the banking sector in Sri Lanka.  \nThe CBSL recognizes the important role played by the External Audit firms in this regard and is working \ntowards improving the quality and the integrity of bank audits. \n Significant developments and changes have taken place in the global financial architecture \nsince the introduction of the first guidelines to External Auditors by the CBSL. As you are aware, the  \nSarbanes-Oxley Act of the US has attempted to address some of these issues. Accordingly, the Monetary \nBoard of the Central Bank of Sri Lanka has approved the attached Addendum to the Guidelines issued \non 20 May 1998. The CBSL believes that these additional guidelines will address some of these concerns \nand contribute towards the improvement of bank audits in Sri Lanka.\n Si nce your Firm is on the panel of approved auditors of the Central Bank, you are required to ensure \nthat your firm is in compliance with these guidelines, which are operative with immediate ef fect.\n Please acknowledge receipt of this letter .\nYours faithfully,\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 422, "year": 2013}, "type": "Document"}
{"page_content": "414 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex I\nGUIDELINES FOR EXTERNAL AUDITORS RELATING TO THEIR STATUTORY DUTIES \nIN TERMS OF SECTION 39 OF THE BANKING ACT NO. 30 OF 1988\nAS AMENDED BY THE BANKING ACT NO. 33 OF 1995\nADDENDUM\nNon-Audit Services\n1. Qualified External Auditors shall not undertake any consultancy or other non-audit services with a \nbank contemporaneously with the external audit. The restricted non-audit services are:\n\u2022 Book keeping or other services related to the accounting records or financial statements of the audit \nclient;\n\u2022 Financial information systems design and implementation;\n\u2022 Appraisal or valuation services, fairness options, or contribution-in-kind reports;\n\u2022 Actuarial services;\n\u2022 Internal audit outsourcing services;\n\u2022 Management functions, human resources and payroll services;\n\u2022 Broker or dealer , investment adviser, or investment banking services; and \n\u2022 Legal services and expert services related to the audit.\nThis restriction also applies to services provided by entities where a partner of an Audit Firm is a \nDirector or has a significant share holding.\nManagement Letter\n2. External Audit firms are requested to submit the Management Letter, which is a non-statutory report by \nthe Auditor to the management of the Bank, together with the published audited accounts to the Banks \nthey audit, within five months of the end of the financial year. If the auditors are unable to finalize the \nManagement Letter, they should submit an interim report with their major findings within the said \nperiod. This will enable the Banks and the Regulator to identify significant and systemically important \nrisks in a timely manner.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 423, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  415\nRef. No. : 02  / 03 /004 / 0006  / 001\nBank Supervision Department\n15 October, 2012\nTo :  The CEOs of all Licensed Banks\nSUBMISSION OF STATUTORY RETURNS\nA review of the submission of Statutory Returns to the Bank Supervision Department has \nrevealed that several banks continue submission of some Statutory Returns in manual form which \nhave already been discontinued due to the following. \n(a) Implementation of the web based off-site surveillance system from the reporting \nperiod ending June 2009.\n(b) Withdrawal of certain Circulars.\n2. As intimated to you by our letter dated 28.03.2006, banks were requested only to  \ncontinue submission of Returns that are not replaced with web based Returns, in manual form. \nHowever, it is noted that few banks do not follow these instructions and continue submitting  \nthe same Returns both manually and as web based Returns. \n3. Accordingly, we request you to ensure that only the Returns enumerated in Annex are sent \nin manual form with effect from 01.11.2012 and to advise the respective officers accordingly. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 424, "year": 2013}, "type": "Document"}
{"page_content": "416 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nAnnex\nReturns to be submitted manually \nReturn Reference Reporting \nPeriod\n1.Report of abandoned property - \nsettlements during the period \n(Only  for LCBs)Banking Act Direction No. 05 of \n2009 dated 02.09.2009Weekly\n2.Cheque returns statement \n(Only  for LCBs) Monthly\n3.Donations received by Government,  \nNon-Government Organisations \n(NGOs) and Others (Non-NGOs) \u2013 \nTable 102/19/40110072/001 dated \n07.03.2006Monthly\n4.Donations received by NGOs \u2013 \nTable 202/19/40110072/001 dated \n07.03.2006Monthly\n5.Utilization of investment fund account02/17/800/0014/02 dated \n31.10.2011Monthly \n(by e-mail)\n6.Statements of certification of weekly, \nmonthly, quarterly and annual reports \napproved/submitted Guidelines on Implementation \nof the new web based off-\nsite surveillance system dated \n28.07.2006Monthly, \nquarterly and \nannually\n7.Information on shareholdings \n(Only for domestically incorporated \nprivate banks)  BD/CB/P dated 21.06.1996 Monthly \n8.Statement of exposure to the stock \nmarketBanking Act Direction No. 05 & \n06 of 2011 dated 26.08.2011Quarterly\n(by e-mail)\n9.Information on operation of banking \noutlet 02/03/004/0200/002 dated \n18.01.2012Quarterly \n(by e-mail)\n10. Report of internal loss events in banksExposure Draft on implementation \nof the Standardised Approach \nfor calculating capital charge for \nOperational Risk dated 22.06.2011Quarterly\n11.Business operations that are/to be \noutsourced \nas at/during the yearBanking Act Direction No. 7 & 8 \nof 2010 dated 02.11.2010Annually\n12.Report of abandoned property \u2013 \nadditions during the periodBanking Act Direction No. 05 of \n2009 dated 02.09.2009 Annually *\n13.Report of abandoned property \u2013 \nsettlements during the periodBanking Act Direction No. 05 of \n2009 dated 02.09.2009Annually *\n14.Return on depositor wise details of \neligible deposits Circular No. 02/2010 dated \n09.12.2010Quarterly\n15.Sri Lanka deposit insurance scheme \u2013", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 425, "year": 2013}, "type": "Document"}
{"page_content": "09.12.2010Quarterly\n15.Sri Lanka deposit insurance scheme \u2013 \npayment of premium Circular No. 01/2010 dated \n15.10.2010Quarterly\n* Only for Lic ensed Commercial Banks which are unable to upload data to the web based returns  \nBSD-AF-18-AP \u2013 Report of Abandoned Property-Additions during the period and BSD-AF-18-AS \u2013 \nReport of Abandoned Property-Settlements during the period are required to submit manually.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 425, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  417\nBank Supervision Department\n28 July 2006\nTo : CEOs of all Licensed Commercial Banks\nDear Sirs,\nIMPLEMENTATION OF THE NEW WEB BASED\nOFF-SITE SURVEILLANCE SYSTEM\nFurther to our circular dated 17 March 2006 and the discussions at the meeting of the CEOs of \nlicensed banks held on 04.07.2006 and 22.06.2006, on the above subject, all licensed banks are hereby \ninformed that the submission of periodical returns in manual form will be discontinued from the reporting \nperiod ending June 2006. The new \u2018web-based returns\u2019 will be implemented from the reporting period \ncommencing July 01, 2006. The lists of web-based returns are given in the Annex 1. Existing returns that \nare not replaced with the web-based returns should continue to be submitted in manual form.\nBanks are further informed that statement of certification relating to returns submitted on a weekly/\nmonthly, quarterly and annual basis should be submitted as specified in Annex 2, Annex 3, Annex 4 and \nAnnex 5, respectively, within 3 days from the end of the reporting period.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 426, "year": 2013}, "type": "Document"}
{"page_content": "418 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nWeekly Returns\nInterest Rates BSD-WF-13-IR \u2013 Interest Rates (\u201cBank Only\u201d Totals)\nMonthly Returns\nAssets and Liabilities \u2013 DBU BSD-MF-01-BD \u2013 Balance Sheet (DBU and Bank Only Operations)\nAssets and Liabilities \u2013 FCBU BSD-MF-01- BF \u2013 Balance Sheet (FCBU Operations)\nIncome and Expenditure \u2013 DBU  ( Note) BSD-MF-02-PD \u2013 Profit & Loss (DBU and Bank Only Operations)\nIncome & Expenditure \u2013 FCBU ( Note) BSD-MF-02- PF \u2013 Profit & Loss (FCBU Operations)\nClassified Advances \u2013 DBU (Note) BSD-MF-03-CD \u2013 Classification of Loans & Advances \n(DBU Operations)\nClassified Advances \u2013 FCBU (Note) BSD-MF-03-CF \u2013 Classification of Loans & Advances \n(FCBU Operations)\nStatutory Liquid Assets \u2013 DBU BSD-MF-04-LD \u2013 Statutory Liquid Asset Ratio (DBU Operations)\nStatutory Liquid Assets \u2013 FCBU BSD-MF-04- LF \u2013 Statutory Liquid Asset Ratio \n(FCBU Operations)\nCommercial Paper/Promissory Notes BSD-MF-16-CP \u2013 Commercial Papers/Promissory Notes\nOverdue Export Credit\n(DBU & FCBU)BSD-MF-17-CS \u2013 Overdue Export Credit \n(Enhanced Interest Charge on Settlements)\nBSD-MF-17-CO \u2013 Overdue Export Credit (Outstanding)\n\u2013 BSD-MF-15-GE \u2013 Government Exposure \n(\u201cBank Only\u201d Totals) (New)\nQuarterly Returns\nAccommodation Granted to a Bank \nDirector and/or Close Relation  \u2013 \nDomestic BanksBSD-QF-06-RC \u2013 Related Party Exposures (Accommodation Granted \nby the Bank to Directors and/or Close Relatives \u2013 \u201cBank Only\u201d Totals)\nAccommodation Granted to Bank \nDirectors and Concerns where the \nDirector has a Substantial Interest  - \nDomestic BanksBSD-QF-06-RS \u2013 Related Party Exposures (Accommodations Granted \nby the Bank to Concerns where a Director of the Bank has a Substantial \nInterest \u2013 \u201cBank Only\u201d Totals)\nInvestments in Shares (Section 17A(1) \nof the Banking Act, No.30 of 1988 as \namended by (Amendment) Act, No.33 \nof 1995)BSD-QF-07-IE \u2013 Investment in Equity\n(\u201cBank Only\u201d Totals)\nCapital Adequacy - Solo BSD-QF-11-C1-C4 \u2013 Capital Adequacy", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 427, "year": 2013}, "type": "Document"}
{"page_content": "(\u201cBank Only\u201d Totals)\nCapital Adequacy - Solo BSD-QF-11-C1-C4 \u2013 Capital Adequacy \n(\u201cBank Only\u201d Solo Basis Totals)\nCapital Adequacy - Consolidated BSD-QF-11-C5-C8 \u2013 Capital Adequacy \n(Consolidated Totals)\nInterest Spread BSD-QF-14-SP \u2013 Interest Spread\n\u2013 BSD-QF-05-LN \u2013 Large Exposures \n(Performing & Non Performing \u2013 \u201cBank Only\u201d Totals) ( New)\n\u2013 BSD-QF-08-FE \u2013 Foreign Currency Exposures \n(DBU Operations Only) (New)Annex 1\nThe List of Returns implemented under New Web-based Off-site Surveillance System\nLicensed Commercial Banks\nExisting Manual Return New web-based Return to replace the Manual Return", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 427, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  419\n\u2013 BSD-QF-09-GA \u2013 Maturity Gap Analysis (\u201cBank Only\u201d Totals) ( New)\n\u2013 BSD-QF-10-IS \u2013 Interest Rate Sensitivity (\u201cBank Only\u201d Totals) ( New)\n\u2013 BSD-QF-12-SC \u2013 Sector Wise Credit Exposures (\u201cBank Only\u201d Totals) \n(New)\nAnnual Returns \u2013 As per Audited \nAccounts\nAssets and Liabilities \u2013 DBU BSD-AF-01-BD \u2013 Balance Sheet (DBU and Bank Only Operations)\nAssets and Liabilities \u2013 FCBU BSD-AF-01-BD & BF \u2013 Balance Sheet (FCBU Operations)\nIncome and Expenditure \u2013 DBU BSD-AF-02-PD \u2013 Profit & Loss (DBU and Bank Only Operations)\nIncome and Expenditure \u2013 FCBU BSD-AF-02-PF \u2013 Profit & Loss (FCBU Operations)\nCapital Adequacy - Solo BSD-AF-11-C1-C4  \u2013 Capital Adequacy (\u201cBank Only\u201d Solo Basis \nTotals)\nCapital Adequacy - Consolidated BSD-AF-11-C5-C8  \u2013 Capital Adequacy (Consolidated Totals)\nNote: Frequency has been changed form quarterly to monthly.\n Annex 2\nStatement \tof\tCertification \tof\tWeekly/Monthly \tReturns\tApproved/Submitted\n Existing Manual Return New web-based Return to replace the Manual Return\nReturn Due DateSubmitted Approved \nDate Yes No\nMonthly Returns\nBSD-MF-01-BD  \u2013 Balance Sheet - Domestic Banking Unit \nOperations (DBU) and Bank15/MM/YY\nBSD-MF-01-BF \u2013 Balance Sheet - Foreign Currency Banking \nUnit Operations (FCBU)15/MM/YY\nBSD-MF-02-PD  \u2013 Profit & Loss - Domestic Banking Unit \nOperations (DBU) and Bank15/MM/YY\nBSD-MF-02-PF \u2013 Profit & Loss - Foreign Currency Banking \nUnit Operations (FCBU)15/MM/YY\nBSD-MF-03-CD  \u2013 Classification of Loans & Advances - \nDomestic Banking Unit Operations (DBU)15/MM/YY\nBSD-MF-03-CF  \u2013 Classification of Loans & Advances - \nForeign Currency Banking Unit Operations (FCBU)15/MM/YY\nBSD-MF-04-LD  \u2013 Statutory Liquid Asset Ratio - Domestic \nBanking Unit Operations (DBU)15/MM/YY\nBSD-MF-04-LF  \u2013 Statutory Liquid Asset Ratio - Foreign \nCurrency Banking Unit Operations (FCBU)15/MM/YY\nBSD-MF-16-CP \u2013 Commercial Papers/Promissory Notes 15/MM/YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 428, "year": 2013}, "type": "Document"}
{"page_content": "BSD-MF-16-CP \u2013 Commercial Papers/Promissory Notes 15/MM/YY\nBSD-MF-17-CS \u2013 Overdue Export Credit - Enhanced Interest \nCharged on Settlement15/MM/YY\nBSD-MF-17-CO \u2013 Overdue Export Credit - Outstanding 15/MM/YY\nBSD-MF-15-GE \u2013 Government Exposure (New) 15/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 1st Week DD/MM/YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 428, "year": 2013}, "type": "Document"}
{"page_content": "420 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBSD-WF-13-IR \u2013 Interest Rates \u2013 2nd Week DD/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 3rd Week DD/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 4th Week DD/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 5th Week DD/MM/YY\nWe certify that the information contained in the above returns has been extracted from and is in \naccordance with the books of accounts of the bank.\n (Name ) (Name ) \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator\n Date: DD/MM/YY  Date: DD/MM/YY\nAnnex 3\nStatement \tof\tCertification \tof\tQuarterly \tReturns\tApproved/Submitted\nQuarterly Returns\nBSD-QF-05-LN \u2013 Large Exposures ( New) 21/MM/YY\nBSD-QF-06-RC \u2013 Related Party Exposures - Accommodation \ngranted by the Bank to Directors and/or Close Relatives 21/MM/YY\nBSD-QF-06-RS \u2013 Related Party Exposures - Accommodation \nGranted by the Bank to Concerns where a Director of the Bank \nhas a Substantial Interest21/MM/YY\nBSD-QF-07-IE \u2013 Investment in Equity 21/MM/YY\nBSD-QF-08-FE \u2013 Foreign Currency Exposures (New) 21/MM/YY\nBSD-QF-09-GA \u2013 Maturity Gap Analysis ( New) 21/MM/YY\nBSD-QF-10-IS \u2013 Interest Rate Sensitivity ( New) 21/MM/YY\nBSD-QF-12-SC \u2013 Sector Wise Credit Exposures ( New) 21/MM/YY\nBSD-QF-14-SP \u2013 Interest Spread 21/MM/YY\n   \nWe certify that the information contained in the above returns has been extracted from and is in \naccordance with the books of accounts of the bank.\n (Name ) (Name ) \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator\n Date: DD/MM/YY  Date: DD/MM/YYReturn Due DateSubmitted Approved \nDate Yes No\nReturn Due DateSubmitted Approved \nDate Yes No", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 429, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  421\nAnnex 4\nStatement \tof\tCertification \tof\tAnnual\tReturns\tApproved/Submitted\n \nAnnual Returns\nBSD-AF-01-BD  \u2013 Balance Sheet (DBU and Bank Only \nOperations)30/MM/YY\nBSD-AF-01-BD & BF \u2013 Balance Sheet (FCBU Operations) 30/MM/YY\nBSD-AF-02-PD  \u2013 Profit & Loss (DBU and Bank Only \nOperations)30/MM/YY\nBSD-AF-02-PF \u2013 Profit & Loss (FCBU Operations) 30/MM/YY\nWe certify that the information contained in the above returns has been extracted from and is in \naccordance with the books of accounts of the bank.\n (Name ) (Name ) \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator\n Date: DD/MM/YY  Date: DD/MM/YY\nAnnex 5\nStatement \tof\tCertification \tof\tQuarterly/Annual \tReturns\tApproved/Submitted\n(Only for Capital Adequacy)\n \nQuarterly Returns\nBSD-QF-11-C \u2013 Capital Adequacy \u2013 Bank Only (SOLO basis) 30/MM/YY\nBSD-QF-11-C \u2013 Capital Adequacy \u2013 Consolidated 30/MM/YY\n   \nWe certify that \u2013\n(1) The information submitted in the above return is, to the best of our knowledge and belief, correct;\n(2) The capital adequacy ratio was, at any time during the quarter/year under review, not less than the \nratio determined by the Monetary Board, in terms of section 19(7)(a) of the Banking Act, No.30 of \n1988 as amended by Banking Act, No.33 of 1995 and Act, No.2 of 2005. \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\n Chief Accountant  / Authorised Officer  Chief Executive\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\n Name   Name\n Date:\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  Date:\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.Return Due DateSubmitted Approved \nDate Yes NoReturn Due DateSubmitted Approved \nDate Yes No", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 430, "year": 2013}, "type": "Document"}
{"page_content": "422 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nBank Supervision Department\n17 March 2006\nTo : CEOs of all Licensed Commercial Banks and\n        all Licensed Specialised Banks\nDear Sirs,\nNEW WEB-BASED OFF-SITE SURVEILLANCE SYSTEM\nWe refer to the discussion at the Bank Managers\u2019 Meeting held on 26 January 2006 and the previous \ncorrespondence on the above subject and write to inform you that the testing of, and familiarization with, \nthe above system with the use of information submitted by the banks for the month of September 2005, \nthrough the web-based application, has been completed. The next step is to go \u201clive\u201d with the above \nsystem and this exercise will start in parallel with the existing manual system till June 2006. Once the \nsystem is fully tested, the existing manual returns submission system will be discontinued.\nTherefore, we shall be thankful if you will make arrangements to forward the information in the \nnew returns, from January 2006 onwords, through the above web-based system, in addition to the present \nsystem of \u201cmanual returns submission\u201d to this Department. Your co-operation in this regard will be much \nappreciated.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 431, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  423\nRef. No. : 02  / 04 / 004 / 0010  / 001\nBank Supervision Department\n18 February 2005\nTo : The CEOs of all Licensed Commercial Banks and\n Licensed Specialised Banks\nDear Sirs,\nSUBMISSION OF THE MONTHLY & QUARTERLY COMPLIANCE REPORTS\nI refer to the BSD Circular dated 26 October 2001 and the discussion on the above subject at the \nmeeting of the CEOs of Licensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) \nheld on 17.02.2005.\nAs agreed, all banks are hereby informed that the CEO of the respective bank should sign the \nCompliance Reports submitted to this Department on a monthly and quarterly basis.\nThis will be effective for the Compliance Reports to be submitted for the month of February 2005 \nonwards. \nYours faithfully,\nSgd, Director of Bank Supervision\ncc \u2013 Secretary-General/SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 432, "year": 2013}, "type": "Document"}
{"page_content": "424 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nBANKING ACT NO. 30 OF 1988 \nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nConditions determined, by the Monetary Board of the Central Bank of Sri Lanka, under section 83A \nof the Banking Act No.30 of 1988 as amended by the Banking (Amendment) Act No.33 of 1995 relating \nto business of pawn broking.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n07 September 1998\nLICENSED COMMERCIAL BANKS (PAWNING) CONDITIONS 1998\n1. ( 1)  T hese Conditions may be cited as the Licensed \nCommercial Banks & (Pawning) Conditions, 1998\n (2) These Conditions shall apply to the business of pawn \nbroking, (hereafter referred to as pawning) carried on by a licensed \ncommercial bank or any branch or agency of such bank (hereafter \nreferred to as the \u201cpawnee\u201d).\n2. In these Conditions, \u201cpawning\u201d means the lending of money \non the security of personal articles made of gold (hereafter referred to as \nthe \u201carticle\u201d) accepted as a pledge for a period not exceeding an initial \nperiod of 12 months.\n3. (1) A  pawnee shall not accept an article as a pledge where \nthe pawnee has reasonable grounds to believe that the person who gives \nthe article as a pledge is not the owner or the authorised agent of the \narticle.\n (2) A person who gives an article as a pledge or redeems an \narticle shall establish the identity of the person to the satisfaction of the \npawnee.\n4. Pawning shall be carried on by a pawnee \u2013\n (a) between the opening and closing hours of business for \nthe public in its capacity as a licensed commercial bank; \nand\n (b) on such other dates and times as may be specified in a \nnotice displayed in a conspicuous place at the place of \nbusiness of the pawnee.\n5. A  pawnee shall, for the purpose of testing and valuing articles \nfor pawning, have staff with sufficient training and competency in and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 433, "year": 2013}, "type": "Document"}
{"page_content": "for pawning, have staff with sufficient training and competency in and \nthe equipment for assaying the gold content of an article.Citation & Application.\nInterpretation.\nOwnership of pledge.\nDates & Times of Pawning.\nCompetence of Staff and \nequipment.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 433, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  425\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n6. (1) The standard measurement for the determination of the \nquality of an article shall be a carat.\n ( 2)  T he standard measurement of weight used in the \nvaluation of an article shall be a gram.\n ( 3)  An a rticle measuring less than 9 carats shall not be \naccepted as a pledge.\n (4) In valuing an article , the pawnee shall have regard only \nto the value of gold in the article.\n ( 5)  A  pawnee shall, in accepting an article as a pledge, \ninform the person delivering the article, the value of the article \ndetermined in accordance with this paragraph.\n7. (1) The rate of interest chargeable on the money lent on the \nsecurity of an article accepted as a pledge for pawning shall be fixed by \nthe pawnee.\n ( 2)  A pawnee shall display in a conspicuous place in its \nplace of business a notice specifying \u2013\n (a) the daily market value of sovereign gold;\n (b) the rate or rates of interest fixed under subparagraph \n(1) or subparagraph (3).\n (c) The maximum percentage of the value of an  \narticle lent on each carat of the article.\n (3) Where an article given as a pledge for pawning is not \nredeemed within the redeemable period calculated under paragraph 11, a \npawnee may, subject to paragraph 10(2), levy interest on the money lent \nat a rate higher than the rate levied during the redeemable period, (such \nhigher rate referred to as \u201cenhanced interest\u201d) from the date immediately \nfollowing the redeemable period.\n8. (1) A  pawnee shall keep for its business \u2013\n (a) a pledge book in the Form set out in the First  \nSchedule;\n (b) a sale book of pledges in the Form set out in the \nSecond Schedule.\n (2) A pawnee shall, after due inquiry, enter in each book \nkept under the subparagraph (1), the particulars specified therein in \nrespect of each article taken as  a pledge.\n9. ( 1)  Subject to s ubparagraph (6), a pawnee shall execute,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 434, "year": 2013}, "type": "Document"}
{"page_content": "9. ( 1)  Subject to s ubparagraph (6), a pawnee shall execute, \nin respect of every article accepted as a pledge for pawning, a pawn \nticket.\n (2) A pawn ticket shall be in foil and counterfoil and  shall \nbe in the Form set out in the Third Schedule.Interest Rates.\nBooks to be maintained.\nPawn Ticket.Standard Measurement.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 434, "year": 2013}, "type": "Document"}
{"page_content": "426 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n (3) The counterfoil of the pawn ticket shall, after its is filled \nup by the pawnee, be signed by the person giving the article as a pledge \n(hereafter referred to as the \u201cpawner\u201d) or, if the pawner is unable to sign \nthe name, be marked with the left thumb impression of the pawner.\n (4) The foil of the pawn ticket shall be filled up and signed \nby the pawnee.\n (5) The pawnee shall, after compliance with sub paragraph \n(4), hand over the foil of the pawn ticket to the pawner.\n (6) When a pawner gives more than one article as pledge on \nthe same occasion, the pawnee may execute one pawn ticket for all such \narticles, unless the pawner requests otherwise.\n10. (1) Where an article is redeemed within the first fourteen \ndays of a month, the interest chargeable for that month shall be one half \ninterest chargeable for that month.\n ( 2)  Where the business of a pawnee remains closed on  \nthe last date of the redeemable period without reasonable and adequate \nnotice, enhanced interest may be levied only from the day immediately \nsucceeding the first day on which the business thereafter remains open.\n11. ( 1)  Every article given as a pledge shall be redeemable  \nwithin a period of 12 months commencing from the date of pawning (in \nthese Conditions referred to as the \u201credeemable period\u201d).\n (2) In calculating the period of 12 months under subparagraph \n(1) the date of pawning shall be disregarded.\n12. ( 1)  Subj ect to the other provisions of this paragraph, a \npawner may redeem an article given as a pledge, by delivering to the \npawnee the foil of the pawn ticket in relation to that article and by \nplacing the signature or the left thumb imprint, as the case may be, of the \npawner on the foil in the presence of the pawnee or an authorised agent \nor employee of the pawnee.\n ( 2)  A person authorised in writing by the pawner may", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 435, "year": 2013}, "type": "Document"}
{"page_content": "or employee of the pawnee.\n ( 2)  A person authorised in writing by the pawner may \nredeem an article given as a pledge by delivering to the pawnee the \nfoil of the pawn ticket in relation to the article, duly endorsed by the \nsignature or the left thumb imprint of the pawner and by placing on the \nfoil the person\u2019s signature or left thumb impression in the presence of \nthe pawnee or an authorised agent or employee of the pawnee.\n (3) Where by reason of the death or disability of the pawner, \nan article given as a pledge cannot be redeemed under subparagraph (1) \nor subparagraph (2), a holder of the foil of the pawn ticket in relation to \nthe article may redeem the article by delivering to the pawnee the foil \ntogether with a declaration in the form set out in the Fourth Schedule \nsigned by the holder and by a person identifying the holder and made \nbefore a Justice of Peace.Computation of Interest.\nRedeemable period.\nProcedure for redemption of a \npledge.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 435, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  427\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n (4) Where a foil in relation to an article given as a pledge \nis lost, stolen, mislaid, destroyed or has been obtained by a person \nnot entitled to it, the pawner, the person or the holder referred to in \nsubparagraphs (1), (2), or (3) may redeem the article by making a \ndeclaration in the Form set out in the Fifth Schedule signed by the \npawner, person or holder, as the case may be, and a person identifying \nthe pawner, person or holder and made before a Justice of the Peace and \nin that event the pawner, person or holder, as the case may be, shall place \nthe signature or the left thumb impression on the counterfoil of the pawn \nticket in the presence of the pawnee, or an authorised agent or employee \nof the pawnee.\n (5) Subject to subparagraphs (1), (2),(3) and (4) the pawnee \nof an article given as a pledge shall, on payment of the money lent on the \nsecurity of the article together with the interest due thereon by the person \nentitled to redeem the article under those subparagraphs, deliver, subject \nto subparagraph (6), the article to such person.\n (6) Where a pawnee has reasonable grounds to believe that \na person delivering a foil of a pawn ticket under subparagraphs (1), (2) or \n(3) has stolen or otherwise illegally obtained possession of it, the pawnee \nmay refuse to deliver the article in relation to that foil.\n (7) The pawnee shall in delivering under subparagraph (4) \nan article given as a pledge, issue to the person redeeming the article a \nreceipt for the money paid in the Form set out in the Sixth Schedule.\n13. (1) Where an article given as a pledge is lost, destroyed or \ndamaged while in the custody of the pawnee, the pawnee shall be liable, \non demand by a person entitled to redeem it within the redeemable \nperiod, to pay the person the value of the article determined under", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 436, "year": 2013}, "type": "Document"}
{"page_content": "period, to pay the person the value of the article determined under \nparagraph 6 less any sum due as money lent and interest thereon.\n (2) Every pawnee shall insure the business of pawn broking \nto the value of the articles taken as pledges.\n14. Every pawnee shall retain in the possession of the pawnee  \u2013\n (a) the counterfoil of each pawn ticket for a period of  \n12 months from the date of redemption of the article \nrelating that pawn ticket or, when the article is sold \nunder paragraph 15 from the date of sale.\n (b) foil of every such pawn ticket referred to in paragraph \n(a) for a period of 12 month from the date of redemption \nwhere the foil is delivered to the pawnee;\n (c) each declaration made under paragraph 12 for a period \nof 12 months from date of redemption of the article in \nrespect of which the declaration is made.\n (d) the duplicate copy of the receipt issued under paragraph \n12 (7) for a period of 12 months from the date of issue \nof the receipt.Loss or destruction of pledge.\nPeriod of retention of documents.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 436, "year": 2013}, "type": "Document"}
{"page_content": "428 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n15. (1) Where an article delivered as a pledge is not redeemed \nwithin the redeemable period calculated under paragraph 11, a pawnee \nmay sell the article by public auction and the provisions of this paragraph \nand the Seventh Schedule shall apply to such sale.\n ( 2)  The auctioneer at a public auction conducted under  \nsubparagraph (1) shall be a senior officer of the pawnee of a rank not \nbelow the rank of a Branch Manager.\n (3) A pawnee shall give to each pawner of an article liable \nfor sale under subparagraph (1) not less than 14 days notice of the \nauction.\n (4) The notice under subparagrah (3) shall state the date, \ntime and place of the auction and shall be sent to the pawner by registered \npost to the address stated in the pledge book and the cost of such postage \nshall be borne by the pawner.\n (5) Where a notice sent by registered post to a pawner is \nreturned undelivered to the pawnee, the notice of the auction published \npursuant to the Seventh Schedule shall be a sufficient notice to the \npawner.\n ( 6)  A pawnee may bid for and purchase at an auction \nconducted under subparagraph (1) an article delivered to the pawnee \nas a pledge and liable to be sold under that subparagraph and on such \npurchase shall be deemed to be the absolute owner of the article.\n (7) Where at an auction conducted under subparagraph (1) \nan article is sold for an amount exceeding the money lent on the security \nof that article together with interest thereon, the pawnee shall \u2013\n (a) forthwith give notice to the pawner of that article by \nregistered post to the address stated in the pledge book \nof the amount for which the article was sold and of the \namount lying to the credit of the pawner after deducting \nthe cost of postage and the charges of the auction;\n (b) on demand made by the pawner within 12 months from", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 437, "year": 2013}, "type": "Document"}
{"page_content": "(b) on demand made by the pawner within 12 months from \nthe date of dispatch of the notice, pay to the pawner the \nsum lying to the pawner\u2019s credit; \n (c) i f no demand is made within the period specified in \nclause (b) above, deposit forthwith after the expiration \nof that period such amount in a savings account opened \nin the name of the pawner or transfer the said amount \nto an un claimed balance account maintained by the \npawnee.\n (8) A pawnee shall keep proper records of the unclaimed \nbalance account maintained under subparagraph (7)( c) and pay to the \npawner the amount due to the pawner if a claim is made thereto by the \npawner.Sale of Pledges.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 437, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  429\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRules.16. A  pawnee shall at the end of every quarter carry a physical \ncheck to be made of the articles delivered as pledges and held in stock \nby the pawnee.\n17. A  pawnee shall not \u2013\n (a) accept an article as a pledge from any person appearing \nto be under the age of 16 years or to be under the \ninfluence of alcohol;\n (b) accept an article as a pledge without giving the pawner \nof the article the foil of the pawn ticket;\n (c) purchase or take as security or exchange the foil of a \npawn ticket issued by another pawnee;\n (d) purchase any article given to the pawnee as a pledge \nexcept at a public auction conducted under paragraph \n15;\n (e) allow any article delivered as a pledge to be redeemed \nwith the view to purchasing it by the pawnee;\n (f) a gree with the pawner to purchase, sell, or dispose \nwithin the redeemable period an article delivered by \nthe pawner as a pledge;\n (g) sel l or otherwise dispose of an article delivered as a \npledge except at such time and in such manner as is \nauthorised under these Conditions.\n (h) m ake any false entry in a pledge book or any other \ndocument required to be kept under these Conditions \nor fail to make therein any entry required to be entered \nunder these Conditions.\n18. (1) A  pawnee shall be responsible for the safe custody of \narticles delivered as pledges.\n ( 2)  Articles delivered to a pawnee as pledges shall be  \nplaced \u2013\n (a) In safes which are under dual control;\n  or\n (b) In steel cabinets under dual control kept inside a \nvault.\n (3) A pawnee shall establish a dual control team of which \nthe Head of the pawning division shall be a member.\n19. (1) A  pawnee may formulate rules which are not inconsistent \nwith these Conditions for the conduct of its pawn broking business.\n ( 2)  A pawnee shall forward to the Director of the Bank", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 438, "year": 2013}, "type": "Document"}
{"page_content": "( 2)  A pawnee shall forward to the Director of the Bank \nSupervision Department of the Central Bank a copy of the rules \nformulated under paragraph (1) and display a copy of those rules in a \nconspicuous place at its place of business.Physical check of pledges.\nSafe custody of articles.Acts prohibited.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 438, "year": 2013}, "type": "Document"}
{"page_content": "430 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n [ PARAGRAPH 8 ]  First Schedule\nPLEDGE BOOK\nPledge Book of  ......................................................  Pawnee of ...................................................................\nSerial\nNo. of  \npledge  in  \nthe monthDate No. of  \nthe Issued \nPawn \nTicketName\nof\nPawnerAddress*\nof\nPawnerName\nof Owner if \nother than\nPawnerDescription\nof each Article\nPawned\n [ PARAGRAPH 8 ]  Second Schedule\n SALE BOOK OF PLEDGES\nDate and Place of Sale : ................................................................................................................................\nName and Address of Auctioneer : ...............................................................................................................Weight of \nArticle if \nJewelleryValue of each \nArticle in term \nof\n para (6)\n(Rs. cts.)Amount of \nLoan upon \neach Article\n(Rs. cts.)Profit or \ninterest \ncharged upon \neach Article\n(Rs. cts.)Name & \nAddress\nof\nPerson \nredeemingDate \nof \nredemption\n* New address if original is changed\nDate\nof\nPawningNo. of  \npledge as in  \npledge  \nBookName\nof\nPawnerAmount  \nof \nLoanAmount  \nof  \nInterest  \ndueAmount for \nwhich each \nPledge was Sold \nby AuctioneerName & \nAddress of \nPurchaser", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 439, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  431\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n[ PARAGRAPH 9 ]  Third Schedule\nPAWN TICKET\nCounterfoil  No. \u2026\u2026\u2026\u2026\u2026\n(To be retained by Pawnee)\nDate : \u2026\u2026\u2026\nName and address of pawnee \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nI, the undersigned, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 of \n(*address of pawner) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 \nhave this day pawned with the aforesaid \npawnee\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 worth  \nRs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 for \nRs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(Value as determined in terms of para (6) of the \ncondition)\nSignature of pawner, or \nLeft thumb impression of \nPawner if unable to write \nName.\nSignature of pawnee\nFoil.  No. \u2026\u2026\u2026\u2026\u2026\u2026Date : \u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \n(name and *address of pawner) has \nthis day pawned with the undersigned \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \n(name and address of pawnee) worth \nRs\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 for \nRs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(Value as determined in terms of para (6) of the \ncondition) \nSignature of Pawnee\nSignature of Pawner or \nleft thumb impression\nPawner agrees\n1) w here an article delivered as a pledge is \nnot redeemable within the redeemable \nperiod calculated under paragraph 11 of \nthe condition under paragraph 11 of the \nconditions of pawning, a pawnee may sell \nthe article by public auction.\n2) wh ere a notice sent by registered post to \na pawner is returned undelivered to the \npawnee, the notice of auction published in \nthe newspapers shall be sufficient notice to \nthe pawner.* Change of address to be notified", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 440, "year": 2013}, "type": "Document"}
{"page_content": "432 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n[ PARAGRAPH 12 ]  4th Schedule\nDECLARATION WHERE THE FOIL OF THE PAWN TICKET IS SURRENDERED \nWITHOUT THE SIGNATURE\nOF THE PAWNER ENDORSED THEREON\nI,  A.  B.,  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 , of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 , do solemnly  and  \nsincerely  declare  that  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 pledged  at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, \nPawnee,  the  article/s  described  below  and received  the  foil  of a pawn ticket for the same and that  for  \nthe  purpose  of redeeming  the pledge I am unable to surrender the foil of the pawn ticket to the pawnee \nwith the signature of the said .\u2026\u2026\u2026.........\n(pawner) duly endorsed thereon, because the said  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(pawner) is dead/under a disability, to wit  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(nature of  disability).\nThe article/s above referred to is/are \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nI,  C. D., \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 do solemnly and sincerely declare that I know the  person  now making \nthe  foregoing declaration to be A. B., of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclared before me this \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 day of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, 19\u2026\u2026\u2026\nSignature of A. B.,  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nSignature of C. D.,  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nJustice of Peace\n[ PARAGRAPH 12 ]  5th Schedule\nDECLARATION WHERE THE FOIL OF THE PAWN TICKET IS LOST &C.\nTake notice, if this declaration is false the person making it is punishable.\nI,  A.  B.,  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 , of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 , do solemnly  and  \nsincerely  declare  that  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 pledged  at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, Pawnee,  \nthe  article (or articles)  described  below, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, property, \nand   received   the   foil  of  the  pawn  ticket  for  the   same,   which   has   since been  \u2026\u2026\u2026\u2026\u2026, \nby \u2026\u2026\u2026\u2026\u2026,  and that the foil of the pawn ticket has not  been  sold  or transferred to any person by \n\u2026\u2026\u2026\u2026\u2026 to  \u2026\u2026\u2026\u2026\u2026knowledge or belief.\nThe article (or articles) above referred to is (or are) the following : .....\u2026\u2026\u2026\u2026\u2026.....", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 441, "year": 2013}, "type": "Document"}
{"page_content": "The article (or articles) above referred to is (or are) the following : .....\u2026\u2026\u2026\u2026\u2026.....\nAnd, I,  C. D., \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 do solemnly and sincerely declare that I know the  person  now \nmaking the  foregoing declaration to be A. B.,  of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclared before me this \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 day of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, 19\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nJustice of Peace", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 441, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  433\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n[ PARAGRAPH 12 ]  6th Schedule\nRECEIPT NO.\nDate : \u2026\u2026\u2026\u2026\nReceived on redemption of Pledge No. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nRs.   Cts.\n       Amount of loan\n       Profit or interest  \nTotal            \n                                                      ==============\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nSignature of Pawnee\n[ PARAGRAPH 15 ]  7th Schedule\nREGULATIONS RELATING TO AUCTIONS OF PLEDGES\n1. The pawnee shall cause all pledges to be exposed to public view .\n2. The pawnee shall display catalogues of the pledges, stating \u2013\n (a) the pawnee\u2019 s name and place of business;\n (b) the month in which each pledge was pawned;\n (c) the number of each pledge as entered at the time of pawning in the pledge book.\n3. The pledges of each pawnee in the catalogue shall be separate from any pledges of  any other pawnee.\n4. The auctioneer shall insert in a daily newspaper in all three  languages an  advertisement giving \nnotice of the sale, and stating \u2013\n   (a) the pawnee\u2019 s name and place of business;\n   (b) the months in which the pledges were pawned;\n   (c) the place of auction;\n   (d) the date and time of auction.\n5. The  advertisement shall be inserted on two separate days  in  the same  newspaper,  and  the second \nadvertisement shall be  inserted at least ten clear days before the first day of sale.\n6. Where  a pawnee bids at a sale, the auctioneer shall not take  the bidding  in  any   other  form than that \nin  which  he  takes  the biddings of other persons at the same sale; and the auctioneer  on knocking  \ndown  any article to a pawnee  shall  forthwith  declare audibly the name of the pawnee as purchaser.\n7. The auctioneer shall, within fourteen days after the sale, deliver to the pawnee a copy of the catalogue, \nor of so much thereof  as relates  to the pledges of that pawnee, filled up with the  amount for  which", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 442, "year": 2013}, "type": "Document"}
{"page_content": "the  several pledges of that  pawnee  were  sold,  and authenticated by the signature of the auctioneer.\n8. The  pawnee shall preserve every such catalogue for two  years  at least after the date of the auction.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 442, "year": 2013}, "type": "Document"}
{"page_content": "434 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02/04/002/005/001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha\nColombo 01.\n01 December 1999\nTo : All Licensed Commer cial Banks &\n  all Licensed Specialised Banks\nDear Sir  / Madam,\nSECRECY OF BANKING TRANSACTIONS IN TERMS \nOF SECTION 77 OF THE BANKING ACT\nIn terms of Section 77 of the Banking Act, No.30 of 1988 as amended by Banking (Amendment) \nAct, No.33 of 1995, Banks are required to observe strict secrecy in respect of all banking transactions.\nInnovations in the field of Information Technology have changed the environment of the Banking \nIndustry and it has been observed  that staff of outside computer firms also have access to confidential \ncustomer information of Banks. \nIn the above circumstances all Licensed Commercial Banks and all Licensed Specialised Banks are \nhereby required to adhere to the following:\n (i) Inclusion of a special clause/condition in software maintenance agreements or service  \nagreements with outside software companies, requiring them to observe strict secrecy in \nrespect of all transactions of the bank, its customers and the state of accounts of any person \nand all matters relating thereto.\n (ii) Obtain declarations of secrecy from all persons and organisations who perform services in \nterms of such maintenance or service agreements. \nYours faithfully,\nSgd. Dr. Anila Dias Bandaranaike\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 443, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  435\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka in terms of Sections 46(1) and \n76(J)(1) of the Banking Act, No. 30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\n05 October 2011\nBANKING ACT DIRECTION NO. 8 OF 2011\nCUSTOMER CHARTER OF LICENSED BANKS\nIn order to ensure the soundness of the banking system, Sections 46(1) and 76( J)(1) of the Banking Act, \nNo. 30 of 1988, last amended by the Banking Act, No.46 of 2006, empowers the Monetary Board to issue \nDirections to licensed banks regarding the manner in which any aspect of the business of such banks is \nto be conducted. Safeguarding the interests of the customers, building up a healthy relationship between \ncustomers and banks; and improving the customer confidence in the banking sector would promote and \nensure stability in the banking sector. In view of the above, the Monetary Board issues this Direction \nto all licensed banks to adopt a \u2018Code of Conduct\u2019 in line with the Customer Charter annexed to this \nDirection.\n1. All licensed banks shall ensure that the customers\u2019 rights are protected in line with \u2018Customer \nCharter\u2019 annexed to this Direction and adopt a \u2018Code of Conduct\u2019 based on the charter. \n2. All licensed banks shall obtain written confirmation on adherence to the \u2018Code of Conduct\u2019 from the \ncurrent employees and all new employees (prior to taking up their employment in the bank).\n3. All licensed banks shall publish the \u2018Customer Charter\u2019 in their websites, make copies available for \ncustomers on request in their preferred language and educate them when necessary.\n4. All licensed banks shall ensure the implementation of this Direction within 6 months from the date \nof the Direction.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 444, "year": 2013}, "type": "Document"}
{"page_content": "436 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nAnnexure\nCUSTOMER CHARTER OF LICENSED BANKS\n1. Introduction\n This Charter sets key standards of fair banking practices envisaged by customers when they undertake \ntransactions with licensed banks and provides guidance to the licensed banks to adopt a \u2018Code of \nConduct\u2019 on customer protection. The Charter also includes a set of customer obligations towards \nlicensed banks in the interest of stable relationship.\n2. Receiving information and understanding the banking Pr oducts/Services\n The customers have the right to receive factual information and understand the financial products/\nservices offered by banks. In this regard, certain good practices of banks would be as follows:\n (a) T he licensed banks should help the customers to understand the financial products/services \noffered by providing adequate information about them, explaining their financial implications and \nassisting the customers to choose the appropriate banking products/services. \n (b) Each licensed bank should have Key Facts Document in the form of a brochure/leaflet written in \nsimple language for its products or services, separately or in combination and which should be \ndistributed to the customers seeking such products/services. These brochures/leaflets should, at \nminimum, contain the following basic information and be available in languages preferred by the \ncustomers (i.e., Sinhala/Tamil/English):\n i.  Description of the products/services.\n ii.  Financial and other benefits to customers including any incentives and promotions.\n iii.  Fees/char ges, commission, interest etc., charged from customers.\n iv .  Procedures to be followed to obtain the product/service.\n v .  Major terms and conditions.\n vi.  A common complaint procedure for customers.\n (c) All advertisements by licensed banks should contain factual information on products/services", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 445, "year": 2013}, "type": "Document"}
{"page_content": "(c) All advertisements by licensed banks should contain factual information on products/services  \noffered by them in any media and promotional material, which can be understood by the targeted \ncustomers and not contain information that may be likely to mislead the public. In addition,  \nall such advertisements should give the contact details and state that the respective bank is a \nlicensed bank supervised by the Central Bank of Sri Lanka.\n (d) Further information or clarification on any advertisements on bank\u2019s products/services ( i.e., fees/\ncharges and interest rates etc.) should be provided by banks on request.\n (e) The following information should be conspicuously displayed in the Head Offices and all branches \nand other banking outlets of the licensed banks.\n i.  Current interest rates on all deposit and loan products \n ii.  Buying and selling rates of foreign currencies\n iii. Credit rating of the bank with underlying specifications\n iv . The contact details of the Financial Ombudsman and Credit Counselling Centre\n v .  Banking hours and Holiday notices\n vi. Any other relevant information\n (f) A  periodic statement should be sent to customers either in printed form or electronic form opted by \nthem regarding transactions and balances in their deposit or loan accounts or other services other \nthan passbook savings accounts of non-dormant category.\n  Statements for credit cards should set out the minimum payment required and the total interest \namount charged if only the required minimum payment is made and late payment fee if the \nminimum payment is not made.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 445, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  437\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n (g) The licensed banks should improve the customer awareness on financial products/services and \nrisks by arranging specific financial literacy programmes. \n (h) The licensed banks should act fairly and reasonably by ensuring that the banks\u2019 staff follows \nprocedures and practices stipulated in the \u2018Code of Conduct\u2019, the products/services offered are \nin line with relevant laws and regulations and the maintenance of the principles of integrity and \ntransparency.\n3. A wareness and understanding the \u2018Terms & Conditions\u2019 on Products/Services\n3.1 The customers have the right to access to and fully understand the terms and conditions relevant \nto each and every product or service they obtain from banks. In this regard, the licensed banks \nshould ensure that:\n (a) the \u2018Terms and Conditions\u2019 associated with each product or service are made available to \ncustomers in languages preferred by them;\n (b) a copy of the \u2018Terms and Conditions\u2019 is given to the prospective customer prior to offering \nor recommending a product or service and any clarification sought by customers is clearly \nexplained;\n (c) an of ficer carrying out the duties of a relationship officer should clearly explain to the customer \nof the terms and conditions and features of the products/services, provide a comparison of \nalternative products/services available and give reasonable time for the customer to make a \ndecision; \n (d) a written confirmation is obtained from the customer that the details of the products or services \nand their terms and conditions were received, explained and understood;\n (e) all the documents pertaining to the product or service are duly completed and signed by the \ncustomer. (Incomplete documents and obtaining signatures on blank papers/documents are \navoided.);", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 446, "year": 2013}, "type": "Document"}
{"page_content": "customer. (Incomplete documents and obtaining signatures on blank papers/documents are \navoided.);\n (f) a ny changes made by licensed banks to the agreed terms and conditions on products or \nservices should be informed to the customers in writing or through paper notice or any other \nappropriate way before such changes are made.\n3.2 The customers have the right to know specifically the following under \u2018T erms and Conditions\u2019.\n (a) The details of the bank\u2019s general charges such as interest rates, fees and commissions, if any, \nrequired to be paid by the customer including the method of computing interest charges.\n (b) The bank\u2019 s procedure for receiving complaints and the resolution mechanism.\n (c) The course of recovery actions a bank may follow in the event of any default by the customer \non his/her obligations and bank\u2019s expenses that will be reimbursed from the customer.\n (d)  Any compensation proposed to be paid by the relevant customers in case of pre-mature \nwithdrawal/termination of participation in a product/service by the customers.\n (e) Any re strictions on opening of accounts, closing of accounts, maintenance of accounts  \n(e.g., minimum balance), transfer of funds by customers and policies and procedures on \ndormant accounts and abandoned property. \n (f) The disclosure of customer information to a party legally authorised to obtain such information.\n (g) The rules regarding (i) reporting of suspicious transactions and above-the-threshold  \ntransactions to the Financial Intelligence Unit (ii) the reporting procedures that the customer \nshould follow in the case of stolen cards /financial instruments and (iii) liability of the bank \nand the customer. \n (h) The procedures to be employed by the bank to foreclose on the property held as collateral for \na loan and the consequences thereof to the customer and options available to him/her.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 446, "year": 2013}, "type": "Document"}
{"page_content": "438 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n4. Compensation fr om withdrawal / cancellation of products / services by banks\n In the event  a licensed bank seeks to withdraw/terminate a product or service already on contract, \nespecially deposit products, customers have the right to receive a reasonable time with an exit \ncompensation scheme disclosed in advance.\n5. Pr otection from Agents of banks\n The customers have the right to know the details of the agents appointed for customer services by \nlicensed banks and the \u2018Code of Conduct\u2019 issued to them by banks to refrain from doing any of the \nfollowing.\n (a) Harassing customers. \n (b) Using abusive debt collection practices.\n (c) Disclosing customer information to others.\n (d) Giving false or misleading information about products/services.\n (e) Unduly influence customers or the general public to buy or get involved in the bank\u2019s products/\nservices.\n (f) Engage in getting any security documents signed outside the bank.\n6. Complaint measur es and relief\n The customers have the right to resolve their complaints with transparency and effectively. In this \nregard, licensed banks should:\n (a) implement a quick and effective resolution mechanism on disputes between customers and banks \nby rectifying disputes quickly, handling complaints within a short period, directing to take the \ncomplaints forward if the customer is still not satisfied and reversing any charges that applied due \nto a mistake;\n (b) have in place a written procedure for receiving complaints and steps to be taken to resolve such \ncomplaints;\n (c) acknowledge the receipt of any complaint in writing within a reasonably short period of time and \ninform the complainants of the procedure that will be followed by the bank for the resolution of \nthe complaint and the contact details of the officer/officers handling the complaint;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 447, "year": 2013}, "type": "Document"}
{"page_content": "the complaint and the contact details of the officer/officers handling the complaint;\n (d) facilitate receiving complaints verbally or in writing and the banks shall not insist that complaints \nbe necessarily made only in writing;\n (e) establish a management information system regarding complaints and process of resolution as part \nof the duties of risk management committee relating to operational risks;\n (f) assign an of ficer with the duty of handling the complaints and management information in each \nbranch or office; and\n (g) advise the customers to seek af fordable and efficient recourse through the Financial Ombudsman \nor in Courts in the event the complaint is not resolved to their satisfaction.\n7. Special attention and Car e\n The customers such as elderly , disabled or customers with low financial literacy have the right to \nreceive special attention to facilitate them to have a fair access to banking services.\n8. Customer  obligations toward banks\n Customers should foster the relationship with banks fulfilling their obligations. In this regard:\n (a) Customers should not borrow beyond their af fordable repayment capacity limit.\n (b) Customers should not allow the repayments or instalments to go into arrears and the prompt  \nrepayments will create healthy relationships with the banks.\n (c) If a customer wants to settle his/her loan before the end of the loan period, he/she has to pay certain \namount of money over the loan amount as agreed at the time of accepting the offer.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 447, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  439\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n (d) If the customer is unable to repay his/her loan outstanding as agreed, the bank will have the right \nto recover the amount owing to the bank including the bank\u2019s expenses specified in the \u2018Terms & \nConditions\u2019.\n (e) If a customer finds himself/herself in financial difficulties, he/she should let the bank know as \nearly as possible. The sooner the bank discusses the customer\u2019s problems, the easier it will be for \nboth of the customer and the bank to find a solution. \n (f) When a customer account goes into default, the first step the bank takes is to contact the customer . \nIn this regard, it is imperative that the customer should inform the bank at all times of any changes \nto his/her address and contact details.\n (g) C ustomers should have the full knowledge and understanding of the product/service offered \nbefore entering into the contract.\n (h) Customers should duly fill and submit the required application forms and supporting documents \nin time.\n (i) Customers should exercise due care in all transactions with banks. \n (j) Customers should notify the bank promptly of any fraudulent transaction/s or such attempts in \ntheir accounts with the banks whenever they become aware of such instances.\n (k) Cust omers should exercise utmost care in using and storing/handling Personal Identification \nNumbers (PIN) and security measures of other electronic cards issued by the bank.\n (l) Customers should not treat any operational lapse of a bank on its obligations mentioned in Clause \n2 to 7 above other than any dispute on the amount payable to the bank as a reason for his/her non \nsettlement or delay in settlement of a debt unless otherwise allowed by a court of law. All such \nincidents need to be resolved separately or individually.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 448, "year": 2013}, "type": "Document"}
{"page_content": "440 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. : 02  / 17 / 600 / 002 / 001\nBank Supervision Department\n26 July 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\n \nCAP ON PENAL INTEREST RATES CHARGED BY LICENSED BANKS  \nON LOANS AND ADV ANCES\n  The Central Bank of Sri Lanka (CBSL) has reviewed the penal interest rates charged by licensed \nbanks on overdue loans and advances, and is of the view that such rates are excessively high, and result \nin an undue burden to overdue borrowers when repaying loans. The inability to sustainably service the \nloans as a result of such excessive rates being charged also has an adverse impact on financial position of \nbanks, as well as on the financial system stability. In addition high interest rates hinder entrepreneurship \ndevelopment in the economy. \n2. The recent surveys conducted by CBSL has revealed that the penal rates charged by the banks \nare in the range of 2 per cent to 20 per cent per annum on the amount in arrears and sometimes on the \ntotal amount outstanding, over and above the original interest rates charged on the loan. In the case of \nleasing facilities, penal rates are in the range of 36 per cent to 48 per cent per annum, on overdue rentals \nover and above the original rate.\n3. In view of the foregoing, the Monetary Board has instructed the undersigned to request all licensed \nbanks to reduce the penal interest rates charged on all loans and advances including credit facilities already \ngranted to a level not exceeding 2 per cent per annum for the amount in arrears, during the overdue period \nwith effect from 1 August 2013. \n4. Accordingly , you are requested to take necessary measures to comply with the above.\nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 449, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  441\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. : 02  / 17 / 600 / 002 / 001\nBank Supervision Department\n07 June 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\n \nINTEREST RATES ON CREDIT CARDS AND OTHER LOANS AND ADV ANCES\nThe Central Bank of Sri Lanka in the recent past has eased its monetary policy stance resulting \nin a reduction of policy rates leading to a reduction in short term interest rates. In view of these \ndevelopments, the Central Bank on many occasions requested banks to reduce interest rates on lending. \nAlthough a marginal reduction in interest rates of a few products has been observed in certain banks,  \na wider reduction is required across the banking sector.\n2. In view of the foregoing, the Monetary Board has instructed the undersigned to request you to \nreduce interest rates on: \n(a) credit card advances from its present level of 28 per annum to 24 per annum, and\n(b) all other loans and advances in an appropriate manner from their current level, so as to not \nexceed 24 per cent per annum.\n3. Accordingly , you are requested to take necessary measures to comply with the above.\nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 450, "year": 2013}, "type": "Document"}
{"page_content": "442 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nOur Ref. : 02  / 17 / 600 / 002 / 001\nBank Supervision Department\n17 April 2012\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\n \nINTEREST RATES ON CREDIT CARDS AND HOUSING LOANS\nWe refer to our letter dated 21 September 2010 on the Reduction of Interest Rates on Loans and \nAdvances and write to inform you that, considering the recent trends in market interest rates, the \nMonetary Board is of the view that licensed banks may increase interest rates on housing loans to 16 per \ncent per annum and credit card advances to 28 per cent per annum. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 451, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  443\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 04 / 001 / 0105  / 002\nBank Supervision Department\n06 April 2005\nTo : All Licensed Commercial Banks\n       Licensed Specialised Banks;\nDear Sirs,\nEXTENDING  / RESTRICTING OF BANKING HOURS BY THE BANKS\nIt has been observed that the Licensed Commercial Banks and Licensed Specialised Banks have \nmade requests from time to time to extend and restrict their banking hours. There is no legal provision \nthat governs banking  hours of the licensed banks.  However, as there can be certain repercussions arising \nunder certain laws if banking hours are extended to bank holidays and/or normal business hours are \nrestricted, it is important that banks satisfy themselves with the legal implications and liabilities, if any, \narising out of these arrangements. \nAll licensed banks are hereby informed that the Central Bank of Sri Lanka has no objection to \nthe extension or restriction of banking hours subject to the above concerns being met. All banks should \nensure that customers are informed of such changes well in advance to avoid inconvenience to them.\nYours faithfully,\nSgd, Director of Bank Supervision\ncc: Mr . Upali de Silva\n Secretary-General\n Sri Lanka Banks\u2019  Association (Gte) Ltd.\n Level 8, Ceylinco House\n Colombo 1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 452, "year": 2013}, "type": "Document"}
{"page_content": "444 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : BS/33/93\n1st July, 1993.\nNOTICE TO BANKS \u2013 1/93\nINCENTIVE SCHEMES FOR MOBILIZING DEMAND DEPOSIT ACCOUNTS\nThe following guidelines should be followed by all Commercial Banks when framing incentive  \nschemes to mobilize demand deposits.\n1. First preference to be given to schemes that promote service oriented facilities such as \u2013\n (a) permitting withdrawals of funds from any branch office;\n (b) extended banking hours;\n (c) reducing time taken for the encashment of cheques; and\n (d) reducing the minimum deposit required to open an account.\n2. Where any other form of incentive is of fered, the scheme should :\n (a) be within the legal framework and accepted banking practices;\n (b) promote banking habits or any other broader objective in the economy;\n (c) not have adverse revenue implications for the Government;\n (d) not have an adverse impact on the profitability of the bank through excessive increase in costs \nof mobilizing deposits;\n (e) bestow on the depositor a real benefit and not something illusory;\n (f) not lead to unfair and unethical banking practices;\n (g) not weaken the monetary policy tools or prudential requirements; and\n (h) be operated directly by the bank or, where it is undertaken in association with another company, \nthe company providing the benefit should not be an affiliate/subsidiary company of the bank \nconcerned or part of Group to which the bank belongs.\nThe prior approval of the Director of Bank Supervision should be obtained before such deposit \nincentive  schemes are implemented.\nYours faithfully\nSgd.  P. T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 453, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  445\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nINTRODUCTION OF PRODUCTS BASED ON ISLAMIC PRINCIPLES1/\nThe recent amendments to the Banking Act permit banks to introduce banking products based on \nIslamic principles. Several banks have requested permission from CBSL in this regard.\nIn order to ensure that all banking operations, be it conventional banking or Islamic Banking, are \nconducted in a prudential manner, the following regulatory framework will apply:\n1. The Islamic Banking operations should be conducted strictly within the existing regulatory \nframework applicable to the licensed banks.\n2. The respective banks should maintain separate books of accounts for their Islamic Banking \nOperations.\n3. Data on Islamic Banking should be included under a separate column in the statutory returns \nsubmitted to CBSL in order to enable a clear demarcation between the accounts relating to \nconventional banking and Islamic Banking. \n4. The prudential regulations that apply to conventional banking operations will apply equally to \nIslamic Banking business and banks are advised to strictly follow the existing regulations. If \nany deviations are observed, such banks will be required to immediately cease the continuation \nof the relevant operations.\nThe CBSL will write individually to the banks that have inquired in this regard.            \n1/  Distributed at the meeting of the CEOs of LCBs and LSBs held on 19 May 2005", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 454, "year": 2013}, "type": "Document"}
{"page_content": "446 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nBank Supervision Department\n31 December 2004\nTo : CEOs of Licensed Commercial Banks\n       Secreatary-General/SLBA\nDear Sirs,\nWITHDRAWALS ON SA VINGS ACCOUNTS\nThis is to inform you that the restriction on payment of interest for a particular month, on savings \naccounts in respect of which there had been more than 4 withdrawals per month, in terms of Circular  \nNo. BS/6/81 dated 29 June 1990, has been removed with immediate effect.\nPlease acknowledge receipt.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 455, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  447\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : BS/6/81\n29, June 1990.\nTo : All Commercial Banks\nWITHDRAWALS ON SA VINGS ACCOUNTS AND\n7 DAY CALL DEPOSIT ACCOUNTS\nIt has been observed that some commercial banks operate savings accounts and 7 day call deposit  \naccounts for their customers in the manner of current accounts, i.e., permitting almost daily withdrawals \non these accounts, whilst paying interest on them. This is tantamount to the payment of interest on \ndemand deposits and is contrary to established banking practice in Sri Lanka.\nTo ensure the element of notice on withdrawals from savings accounts, it has been the practice to \npermit only once-a-week withdrawals on these accounts. 7 day call deposits by their very name ensure \nthat a deposit is not uplifted before 7 days for the payment of interest.\nIn order to ensure the savings character of these accounts and with a view to ensuring uniformity \nin the practice prevailing in the commercial banking system in Sri Lanka, commercial banks are hereby \ninformed that they should, with immediate effect, conform strictly to established banking practice in Sri \nLanka in the operation of savings accounts and 7 day call deposit accounts for their customers, through \ntheir savings  pass books or through automated teller machines.\nWhere any commercial bank has deviated from the above practice, a press notice drawing the \nattention of its customers to the correct procedure in the operation of these accounts is required.\nSgd. P. T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 456, "year": 2013}, "type": "Document"}
{"page_content": "448 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. : 02  / 17 / 800 / 007 / 001\nBank Supervision Department\n19 March 2012\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nTHRESHOLD AGE OF THE SENIOR CITIZENS FOR \nTRANSACTIONS WITH LICENSED BANKS\nThe Monetary Board having observed that licensed banks and licensed finance companies use \ndifferent thresholds of age to identify senior citizens when conducting banking operations has decided \nto request the licensed banks to use a common threshold of 55 years of age in identifying senior citizens.\nAccordingly, you are requested to take appropriate measures to implement the above. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 457, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  449\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nDirections issued by the Monetary Board in terms of Section 46(1) of the Banking Act, No.30 of \n1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\n27 September 2010\nBANKING ACT DIRECTION NO. 5 OF 2010\nINSURANCE OF DEPOSIT LIABILITIES\nIn the exercise of the powers conferred by Section 46(1) of the Banking Act, No. 30 of 1988, last amended \nby the Banking Act No. 46 of 2006, the Monetary Board hereby issues Directions to licensed commercial \nbanks to be effective from 1 October, 2010.\n1.1 These Directions shall be cited as the Banking Act, Directions No. 5 of 2010 \non Insurance of Deposit Liabilities. \n2.1 In terms of Section 46(1) of the Banking Act in order to ensure the soundness \nof the banking system, the Monetary Board may issue directions to licensed \ncommercial banks regarding the manner in which any aspect of the business of \nsuch bank or banks is to be conducted.\n3.1 In terms of statutory provisions and best practices in banking, accepting  \ndeposits is a core business that requires effective risk management measures \nas it critically depends on the public confidence in banks. As such, insurance \nof deposits is a well-accepted safety net measure that will protect and promote \nthe public confidence and stability of the banking system.\n4.1 As such, all licensed commercial banks shall insure their deposit liabilities in \nthe Deposit Insurance Scheme operated by the Monetary Board in terms of \nSri Lanka Deposit Insurance Scheme, Regulations No. 1 of 2010 issued under \nSections 32 A to 32 E of the Monetary Law Act with effect from 1 October, \n2010.\n4.2 All licensed c ommercial banks shall also disclose to the public, in their \nadvertisements soliciting deposits, the fact that eligible deposit liabilities have", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 458, "year": 2013}, "type": "Document"}
{"page_content": "advertisements soliciting deposits, the fact that eligible deposit liabilities have \nbeen insured with the Sri Lanka Deposit Insurance Scheme implemented by \nthe Monetary Board on payment of the applicable premium for compensation \nup to a maximum of Rs. 200,000 per depositor.1. Citation.\n2. Enabling  \nstatutory \nprovisions.\n3. The objective  \nof Directions.\n4. Insurance of  \ndeposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 458, "year": 2013}, "type": "Document"}
{"page_content": "450 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nPART I : SECTION (I) \u2013 GENERAL\nCentral Bank of Sri Lanka Notices\nTHE MONETARY LAW ACT\nREGULATIONS made by the Monetary Board under Section 32 E of the Monetary Law Act, \n(Chapter 422).\nniv aRd  ajith leslie  cabRaal ,\nChairman,\nMonetary Board.\nCentral Bank of Sri Lanka,\nColombo,\n20th June 2011.\nSri Lanka Deposit Insurance Scheme Regulations\nAmendment to the Sri Lanka Deposit Insurance Scheme Regulations, No.1 of 2010\n1.1 These Regulations shall be cited as \u201cSri Lanka Deposit Insurance Scheme  \nRegulations, No. 2 of 2011\u201d. \n2.1 Sri Lanka  Deposit Insurance Scheme Regulations, No. 1 of 2010 published in \nGazette Extraordinary No. 1673/11 of 28th September, 2010 are hereby amended \nas follows:\u2013\n2.2 In regulat ion 7 thereof by the repeal of paragraph 7.3 of that regulation and the \nsubstitution therefor of the following paragraph :\n\u201c 7.3 Debits to the Fund shall be for compensation payments to depositors, \ninvestments and operating expenses of the Scheme as may be determined \nby the Monetary Board.\u201d.1. Citation.wxl 1711$14 \u2013 2011 cqks 22 jeks nodod \u2013 2011'06'22\nno. 1711/14 \u2013 W ednesday , june 22, 2011\n(Published by Authority)\n2. Amendments  \nto the principal \nregulation.\n Substitution for  \nregulation 7.3.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 459, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  451\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nPART I : SECTION (I) \u2013 GENERAL\nCentral Bank of Sri Lanka Notices\nTHE MONETARY LAW ACT\nREGULATIONS made by the Monetary Board under Section 32 E of the Monetary Law Act, \n(Chapter 422).\nniv aRd  ajith leslie  cabRaal ,\nChairman,\nMonetary Board.\nCentral Bank of Sri Lanka,\nColombo,\n26th January 2011.\nSri Lanka Deposit Insurance Scheme Regulations\nAmendments to the Sri Lanka Deposit Insurance Scheme Regulations, No. 1 of 2010\n1.1 These Regulations shall be cited as \u201cSri Lanka Deposit Insurance Scheme  \nRegulations, No. 1 of 2011\u201d. \n2.1 Sri Lanka  Deposit Insurance Regulations, No. 1 of 2010 published in Gazette \nExtraordinary  No. 1673/11 of 28th September, 2010 is hereby amended as \nfollows:\u2013\n2.2 By the substitution for word \u201cregulation\u201d of the word \u201cregulation\u201d wherever it \nis applicable.\n2.3 In regulation 5 thereof by the repeal of paragraph 5.2(iii) of that regulation and \nthe substitution therefor of the following paragraph:\n\u201c 5 .2(iii)  Deposit liabilities to directors, key management personnel and other  \nrelated parties excluding shareholders as defined in Banking Act \nDirection, No. 11 of 2007 on Corporate Governance for Licensed \nCommercial Banks, Banking Act Direction, No. 12 of 2007 on \nCorporate Governance for Licensed Specialised Banks and the \nFinance Companies Act (Corporate Governance) Direction, No. 3 \nof 2008 for Registered Finance Companies.\u201d1. Citation.wxl 1690$11 \u2013 2011 ckjd\u02d9 27 jeks n%yiam;skaod \u2013 2011'01'27\nno. 1690/11 \u2013 thuRsday , januaR y 27, 2011\n(Published by Authority)\n2. Amendments  \nto the principal \nregulation.\n Substitution \nfor the word \n\u201cregulation\u201d.\n Substitution \nfor regulation \n5.2(iii).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 460, "year": 2013}, "type": "Document"}
{"page_content": "452 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nPART I : SECTION (I) \u2013 GENERAL\nCentral Bank of Sri Lanka Notices\nTHE MONETARY LAW ACT\nREGULATIONS made by the Monetary Board under Section 32 E of the Monetary Law Act, \n(Chapter 422).\nniv aRd  ajith leslie  cabRaal ,\nChairman,\nMonetary Board.\nCentral Bank of Sri Lanka,\nColombo,\n27th September, 2010.\nSRI LANKA DEPOSIT INSURANCE SCHEME REGULATIONS\n1.1 These Regulations shall be cited as \u201cSri Lanka Deposit Insurance Scheme  \nRegulations, No. 1 of 2010\u201d. \n2.1 In terms of Section 5 of the Monetary Law Act, the Central Bank of Sri Lanka \nis charged with the duty of securing, as far as possible by action authorized \nby such Act, the two objectives, namely, ( a) economic and price stability and  \n(b) financial system stability.\n2.2 In terms of the Sections 32 A to 32 E of the Monetary Law Act, the Central Bank \nmay establish, maintain, manage and control, as determined by the Monetary \nBoard from time to time, a scheme for insurance of deposits held by banking \ninstitutions.\n2.3 In terms of Sections 46(1) and 76J of the Banking Act, in order to ensure the \nsoundness of the banking system, the Monetary Board is empowered to issue 1. Citation.\n2. Objective of  \nthe Scheme \n& Enabling \nProvisions.\n  wxl 1673$11 \u2013 2010 iema;e\u00efnr\u00ae 28 jeks w\u00dbyrejdod \u2013 2010'09'28\nno. 1673/11 \u2013 tuesday , septeMbeR  28, 2010\n(Published by Authority)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 461, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  453\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nDirections to licensed commercial banks and licensed specialized banks, \nregarding the manner in which any aspect of the business of such banks is to \nbe conducted. \n2.4 In terms of the Sections 27 to 29 of the Finance Companies Act, the Central \nBank may operate a scheme for insurance of deposits held by registered finance \ncompanies and require such finance companies to insure their deposit liabilities \nunder the scheme or under any other scheme as is specified by the Monetary \nBoard. \n2.5 Accordingly , this Deposit Insurance Scheme will be implemented in the interest \nof the overall financial system stability of the country, and it will initially outline \na mechanism to protect small depositors from failure of financial institutions, \nthereby promoting the stability of financial institutions by maintaining small-\ndepositor-confidence. \n3.1 This Scheme shall be titled Sri Lanka Deposit Insurance Scheme.\n3.2 The Scheme shall come into ef fect from 1 st October, 2010. \n4.1 All Licensed Commercial Banks, Licensed Specialised Banks and Registered \nFinance Companies shall be the members of the Scheme.\n5.1 Deposits to be insured shall include demand, time and savings deposit liabilities  \nof member institutions and exclude all borrowing instruments.\n5.2 The following deposit liabilities shall be excluded from the Scheme:\u2013\n (i) Deposit liabilities to member institutions.\n (ii) Deposit liabilitie s to the Government of Sri Lanka inclusive of  \nMinistries, Departments and Local Governments. \n (iii) Deposit liabilities to shareholders, directors, key management personnel   \nand other related parties as defined in Banking Act, Direction No. 11 \nof 2007 on Corporate Governance for Licensed Commercial Banks, \nBanking Act, Direction No. 12 of 2007 on Corporate Governance \nfor Licensed Specialised Banks and the Finance Companies Act", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 462, "year": 2013}, "type": "Document"}
{"page_content": "for Licensed Specialised Banks and the Finance Companies Act \n(Corporate Governance) Direction, No. 3 of 2008 for Registered Finance \nCompanies.\n (iv) Deposit liabilities held as collateral against any accommodation  \ngranted.\n (v) Deposits falling within the meaning of abandoned property in terms of \nthe Banking Act and dormant deposits in terms of the Finance Companies \nAct, funds of which have been transferred to the Central Bank of Sri \nLanka in terms of the relevant Directions issued by the Monetary \nBoard.\n5.3 All eligible deposits shall be insured by member institutions.\n6.1 Member institutions shall pay a premium calculated on the total amount of \ndeposits, excluding the deposit liabilities stated in 5.2 above as at end of the \nquarter  / month as may be determined by the Monetary Board from time to \ntime, to the Deposit Insurance Fund stated in Regulation 7.3. T itle of the \nScheme and \nEffective Date.\n4. Member  \nInstitutions to \nbe governed by \nthe Scheme.\n5. Eligible  \nDeposits to \nbe insured.\n6. Premium to  \nbe levied \non insured \ndeposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 462, "year": 2013}, "type": "Document"}
{"page_content": "454 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n6.2 The calculation of premia ef fective until further notice shall be as follows:\u2013\n (i) Licensed banks which maintained a capital adequacy ratio of 14 per \ncentum or above at the end of the immediately preceding financial year as \nper its audited accounts as accepted by the Director of Bank Supervision \n\u2013 a premium of 0.10 per centum per annum payable quarterly calculated \non total amount of all eligible deposits as at end of the quarter.\n (ii) All other licensed banks \u2013 a premium of 0.125 per centum per annum \npayable quarterly calculated on total amount of all eligible deposits as \nat end of the quarter.\n (iii) Re gistered Finance Companies \u2013 a premium of 0.15 per centum  per \nannum payable monthly calculated on total amount of all eligible deposits \nas at end of the month. \n6.3 Member institutions shall remit the applicable amount of the premium to the \naccount of the Deposit Insurance Fund within a period of 15 days from the end of \nthe respective quarter  / month and submit the details of deposits and calculation \nof premium in a format specified by the Director of Bank Supervision.\n6.4 In the event of a delay in the payment of the premium inclusive of instances \nof under-payment, a penalty will be levied at the prevailing weighted average  \n91 days primary Treasury bill yield rate plus 200 basis points.\n7.1 The Scheme shall have a fund titled \u201cDeposit Insurance Fund\u201d (hereafter referred \nto as \u201cthe Fund\u201d), and it shall be operated and managed by the Monetary Board, \nwhich responsibility it may delegate to an officer or a Department of the Central \nBank of Sri Lanka of its choice. \n7.2 Credits to the Fund shall include premia and penalties paid by member -institutions, \nall proceeds of profits, income and gains arising out of the investments of the \nmoneys in the Fund, recovery of deposits paid as compensation, such sums as", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 463, "year": 2013}, "type": "Document"}
{"page_content": "moneys in the Fund, recovery of deposits paid as compensation, such sums as \nmay be appropriated out of the abandoned property in the case of licensed banks \nand dormant deposits in the case of registered finance companies transferred to \nthe Central Bank of Sri Lanka in terms Directions issued by the Monetary Board \nunder Part IX \u2013 Sections 72 and 76 of the Banking Act and Sections 31(1) to \n31(3) of the Finance Companies Act as applicable, borrowings and contributions \nfrom the Government and  / or any other sources as may be approved by the \nMonetary Board. \n7.3 Debits to t he Fund shall be for Compensation payments to depositors, \ninvestments, repayment of abandoned property or dormant deposits, as the \ncase may be, in the event such property/dormant deposits lying in the fund \nand operating expenses of the Scheme as may be determined by the Monetary \nBoard. \n8.1 The moneys in the fund shall be invested as hereinafter provided:\n (i) Government Securities  \u2013 Government securities will include Treasury \nbills, Treasury bonds and other marketable securities issued by the \nGovernment of Sri Lanka. \n (ii) Secured advances or loans to any member institution in the instance of \na severe liquidity crisis in such member institution, if, in the opinion 7. Deposit  \nInsurance \nFund.\n8. Investments  \nof moneys in \nthe Funds.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 463, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  455\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nof the Monetary Board (after considering an assessment report on the \nliquidity position submitted by the Director of Bank Supervision in the \ncase of a licensed bank or the Director of Department of Supervision \nof Non-Bank Financial Institutions in the case of a registered finance \ncompany), such an advance  / loan will help avoid an imminent financial \npanic in the particular institution or in the financial system as a whole.\n8.2 Su ch advances or loans to member institutions shall be provided on the security \nof re-saleable collaterals and  / or G overnment  / Central Bank of S ri Lanka \nGuarantees and at rates of interest as may be determined by the Monetary \nBoard. \n8.3 The repayment period of such loans or advances shall be as determined by the \nMonetary Board.\n9.1 Compensation to depositors on insured deposits will be paid as per regulations \nissued by the Monetary Board from time to time, or as hereinafter provided.\n9.2 Compensation on insured deposit liabilities of a member institution will  \nbe paid only when the licence  / registration of the member institution is  \nsuspended  / cancelled by the Monetary Board in terms of the relevant statutory \nprovisions.\n9.3 W ithin a week from the announcement of Monetary Board decision to suspend  /\ncancel the licence  / registration of the member institution, the Director of  \nBank Supervision in the case of a licensed bank or the Director of Department \nof Supervision of Non-Bank Financial Institutions in the case of a registered \nfinance company, shall prepare a list of depositors with the details of deposit \naccounts setting out the amounts due from the institution to such depositors as \nat the date of the Monetary Board Order of suspension  / cancellation. \n9.4 The compensation within the limits as specified will be paid within six months", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 464, "year": 2013}, "type": "Document"}
{"page_content": "9.4 The compensation within the limits as specified will be paid within six months \nfrom the date of the suspension/cancellation. No interest will be paid in the \nensuing period. \n9.5 The compensation payable in respect of insured deposits of a member institution \nwill be computed on a \u201cper-depositor\u201d basis, consolidating all insured deposit \nliabilities to each depositor inclusive of any interest accrued and net of any dues \nfrom the depositor to the member institution as at the date of the suspension  /\ncancellation of licence  / registration. \n9.6 The amount of compensation payable to a depositor shall be limited to the total \ninsured deposits computed as above, subject to a maximum of Rs. 200,000 or \nits equivalent in the case of foreign currency deposits, if such amount exceeds \nRs. 200,000.\n9.7 Any compensation paid to depositors of a member institution by the Deposit \nInsurance Fund shall be accounted in the books of the member institution as its \ndeposit liability to the Deposit Insurance Scheme, while redeeming the deposit \nliabilities due to the respective depositors by an equivalent amount. \n9.8 In the event that any depositor is unable to receive the entitled compensation at \nthe time of payment of compensation, the legal beneficiaries of the depositor 9. Compensation  \non Insured \nDeposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 464, "year": 2013}, "type": "Document"}
{"page_content": "456 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nshall be paid the compensation in terms of the applicable legal provisions and \nprocedures. \n9.9 The payment of compensation shall not be a liability of the Monetary Board \nor the Central Bank of Sri Lanka, and shall be limited to funds available or \nraised in the Deposit Insurance Fund including any borrowings permitted and \ncontributions received. The Monetary Board and the Central Bank of Sri Lanka \nshall not be responsible for any liability that exceeds the total amount lying to \nthe credit of the Fund. \n9.10 T he payment of compensation shall come into effect in the case of a suspension  /\ncancellation as ordered by the Monetary Board on or after 1 st January, 2012.\n10.1 There shall be an established Deposit Insurance Unit in the Bank Supervision \nDepartment (The Unit) which shall be responsible for the operational and \nmanagement arrangements, under the instructions and supervision of the \nDirector of Bank Supervision in terms of Directions  / Regulations and policies \nas approved by the Monetary Board from time to time. \n10.2 The Unit shall maintain books, accounts and statements relating to financial \ntransactions of the Scheme in terms of the applicable Sri Lanka Accounting \nStandards.\n10.3 The financial year of the Scheme shall be the calend ar year and the Auditor \nGeneral shall be the Auditor.\n10.4 The Unit shall prepare financial statements on income and expenses, assets and \nliabilities, cash flows and investments for each financial year and submit the \naudited financial statements to the Monetary Board on or before 31st March \nof the following year and disclose such statements for the information of the \nmember institutions and the public. \n10.5 The financial statements of the Sri Lanka Deposit Insurance Scheme shall be \ndistinctly separate from the financial statements of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 465, "year": 2013}, "type": "Document"}
{"page_content": "distinctly separate from the financial statements of the Central Bank of Sri Lanka \nand accordingly, no consolidation of the Unit\u2019s financial statements shall be \nmade with that of the Central Bank of Sri Lanka.\n11.1 Deposit Insurance Scheme Regulations  / No. 1 of 1987 dated 27 th February, \n1987 and Gazette, No. 443/17 dated 6 th March, 1987 issued under Section 32 E \nof the Monetary Law Act, (Chapter 422) and subsequent amendments shall be \nrepealed and cease to operate with effect from 1 st October, 2010 and the Deposit \nInsurance Fund operated under these Regulations as at 30 th September, 2010 \nshall be vested with the Sri Lanka Deposit Insurance Scheme with effect from \n1st October, 2010.\n11.2 As such, all commitments or contingencies arising from the Scheme  \noperated under Deposit Insurance Scheme, Regulations No. 1 of 1987 as at  \n30th September, 2010 shall be extinguished as on 1 st October, 2010.10. Books and \nAccounts of \nthe Scheme.\n \n11. Repeal of \nRegulations \ndated 27 \nFebruary, \n1987 and , No. \n443/17dated 6 \nMarch, 1987.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 465, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  457\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nCircular No. : 01  / 2011\nBank Supervision Department\n20 April 2011\nTo : CEOs of all Member Institutions of\n       Sri Lanka Deposit Insurance Schemes\nDear Sir  / Madam,\nSRI LANKA DEPOSIT INSURANCE SCHEME \u2013 OPERATING INSTRUCTIONS\nAll member institutions are informed that Paragraph 4( c) of Circular No.02/2010 on the above subject \ndated 09 December 2010 is hereby amended as follows.\n\u201c Deposits at overseas branches shall not be considered as eligible deposits.  \u201d.\nAccordingly, deposits at Off-shore Banking Unit shall be considered as eligible deposits from next \npremium date.\nYours faithfully,\n(Mrs). T M J Y P Fernando\nDirector of Bank Supervision\nCopy: Director of Supervision of Non-Bank Financial Institutions\n           Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 466, "year": 2013}, "type": "Document"}
{"page_content": "458 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nCircular No. : 02  / 2010\nBank Supervision Department\n09 December 2010\nTo : CEOs of all Member Institutions of\n       Sri Lanka Deposit Insurance Schemes\nDear Sir  / Madam,\nSRI LANKA DEPOSIT INSURANCE SCHEME \u2013 OPERATING INSTRUCTIONS\nAll member institutions are requested to adhere to the following instructions. \n1. Conversi on rates for foreign currency deposit liabilities:  The daily indicative exchange rates \nissued by International Operations Department of the Central Bank in the Central Bank web site \n(http://www.cbsl.gov.lk) should be used to convert the foreign currency liabilities in the local \naccounting requirements.  \n2. Deposits held as collaterals against any accommodation granted:  The deposits held as collateral \nto the extent of actual usage of the credit facilities as of the reporting date should be excluded for \ncalculation of insurance premium. In the case of a deposit taken as an additional collateral, the \ndeposit balance or the outstanding balance of the accommodation, which ever is lower, should be \nexcluded.\n3. Deposit liability calculation:  The outstanding balance of depositors\u2019 accounts eligible for insurance \nas at the end of each month/quarter should be treated as the deposit liability.\n4. Eligibility of deposits:  \n (a) Certificates of deposits shall be considered as eligible deposits.\n(b) V ostro accounts of entities in the member institution\u2019s group entity shall not be considered as \neligible deposits.\n(c) Deposits at Off-shore Banking Unit and overseas branches shall not be considered as eligible \ndeposits.\n5. Reporting on depositor wise details:  Member institutions shall submit depositor wise details of \neligible deposits to the Deposit Insurance Unit of the Central Bank of Sri Lanka in the annexed \nformat in an electronic form, along with a covering letter duly signed by the Chief Executive Officer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 467, "year": 2013}, "type": "Document"}
{"page_content": "and the Chief Financial Officer, commencing from 31 December 2011.\nYours faithfully,\nActing Director of Bank Supervision\nCopy: Director of Supervision of Non-Bank Financial Institutions\n           Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 467, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  459\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nAnnex\nForm No: SLDIS/02/2010/01\nCONFIDENTIAL\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\u2026\u2026\u2026..  \n(Name of the Member Institution)\nReturn on Depositor wise details of eligible deposits \nAs at \u2026\u2026\u2026\u2026\u2026\u2026  (dd/mm/yyyy)\nAccount No. Name of Depositor/(s)NIC No. \nor \nany other Identity No.Eligible \nDeposit \nBalance \nNote: In case of joint accounts, Names and NIC numbers of joint account holders and the total deposit \nbalances shall be reported.\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n CFO / Chief Financial Officer  CEO / Chief Executive Officer\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Name  Name", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 468, "year": 2013}, "type": "Document"}
{"page_content": "460 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nCircular No. : 01  / 2010\nBank Supervision Department\n15 October 2010\nTo :  CEOs of all Member Institutions of\n Sri Lanka Deposit Insurance Scheme\nDear Sir  / Madam\nSRI LANKA DEPOSIT INSURANCE SCHEME \n\u2013 PREMIUM TO BE LEVIED ON INSURED DEPOSIT\nIn terms of Regulation 10.1 of the Sri Lanka Deposit Insurance Scheme Regulations No. 01 of \n2010 dated 27 September, we write to inform you of the following. \n1. The premium on deposits in terms of Regulation No. 6 of the Regulations should be paid to \n\u201cSri Lanka Deposit Insurance Fund\u201d through RTGS, specially mentioning the account name \nas \u201cSri Lanka Deposit Insurance Fund \u2013 Account Number 4681\u201d or drawing a cheque in favor \nthe said account. \n2. In terms of Regulation No. 6.3 of the Regulations, all members of the scheme are required \nto e-mail the details of the \u2018calculation of premium\u2019 as per Annex I to the Director of Bank \nSupervision (e-mail addresses: dbsd@cbsl.lk, anuradha@cbsl.lk and sumithi@cbsl.lk) along \nwith the payment of premia.\n3. All Member Institutions should maintain a proper system of information to support the \naccuracy of calculation of premium.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 469, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  461\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nAnnex 1\nSri Lanka Deposit Insurance Scheme\nPayment of Premium\n1. Name of the Member  Institution :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n2. Capital Adequacy Ratio  \n(At\tthe\tend\tof\tthe\timmediately \tpreceding \tfinancial\tyear\tas\tper\tits\taudited\taccounts) \t:\t \u2026\u2026\u2026\n3. Quarter  / Month :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n4. Pr emium to be Paid                                                                                (Rs. \u2019000) \nTotal deposit liability as per the general ledger (a) XXX\nLess: Total excluded deposits (XX)\nTotal eligible deposits XXX\nApplicable annual insurance premium rate (%) (b) XX\nTotal insurance premium to be paid for the quarter/month (c) XXX\n (a) Deposit liability as at end of the quarter in the case of licensed banks and as at end of the month \nin the case of registered finance companies.\n (b) Rate of Premium\n (i) Licensed banks which maintained a capital adequacy ratio of 14% or above at the end \nof the immediately previous financial year as per its audited accounts as accepted by \nthe Director of Bank Supervision \u2013 a premium of 0.10 per cent per annum, payable \nquarterly.\n (ii) All other licensed banks \u2013 a premium of 0.125 per cent per annum, payable quarterly .\n (iii) Regist ered Finance Companies \u2013 a premium of 0.15 per cent per annum, payable \nmonthly calculated on total amount of all eligible deposits as at end of the month.\n (c) Premium should be paid within 15 days from the end of the quarter  / month.\n Prepared by  Checked by  Authorised by\nName of the officer :   \u2026\u2026\u2026\u2026\u2026..  \u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\nDesignation of the officer :   \u2026\u2026\u2026\u2026\u2026..  Head of Finance  Chief Executive \nOfficer\nDate :  \u2026\u2026\u2026\u2026\u2026..  \u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\nThis return should be sent to the Director of Bank Supervision.\nTelephone: 01124772100, 0112398602 and 0112477169. Fax: 0112477711.\nE-mail: dbsd@cbsl.lk, anuradha@cbsl.lk and sumithi@cbsl.lk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 470, "year": 2013}, "type": "Document"}
{"page_content": "462 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nBANKING ACT\nDetermination made by the Monetary Board of the Central Bank of Sri Lanka under Section 48 a of \nthe Banking Act, No.30 of 1988 as amended by Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n22 August 1997\nDETERMINATION\n1. By virtue of the provision of section 48 A of the Banking Act, No.30 of 1988 as amended \nby Banking (Amendment) Act, No.33 of 1995, the Monetary Board has determined that a licensed \ncommercial bank shall not purchase or in any other way acquire any immovable property or any right \ntherein, exceeding in the aggregate fifteen percent of its capital funds.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 471, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  463\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 19 / 150 / 0104  / 001\nBank Supervision Department\n17 April, 2013\nTo :  The CEOs of all Licensed Commer cial Banks\nDear Sir  / Madam,\nEXEMPTING FOREIGN BORROWINGS OF LICENSED COMMERCIAL \nBANKS FROM REGULATORY LIMITS\nIn order to facilitate the implementation of proposals of Budget 2013 on foreign borrowings by \nlicensed banks, the Monetary Board has granted approval for the following exemptions:\n(a) Foreign borrowings of licensed commercial banks of USD 50 mn each during the period \n2013 to 2015 and further borrowing of USD 250 mn by the National Development Bank \nPLC, from the limit of 15 per cent of capital funds of respective banks, in terms of Circular \nBD/FX/196 dated 13 January 1997 issued by the Central Bank of Sri Lanka.\n(b) Non-agricultural credit facilities granted through the utilisation of the above funds from total \nloans when computing the respective bank\u2019s mandatory lending to the Agriculture Sector. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 472, "year": 2013}, "type": "Document"}
{"page_content": "464 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 17 / 800 / 007 / 001\nBank Supervision Department\n19 March 2010\nTo :  CEOs of Licensed Commer cial Banks \nDear Sirs,\nDECISION OF THE CABINET OF MINISTERS ON \nRESERV ATION OF GOVERNMENT SECTOR IMPORT CARGO FOR \nTHE CEYLON SHIPPING CORPORATION LTD. \n\u2013 PUBLIC FINANCE CIRCULAR NO. 415 DATED 6 MAY 2005\nThe Ministry of Ports and Aviation by their letter dated 10 March 2010 on the above subject has \nadvised us to inform the licensed commercial banks of the decision taken by the Cabinet of Ministers \ndated 3 February 2010, as follows:\n\u201cAll cargo imported by Government institutions, including Government Owned Companies, \nshould be carried through the Ceylon Shipping Corporation Ltd., as stipulated in Public Finance \nCircular No. 415 of 6 May 2005.\u201d\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 473, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  465\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 17 / 800 / 007 / 001\nBank Supervision Department\n07 April 2009\nTo :  CEOs of Licensed Commer cial Banks and\n Licensed Specialised Banks\nDear Sir  / Madam,\nSTIMULUS PACKAGE APPROVED BY THE GOVERNMENT FOR THE\nFINANCE AND LEASING INDUSTRY\nThe Cabinet of Ministers at its meeting held on 25.02.2009, having considered the present \nfinancial stress experienced by some registered finance companies (RFCs) and specialised leasing \ncompanies (SLCs), has approved of a Stimulus Package consisting of several measures to address \nthe liquidity and funding constraints faced by RFCs and SLCs. This Stimulus Package is designed to \nrestore public confidence in the finance and leasing companies and thereby to ensure the stability of the \nfinancial system. \nThe current liquidity problems encountered by the finance companies and leasing companies  \nhave been aggravated by the sudden withdrawal of credit lines by some banking institutions. As the stability \nof the financial system is of utmost importance, all licensed banks are requested to carry on their normal \nbusinesses with registered finance companies and specialised leasing companies.\nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 474, "year": 2013}, "type": "Document"}
{"page_content": "466 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : PS  / 21 / 98\nBank Supervision Department\n14 September 1998\nTo : All Licensed Commercial Banks\nDear Sirs,\nAPPOINTMENT OF COMPLIANCE OFFICERS\nYour attention is drawn to the discussion held at the Bank Managers\u2019 Meeting of 13 August 1998, \nwhere it was agreed that the banks should establish an independent compliance function to ensure \ncompliance in respect of banking and other statutory requirements.\nAs compliance failures affect integrity and reputation of banking institutions, it is imperative, that \nbanks have in place adequate policies and procedures to ensure compliance with laws and regulations.\nSuch a compliance function would be most appropriately addressed, by appointing a Compliance \nOfficer whose terms of reference, would broadly encompass the following:\u2013\n1. Develop policies and procedures designed to eliminate or minimize the risk of breach of  \nregulatory requirements and of damages to the bank\u2019s reputation and to ensure these policies \nand arrangements are adhered to in letter and spirit.\n2. Promote throughout the business the belief that compliance is not a negative process but a \npositive contribution to the success of the Bank, so that the principles and importance of \ncompliance are clearly understood by all.\n3. Secure early involvement in the design and structuring of new products and systems, to  \nensure that they conform to local regulatory requirements and internal compliance and ethical \nstandards.\n4. Maintain regular contact and good working relationship with regulators based upon clear and \ntimely communication and a mutual understanding of the regulators\u2019  objectives.\n5. Ensure that reviews are undertaken at appropriate frequencies to assess compliance with  \nregulatory rules and internal compliance standards.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 475, "year": 2013}, "type": "Document"}
{"page_content": "regulatory rules and internal compliance standards. \n6. Promote, across the compliance network, best practices developed in the area of compliance.\n7. Understand and apply all new legal and regulatory developments relevant to the business of \nthe Bank.\n8. Represent the compliance function on relevant internal  and external committees.\n9. Ensure that compliance policies and procedures are clearly communicated to management and \nmembers of staff.\n10. Provide timely reports to management, including senior management, which will highlight \nregulatory developments, changes in the law, and other developments insofar as they give rise \nto compliance issues relevant to the Bank\u2019s business.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 475, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  467\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n11. Highlight serious or persistent compliance problems and where appropriate, work with  \nmanagement to ensure that they are rectified within an acceptable time.\n12. Liaise with the Bank\u2019 s Audit function to ensure that:\n (a) Auditors are familiar with local regulatory and ethical requirements, so that they are able \nto ensure that compliance issues are properly addressed.\n (b) Compliance weaknesses identified as a result of audits are followed up.\nYou are requested to make early arrangements to appoint a Compliance Officer with sufficient \nseniority and also communicate the name of the officers and his contact telephone number for our \nrecords.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd, Y. A. Piyatissa\nDirector of Bank Supervision\ncc: Mr . C.A.P. Leonard,\n Chairman\n Sri Lanka Banks\u2019  Association (Gte) Ltd.\n 17 1/B, Standard Chartered Bank Building\n Janadhipathi Mawatha\n Colombo 1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 476, "year": 2013}, "type": "Document"}
{"page_content": "468 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 04 / 008 / 0002  / 001\nBank Supervision Department\n06 May, 2008\nTo :  All CEOs of Licensed Commer cial Banks\n        and Licensed Specialised Banks\nDear Sir/Madam,\nENHANCING LENDING TO AGRICULTURE SECTOR\n As you are aware, international food prices have risen in an unprecedented manner in the recent \npast and these price escalations could have far reaching effects on Sri Lanka and indeed on almost every \ncountry in the world. As you also know, a significant portion of the current inflation in Sri Lanka is driven \nby these large increases in food prices. This clearly demonstrates the importance of enhancing food \nproduction and food security in the country.\nHence, as conveyed by the Governor at the Bank Managers\u2019 Meeting held on 24 April 2008, there \nis a need to sustain and expand lending to the Agriculture sector.  While we note that some banks have \nalready achieved the target set out in the Budget 2006, there are others who are yet below such level of \nlending to the sector. Hence, banks which are yet to expand their Agriculture lending to reach 10% of \ntheir lending portfolio, are requested to take steps to do so, and also to inform us of their plans to expand \nagricultural loans, in particular for cultivation of food crops.  \nIn view of the present national requirement in expanding food production and increasing agricultural \nproductivity, your urgent attention and cooperation to channel lending to this sector is solicited.\nYours faithfully,\nSgd. Actg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 477, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  469\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. : 02  / 04 / 008 / 0002  / 003\nBank Supervision Department\n30 April 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\n \nMANDATORY LENDING TO THE AGRICULTURE SECTOR\nWe refer to the requests and discussions on compliance with the mandatory lending to the \nagriculture sector and write to inform you that the Monetary Board has decided to:\n(a) permit licensed banks to include loans and advances granted for growing, processing and \ntrading of domestic agriculture products in the definition of agriculture for the purpose of \ncompliance with the above. \n(b) exclude the following from the total loans and advances in computing the ratio of mandatory \nlending to agriculture sector:\n (i) Total loans and advances granted outside Sri Lanka by Off-shore Banking Units and \nby overseas branches on a staggered basis, as 50 per cent of such advances in 2013 and \n100 per cent in 2014 onwards; and\n (ii) Direct financing to large Government and other infrastructure projects promoted by the \nGovernment.\n(c) permit LCBs and LSBs to include their loans granted to other banks and finance companies for \non-lending to agriculture sector in the mandatory lending, provided that a suitable monitoring \nmechanism to identify such lending is maintained by the respective banks.\n2. Loans and advances granted for processing and trading of domestic agriculture products include \nadvances to:\n(a) manufacturing companies for value addition using domestic agricultural produce; and \n(b) companies that act as intermediaries to provide advances to meet working capital and other \ncapital requirements of agricultural producers and to facilitate the sale of agricultural produces.\n3. The monitoring mechanism under loans granted to other licensed banks for on-lending to agriculture", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 478, "year": 2013}, "type": "Document"}
{"page_content": "sector should ensure that the borrowing banks will not consider such loan facilities as lending to agriculture \nsector in complying with the above. \nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 478, "year": 2013}, "type": "Document"}
{"page_content": "470 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 04 / 008 / 0002  / 002\nBank Supervision Department\n25 February, 2010\nTo :  CEOs of all Licensed Banks\nDear Sir/Madam,\nMANDATORY LENDING TO THE AGRICULTURE SECTOR\n Further to our letter No: 02/04/008/0002/002 dated 13 July 2009 on the above subject, we write to \ninform you of the following:\n(1) The Monetary Board has decided to:\n (a) create a refinance fund to be operated by the Regional Development Department (RDD) \nof the Central Bank of Sri Lanka (CBSL) for lending to the Agriculture Sector through \nbanks; \n (b) require banks that are non-compliant with the 10% lending requirement to the Agriculture \nSector since end 2009 to contribute any shortfall to this refinance fund; and\n (c) pay a rate of return of 2% per annum to the contributing banks after commencing lending \nthrough other banks.\n(2) A  refinance fund \u201cSpecial Loan Scheme for Agriculture Sector Development \u2013 Account  \nNo: 32 0000 900\u201d has been created in the CBSL. \n(3) Accordingly , all licensed banks are required to:\n (a) cre dit funds to the above account to cover any shortfall of the agriculture lending \nrequirement of 10% by end 2009 within 7 days from the date of this letter; and\n (b) assess the position on lending to agriculture sector quarterly and credit funds equivalent \nto the shortfall of the requirement of 10% to the above account within 15 days from the \nend of each quarter.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nActg.  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 479, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  471\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 04 / 008 / 0002  / 002\nBank Supervision Department\n13 July, 2009\nTo :  CEOs of all Licensed Banks\nDear Sir/Madam,\nMANDATORY LENDING TO THE AGRICULTURE SECTOR\n As per the 2006 Budget proposal, all licensed banks have to fulfil the mandatory requirement \nof lending 10% of the total advances granted by each bank, to the Agriculture Sector by end 2009.  \nThe following time targets were proposed and agreed with the banks at the meeting of Chief Executive \nOfficers of Licensed Banks held on 04 July 2006, in order to reach the tar get by end of 2009.  \n(a) 3% of total advances by 31.12.2007\n(b) 6% of total advances by 31.12.2008; and\n(c) 10% of total advances by 31.12.2009\nThe position as at 31 March 2009 shows that of the 36 banks, 10 banks have already achieved the  \n10% target, while 14 banks have achieved the 6% target.  However, the Monetary Board, having observed \nthat there are 12 banks that have not yet met even the 6% requirement, has decided to consider the following \ntwo options to facilitate banks to grant credit to the Agriculture Sector. \n1. Permitting banks to provide funds to banks of their choice to re-lend such funds to the \nAgriculture Sector; and \n2. The banks to subscribe to a fund managed and monitored by the Rural Development  \nDepartment of the Central Bank, which will lend to the Agriculture Sector.\nIn this regard, the Central Bank wishes to know the preferred option from each bank, which would facilitate \nthe bank to achieve the stipulated percentage before end 2009. Therefore, you are kindly requested to \nforward your position to us on or before 17th July, 2009.\nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 480, "year": 2013}, "type": "Document"}
{"page_content": "472 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nBank Supervision Department\n21 August 2006\nTo : CEOs of all Licensed Commercial Banks\n       All Licensed Specialised Banks;\nDear Sirs,\nMANDATORY LENDING TO AGRICULTURE SECTOR\n \nWe refer to the discussion on the above subject at the meeting of the CEOs of Licensed Commercial \nBanks (LCBs) and Licensed Specialised Banks (LSBs) held on 11 August 2006.\nAs announced, all banks are requested to inform us of the advances granted to the different  \nsub-sectors in the agriculture sector on the basis of definition provided at the meeting held on 04 July \n2006 (copy enclosed for reference). You are also requested to include any other advances that are not \ncaptured in the above definition but are connected with agricultural purposes, separately, indicating the \npurpose.\nWe shall be thankful if you will make arrangements to provide the information on or before  \n31 August 2006.\nYours faithfully,\nSgd, Actg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 481, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  473\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nMANDATORY LENDING TO THE AGRICULTURE SECTOR\nThe attention of the CEOs is drawn to the discussion on the proposed implementation of the budget \nproposal on mandatory lending to the agriculture sector. The CEOs were requested to send in their \nsuggestions in this regard.\nThe BSD has presented a paper in this regard to the Monetary Board, and the following has been \napproved:\n1.\t The\tdefinition \tof\tagriculture\n Cultivation, processing and purchasing of tea, rubber, coconut, paddy, minor export crops, livestock \nand dairy farming, fisheries, minor food crops, horticulture, forestry and bee keeping etc. as well as \nprocessing of products for value addition for export purposes.\n W ithin the above definition, the following could be construed as mandatory lending to the agriculture \nsector.\n(a) Direct finance to farmers to undertake the agricultural activities specified above and\n(b) Indirect finance for:\n\u2022 Purchase of agricultural implements\n\u2022 Purchase of farm machinery (tractors, trailers, power tillers, tractor accessories and providing \nfunds to Co-operative societies to provide agricultural equipments and tractors on concessional \nrental basis to farmers)\n\u2022 Purchase of vehicles for the transport of agricultural inputs and farm products including lease \nfacilities\n\u2022 Developing the national irrigation potential ( e.g.: implementing multipurpose irrigation \nschemes, construction of tanks, tube wells etc. and purchase of drilling units)\n\u2022 Reclamation and developing land for cultivation\n\u2022 Construction of farm buildings and structures (Bullock sheds, farm sheds, implement sheds, \ntractor and truck sheds)\n\u2022 Construction and running of storage facilities (warehouses, silos and loans granted for \nestablishing cold storages for storing produce)\n\u2022 Production and processing of hybrid seeds for crops ( e.g.: developing state owned seed", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 482, "year": 2013}, "type": "Document"}
{"page_content": "\u2022 Production and processing of hybrid seeds for crops ( e.g.: developing state owned seed \nresearch farms and seed production farms)\n\u2022 Obtaining fertilizer (Establishing a fertilizer factory to supply fertilizer at cheaper prices and \nproviding essential insecticides and weedicides through Co-operatives at competitive prices)\n\u2022 Agricultural advisory services and research activities (reviving schools of Agriculture and \nUniversity faculties, training farmers and equipping them with required technological and \nother skills)\n\u2022 Purchase of Agricultural produce (granting loans at concessionary rates to rehabilitate the \nsmall and medium scale paddy mills and establishing Rice Processing Villages)\n\u2022 Developing plantations, horticulture, forestry, dairy, fisheries, piggery, poultry, bee  \nkeeping etc. and providing loans for allied activities (Providing incentives for introducing", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 482, "year": 2013}, "type": "Document"}
{"page_content": "474 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nnew varieties and value addition, conducting research, boosting exports, modernizing \nfactories, providing assistance for obtaining equipment and new technology, launching \nprojects to preserve crops, add value to market crops as processed/packed foods and store the \nproduce, establishing Regional distribution Centres and arranging to store produce in fully \nequipped cool rooms etc.)\n In addition, i t is proposed that funding provided under the credit schemes operated by the \nRegional Development Department of CBSL, also be considered as agricultural credit.  \nThe schemes presently in operation are as follows:\n\u2022 T ea Development Project \u2013 Established for the purpose of increasing tea small holders\u2019 income \non a sustainable basis, improving the natural environment in the project area and developing \nthe necessary infrastructure in the sector (2,678 loans amounting to Rs.2,963 mn had been \ngranted as at end 2005).\n\u2022 Second Perennial Crops Development Project \u2013 Set up to commercialise the perennial crop \nsector, increase production, develop nurseries, handle post harvest processing and marketing \n(6,250 loans amounting to Rs.1,453 mn had been granted as at end 2005).\n\u2022 New Comprehensive Rural Credit Scheme \u2013 Provision of working capital requirement \nof small farmers; short term production loans, production of seeds and plant material and \npurchase of agricultural commodities under forward sales contracts (70,196 loans amounting \nto Rs.1,620 mn had been granted during 2005).\n\u2022 Small Farmers and Landless Credit Project \u2013 To establish a cost effective and sustainable \nmicro credit delivery system to generate employment and improve savings habits among the \nlow income receiving people (106,632 loans amounting to Rs.1,513 mn had been granted as \nat end 2005).\n2. Pr oposed time frame", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 483, "year": 2013}, "type": "Document"}
{"page_content": "at end 2005).\n2. Pr oposed time frame \nIn implementing the proposals, it is suggested that the banks be required to increase their lending to \nthe agricultural sector to 10% of total advances as follows:\n\u2022\t3%\tby\tend\t2007,\t6%\tby\tend\t2008\tand\t10%\tby\t31\tDecember \t2009.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 483, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  475\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nBank Supervision Department\n27 June 2006\nTo : CEOs of Licensed Banks\n       Panel of Approved Auditors\nDear Sirs,\nPAYMENT OF TAXES BY THE BANKING AND FINANCIAL SECTOR\n \nThe Inland Revenue Department has drawn the attention of the CBSL to the deviations observed \nin the payment of taxes (income tax, V AT \u2013 including V AT on financial activities, PAYE, Debit Tax and \nEconomic Service Charge) by the banking sector.\nLicensed Banks are therefore informed that payment of all taxes such as income tax, V AT (including \nV AT on financial activities), PAYE, Debit Tax and Economic Service Charge payable to the Department \nof Inland Revenue should carry a certification by the External Auditors of the bank, when such payment is \nmade, that the relevant tax is in conformity with the provisions of the relevant Inland Revenue regulations \nin that regard.\nYours faithfully,\nDirector of Bank Supervision\ncc: Secretary-General/SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 484, "year": 2013}, "type": "Document"}
{"page_content": "476 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 17 / 800 / 0007  / 001\nBank Supervision Department\n08 November 2013\nTo: CEOs of Licensed Commercial Banks and\n      Licensed Specialised Banks \nDear Sirs,\nMISLEADING AND UNETHICAL ADVERTISEMENTS\n We refer to our Circular 02/17/800/0007/001 dated 6 November 2008 requiring all banks to refrain \nfrom publishing misleading and unethical advertisements, and to ensure that all important information is \nhighlighted in a visible manner to enable the general public to understand clearly the nature of the products \nand the effective interest rates applicable.\n As informed at the meeting of the Chief Executive Officers of licensed commercial banks and licensed \nspecialised banks held on 24 October 2013, banks publish advertisements in a misleading and unethical \nmanner, e.g., publication of annual effective rate of interest (AER) of deposits in small font size which \nis much smaller or less than that of other important information, promoting deposits without divulging a \nrate of return, i.e., an interest rate or an annual percentage yield.\n W e, therefore, request you to comply with the Circular 02/17/800/0007/001 dated 6 November 2008 \nat all times, ensuring that all key information including nominal interest rate, AER and credit rating of \nthe bank is published with the same prominence in all advertisements, articles, etc., to enable the general \npublic to make informed decisions.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 485, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  477\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 17 / 800 / 0007  / 001\nBank Supervision Department\n06 November 2008\nTo: All the CEOs of Licensed Commercial Banks and\n      Licensed Specialised Banks \nDear Sirs,\nMISLEADING AND UNETHICAL ADVERTISEMENTS\n It has been observed on several occasions that banks are publishing misleading and unethical \nadvertisements, e.g., 15% on US Dollar deposits, interest rate of 30% on Fixed deposits, mega bonus \nreturn of 300% or bonus interest of 200% etc., in the media and in bill boards displayed in public places.  \nThese advertisements are very misleading and cause much negative misinterpretation of the economic \nsituation of the country. There have been complaints from the public about being misled by these \nadvertisements too. Whilst we understand that good marketing strategies are necessary in a competitive \nmarket, we wish to emphasise that they should be ethical, with clear policies.\n Therefore, we hereby request all the l icensed banks to refrain from publishing misleading and \nunethical advertisements with immediate effect and to ensure that all important information is highlighted \nin a visible manner to enable the general public to understand clearly the nature of the products and the \neffective interest rates applicable.\nYours faithfully,\nActg. Director of Bank Supervision\ncc: Secretary-General / SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 486, "year": 2013}, "type": "Document"}
{"page_content": "478 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. : 02  / 17 / 600 / 0031  / 001\nBank Supervision Department\n28 July 2011\nTo : CEOs of all Licensed Commercial Banks, and\n       Licensed Specialised Banks\nDear Sir  / Madam,\nREGISTRATION OF SECURED INTERESTS OVER MOV ABLE PROPERTIES\nWITH THE SECURED TRANSACTIONS REGISTRY\nIt is observed that the Secured Transactions Registry maintained by Credit Information Bureau \n(CRIB) of Sri Lanka under section 23 of the Secured Transactions Act, No. 49 of 2009, will be beneficial \nto credit risk management of banks as it provides valuable information to assess the availability and \nquality of movable assets taken as securities for loans and other banking facilities.\nTherefore, licensed banks are requested to register any pledge, mortgage or obligation on movable \nassets as collaterals for loans and other banking facilities, as provided for in sections 2 and 3 of \nthe Secured Transactions Act, with the Secured Transactions Registry at the CRIB and utilize such \ninformation obtainable from the CRIB for credit risk management decisions.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 487, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  479\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 01 / 00 / 0002  / 001\nBank Supervision Department\n31 December 2007\nTo :  CEOs of All Licensed Banks\nDear Sirs/Madam,\nGUIDELINES FOR EMPLOYMENT OF EXPATRIATE STAFF IN BANKS\n As announced at the meeting of the Chief Executive Officers of licensed banks on 22 November \n2007, the Guidelines for employment of expatriate staff in banks, which have been developed to facilitate \nthe introduction of new banking products and risk management of banks, are sent herewith. \n Please acknowledge receipt of this Circular .\nYours faithfully,\nSgd.  B.D.W.A. Silva\nActing Director of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 488, "year": 2013}, "type": "Document"}
{"page_content": "480 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nGuidelines for Employment of Expatriate Staff in Banks\n1. Curr ent Policy\n1.1 At present, the Central Bank of Sri Lanka (CBSL) recommends to Immigration and Emigration \nDepartment resident visas for expatriate staff of foreign banks to enable the banks to employ them \nas follows.\n (i) Maximum of three officers without any restriction.\n (ii) Permission for any officers exceeding 3 is granted on a case-by-case-basis for a specific \nperiod not exceeding one year subject to condition that local staff should be trained to handle \nthe work initiated/undertaken by such expatriate officers.\n1.2 The objective of developing this policy is to provide local staff with the training and opportunities \nto take on positions held by the expatriate officers.\n1.3 In the case of local banks, there has not been such a policy since local banks generally do not \nemploy foreign personnel. However, four local banks have employed foreign consultants to \nundertake specific assignments.\n2. Need for  a Revision of the Policy\n The following factors are considered favourably to relax the current policy to permit more expatriate \nofficers and to encourage domestic banks to employ foreign experts.\n (i) Expansion of business operations of some foreign banks. \n ( ii) Foreign banks now t end to expand business in Sri Lanka, especially infrastructure projects, \nthrough funds borrowed from their respective head offices and branches. \n (iii) The activ e presence of foreign banks with internationally experienced professionals will help \nimprove Sri Lanka\u2019s image and investment promotion internationally.\n (iv) T endency to introduce international banking products such as securitization, loan syndication, \nforeign loan raising, infrastructure funding and derivative products. \n (v) Banks in Sri Lanka mainly depend on conventional deposit and loan products. Introduction of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 489, "year": 2013}, "type": "Document"}
{"page_content": "(v) Banks in Sri Lanka mainly depend on conventional deposit and loan products. Introduction of \ninnovative banking products indicate the development of the financial sector and the economy. \nInternational banking know-how is necessary to introduce new banking products, especially to \nattract foreign capital to Sri Lanka. \n (vi) Banks will need to employ risk management specialists to implement advanced approaches of \nBasel II in the medium term and there may be a need to look for such specialists from countries \nwhich implement Basel II.\n (vii) The proposed adoption of IAS/IFRS also will require bankers who have practical experience in \nadopting IAS/IFRS.\n (viii)  In general, banking industry needs experts who have global banking experience if Sri Lankan \nbanks are to introduce modern banking products, technology and risk management techniques.\n3. Policy Guidelines\n 3.1 For  Foreign Banks\n (i) The maximum number of expatriate officers permitted will be as follows:\n (a) 3 for banks whose staf f strength is less than 75.\n (b) 5 for banks with staf f strength of 75 to 400. \n (c) 10 for banks with staf f strength of more than 400.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 489, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  481\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n (ii) In the case of Indian banks, agreement as per on-going negotiations of the Comprehensive \nEconomic Partnership Agreement (CEPA) will be adopted as the minimum criteria.\n (iii) Approval for expatriate officers in excess of the above limits will be considered on a case-\nby-case-basis taking into consideration the specific skills of the nominated expatriates \nand specific assignments given to them. The banks should submit projections for specific \nbusiness or deliverables expected from expatriate officers.\n (iv) V alidity period of the approval will be two years for expatriates under the normal quota and \none year for others (case-by-case-basis criteria).\n (v) In the case of expatriate officers under the normal quota except for CEO, approval may \nbe renewed for another term of two years after assessing the performance of respective \nexpatriate officer. For CEOs, approval may be extended for two terms (4 more years) on the \nbasis of performance records. The renewal for the term of expatriates permitted in excess of \nthe normal quota (case-by-case basis) will be considered only for extension of the projects/\nassignments or new projects/assignments. \n (vi) Approving authority for expatriate officers under normal quota will be the Director of Bank \nSupervision. The Deputy Governor will approve expatriate officers in excess of the normal \nquota.\n 3.2  For  Locally Incorporated Banks\nPermission will be granted on a-case-by-case basis taking into consideration the specific needs of \nthe banks. Special attention will be given to employment of foreign experts in the following fields:\n (a) Basel II-based risk management\n (b) International Accounting Standards\n (c) Risk modeling and data warehouse\n (d) Structuring of derivative products\n (e) Corporate governance", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 490, "year": 2013}, "type": "Document"}
{"page_content": "482 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nRef. No. : 02  / 04 / 003 / 0400  / 001\nDepartment of Bank Supervision\n19 January, 2004\nTo :  All Chief Executive Officers \n of LCBs and LSBs\nGUIDELINES ON CREDIT RATING OF BANKING INSTITUTIONS\n I refer to the discussions on the above subject at the meetings of the Chief Executive Officers of \nLicensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) held on 20.11.2003 and \n18.12.2003 and the agreement of the Chief Executive Officers to obtain ratings for banks. \n All LCBs and LSBs are hereby required to observe the following guidelines in this regard.\n1. All LCBs and LSBs (both local and foreign) are hereby required to obtain a Credit Rating on \nor before 30 June 2004.\n2. All ratings should be from an independent rating agency acceptable to the Central Bank of Sri \nLanka.\n3. Local Branches of foreign banks may disclose their parent bank\u2019 s rating.\n4. W ith effect from July 2004, all banks are required to disclose their rating in all their advertise -\nments soliciting deposits and other debt instruments. The fact that a bank has not obtained a \nrating should also be disclosed, if that is the case.\n5. Credit Ratings should be updated annually and the rating report should be submitted to the \nCentral Bank of Sri Lanka within one month from the date of the report.\nPlease acknowledge the receipt of this letter.\nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 491, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  483\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nOur Ref. : 02  / 17 / 800 / 0014  / 01\nBank Supervision Department\n24 April 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nAMENDMENTS TO GUIDELINES ON THE \nOPERATIONS OF THE INVESTMENT FUND ACCOUNT\nAn amendment to paragraph 3.1( iii) of the above Guidelines and the amended format to submit \ninformation on the utilisation of the investment fund account on a monthly basis are enclosed for \ncompliance.\nThe letter dated 1st October 2011 sent on the above subject is hereby withdrawn.\nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nAnnex \nAmendment to Guidelines to Licensed Commercial Banks and Licensed Specialised Banks \non the Operations of the Investment Fund Account\nThe following Guidelines will replace 3.1( iii) of the above. \n3.1(iii)  Lend only for the following purposes commencing 01 May 2013:\n (a) Long-term loans for cultivation of plantation crops/agriculture crops including, fruits, \nvegetables, cocoa and spices and for livestock and fisheries\n (b) Factory/mills modernization/establishment/expansion \n (c) Small and medium enterprises: loans up to Rs. 200 mn to enterprises with annual  \nturnover less than Rs. 600 mn  \n (d) Information Technology related activities and Business Process Outsourcing \n (e) Infrastructure development\n (f) Education: vocational training and tertiary education\n (g) Housing: up to Rs. 2 mn per customer for construction of a house for residential purposes\n (h) Housing development: construction of low cost houses for residential purposes\n (i) Construction of hotels and for related purposes \n (j) Investment in/purchases of sustainable ener gy sources including solar power up to  \nRs. 10 mn\n (k) W omen enterpreneurship venture capital projects up to Rs. 10 mn\n (l) Restructuring of loans extended for the above purposes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 492, "year": 2013}, "type": "Document"}
{"page_content": "484 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nUtilization of Investment Fund Account (IFA)\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nMonth ended :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(Rs. \u2019000)\nItem Amount\nA. Total Transferred to IFA XXXX\nB. Total Loans Granted\nXXXX\nSector Description Amount \n(a) Long-term loans for cultivation of plantation \ncrops/agriculture crops including, fruits, \nvegetables, cocoa and spices and for livestock \nand fisheriesXX\n(b) Factory/mills modernization/establishment/\nexpansionXX\n(c) Small and medium enterprises: loans up to Rs. \n200 mn to enterprises with annual turnover \nless than Rs. 600 mnXX\n(d) Information Technology related activities and \nBusiness Process OutsourcingXX\n(e) Infrastructure development XX\n(f) Education: vocational training and tertiary \neducationXX\n(g) Housing: up to Rs. 2 mn per customer \nfor construction of a house for residential \npurposesXX\n(h) Housing development: construction of low \ncost houses for residential purposesXX\n(i) Construction of hotels and for related \npurposesXX\n(j) Investments in/purchases of sustainable \nenergy sources including solar power up to \nRs. 10 mnXX\n(k) W omen entrepreneurship venture capital \nprojects up to Rs. 10 mnXX\n(l) Restructuring of loans extended for above \npurposesXX\nSub Total \nC. Total investments in Government Securities  \u2013  long-term\n                                                                                  \u2013  short-termXXXX\nXXXX\n  Sub Total XXXX\nD. Balance available for utilization (A-B-C) XXXX\nNOTE:  E-mail the above details to dbsd@cbsl.lk with copies to mihiri@cbsl.lk  and \n  manjulap@dfd.treasury.gov.lk by 10th of each month following the month of reporting.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 493, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  485\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nOur Ref. : 02  / 17 / 800 / 0014  / 02\nBank Supervision Department\n31 October 2011\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nAMENDMENTS TO GUIDELINES ON THE \nOPERATIONS OF THE INVESTMENT FUND ACCOUNT\nAn amendment to paragraph 3.1( iii) of the above Guidelines and the amended format to submit \ninformation on the utilisation of the investment fund account on a monthly basis are enclosed for \ncompliance.\nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nAnnex  I\nAmendment to Guidelines to Licensed Commercial Banks and Licensed Specialised Banks \non the Operations of the Investment Fund Account proposed in the 2011 Budget\nThe following Guidelines will replace 3.1( iii) of the above. \n3.1(iii)  Lend only for the following purposes commencing 1 November 201 1:\n (a) Long-term loans for cultivation of plantation crops/agriculture crops including, fruits, \nvegetables, cocoa and spices and for livestock and fisheries\n (b) Factory/mills modernization/establishment/expansion \n (c) Small and medium enterprises:  loans up to Rs. 200 mn to enterprises with annual \nturnover less than Rs. 600 mn  \n (d) Information Technology related activities and Business Process Outsourcing \n (e) Infrastructure development\n (f) Education: vocational training and tertiary education\n (g) Ho using: up to Rs. 2 mn per customer for construction of a house for residential \npurposes\n (h) Construction of hotels and for related purposes \n (i) Restructuring of loans extended for the above purposes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 494, "year": 2013}, "type": "Document"}
{"page_content": "486 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nUtilization of Investment Fund Account (IFA)\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nMonth ended :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(Rs. \u2019000)\nItem Amount \nA. T otal Transferred to IFA XXXX\nB. T otal Loans Granted\nXXXXSector Description Amount \n(a) Agriculture XX\n(b) Factory/mills modernization XX\n(c) Small and Medium Enterprises XX\n(d) Information Technology and BPO XX\n(e) Infrastructure development XX\n(f) Education XX\n(g) Housing XX\n(h) Construction of hotels and for \nrelated purposesXX\n(i) Restructuring of loans extended \nfor above purposesXX\nC. Total investments in Government Securities  -  long-term\n                                                                             -  short-termXXXX\nXXXX\nD. Balance available for utilization XXXX\nNOTE:  E-mail the above details to dbsd@cbsl.lk with copies to mayadunne@cbsl.lk  and \n  jayaminiw@fpd.treasury.gov.lk by 10th of each month following the month of reporting.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 495, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  487\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nOur Ref. : 02  / 17 / 800 / 0041  / 01\nBank Supervision Department\n29 April 2011\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sirs,\nGUIDELINES ON THE OPERATION OF THE\nINVESTMENT FUND ACCOUNT\nWe enclose the Guidelines on the establishment and operations of the Investment Fund Account \nproposed in the Budget 2011, for compliance.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 496, "year": 2013}, "type": "Document"}
{"page_content": "488 Directions, Determinations, and Circulars issued to Licensed Commercial Banks\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\nGuidelines to Licensed Commercial Banks and Licensed Specialised Banks \non the Operations of the \nInvestment Fund Account proposed in the 2011 Budget\n1. Establishment of an Investment Fund Account (IFA)\n As proposed in Budget 2011, every person or partnership who is in the business of banking or financial \nservices, is required to establish and operate an IFA.\n2. Initial Cr edits to IFA \n As and when taxes are paid after 1 January 2011, licensed banks shall transfer the following funds to \nthe IFA and build a permanent fund in the bank: \n (i) 8 per cent of the profits calculated for the payment of Value Added Tax (V AT) on financial services \non dates as specified in the V AT Act for payment of V AT. \n (ii) 5 per cent of the profits before tax calculated for payment of income tax purpos es on dates \nspecified in Section 113 of the Inland Revenue Act for the self assessment payments of tax. \n3. Utilisation of Funds\n3.1 Banks shall commence utilization of funds in the IFA in the following manner within three months \nfrom the date of transfer to the IFA: \n (i) Invest in long-term Government securities and/or bonds with maturities not less than seven \nyears. \n (ii) Lend on maturities not less than five years at interest rates not exceeding 5-year Treasury bond \nrates plus 2 per cent. \n (iii) Lend only for the following purposes:\n (a) Long-term loans for cultivation of plantation crops/agriculture crops including, fruits,  \nvegetables, cocoa and spices and for livestock and fisheries\n (b) Factory/mills modernization/establishment/expansion \n (c) Small and medium enterprises: \n a. loans up to Rs. 30 mn or \n b. loans over Rs. 10 mn to enterprises with annual turnover less than Rs. 300 mn and employees   \nless than 400 \n (d) Information Technology related activities and Business Process Outsourcing \n (e) Infrastructure development", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 497, "year": 2013}, "type": "Document"}
{"page_content": "(e) Infrastructure development\n (f) Education - vocational training and tertiary education\n (g) Restructuring of loans extended for the above purposes.\n3.2 Lending may be in Sri Lanka Rupees and/or foreign currency loans granted within the country .\n3.3 Ba nks shall invest funds in short-term Government securities until the commencement of \nutilization of funds as stated in 3.1 above.\n4. Conditions\n4.1 Applicability of Prudential Requirements\n (i) Subject to paragraph ( ii) below, transactions of the IFA shall be subject to all Regulations, \nDirections, Determinations and Circulars issued by the Central Bank of Sri Lanka as \napplicable.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 497, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Commercial Banks  489\nLCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013\n (ii) Lending to the Agriculture sector in the case of licensed banks shall be in addition to the \nrequirement on lending to agriculture by banks of 10 per cent of total loans and advances of \nthe bank in terms of the budget proposal 2006.\n4.2 Accounting for Transactions\n (i) T ransfers to the IFA shall be treated as appropriations of profit after tax.\n (ii) The IF A shall be maintained as a separate item under general and other reserves and constitutes \na part of shareholder funds.\n (iii) Cost of operations of IF A and income from investments and lending operations shall be \naccounted for in the financial statements of the bank.\n (iv) Banks shall maintain separate accounts with necessary details on all operations of the IF A.\n (v) IF A shall not be impaired or reduced without the approval of the Central Bank of Sri Lanka.\n4.3 Disclosur es and Reporting to Central Bank of Sri Lanka\n (i) The following disclosures shall be made in the \u201cNotes to the financial statements\u201d:\n (a) Number of loans granted and total amount outstanding for each purpose stated in  \nparagraph 3.1(iii ), interest rates and tenure of loans.\n (b) T otal investments in Government securities, interest rates and maturity.\n (ii) Information on the operations of the IFA shall be made available as and when required by the \nCentral Bank of Sri Lanka and Ministry of Finance.\n4.4 T reatment of Taxation \nThe tax liability in relation to the operations of IFA shall be computed in accordance with \napplicable tax laws. However, the following shall be noted:\n (i) Interest income on investments, stated in paragraphs 3.1( i) and 3.3 is liable to income tax. \n (ii) Interest income on loans granted utilizing the IF A will be exempt from income tax. \n (iii) Specific provisions on loan losses will be subject to normal adjustments applicable to bad \ndebts.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 498, "year": 2013}, "type": "Document"}
{"page_content": "debts. \n (iv) Any ove r-funding or under-funding shall be in accordance with the relevant tax laws/\nregulations/guidelines.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 498, "year": 2013}, "type": "Document"}
{"page_content": "LCB - 30 Nov 2013 (5th Final Proof) - 29/11/2013", "metadata": {"source": "data\\CBSL\\2013\\bsd_LCB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 499, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars\nissued to\nLicensed Specialised Banks\n(Inclusive of amendments made up to 30 November 2013)\nBank Supervision Department\nCentral Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 0, "year": 2013}, "type": "Document"}
{"page_content": "Printed at Central Bank Printing Press, 58, Sri Jayawardenepura Mw., Rajagiriya, Sri Lanka.\nPublished by Bank Supervision Department\nCentral Bank of Sri Lanka, 30, Janadhipathi Mawatha, Colombo 01, Sri Lanka. \nDISCLAIMER\nThis updated edition contains of Directions, Determinations, \nand Circulars issued by the Central Bank of Sri Lanka to \nLicensed Specialised Banks up to 30th November 2013. \nPlease note that this edition is issued only for the purpose \nof convenience, and although every effort has been made to \nensure the accuracy of the text, the Central Bank of Sri Lanka \ndoes not hold itself responsible for any errors, omissions or \ninadvertent alterations, in any manner.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 1, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  iii\nGovernor\u2019s Statement\nSri Lankan economy has now entered into an accelerated growth path of achieving Rs. 100 \nbillion economy with USD 4,000 per capita income by 2016. In this scenario, Sri Lankan banking sector \nwhich holds more than 55% of the financial sector assets of the country is destined to play a pivotal role \nin supporting the growth momentum of the economy. Improved resilience to face external and internal \nshocks, innovative and futuristic banking products, expanded access to finance and consumer protection \nare some of the key drivers to promote a strong and dynamic banking sector through business excellence.\nDespite the global financial crisis, Sri Lanka\u2019s banking sector has remained resilient with the \nexisting prudential regulatory initiatives and reforms that have ensured the financial system stability.  \nA strong regulatory framework that promotes risk management of banks is a key component of the safety \nnet to ensure systemic stability. Thus, the earlier regulatory initiatives on improving risk management, \ncorporate governance and capital requirements have continued with reforms in 2013 too. Compliance \nwith these new regulatory reforms has enabled the Banks to improve their governance structure, risk \nmanagement framework and capital requirements. It is expected that the consolidation between banks \nand the financial institutions would further strengthen the resilience in the financial sector .\nAt the same time, the Directors of Banks are expected to play a major role in setting strategic  \ndirections to ensure a sound and resilient banking sector in the country by adopting prudent policies in line \nwith new financial reforms. In that context, the Central Bank expects all Directors, Senior Management \nand Other Staff of the banks to be fully conversant with the Directions, Determinations, and Circulars", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 2, "year": 2013}, "type": "Document"}
{"page_content": "issued time to time by the Central Bank, thereby ensure compliance. In order to facilitate such task, this \nvolume containing \u201cDirections, Determinations, and Circulars issued to Licensed Specialised Banks\u201d, \nincorporating the changes and amendments up to 30 November 2013, is being issued.\nIt is hoped that this new volume will create greater awareness of and compliance therewith,  \nso that more effective inputs will contribute to ensure improved risk management, corporate governance, \nefficiency and resilience in the Banking Sector.\nAjith Nivard Cabraal\nGovernor\nCentral Bank of Sri Lanka\n02 December 2013", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 2, "year": 2013}, "type": "Document"}
{"page_content": "iv Directions, Determinations, and Circulars issued to Licensed Specialised Banks", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 3, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  v\nContents\nPage No.\n1. Licensing of Banks  \n Determinations  \n 1.1 Determination No. 02 of 201 1 \u2013 Annual Licence Fee  1\n Circulars  \n 1.2 Establishment of Bank Branches  2\n 1.3 Classification of Banking Outlets  3\n   \n2. Capital Adequacy  \n 2.1 The Adoption of the Basel II Capital Adequacy Framework Beginning 2008  4\n Directions  \n 2.2 Direction No. 10 of 2007 \u2013 Maintenance of Capital Adequacy Ratio  6\n 2.3  Direction No. 10 of 201 1 \u2013 Amendment to Directions on \n  Maintenance of Capital Adequacy Ratio  68\n 2.4 Direction No. 05 of 2013 \u2013 Supervisory Review Process (Pillar 2 of Basel II) \n  for Licensed Commercial Banks and Licensed Specialised Banks  69\n 2.5 Direction No. 02 of 2009 \u2013 Amendment to Directions on Ownership  \n  of Issued Capital Carrying V oting Rights  83\n 2.6 Direction No. 02 of 2007 \u2013 Ownership of Issued Capital Carrying V oting Rights  84\n 2.7 Reserve Fund  87\n Circulars  \n 2.8 ICRA  Lanka Limited \u2013 Recognition as an External Credit Assessment Institution  88\n 2.9 Criteria for Selection of Valuers Undertaking the Revaluation of  \nFixed Assets for the Computation of the Capital Adequacy Ratio  90\n 2.10 Enhancement of Minimum Capital Requirement of Banks  92\n 2.1 1  Interpretation of Capital Funds  96\n 2.12 Shipping Guarantees Issued by Banks  97\n3. Cr edit Risk Management  \n Directions  \n 3.1 Conditions for Grant of Accommodation  98\n 3.2 Investments in Equity  99\n 3.3 Direction No. 04 of 2010 \u2013 Amendments to Directions on Classification of \n  Loans and Advances, Income Recognition and Provisioning  101\n 3.4 Direction No. 04 of 2008 \u2013 Classification of Loans and Advances, \n  Income Recognition and Provisioning  102\n 3.5 Direction No. 08 of 2007 \u2013 Maximum Amount of Accommodation  114\n 3.6 Accommodation to Directors and Related Companies  120\n 3.7 Direction No. 04 of 2009 \u2013 Leased Backed Trust Certificates / Lease Receivables", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 4, "year": 2013}, "type": "Document"}
{"page_content": "3.7 Direction No. 04 of 2009 \u2013 Leased Backed Trust Certificates / Lease Receivables \n  as Approved Security for Accommodation to Any Director  124\n 3.8  Direction No. 01 of 2013 \u2013 Exposure to Stock Market \n  by Licensed Commercial Banks and Licensed Specialised Banks  125", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 4, "year": 2013}, "type": "Document"}
{"page_content": "vi Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n Circulars  \n 3.9 Accounting for Properties Acquired by Foreclosure of  \nCollateral / Part Settlement of Debt  128\n 3.10 Establishment of a Revolving Fund to Grant Loans to \n  Acquire Property to the State Sector Employees  129\n 3.1 1  Concessions Granted to Tourism Industry  130\n 3.12 Granting Credit Facilities to Private Sector  131\n Orders\n 3.13 Order No. 01 of 2012 \u2013 Ceiling on Credit Growth of Licensed Banks  132\n Guidelines  \n 3.14 Guidelines on the Grant of Facilities for the Issue of  \nCommercial Paper and Other Forms of Promissory Notes  133\n  \n4. Liquidity Risk Management  \n Directions  \n 4.1 Direction on Liquid Assets \u2013 State Mortgage and Investment Bank  137\n 4.2 Liquid Assets  138\n Circulars  \n 4.3  Definition of Liquid Assets Under Section 76J (l) of the  \n  Banking Act, No. 30 of 1988, as Amended  140\n5. Market Risk Management  \n Directions  \n 5.1 Prudential Norms for Classification, Valuation and  \nOperation of the Bank\u2019s Investment Portfolio  142\n6. Operational Risk Management  \n Directions  \n 6.1 Direction No. 02 of 2012 \u2013 Outsourcing of Business Operations of \n  a Licensed Commercial Bank and Licensed Specialized Bank  145\n Circulars  \n 6.2 Acceptance of Certificates of Deposit  151\n 6.3 Conduct of Non-Government Or ganizations (NGO) Accounts by Licensed Banks  154\n 6.4 Customer Due Diligence \u2013 \u2018Know Your Customer\u2019 Procedures  158\n 6.5 Prevention of Frauds Using Electronic Cards  162\n 6.6 Use of Banking System by Institutions and Persons not Authorised to Accept Deposits  164\n 6.7 Regulations Made Under the Public Security Ordinance  165\n7. Corporate Governance for  Banks  \n Directions  \n 7.1  Direction No. 04 of 2013 \u2013 Amendments to Direction on  \n  Corporate Governance Issued to Licensed Specialised Banks in Sri Lanka  168\n 7.2 Direction No. 08 of 2008 \u2013 Amendments to Directions on Corporate Governance  169", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 5, "year": 2013}, "type": "Document"}
{"page_content": "7.2 Direction No. 08 of 2008 \u2013 Amendments to Directions on Corporate Governance  169\n 7.3 Direction No. 06 of 2008 \u2013 Amendments to Directions on Corporate Governance  170\n 7.4 Direction No. 12 of 2007 \u2013 Corporate Governance  171\n 7.5 Directi on No. 07 of 2011 \u2013 Integrated Risk Management Framework  188", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 5, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  vii\n 7.6 Disqualification for Appointment as Manager, Secretary or Other Official  218\n 7.7 Disqualification for being Appointed or Elected Director  219\n 7.8 Secretary of a Licensed Specialised Bank  220\n Determinations  \n 7.9 Determination No. 04 of 2010 \u2013 Assessment of Fitness and Propriety of \n  Officers Performing Executive Functions  221\n Circulars  \n 7.10 Appointment of Directors of Banks  228\n 7.11 Requirements Under the Corporate Governance Direction  242\n 7.12 Assessment of Fitness and Propriety of Chief Executive Officers  243\n 7.13 Special Payments/Benefits to Directors at their Retirement  252\n 7.14 Disclosures in Annual Reports \u2013 Banking Act Direction on Corporate Governance  253\n Explanatory Notes  \n 7.15  Explanatory Note 1/2012 \u2013 Authority of the Monetary Board to Issue\n  Directions to Licensed Banks Reaffirmed by the Court of Appeal  254\n8. Abandoned Pr operty  \n Guidelines  \n 8.1 Implementation of the Provisions of Part IX (Sections 72 to 76)  \nof the Banking Act on Abandoned Property  255\n9. Disclosures  \n Circulars  \n 9.1 List of Qualified Auditors  261\n 9.2 Display of Interest Rates, Exchange Rates, Service Charges, Fees and Commissions  263\n 9.3 Inadequate / Incorrect Disclosures / Press Statements by Banks  268\n 9.4 Publication of Audited Financial Statements of Banks in the Press  269\n 9.5 Public Disclosure by Publication of Quarterly Financial Statements of Banks in the Press  270\n 9.6 Prescribed Accounting Format for the Publication of Annual Audited Accounts  284\n 9.7 Preparation, Presentation and Publication of Annual Audited Accounts of Banks  285\n 9.8 Publication of Capital Adequacy Statement in the Annual Report  321\n 9.9 Publication of Financial Statements and Other Disclosures on the Websites  322\n Guidelines  \n 9.9 Guidelines for External Auditors relating to their Statutory Duties  323\n10. Reporting of Data to Central Bank\n Circulars", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 6, "year": 2013}, "type": "Document"}
{"page_content": "10. Reporting of Data to Central Bank\n Circulars  \n 10.1 Implementation of the New Web-based Off-site Surveillance System  333\n 10.2 Submission of the Monthly & Quarterly Compliance Reports  339\n 10.3 Submission of Statutory Returns  340\n11. General Banking Practices  \n Directions  \n 1 1.1  Licensed Specialised Banks (Deposits) Directions  342\n 1 1.2  Regional Develo pment Banks (Pawning) Directions 1998  344\n 1 1.3  Secrecy of Banking Transactions  354\n 11.4 Direction No. 08 of 201 1 \u2013 Customer Charter of Licensed Banks  355", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 6, "year": 2013}, "type": "Document"}
{"page_content": "viii Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n Circulars  \n 1 1.5  Cap on Penal Interest Rates char ged by Licensed Banks on Loans and Advances  360\n 1 1.6  Interest Rates on Credit Cards and Housing Loans  361\n 1 1.7  Interest Rates on Credit Cards and Other Loans and Advances  362\n 1 1.8  Extending / Restricting of Banking Hours by the Banks  363\n 1 1.9  Introduction of Products based on Islamic Principles  364\n 1 1.10  Threshold Age of Senior Citizens for Banking Transactions  365\n12. Sri Lanka Deposit Insurance Scheme  \n Directions  \n 12.1 Direction No. 06 of 2010 \u2013 Insurance of Deposit Liabilities  366\n Gazette Notifications  \n 12.2 Amendment to Sri Lanka Deposit Insurance Scheme Regulations, No. 02 of 201 1 367\n 12.3 Amendment to Sri Lanka Deposit Insurance Scheme Regulations, No. 01 of 201 1 368\n 12.4 Sri Lanka Deposit Insurance Scheme Regulations, No. 01 of 2010  369\n Circulars  \n 12.5 Sri Lanka Deposit Insurance Scheme \u2013 Operating Instructions, No. 01 of 201 1 374\n 12.6 Sri Lanka Deposit Insurance Scheme \u2013 Operating Instructions, No. 02 of 2010  375\n 12.7 Sri Lanka Deposit Insurance Scheme \n  \u2013 Premium to be Levied on Insured Deposit, No. 01 of 2010  377\n13. Other  Directions, Circulars and Guidelines  \n Directions  \n 13.1  Direction No. 02 of 2013 \u2013 Restriction on Sale, Transfer, Assign \n  or Disposal of Immovable Assets of Licensed Specialised Banks  379\n 13.2 Acquisition of Immovable Property  380\n 13.3 Restriction in the Sale, Transfer of Immovable Assets  381\n 13.4 Alteration of Memorandum and Articles of Association  382\n 13.5 Directions Issued to National Savings Bank  383\n 13.6 Payment of Dividends  384\n 13.7 Prior Approval of the Central Bank to carry on Certain Transactions  385\n Circulars  \n 13.8 Stimulus Package Approved by the Government for the\n  Finance and Leasing Industry  386\n 13.9 Appointment of Compliance Officers  387\n 13.10  Enhancing Lending to Agriculture Sector  389", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 7, "year": 2013}, "type": "Document"}
{"page_content": "13.9 Appointment of Compliance Officers  387\n 13.10  Enhancing Lending to Agriculture Sector  389\n 13.1 1  Mandatory Lending to Agriculture Sector  390\n 13.12  Payment of Taxes by the Banking and Financial Sector  396\n 13.13  Misleading and Unethical Advertisements  397\n 13.14  Registration of Secured Interest Over Movable Properties \n  with the Secured Transaction Registry  399\n Guidelines  \n 13.15  Guidelines for Employment of Expatriate Staf f in Banks  400\n 13.16  Guidelines on Credit Rating of Banking Institutions  403\n 13.17  Guidelines on the Operation of the Investment Fund Account  404", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 7, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  1\nAnnual licence \nfee for the period\n2012 \u2013 2014.Determination made by the Monetary Board of the Central Bank of Sri Lanka under Section 76 D(6) of \nthe Banking Act, No. 30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n29 September 2011\nBANKING ACT DETERMINATION NO. 2 OF 2011\nANNUAL LICENCE FEE OF LICENSED SPECIALISED BANKS\n1. I n terms of Section 76 D(6) of the Banking Act, the Monetary Board has \ndetermined that the licence fee that shall be paid by a licensed specialised bank \nfor the period 2012 to 2014 shall be based on the total assets as follows:\nTotal assets as at end of the previous year Licence fee\nAbove Rs. 200 bn Rs. 20 mn \nRs. 125 bn to Rs. 200 bn Rs. 15 mn\nRs. 75 bn to Rs. 125 bn Rs. 10 mn\nRs. 25 bn to Rs. 75 bn Rs.  5 mn\nLess than Rs. 25 bn Rs.  2 mn\n2. Every licensed specialised bank shall pay the licence fee to the Central Bank of \nSri Lanka on or before 31st day of January of the respective year .\n3. Licence fee shall be paid on calendar year basis.Payment of \nlicence fee.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 8, "year": 2013}, "type": "Document"}
{"page_content": "2 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBank Supervision Department\n26 May 2008\nTo :  CEOs of Licensed Commer cial Banks and\n   CEOs of Licensed Specialised Banks\nDear Sir/Madam,\nESTABLISHMENT OF BANK BRANCHES\nThe Central Bank currently approves the opening of bank branches and other outlets by licensed \nbanks considering the feasibility and suitability of the proposed expansion. At present, nearly 40 per \ncent of the bank branches in the country are concentrated in the Western Province resulting in a banking \ndensity (bank branches for 100,000 persons) of 11.9 in the Western Province as against a range of 5.3 to \n8.4 in the other provinces.  \nThere is a need to accelerate economic development in areas of the country outside the Western \nProvince to achieve balance regional development in the country.  Establishing more branches and \nbanking outlets outside the Western Province is expected to enhance access to finance and promote the \nsavings habits, thereby increasing economic activity in those regions. \nTo facilitate this, the Monetary Board has decided that banks shall establish a minimum of  \ntwo branches outside the Western Province for each new branch established in the Western Province.  \nThis new criteria will be applicable for all future requests made to the Central Bank for opening of \nbranches. \nYours faithfully,\nSgd, B.D.W.A. Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 9, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  3\nOur Ref. : 02  / 17 / 500 / 0554  / 001\nBank Supervision Department\n29 November 2012\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nCLASSIFICATION OF BANKING OUTLETS\nAs intimated to you at the periodic meeting of the CEOs of licensed banks held on 26th January \n2012, the current classification of banking outlets system for licensed banks has been reviewed with a \nview to streamline and rationalize the branch approval procedures.\n2. Accordingly , the Monetary Board has granted approval for licensed banks to: \na. reclassify the banking outlets into two categories, namely branches and student savings units \nand seek future approvals under these two outlet categories ; \nb. upgrade all existing banking outlets except student savings units to branches with effect from \n01.01.2013 ; and\nc. conspicuously display the list of activities for the information of the customers in the premises \nof a branch when such branch is extending only selected banking services. \n3. Circular issued under Ref. No. 02/08/005/0002/002 dated May 03, 2006 on the above subject is \nhereby rescinded.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 10, "year": 2013}, "type": "Document"}
{"page_content": "4 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBank Supervision Department\n26 December 2007\nTo : The CEOs of all Licensed Commer cial Banks and\n Licensed Specialised Banks\nDear Sir  / Madam,\nTHE ADOPTION OF BASEL II CAPITAL ADEQUACY FRAMEWORK \nBEGINNING 2008\nAs announced in the \u201cRoad Map: Monetary and Financial Sector Policies for 2007 and beyond\u201d, \nreleased by the Central Bank on January 2, 2007, the Monetary Board of the Central Bank of Sri Lanka \nhas issued the Directions on the maintenance of capital adequacy ratios under the BASEL II for Licensed \nCommercial Banks (LCBs) and Licensed Specialised Banks (LSBs), in terms of the provisions under \nSection 46(1) and 76 J(1), of the Banking Act, No. 30 of 1988, respectively , which will be effective from \nJanuary 1, 2008. These Directions have been prepared on the basis of the \u201cInternational Convergence of \nCapital Measurement and Capital Standards \u2013 a Revised Framework\u201d, widely known as Basel II, issued \nby the Basel Committee on Banking Supervision of the Bank for International Settlements (BIS) in  \nJune 2004 and revised thereafter in June 2006.\n2. The Adoption of the Basel II\nAs you are aware, Basel II provides a \u201cthree pillar\u201d  approach, i.e., (1) Minimum Capital Requirements;  \n(2) Supervisory Review Process; and (3) Market Discipline, for the implementation of this \nframework. However, as announced at the Bank Managers\u2019 Meeting held on November 22, 2007, \nthe Central Bank has decided to adopt Pillar I, i.e., \u201cMinimum Capital Requirements\u201d effective from \n01 January 2008 and to adopt the other two pillars in the medium term. The approach for adoption \nof Basel II is as follows. \n 2.1 The Adoption of Pillar I: Minimum Capital Requirements\nThe Basel II framework provides several options for the implementation of the Pillar I, based \non the level of sophistication and development of the banking system. Accordingly, all LCBs", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 11, "year": 2013}, "type": "Document"}
{"page_content": "on the level of sophistication and development of the banking system. Accordingly, all LCBs \nand all LSBs are required to apply the Standardised Approach for credit risk, the Standardised \nMeasurement Method for market risk and the Basic Indicator Approach for operational risk, \nin computing the capital requirements, commencing January 1, 2008. For this purpose, the \nfollowing documents are attached herewith.\n (i) Banking Act, Directions No.9 (for LCBs) and No.10 (for LSBs) dated 26.12.2007 issued \nby the Monetary Board.\n (ii) Guidelines on computation of capital adequacy ratio (Schedule I).*\n (iii) Return to be submitted on capital adequacy ratio (Schedule II).*\n 2.2  Migration to Advanced Approaches\nThe Central Bank has decided to move to adopting the internal ratings based (IRB) advanced \napproaches beginning 2013. Once the Central Bank is satisfied that the banks have the \nappropriate models and risk management systems capacities, permission will be granted for", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 11, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  5\nthem to proceed with the IRB approaches. Separate guidelines in this regard will be issued later, \nspecifying the pre-requisites and procedures for seeking the Central Bank\u2019s prior approval for \nsuch migration.\n 2.3 Resour ce Requirements: Data, IT Needs and Training\nData and IT Needs:  Banks should begin preparing a comprehensive data capturing system \nto identify, measure and report all material risks and to assess and allocate capital against \nthese risks in a systematic and objective manner to meet the requirements under the simplified \napproaches and to move to advanced approaches in the future. Accordingly, banks are required \nto implement changes, especially plan for systems integration, modifications to internal systems \nand use of new software for appropriate data collection, to move to the advanced approaches.  \nIn this regard, Banks are expected to have in place, or be actively developing, a data \u201cwarehouse\u201d, \nthat is, a process that enables a bank to collect, store and draw upon loss statistics in an efficient \nmanner over time. Guidelines in this regard are given in Annex I.*\nTraining: Upgrading skills in the areas of credit risk models and capital assessment strategies, \ncredit risk mitigation techniques and measuring market and operational risks will be critical to \nthe successful implementation of Basel II.\n 2.4 Adoption of the other  two Pillars\n 2.4.1  The Pillar  II: Supervisory Review Process (SRP)\nThe objective of SRP is to ensure that banks have adequate capital to support all \nmaterial risks in their business and also encourage them to adopt more sophisticated risk \nmanagement techniques for monitoring and managing all risks. For this purpose, banks \nare required to establish well-defined internal assessment processes within themselves \nin order to determine the additional capital requirement for all material risks, internally,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 12, "year": 2013}, "type": "Document"}
{"page_content": "in order to determine the additional capital requirement for all material risks, internally, \nand which would also be able to assure the Central Bank that adequate capital is actually \nheld towards all their material risk exposures. However, considering the current level of \ninternal systems of the banks, it has been decided to adopt the Pillar II from 2010.\n 2.4.2  The Pillar  III: Market Discipline\nThe introduction of disclosure requirements for banks, based on the revised framework, \nwill be initiated along with the adoption of new international accounting standards, \ni.e., the International Financial Reporting Standards (IFRS 7). Accordingly, banks are \nadvised to continue with the current disclosure requirements until the adoption of the \nPillar III.\nYours faithfully,\nSgd, B D W A Silva\nActg. Director of Bank Supervision\nCopy To : Secretary General / SLBA\n* The schedule I and II and Annex I are available at www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 12, "year": 2013}, "type": "Document"}
{"page_content": "6 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) of the \nBanking Act, No.30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nGovernor\nColombo\n26th December 2007\nDIRECTIONS\nBANKING ACT DIRECTION NO. 10 OF 2007\nMAINTENANCE OF CAPITAL ADEQUACY RATIO\nWHEREAS in terms of the powers conferred by Section 76 j(1) of the Banking Act, No.30 of 1988 as \namended, the Monetary Board has arrived at a determination with regard to the guidelines in respect of \nthe maintenance of capital adequacy ratio of licensed specialised banks having regard to the guidelines for \ncapital adequacy set out by the Bank for International Settlements in Basle; and\nWHEREAS in the exercise of powers conferred by Section 76 j(1) of the Banking Act, No.30 of 1988 as \namended, the Monetary Board hereby issues the following directions.\nMinimum Capital \nAdequacy Ratio.1 (1) Commencing from 01 January 2008, all licensed specialised banks shall, at \nall times, maintain a capital adequacy ratio of  not less than 10 per cent in \nrelation to total risk weighted assets with core capital constituting not less \nthan 5 per cent in relation to total risk weighted assets.\n1 ( 2)  T he capital adequacy ratios referred to in Direction 1(1) above shall be \ncomputed as per guidelines given in Schedule I hereto prepared in accordance \nwith the Basel II Capital Accord \u201cInternational Convergence of Capital \nMeasurement and Capital Standards - A Revised Framework\u201d recommended \nby the Basle Committee on Banking Supervision at the Bank for International \nSettlements.\n2 Licensed specialised banks shall use the format at Schedule II attached hereto for \nreporting of capital adequacy ratios on a periodic basis as specified in Schedule  I.\n3 Where a lic ensed specialised bank has failed to comply with these Directions, such", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 13, "year": 2013}, "type": "Document"}
{"page_content": "3 Where a lic ensed specialised bank has failed to comply with these Directions, such \nlicensed specialised bank shall not pay dividends or repatriate profits until such \ncompliance is effected and confirmed by the Director of Bank Supervision.\n4 Every licensed specialised bank which is required by these directions to augment \nits capital may apply to the Monetary Board for an extension of time to comply \nwith such requirement which extension shall not exceed a period of twelve \nmonths or such longer period as may be determined by the Monetary Board.\n5 ( 1)  Al l previous Determinations, Directions and Guidelines that have been \nissued to licensed specialised banks by the Monetary Board in relation to \nmaintenance of capital adequacy ratio in terms of Section 76 j of the Banking \nAct are hereby revoked. \n5 (2) Notwithstanding the revocation referred to in Direction 5(1) above, licensed \nspecialised banks granted time by the Monetary Board in term of Direction \n4 above shall comply with the requirements contained in such previous \nDeterminations, Directions and Guidelines until the expiration of the time so \ngranted.Reporting Format.\nSteps to secure \ncompliance with \nDirections.\nTransitional \nArrangements.\nRevocation \nof previous \nDeterminations.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 13, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  7\nSchedule I\nGuidelines\non\nComputation of Capital Adequacy Ratio\n(Revised Framework \u2013 Basel II)\nCONTENTS\n1. Introduction\n 1.1 Approaches to Implementation of the Basel II Framework\n 1.2 An initial step towards adopting Basel II\n2. Scope of Application\n3. Minimum Capital Ratio\n4. Reporting Format\n5. Submission dates\n6. Instructions for  Completion the Return\n 6.1 Part I \u2013 Computation of Capital Adequacy Ratio\n 6.2 Part II ( a) \u2013 Computation of Total Capital Base (Regulatory Capital)\n 6.3 Part II ( b) \u2013 Computation of Eligible Tier III for Market Risk\n 6.4 Part III ( a) \u2013 Computation of Risk-weighted Amount for Credit Risk\n 6.5 Part III ( b) \u2013 Computation of Credit Equivalent Amount of Off-Balance Sheet Items\n 6.6 Part III ( c) \u2013 Exposures Recognized under Credit Risk Mitigation (CRM)\n 6.7 Part IV  \u2013 Computation of Risk-weighted Amount for Market Risk\n 6.8 Part V \u2013 Computation of Risk-weighted Amount for Operational Risk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 14, "year": 2013}, "type": "Document"}
{"page_content": "8 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAbbreviations\nAMA  \u2013 Advanced Measurement Approaches\nBIA \u2013 Basic Indicator Approach\nBIS \u2013 Bank for International Settlements\nBCBS  \u2013 Basel Committee on Banking Supervision\nCAR  \u2013 Capital Adequacy Ratio\nCBSL  \u2013 Central Bank of Sri Lanka\nCCR  \u2013 Counterparty Credit Risk\nCIPC  \u2013 Cash Items in the Process of Collection\nCRM  \u2013 Credit Risk Mitigation\nECAI  \u2013 External Credit Assessment Institution\nGOSL  \u2013 Government of Sri Lanka\nIMF  \u2013 International Monetary Fund\nLKR  \u2013 Sri Lanka Rupee\nMDB  \u2013 Multilateral Development Bank\nNPA  \u2013 Non Performing Assets\nPSE \u2013 Public Sector Entities\nSA \u2013 Standardised Approach\nSLECIC  \u2013 Sri Lanka Export Credit Insurance Corporation\nSME  \u2013 Small and Medium Enterprise\nSMM  \u2013 Standardised Measurement Method\nLCB  \u2013 Licensed Commercial Bank\nLSB  \u2013 Licensed Specialised Bank", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 15, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  9\n1. Introduction\n1.1 Appr oach to Implementation of the Basel II Framework:  As announced by the Central Bank of Sri \nLanka (CBSL) in March 2006, the \u201cInternational Convergence of Capital Measurement and Capital \nStandards \u2013 a Revised Framework\u201d, widely known as Basel II, issued by the Basel Committee on Banking \nSupervision of the Bank for International Settlements in June 2004 and as amended to framework in June \n2006, will be the basis for the computation of the Capital Adequacy Ratio effective from 1st January \n2008.\n1.2 As an initial step towards adopting Bas el II, all licensed commercial banks (LCBs) and licensed \nspecialized banks (LSBs) are required to apply the following approaches in computing the capital \nadequacy ratio.\n1.2.1  The Standardised Approach for credit risk\n1.2.2  The Standardised Measurement Method for market risk\n1.2.3  The Basic Indicator Approach for operational risk.\n2. Scope of Application\n2.1 The revised capital adequacy norms will be applicable, in the case of all LCBs and LSBs incorporated  \nin Sri Lanka:\n2.1.1  on the solo basis - All positions of the bank and its local and overseas branches/offices.\n2.1.2  on the consolidated basis \u2013 All position of the bank (including its local and overseas branches/ \noffices) and its subsidiary companies.\n2.2 In the case of LCBs incorporated outside Sri Lanka, the revised capital adequacy norms will be applicable  \nto the branch operations in Sri Lanka and subsidiaries in Sri Lanka, established with the assigned capital \nof the branch, if any.\n2.3 All LCBs and LSBs are required to use the attached reporting format (Schedule II) for reporting capital  \nadequacy, commencing 2008.\n3. Minimum Capital Ratio\n All LCBs and LSBs shall at all times maintain the capital adequacy ratios determined by the Monetary \nBoard in term of Sections 19(7)( a) and 76J(1)(a ) of the Banking Act, commencing from 01 January \n2008.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 16, "year": 2013}, "type": "Document"}
{"page_content": "2008.\n4. Reporting Format\n4.1 The attached reporting format (Schedule II) collects information on the capital adequacy position of  \nlicensed banks. The return comprises 5 major parts.\n4.1.1  Part 1  \u2013   Computation of capital adequacy ratio.\n4.1.2  Part 1I  \u2013 (a)  Computation of total capital base.\n   (b)  Computation of eligible Tier III capital for market risk.\n4.1.3  Part III  \u2013  (a)  Computation of risk-weighted amount for credit risk.\n   (b)  Credit equivalent of off-balance sheet items.\n   (c)  Exposures recognized under credit risk mitigation (CRM).\n4.1.4  Part IV  \u2013   Computation of risk-weighted amount for market risk.\n4.1.5  Part V  \u2013   Computation of risk-weighted amount for operational risk.\n5. Submission dates\n5.1 The return should show the position as at the last calendar day of each quarter/each financial year, \nand should be submitted through the web-based system as follows. Regional Developments Banks are \nrequired to submit the attached return (Schedule II) in the manual form.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 16, "year": 2013}, "type": "Document"}
{"page_content": "10 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n5.1.1  Quarterly return/s \u2013 within 1 month after the end of each quart er.\n5.1.2  Annual audited return/s \u2013 within 6 months after the end of the financial year of the respective \nbank.\n5.1.3  If the submission deadline falls on a bank holiday , it will be deferred to the next working day.\n5.2 The Statement of Certification on the information submitted in the above return/s and the capital \nadequacy ratio should be forwarded to Bank Supervision Department in manual form. For this purpose, \nbanks may use the existing format (copy attached), which was issued under the implementation of the \nnew web-based returns in July 2006.\n6. Instructions for  Completion the Return\n The instructions for completion of the capital adequacy return are divided into eight parts. The details/\ndefinitions of each element in these eight parts are described with the web-based return code (WBRC).\n6.1 Part 1 \u2013 Computation of Capital Adequacy Ratio\n The values of the items in this form are updated automatically on the web-based return.\n6.1.1  Eligible Cor e Capital (Eligible Tier I)\n (WBRC 1 1.1.1.0.0.0)\n The amount must agree with item 6.2.2.1 of Part II ( a) Computation of total capital base below.\n  [= WBRC 11.2.1.1.0.0 of Part II ( a)]\n6.1.2  Capital Base (Regulatory Capital)\n (WBRC 1 1.1.2.0.0.0)\n The amount must agree with item 6.2.2.9 of Part II ( a) Computation of total capital base below.\n [= WBRC 11.2.1.5.0.0 of Part II ( a)]\n6.1.3  T otal Risk-Weighted Amount\n (WBRC 1 1.1.3.0.0.0)\n T otal risk-weighted assets are determined by adding the resulting figures to the sum of risk-\nweighted assets for credit risk, market risk and operational risk.\n T otal of risk-weighted amount for credit risk (6.1.3.1), market risk (6.1.3.2) and operational risk \n(6.1.3.3).\n (WBRC 1 1.1.3.1.0.0 + 11.1.3.2.0.0 + 11.1.3.3.0.0)\n6.1.3.1  Risk-W eighted Amount for Credit Risk\n (WBRC 1 1.1.3.1.0.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 17, "year": 2013}, "type": "Document"}
{"page_content": "6.1.3.1  Risk-W eighted Amount for Credit Risk\n (WBRC 1 1.1.3.1.0.0)\n The amount must agree with item 6.4.3.1 of Part III ( a) Computation of risk-weighted \namount for credit risk below.\n [=WBRC1 1.3.1.0.0.0 of Part III ( a)]\n6.1.3.2  Risk-W eighted Amount for Market Risk\n (WBRC 1 1.1.3.2.0.0)\n T he amount must agree with item 6.7.8.2 of Part IV Computation of risk-weighted \namount for market risk below.\n [= WBRC 11.4.2.0.0.0 of Part IV]\n6.1.3.3  Risk-W eighted Amount for Operational Risk\n (WBRC 1 1.1.3.3.0.0)\n The amount must agree with item 6.8.2.3 of Part III ( a) Computation of risk-weighted \namount for operational risk below.\n [= WBRC 11.5.3.0.0.0 of Part V]", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 17, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  11\n6.1.4  Cor e Capital (Tier I) Ratio, %\n (WBRC 1 1.1.4.0.0.0)\n Eligible core capital (6.1.1) divided by Total risk-weighted amount (6.1.3)\n (WBRC 1 1.1.1.0.0.0/11.1.3.0.0.0)*100\n6.1.5  T otal Capital Ratio, %\n (WBRC 1 1.1.5.0.0.0)\n T otal capital base (6.1.2) divided by Total risk-weighted amount (6.1.3)\n (WBRC 1 1.1.2.0.0.0/11.1.3.0.0.0)*100\n6.2 Part II ( a) \u2013 Computation of Total Capital Base (Regulatory Capital)\n6.2.1  Constituents of Capital Base\n Capital base consists of eligible core capital (T ier I), eligible supplementary capital (Tier II) and \neligible short term subordinated debt covering market risk (Tier III).\n6.2.2  Specific instructions for  elements of Capital\n6.2.2.1  Eligible Cor e Capital (Eligible Tier I)\n (WBRC 1 1.2.1.1.0.0)\n The Eligible Core Capital shall be the total core capital less total amount of deductions/\nadjustments to core capital. Total eligible core capital should represent at least half of \ntotal capital base, i.e., the sum total of eligible supplementary capital plus eligible  \nTier III capital should not exceed total eligible core capital.\n The amount must agree with core capital (6.2.2.2) less Tier I adjustments (6.2.2.3).\n (WBRC 1 1.2.1.1.1.0 - 11.2.1.1.2.0)\n6.2.2.2  Core Capital (Tier I)\n (WBRC 1 1.2.1.1.1.0)\n Core capital includes only permanent shareholders\u2019 equity (issued and fully paid ordinary \nshares/common stock and perpetual non-cumulative preference shares), assigned capital \nand disclosed reserves (created or increased by appropriations of retained earnings \nor other surplus, e.g., share premiums, retained profit, general reserves and statutory \nreserves).\n T he amount must agree with the sum of the following elements from 6.2.2.2.1 to \n6.2.2.2.10\n (WBRC 1 1.2.1.1.1.1 to 11.2.1.1.1.10)\n6.2.2.2.1  Paid-up Ordinary Shar es/Assigned Capital\n (WBRC 1 1.2.1.1.1.1)\n In the case of LCBs and LSBs incorporated in Sri Lanka:  Issued and fully", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 18, "year": 2013}, "type": "Document"}
{"page_content": "(WBRC 1 1.2.1.1.1.1)\n In the case of LCBs and LSBs incorporated in Sri Lanka:  Issued and fully \npaid ordinary shares in terms of the Banking Act. For the computation only \nthe paid up portion of partly paid shares should be counted as capital (will be \nrevised in terms of the Companies Act, No.7 of 2007).\n LCB incorporated or established outside Sri Lanka:  Equity capital that \nshall be assigned by the Head Office of a LCB incorporated or established \noutside Sri Lanka.\n6.2.2.2.2  Non-cumulative, Non-r edeemable Preference Shares\n (WBRC 1 1.2.1.1.1.2)\n Issued and fully paid non-cumulative, non-redeemable preference shares  \nwhere the payment of dividend could be reduced or waived permanently in \nthe event of profitability being inadequate to support such payment in part or \nfull.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 18, "year": 2013}, "type": "Document"}
{"page_content": "12 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.2.2.2.3  Shar e Premium\n (WBRC 1 1.2.1.1.1.3)\n The excess of issue price over the par value of the ordinary shares or common  \nstock or non-cumulative, non-redeemable preference shares (will be revised \nin terms of the Companies Act, No.7 of 2007).\n6.2.2.2.4  Statutory Reserve Fund\n (WBRC 1 1.2.1.1.1.4 )\n Balance in the Reserve Fund as per last audited statement of accounts and set  \nup by banks in terms of the Banking Act.\n6.2.2.2.5  Published Retained Pr ofits/(Accumulated Losses)\n (WBRC 1 1.2.1.1.1.5)\n Balance in the profit and loss account brought forward from the previous  \nfinancial years and as reported in the last audited statement of accounts. \nAccumulated losses should be reported in parenthesis and deducted from the \nother capital constituents.\n6.2.2.2.6  General and Other  Reserves\n (WBRC 1 1.2.1.1.1.6)\n Disclosed reserves in the form of general or other reserves created or increased  \nby appropriation of retained earnings, share premium or other surplus as per \nlast audited financial statements.\n6.2.2.2.7  Gain/(Loss) After Tax Arising from the Sale of Fixed and Long-term \nInvestments\n (WBRC 1 1.2.1.1.1.7)\n Any gain/(loss) after tax arising from the sale of fixed and long-term \ninvestments since the closing date of the last audited accounts. Net loss \narising from the sale of fixed and long-term investments should be reported \nin parenthesis and deducted from the other capital constituents.\n6.2.2.2.8  Unpublished Curr ent Year\u2019s Profit/(Loss)\n (WBRC 1 1.2.1.1.1.8)\n Current year profit (excluding any profit/ (loss) after tax arising from the sale \nof fixed and long term investments) earned/incurred since the closing date \nof the last audited accounts and subject to certification by the institution\u2019s \nexternal auditor. Current year loss should be reported in parenthesis and \ndeducted from the other capital constituents. For this purpose, the banks are", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 19, "year": 2013}, "type": "Document"}
{"page_content": "deducted from the other capital constituents. For this purpose, the banks are \nrequired obtain the audit certificate based on the Sri Lanka Auditing Practice \nStatements 1 (SLAPs 1) \u201cThe Auditor\u2019s Report on Special Purpose Audit \nEngagements\u201d\n6.2.2.2.9  Minority Inter ests (consistent with the above capital constituents)\n (WBRC 1 1.2.1.1.1.9)\n Minority interests on consolidation of capital items.\n6.2.2.2.10  Perpetual Debt Capital Instruments\n (WBRC 1 1.2.1.1.1.10)\n Perpetual debt capital instruments that satisfy the following conditions:\n (i) Prior written approval of the CBSL  has been obtained.\n (ii) Such instruments shall have no maturity .\n (iii) Unsecured, fully paid up and subordinated to the interests of creditors\n (iv) The perpetual debt capital instruments should contain a clause that the  \nissuing bank shall not be liable to pay interest, if:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 19, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  13\n a. The bank\u2019s CAR is below the minimum regulatory requirement in \nterms of the Direction on CAR, or\n b. The impact of such payment results in the bank\u2019s CAR falling \nbelow the minimum CAR, and\n c. S uch interest not paid shall not be cumulative or accrued for \npayment in the future.\n (v) Such instruments may contain a call option, which may be exercised \nin 10 years from the date of issue, provided that the prior approval of \nCBSL has been obtained to exercise such option.\n (vi) T otal perpetual debt approved as core capital shall not exceed 15 per \ncent of the total non-innovative core capital after adjustments and \ndeductions.\n (vii) Any other conditions stipulated by CBSL  on prudential grounds.\n6.2.2.3  Deductions/Adjustments \u2013 Cor e Capital (Tier I)\n (WBRC 1 1.2.1.1.2.0)\n The amount must agree with the sum of the following items from 6.2.2.3.1 to 6.2.2.3.9\n (WBRC 1 1.2.1.1.2.1 to 11.2.1.1.2.9)\n6.2.2.3.1  Goodwill\n (WBRC 1 1.2.1.1.2.1)\n Report the amount of goodwill as shown in the balance sheet.\n6.2.2.3.2  Net Deferred Tax\n (WBRC 1 1.2.1.1.2.2 )\n Net debit balance of deferred tax.\n6.2.2.3.3  Other  Intangible Assets\n (WBRC 1 1.2.1.1.2.3)\n Intangible assets and losses in the current period and those brought forward  \nfrom previous periods should be deducted from core capital.\n6.2.2.3.4  Advances granted to employees of the bank for  the purchase of shares of \nthe bank under a share ownership plan.\n (WBRC 1 1.2.1.1.2.4)\n6.2.2.3.5  Amount due fr om head office & branches outside Sri Lanka in Sri Lanka \nRupees (applicable only to branches of foreign banks).\n (WBRC 11.2.1.1.2.5)\n Debit balances in VOSTRO current accounts in Sri Lanka Rupees held by \nHead Office and branches outside Sri Lanka in Sri Lanka Rupees.\n6.2.2.3.6  Amount due to head office & branches outside Sri Lanka in Sri Lanka  \nRupees (-) (applicable only to branches of foreign banks)\n (WBRC 11.2.1.1.2.6)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 20, "year": 2013}, "type": "Document"}
{"page_content": "Rupees (-) (applicable only to branches of foreign banks)\n (WBRC 11.2.1.1.2.6)\n Credit balances in VOSTRO current accounts in Sri Lanka Rupees held by \nHead Office and branches outside Sri Lanka in Sri Lanka Rupees. Report with \nnegative (-) sign.\n6.2.2.3.7  Amount due fr om head office & branches outside Sri Lanka in Foreign \nCurrency (net) (applicable only to branches of foreign banks)\n (WBRC 11.2.1.1.2.7)\n Net Debit balances (after netting of credit balances) in NOSTRO current  \naccounts in foreign currency held with Head Office and branches outside Sri \nLanka and the net amount of fixed and other deposits placed with and amounts", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 20, "year": 2013}, "type": "Document"}
{"page_content": "14 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nlent to Head Office and branches outside Sri Lanka (after netting of fixed and \nother deposits and amounts borrowed from Head Office and branches outside \nSri Lanka) in foreign currency. Ignore any net credit balance.\n6.2.2.3.8  50 per  cent of Investments in Unconsolidated Banking and Financial \nSubsidiary Companies\n (WBRC 1 1.2.1.1.2.8)\n 50 per cent of investments in capital by way of shares, perpetual/hybrid \ncapital instruments or subordinated term debt in unconsolidated banking and \nfinancial subsidiary companies.\n6.2.2.3.9  50 per  cent of Investments in the Capital of Other Banks and Financial \nInstitutions\n (WBRC 1 1.2.1.1.2.9)\n 50 per cent of investments in capital by way of shares, perpetual/hybrid \ncapital instruments or subordinated term debt in other banks and financial \ninstitutions.\n6.2.2.4  Supplementary Capital (T ier II)\n (WBRC 1 1.2.1.2.1.0)\n The amount must agree to sum of following items from 6.2.2.4.1 to 6.2.2.4.5\n (WBRC 1 1.2.1.2.1.1 to 11.2.1.2.1.5)\n6.2.2.4.1  Revaluation Reserves (appr oved by CBSL)\n (WBRC 1 1.2.1.2.1.1)\n Revaluation reserves may be included within Tier II Supplementary Capital \nprovided that such revaluation is prudently valued reflecting fully the \npossibility of price fluctuations and forced sale, with prior approval of CBSL, \nsubject to a discount of 50 per cent. Revaluation surplus may be included in \nTier II capital not more than once in 7 years.\n6.2.2.4.2  General Pr ovisions\n (WBRC 1 1.2.1.2.1.2)\n General provisions or general loan loss reserves created against the  \npossibility of future losses. Where they are not ascribed to particular assets \nand do not reflect deduction in the valuation of particular assets, they qualify \nfor inclusion in Supplementary Capital (Tier II). General provisions should \nnot exceed 1.25 per cent of the sum of risk-weighted assets.\n6.2.2.4.3  Hybrid Capital Instruments (Debt/Equity)\n (WBRC 1 1.2.1.2.1.3)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 21, "year": 2013}, "type": "Document"}
{"page_content": "6.2.2.4.3  Hybrid Capital Instruments (Debt/Equity)\n (WBRC 1 1.2.1.2.1.3)\n Capital instruments which combine certain characteristics of equity capital  \nand debt. i.e., cumulative redeemable preference shares, etc. and satisfy the \nfollowing characteristics :\n (i) Prior written approval of CBSL  has been obtained for inclusion of such \nitems in the capital.\n (ii) Unsecured, fully paid up and subordinated to the interests of creditors.\n (iii) Not redeemable in less than 5 years or without the prior approval of  \nCBSL.\n (iv) A vailable to participate in losses without the Bank being obliged to \ncease trading.\n (v) Obligation to pay interest can be deferred where the profitability of the  \nBank would not support such payment.\n (vi) Any other condition stipulated by CBSL  on prudential grounds.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 21, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  15\n6.2.2.4.4  Minority Inter ests arising from Preference Shares\n (WBRC 1 1.2.1.2.1.4)\n Minority interests arising from the consolidation of preference  shares.\n6.2.2.4.5  Appr oved Subordinated Term Debt\n (WBRC 1 1.2.1.2.1.5)\n Subordinated term debt that satisfies the following conditions:\n (i) The prior written approval of CBSL  has been obtained for inclusion as \nTier II capital.\n (ii) Unsecured and subordinated to the interests of creditors, at fully paid  \nup value in the case of coupon bonds or paid up value plus accrued \ninterest in the case of zero coupon bonds.\n (iii) A  minimum original maturity of 5 years.\n (iv) Early repayment or redemption shall not be made without the prior  \nconsent of CBSL.\n (v) The amount counted as capital should be discounted by 1/5th each \nyear during the four years preceding maturity.\n (vi) The total approved subordinated term debt should not exceed 50 per \ncent of total Tier 1 capital .\n (vii) Any other conditions stipulated by CBSL  on prudential grounds.\n6.2.2.4.6  Actual Amount of Approved Subordinated Term Debts\n (WBRC 0.0.0.0.0.0)\n Report total actual amount of approved subordinated term debts.\n6.2.2.5  Deductions \u2013 Tier II\n (WBRC 1 1.2.1.2.2.0)\n The amount must agree to sum of following items from 6.2.2.5.1 to 6.2.2.5.2\n (WBRC 1 1.2.1.2.2.1 to 11.2.1.2.2.2)\n6.2.2.5.1  50 per  cent of Investments in Unconsolidated Banking and Financial \nSubsidiary Companies\n (WBRC 1 1.2.1.2.2.1)\n 50 per cent of investments in capital by way of shares, perpetual/hybrid \ncapital instruments or subordinated term debt in unconsolidated banking and \nfinancial subsidiary companies.\n6.2.2.5.2  50 per  cent of Investments in the Capital of Other Banks and Financial \nInstitutions\n (WBRC 1 1.2.1.2.2.2)\n 50 per cent of investments in capital by way of shares, perpetual/hybrid \ncapital instruments or subordinated term debt in other banks and financial \ninstitutions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 22, "year": 2013}, "type": "Document"}
{"page_content": "capital instruments or subordinated term debt in other banks and financial \ninstitutions.\n6.2.2.6  T otal Supplementary Capital\n (WBRC 1 1.2.1.2.0.0)\n The amount must agre e to Supplementary Capital (Tier II)  (6.2.2.4) less Tier II \ndeductions (6.2.2.5).\n (1 1.2.1.2.1.0 - 11.2.1.2.2.0)\n6.2.2.7  Eligible Supplementary Capital\n (WBRC 1 1.2.1.3.0.0)\n Eligible supplementary capital (Eligible Tier II) will be restricted to 100 per cent of Total \nCore Capital (6.2.2.1) (After deductions/adjustments).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 22, "year": 2013}, "type": "Document"}
{"page_content": "16 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.2.2.8  Short Term Subordinated Debt (Tier III)\n (WBRC 1 1.2.1.4.0.0)\n Short term subordinated debt may be used for the sole purpose of meeting a proportion of  \nthe capital requirements for market risk. For short-term subordinated debt to be eligible \nas supplementary capital, it needs, if circumstances demand, to be capable of becoming \npart of a bank's permanent capital and thus be available to absorb losses in the event of \ninsolvency. It must, therefore, at a minimum:\n (i) be unsecured, subordinated and fully paid up\n (ii) have an original maturity of at least two years\n (iii) not be repayable before the agreed repayment date unless the prior consent of CBSL  \nis obtained\n (iv) be subject to a lock-in clause which stipulates that neither interest nor principal  \nmay be paid (even at maturity) if such payment means that the bank falls below \nor remains below its minimum capital requirement.\n6.2.2.8.1  Appr oved Short Term Subordinated Debt\n (WBRC 1 1.2.1.4.1.0)\n Total amount of approved short-term subordinated debts under above \nconditions.\n6.2.2.8.2  Eligible Supplementary Capital (Eligible Tier III) - Utilised\n (WBRC 1 1.2.1.4.2.0)\n The amount must agree with item 6.3.3.6.1 of Part II ( b) subject to the \nfollowing conditions. \n [=WBRC 1 1.2.2.6.1.0 of Part II ( b)]\n (i) A  minimum of about 28\u00bd per cent of market risk needs to be supported \nby eligible core capital that is available to support market risk.\n (ii) T ier III capital will be limited to 250 per cent of a bank\u2019s eligible core \ncapital that is available to support market risk after meeting credit risk \nand operational risk.\n6.2.2.9  Capital Base\n (WBRC 1 1.2.1.5.0.0)\n The amount must agree with the sum of items of eligible core capital (6.2.2.1), eligible  \nsupplementary capital (6.2.2.7) and eligible tier III capital (6.2.2.8.2).\n (WBRC 1 1.2.1.1.0.0 + 11.2.1.3.0.0 + 11.2.1.4.2.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 23, "year": 2013}, "type": "Document"}
{"page_content": "(WBRC 1 1.2.1.1.0.0 + 11.2.1.3.0.0 + 11.2.1.4.2.0)\n6.2.3  An indicative list of institutions which may be deemed to be financial subsidiaries/institutions for \nthe purposes of items 6.2.2.3.8, 6.2.2.3.9, 6.2.2.5.1 and 6.2.2.5.2 above is as under:\n (WBRC 1 1.2.1.1.2.8, 11.2.1.1.2.9, 11.2.1.2.2.1 and 11.2.1.2.2.2)\n (i) LCBs and LSBs,\n (ii) Insurance Companies,\n (iii) Registered Finance Companies,\n (iv) Specialised Leasing Companies,\n (v) Merchant Banks,\n (vi) Primary Dealers.\n6.2.4  Subsidiary companies referred to in items 6.2.2.3.8, 6.2.2.3.9, 6.2.2.5.1 and 6.2.2.5.2 above will  \nbe as defined in the Banking Act.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 23, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  17\n6.3 Part II ( b) - Computation of Eligible Tier III for Market Risk\n6.3.1  Rule of Short-T erm Subordinated Debt Covering Market Risk (Tier III Capital)\n F or short-term subordinated debt to be eligible as Tier III capital, it needs, if circumstances \ndemand, to be capable of becoming part of a bank's permanent capital and thus be available to \nabsorb losses in the event of insolvency. Short-term subordinated debt may be used for the sole \npurpose of meeting a proportion of the capital requirements for market risk. It must, therefore, at \na minimum:\n (i) be unsecured, subordinated and fully paid up\n (ii) have an original maturity of at least two years\n (iii) not be repayable before the agreed repayment date unless the prior consent of CBSL  is \nobtained\n (iv) be subject to a lock-in clause which stipulates that neither interest nor principal may be paid  \n(even at maturity) if such payment means that the bank falls below or remains below its \nminimum capital requirement.\n6.3.2  Eligible Tier III capital\n (i) T ier III capital will be limited to 250 per cent of a bank\u2019s eligible core capital that is \navailable to support market risk after meeting credit risk and operational risk.\n (ii) The minimum of about 28\u00bd per cent of market risk needs to be supported by eligible core \ncapital that is available to support market risk.\n (iii) T ier 2 elements may be substituted for Tier III up to the same limit of 250 per cent so far as \nthe overall limits stated in paragraphs 6.2.2.4.5 and 6.2.2.7 are not breached, i.e., eligible \nsupplementary capital may not exceed eligible core capital, and long-term subordinated \ndebt may not exceed 50 per cent of core capital.\n (iv) In addition, eligible core capital should represent at least half of total capital base, i.e., the \nsum total of supplementary capital plus Tier III capital should not exceed eligible core \ncapital.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 24, "year": 2013}, "type": "Document"}
{"page_content": "sum total of supplementary capital plus Tier III capital should not exceed eligible core \ncapital.\n (v) In determining the level of eligible core capital for the purposes of determining eligible Tier \nIII capital, all adjustments required in arriving at the total capital base (as stated in 6.2.2.3 \nand 6.2.2.5) should be taken into consideration.\n6.3.3  Specific instructions for  Computation of eligible Tier III for market risk\n The values of the items in this form are updated automatically, except item 6.3.3.5.1 below.\n (WBRC 1 1.2.2.5.1.0)\n6.3.3.1  T otal Risk Weighted Assets (RWA)\n (WBRC 1 1.2.2.1.0.0)\n The amount must agree with the sum of the following items from 6.3.3.1.1 to 6.3.3.1.2\n (WBRC 1 1.2.2.1.1.0 to 11.2.2.1.2.0)\n6.3.3.1.1  Total Risk Weighted Assets for Credit and Operational Risks\n (WBRC 1 1.2.2.1.1.0)\n The amount must agree with the sum of item 6.4.3.1 of Part III ( a) \nComputation of risk-weighted amount for credit risk and item 6.8.2.3 of  \nPart V Computation of risk-weighted amount for operational risk below.\n (WBRC 1 1.3.1.0.0.0 of Part III ( a) and 1.5.3.0.0.0 of Part V)\n6.3.3.1.2  Total Risk Weighted Assets for Market Risk\n (WBRC 1 1.2.2.1.2.0)\n The amount must agree to item 6.7.8.2 of Part IV Computation of  \nrisk-weighted amount for market risk.\n (WBRC 1 1.4.2.0.0.0 of Part IV)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 24, "year": 2013}, "type": "Document"}
{"page_content": "18 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.3.3.2  Minimum Capital Charge\n (WBRC 1 1.2.2.2.0.0)\n The amount must agree with the sum of the following items from 6.3.3.2.1 to 6.3.3.2.2  \n(WBRC 11.2.2.2.1.0 to 11.2.2.2.2.0)\n6.3.3.2.1  Capital charge for  Credit and Operational Risk\n (WBRC 1 1.2.2.2.1.0 )\n The amount must agree with 10 per cent of the total risk weighted assets for  \ncredit and operational risks item 6.3.3.1.1 above.\n (10% of WBRC11.2.2.1.1.0)\n6.3.3.2.2  Capital Charge for  Market Risk\n (WBRC 1 1.2.2.2.2.0)\n The amount must agree with 10 per cent of total risk weighted assets for  \nmarket risk item 6.3.3.1.2\n (10% WBRC 11.2.2.1.2.0)\n6.3.3.3  T otal Capital Available to Meet the Capital Charge for Credit and Operational \nRisks\n (WBRC 1 1.2.2.3.0.0)\n The amount must agree with the sum of total core capital (6.2.2.1) and eligible  \nsupplementary capital (6.2.2.7) of Part II (a) Computation of total capital base above.\n [WBRC1 1.2.1.1.0.0 and 11.2.1.3.0.0 of Part II ( a)]\n6.3.3.4  T otal Capital Base Available to meet Market Risk\n (WBRC 1 1.2.2.4.0.0)\n T otal capital available to meet the capital charge for credit and operational risks (6.3.3.3) \nless capital charge for credit and operational risks (6.3.3.2.1)\n (WBRC 1 1.2.2.3.0.0 - 11.2.2.2.1.0)\n6.3.3.5  T otal Available Tier III Capital\n (WBRC 1 1.2.2.5.0.0)\n6.3.3.5.1  Appr oved Short-term Subordinated Debt\n (WBRC 1 1.2.2.5.1.0)\n Report total amount of approved short-term subordinated debts under the  \nconditions are stated at item 6.2.2.8.\n (as per WBRC 11.2.1.4.0.0)\n6.3.3.5.2  Minimum of 28.5 per  cent of Capital Charge for Market Risk to be met \nby eligible core capital that is not Required for Credit Risk\n (WBRC 1 1.2.2.5.2.0)\n A minimum of about 28\u00bd per cent of market risk needs to be supported by \neligible core capital that is available to support market risk.\n (i) Limit\n  (WBRC 11.2.2.5.2.1)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 25, "year": 2013}, "type": "Document"}
{"page_content": "eligible core capital that is available to support market risk.\n (i) Limit\n  (WBRC 11.2.2.5.2.1)\n  Limit is computed under condition at 6.2.2.8.2 ( i) above. The amount \nmust agree to item 6.3.3.2.2 *28.5%\n  (WBRC 1 1.2.2.2.2.0*28.5%)\n (ii) Amount Utilised\n  (WBRC 1 1.2.2.5.2.2)\n  Minimum utilised amount should be equal to above limit.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 25, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  19\n6.3.3.5.3  Maximum of 250 per cent of eligible core capital that is not Required for \nCredit and Operational Risks\n (WBRC 1 1.2.2.5.3.0)\n Tier III capital will be limited to 250 per cent of a bank's eligible core \ncapital that is available to support market risk after meeting credit risk and \noperational risk.\n (i) Limit\n  (WBRC 11.2.2.5.3.1)\n  Limit is computed under condition at 6.2.2.8.2 ( ii) above. The amount \nmust agree to item 6.3.3.4 *250%\n  (WBRC 1 1.2.2.4.0.0*250%)\n (ii) Amount Utilised\n  (WBRC 1 1.2.2.5.3.2)\n  The utilized amount is computed automatically .\n6.3.3.6  Eligible Tier III Capital\n (WBRC 1 1.2.2.6.0.0)\n Eligible Tier III capital for market risk is computed as follows.\n6.3.3.6.1  Eligible Tier III Capital utilised\n (WBRC 1 1.2.2.6.1.0)\n Total capital charge for market risk (6.3.3.2.2) less eligible core capital \nutilized for market risk [6.3.3.5.2 ( ii)]\n (WBRC 1 1.2.2.2.2.0 - 11.2.2.5.2.2)\n6.3.3.6.2  Eligible but Unutilized Tier III Capital\n The approved short-term subordinated debt (6.3.3.5.1) less eligible Tier III \ncapital utilized (6.3.3.6.1).\n (11.2.2.5.1.0 - 11.2.2.6.1.0)\n6.4 Part III ( a) \u2013 Computation of Risk-weighted Amount for Credit Risk\n6.4.1  General Rules for  Measuring Credit Risk Based on the Standardised Approach (SA)\n6.4.1.1  Under the SA, the rating assigned by the eligible external credit assessment institutions  \n(ECAIs) will largely support the measure of credit risk. Banks may rely upon the ratings \nassigned by the ECAIs recognised by CBSL (See paragraph 6.4.2) for assigning risk \nweights for capital adequacy purposes as per the mapping furnished in these guidelines.\n6.4.1.2  The risk weighting of claims will be as described in paragraphs 6.4.3 (under specific  \nrules for measuring credit risk).\n6.4.1.3  Claims (exposures) on a counterpart would include placements with banks, investments, \nloans and advances or any other credit exposure.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 26, "year": 2013}, "type": "Document"}
{"page_content": "loans and advances or any other credit exposure.\n6.4.1.4  On-balance sheet claims (exposures) would be risk weighted applying the risk weight as  \ngiven in paragraphs 6.4.3 while off-balance sheet items would continue to be converted \nto credit equivalents using the credit conversion factors given in paragraph 6.5 and \nthereafter risk weighted according to the risk weight applicable to the counterpart.\n6.4.1.5  All exposures should be risk-weighted net of specific provisions and interest in suspense \nthat has been charged to the respective customer account.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 26, "year": 2013}, "type": "Document"}
{"page_content": "20 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.4.2  External Credit Assessments\n6.4.2.1  Recognition of Eligible Cr edit Rating Agencies\n6.4.2.1.1  The Revised Capital Adequacy Framework requires recognizing ECAIs and \ndeveloping a mapping process to assign the ratings issued by eligible credit \nrating agencies to the risk weights available under the Standardised Approach. \nIn accordance with the principles laid down in the revised framework, CBSL \nhas identified the following two credit rating agencies operating in Sri Lanka \nfor the purposes of risk weighting claims by banks for capital adequacy \npurposes:\n (i) Fitch Ratings Lanka Ltd. and\n (ii) Lanka Rating Agency Ltd.\n6.4.2.1.2  The following internationally recognized credit ratings agencies are also  \naccepted as ECAIs.\n (i) Moody\u2019 s\n (ii) Standard and Poor \u2019s and\n (iii) Fitch Ratings\n6.4.2.1.3  Banks are required to obtain the prior approval of CBSL  for the use of other \nECAIs.\n6.4.2.2  Scope of Application of External Ratings\n6.4.2.2.1  Banks should use the chosen ECAIs and their ratings consistently for each  \ntype of claim, for both risk weighting and risk management purposes. Banks \nwill not be allowed to \u201ccherry pick\u201d the assessments provided by different \nECAIs.\n6.4.2.2.2  Banks shall not use one ECAI\u2019s rating for one exposure, while using another \nECAI\u2019s rating for another exposure to the same counterpart, unless the \nrespective exposures are rated by only one of the chosen ECAIs, whose \nratings the bank has decided to use. External assessments for one entity \nwithin a corporate group cannot be used to risk weight other entities within \nthe same group.\n6.4.2.3  Mapping Pr ocess\n6.4.2.3.1  The ratings issued by the eligible ECAIs have been mapped to the appropriate  \nrisk weights applicable as per the Standardised Approach under the Revised \nFramework. The rating risk weight - mapping furnished in the tables below \nshall be adopted by all banks:\nTable 1", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 27, "year": 2013}, "type": "Document"}
{"page_content": "shall be adopted by all banks:\nTable 1\nMapping of Notations of the Credit Rating Agencies in Sri \nLanka\nFitch Ratings \nLankaLanka Rating \nAgencyRating Scale\nof CAR\nAA(sri) AAA AAA\nAA+(sri) AA1 AA+\nAA(sri) AA2 AA\nAA-(sri) AA3 AA-\nA+(sri) A1 A+\nA(sri) A2 A\nA-(sri) A3 A-\n(Contd. on next page)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 27, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  21\nFitch Ratings \nLankaLanka Rating \nAgencyRating Scale\nof CAR\nBBB+(sri) BBB1 BBB+\nBBB(sri) BBB2 BBB\nBBB-(sri) BBB3 BBB-\nBB+(sri) BB1 BB+\nBB(sri) BB2 BB\nBB-(sri) BB3 BB-\nB+(sri) B1 B+\nB(sri) B2 B\nB-(sri) & Lower B3 & Lower B- & Lower\nTable 2\nMapping of Notations of the International Credit Rating Agencies\nStandard and \nPoor\u2019sMoody\u2019s Fitch Ratings Rating Scale of \nCAR\nAAA Aaa AAA AAA\nAA+ Aa1 AA+ AA+\nAA Aa2 AA AA\nAA- Aa3 AA- AA-\nA+ A1 A+ A+\nA A2 A A\nA- A3 A- A-\nBBB+ Baa1 BBB+ BBB+\nBBB Baa2 BBB BBB\nBBB- Baa3 BBB- BBB-\nBB+ Ba1 BB+ BB+\nBB Ba2 BB BB\nBB- Ba3 BB- BB-\nB+ B1 B+ B+\nB B2 B B\nB- & Lower B3 & Lower B- & Lower B- & Lower\nTable 3\nMapping of Short Term Ratings\nShort term ratingsRisk\nweightsLanka Rating \nAgencyStandard and \nPoor\u2019sMoody\u2019s Fitch Ratings \nL - 1 A - 1+/A - 1 P - 1 F1+/ F1 20%\nL - 2 A - 2+/A - 2 P - 2 F2 50%\nL - 3 A - 3+/A - 3 P - 3 F3 100%\nNP Below A - 3 NP Below F3 150%(Contd. on last page)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 28, "year": 2013}, "type": "Document"}
{"page_content": "22 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.4.2.4  Short-T erm Ratings\n6.4.2.4.1  Short-term assessments may only be used for short-term claims against banks  \nand corporates.\n6.4.2.4.2  For risk-weighting purposes, short-term ratings are deemed to be issue  \nspecific. They can only be used to derive risk weights for claims arising from \nthe rated facility. They cannot be generalised to other short-term claims. In no \nevent can a short-term rating be used to support a risk weight for an unrated \nlong-term claim.\n6.4.2.4.3  If a short-term rated facility attracts a 50 per cent risk weight, unrated   \nshort-term claims cannot attract a risk weight lower than 100 per cent. If an \nissuer has a short-term facility with an assessment that warrants a risk weight \nof 150 per cent, all unrated claims, whether long term or short term, should \nalso receive a 150 per cent risk weight, unless the bank uses recognized CRM \ntechniques for such claims.\n6.4.2.4.4  The above risk weight mapping of both long term and short-term ratings of  \nthe chosen domestic rating agencies would be reviewed annually by CBSL.\n6.4.2.5  Use of Unsolicited Ratings\n A  rating would be treated as solicited only if the issuer of the instrument has requested \nthe credit rating agency for the rating and has accepted the rating assigned by the \nagency. As a general rule, banks should use only solicited rating from the chosen ECAIs.  \nNo ratings issued by the credit rating agencies on an unsolicited basis should be \nconsidered for risk weight Computation as per the Standardised Approach.\n6.4.2.6  Issuer versus Issues Assessment\n Where a bank\u2019s exposure is to a particular issue that has an issue-specific assessment, the \nrisk weight of the claim will be based on this assessment.\n6.4.2.7  Use of Multiple Rating Assessments\n Banks shall be guided by the following in respect of exposures/obligors having multiple", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 29, "year": 2013}, "type": "Document"}
{"page_content": "Banks shall be guided by the following in respect of exposures/obligors having multiple \nratings from the eligible ECAIs chosen by the bank for the purpose of risk weight \nComputation:\n6.4.2.7.1  If there is only one rating by an eligible credit rating agency for a particular  \nclaim, that rating would be used to determine the risk weight of the claim.\n6.4.2.7.2  If there are two ratings accorded by eligible credit rating agencies, which map  \ninto different risk weights, the higher risk weight should be applied.\n6.4.2.7.3  If there are three or more ratings accorded by eligible credit rating agencies  \nwith different risk weights, the ratings corresponding to the two lowest risk \nweights should be referred to and the higher of those two risk weights should \nbe applied, i.e., the second lowest risk weight.\n6.4.3  Specific Rules for  Measuring Credit Risk Based on the Standardised Approach (SA)\n6.4.3.1  T otal Risk-weighted amount for Credit Risk\n (WBRC 1 1.3.1.0.0.0)\n The amount must agree to sum of total amount of on-balance sheet items and total amount  \nof credit equivalent items (from 6.4.3.1.1 to 6.4.3.1.14) after applying the specific risk \nweight assigned.\n (WBRC 11.3.1.1.0.0 to11.3.1.14.0.0)\n6.4.3.1.1  Claims on Government of Sri Lanka and Central Bank of Sri Lanka\n (WBRC 1 1.3.1.1.0.0)\n All claims on Government of Sri Lanka and Central Bank of Sri Lanka are", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 29, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  23\nrisk-weighted at zero per cent. The amount must agree to sum of items  \n(i) and (ii)\n (WBRC 1 1.3.1.1.1.0 to 11.3.1.1.2.0)\n (i) Claims on Government of Sri Lanka\n  (WBRC 1 1.3.1.1.1.0)\n  All claims on Government of Sri Lanka are risk-weighted at 0%.\n (ii) Claims on Central Bank of Sri Lanka\n  (WBRC 1 1.3.1.1.2.0)\n  All claims on Central Bank of Sri Lanka are risk-weighted at 0%.\n6.4.3.1.2  Claims on For eign Sovereigns and their Central Banks\n (WBRC 1 1.3.1.2.0.0)\n Exposures on foreign sovereigns and their central banks will attract risk  \nweights as per the rating assigned to those sovereigns/sovereign exposures by \ninternational rating agencies as given in the table below. The amount must \nagree to sum of following items from (i) to (vi).\n (WBRC 1 1.3.1.2.1.0 to 11.3.1.2.6.0)\nTable 4\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.2.1.0 AAA to AA- 0%\n(ii) 11.3.1.2.2.0 A+ to A- 20%\n(iii) 11.3.1.2.3.0 BBB+ to BBB- 50%\n(iv) 11.3.1.2.4.0 BB+ to B 100%\n(v) 11.3.1.2.5.0 Below B- 150%\n(vi) 11.3.1.2.6.0 Unrated 100%\n6.4.3.1.3  Claims on Public Sector  Entities (PSEs)\n (WBRC 1 1.3.1.3.0.0)\n All performing claims  on domestic public sector entities (including public \ncorporations, statutory boards, provincial authorities, local government \nbodies, etc.) and claims on foreign PSEs will be risk weighted in a manner \nsimilar to claims on corporates as given in the table below. The amount must \nagree to sum of following items from ( i) to (v ).\n (WBRC 1 1.3.1.3.1.0 to 11.3.1.2.5.0)\nTable 5\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.3.1.0 AAA to AA 20%\n(ii) 11.3.1.3.2.0 A+ to A- 50%\n(iii) 11.3.1.3.3.0 BBB+ to BB- 100%\n(iv) 11.3.1.3.4.0 Below BB- 150%\n(v) 11.3.1.3.5.0 Unrated 100%", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 30, "year": 2013}, "type": "Document"}
{"page_content": "24 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.4.3.1.4  Claims on Official Entities and Multilateral Development Banks (MDBs)\n (WBRC 1 1.3.1.4.0.0)\n The amount must agree with the sum of the following items from ( i) to (iii ).\n (WBRC 1 1.3.1.4.1.0 to 11.3.1.4.6.0)\n (i) Exposures on following official entities will be assigned zero risk  \nweight:\n (a) Bank for International Settlements (BIS)\n (b) International Monetary Fund (IMF)\n (c) European Central Bank (ECB)\n (d) European Community (EC)\n (ii) The following Eligible MDBs will be assigned a zero risk weight:\n (a) The World Bank Group comprising of the International Bank for \nReconstruction and Development (IBRD) and the International \nFinance Corporation (IFC)\n (b) The Asian Development Bank (ADB)\n (c) The African Development Bank (AFDB)\n (d) The European Bank for Reconstruction and Development (EBRD)\n (e) The Inter -American Development Bank (IADB)\n (f) The European Investment Bank (EIB)\n (g) The European Investment Fund (EIF)\n (h) The Nordic Investment Bank (NIB)\n (i) The Caribbean Development Bank (CDB)\n (j) The Islamic Development Bank (IDB)\n (k) The Council of Europe Development Bank (CEDB)\n (l) The International Finance Facility for Immunization (IFFIm)\n (iii) The risk weight applicable to claims on other MDBs will depend on the \nexternal rating  assigned for each MDBs as follows:\nTable 6\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.4.1.0 BIS,IMF and MDBs 0%\n(ii) 11.3.1.4.2.0 AAA to AA- 20%\n(iii) 11.3.1.4.3.0 A+ to BBB- 50%\n(iv) 11.3.1.4.4.0 BB+ to B- 100%\n(v) 11.3.1.4.5.0 Below B- 150%\n(vi) 11.3.1.4.6.0 Unrated 100%\n6.4.3.1.5  Claims on Banks\n (WBRC 1 1.3.1.5.0.0 )\n Total performing claims on banks denominated in LKR and foreign currency. \nThe amount must agree to sum of total rupee claims and foreign currency \nclaims.\n (WBRC 1 1.3.1.5.1.0 + 11.3.1.5.2.0 + 11.3.1.5.3.0)\n Short-Term Claims:  In order to qualify for the preferential treatment for", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 31, "year": 2013}, "type": "Document"}
{"page_content": "Short-Term Claims:  In order to qualify for the preferential treatment for \nshort-term claims, they should have an original contractual maturity of  \n3 months or less, and should not be rolled over.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 31, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  25\n Branches of banks incorporated abroad:  The rating applicable to the Head \nOffice may be used as the rating applicable to the particular branch, if the \nbranch is not rated locally.\n (i) Claims on Banks: Rupee Exposures less than 3 months\n  (WBRC 1 1.3.1.5.1.0)\n  All performing claims  on all banks (short-term) including LCBs and \nLSBs, excluding investment in equity shares and other instruments \neligible for capital status, denominated in LKR would be risk weighted \nbased on their external credit assessment as follows:\n  The amount must agree with the sum of the following items from   \n(i) to (iv).\n  (WBRC 1 1.3.1.5.1.1 to 11.3.1.5.1.4)\nTable 7\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.5.1.1 AAA to BBB- 20%\n(ii) 11.3.1.5.1.2 BB+ to B- 50%\n(iii) 11.3.1.5.1.3 Below B- 150%\n(iv) 11.3.1.5.1.4 Unrated 100%\n (ii) Claims on Banks: Foreign Currency Exposures less than 3 months\n  (WBRC 1 1.3.1.5.2.0)\n  All performing claims  denominated in foreign currency  on banks \n(short-term) will be risk weighted based on their external credit \nassessment as given in the table below.\n  The amount must agree with the sum of the following items from   \n(i) to (v ).\n  (WBRC 1 1.3.1.5.2.1 to 11.3.1.5.2.5)\nTable 8\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.5.2.1 AAA to A- 20%\n(ii) 11.3.1.5.2.2 BBB+ to BBB- 50%\n(iii) 11.3.1.5.2.3 BB+ to B- 100%\n(iv) 11.3.1.5.2.4 Below B- 150%\n(v) 11.3.1.5.2.5 Unrated 100%\n (iii) Claims on Banks: Rupee and Foreign Currency Exposures more than \n3 months\n  (WBRC 1 1.3.1.5.3.0)\n  All performing claims  denominated in rupee and foreign currency  \non banks (more than 3 months) will be risk weighted based on their \nexternal credit assessment as given in the table below.\n  The amount must agree with the sum of the following items from   \n(i) to (v ).\n  (WBRC 1 1.3.1.5.3.1 to 11.3.1.5.3.5)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 32, "year": 2013}, "type": "Document"}
{"page_content": "26 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nTable 9\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.5.3.1 AAA to AA- 20%\n(ii) 11.3.1.5.3.2 A+ to BBB- 50%\n(iii) 11.3.1.5.3.3 BB+ to B- 100%\n(iv) 11.3.1.5.3.4 Below B- 150%\n(v) 11.3.1.5.3.5 Unrated 100%\n6.4.3.1.6  Claims on Financial Institutions\n (WBRC 1 1.3.1.6.0.0)\n Total performing claims  on non-bank financial institutions. However, \ninvestment in equity shares and other instruments eligible for capital status \nin the financial institutions are stated in paragraph 6.2.3 and 6.2.4 should be \nexcluded from here.\n (WBRC 1 1.3.1.6.1.0 + 11.3.1.6.2.0)\n (i) Claims on Primary Dealers/Finance Companies/Specialised Leasing \nCompanies\n  (WBRC 1 1.3.1.6.1.0)\n  All performing claims  on following institutions.\n  Primary Dealers:  Registered under the Local Treasury Bills Ordinance \n(Primary Dealers), Regulations No.1 of 2002.\n  Finance Companies:  Registered under the Finance Companies Act, \nNo.78 of 1988, as amended.\n  Specialised Leasing Companies:  Registered under the Finance \nLeasing Act, No.56 of 2000.\n  The amount must agree with the sum of the following items from   \n(i) to (v ).\n  (WBRC 1 1.3.1.6.1.1 to 11.3.1.6.1.5)\nTable 10\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.6.1.1 AAA to AA- 20%\n(ii) 11.3.1.6.1.2 A+ to BBB- 50%\n(iii) 11.3.1.6.1.3 BB+ to B- 100%\n(iv) 11.3.1.6.1.4 Below B- 150%\n(v) 11.3.1.6.1.5 Unrated 100%\n (ii) Claims on Other Financial Institutions\n  (WBRC 1 1.3.1.6.2.0)\n  All performing claims  on other financial institutions.\n  The amount must agree with the sum of the following items from   \n(i) to (v ).\n  (WBRC 1 1.3.1.6.2.1 to 11.3.1.6.2.5)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 33, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  27\nTable 11\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.6.2.1 AAA to AA- 20%\n(ii) 11.3.1.6.2.2 A+ to A- 50%\n(iii) 11.3.1.6.2.3 BBB+ to BB- 100%\n(iv) 11.3.1.6.2.4 Below BB- 150%\n(v) 11.3.1.6.2.5 Unrated 100%\n6.4.3.1.7  Claims on Corporates\n (WBRC 1 1.3.1.7.0.0)\n All performing claims  on corporates shall be risk weighted as per the ratings \nassigned.\n Banks can, with prior approval of CBSL, exercise the option to rate all \ncorporate customers at 100 per cent. Once decided and approved by CBSL \nthe banks should apply a single consistent approach.\n The amount must agree with the sum of the following items from ( i) to (v ).\n (WBRC 1 1.3.1.7.1.0 to 11.3.1.7.5.0)\nTable 12\nItem WBRC Credit Assessment Risk Weight\n(i) 11.3.1.7.1.0 AAA to AA- 20%\n(ii) 11.3.1.7.2.0 A+ to A- 50%\n(iii) 11.3.1.7.3.0 BBB+ to BB- 100%\n(iv) 11.3.1.7.4.0 Below BB- 150%\n(v) 11.3.1.7.5.0 Unrated 100%\n6.4.3.1.8  Retail Claims\n (WBRC 1 1.3.1.8.0.0)\n All performing  retail claims include:  Retail claims that qualify for \nregulatory capital purposes and retail claims that do not qualify for regulatory \ncapital purposes.\n However, the following shall be excluded from the retail portfolio:\n (a) Investments in securities such as bonds and equities (to be treated as  \ninvestments).\n (b) Residential housing loans secured by mortgages over the residential  \nproperty that qualify for inclusion as claims secured by residential \nproperty (refer WBRC 1.3.1.9.0.0).\n The amount must agree with the sum of the retail claims that qualify  for \nregulatory capital purposes and retail claims that do not qualify  for regulatory \ncapital purposes.\n (WBRC 1 1.3.1.8.1.0 to 11.3.1.8.2.0)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 34, "year": 2013}, "type": "Document"}
{"page_content": "28 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (i) Retail claims that qualify for regulatory capital purposes\n  (WBRC 1 1.3.1.8.1.0 )\n  Performing claims  that meet the criteria given below qualify for inclusion \nin the regulatory retail portfolio. All such exposures qualify for a 75 per \ncent risk weight.\n  The qualifying criteria for the Regulatory Retail Portfolio  (applicable \nto both the retail and SME portfolios):\n (a) Orientation Criterion  \u2013 The exposure should be to an individual  \nperson or persons or to a SME.\n (b) Product Criterion \u2013 The exposure should be of one of the following \nproduct types. Both fund based and non-fund based facilities to be \nincluded:\n\u2022 Revolving credit and lines of credit including overdrafts and \ncredit cards\n\u2022 Personal term loans and leases ( e.g., instalment loans, vehicle \nloans and leases, student and educational loans, personal \nfinance)\n\u2022 SME facilities.\n (c) Granularity Criterion  \u2013 The regulatory retail portfolio must be \nsufficiently diversified to a degree that reduces the risks in the \nportfolio. In order to meet this criterion,\n\u2022  No aggregate exposure without considering CRM, to one \ncounterpart should exceed 0.2 per cent of the overall retail \nportfolio (excluding any non-performing retail/SME claims).\n\u2022 \u201cT o one counterpart\u201d means one or several entities that \nconstitute a single beneficiary, e.g.: in the case of a small \nbusiness affiliated to another small business, the limit would \napply to the bank\u2019s aggregate exposure on both businesses.\n (d) Low value of Individual Exposures \u2013\n\u2022 Individual Exposures:  The maximum aggregate retail exposure \n(not taking any CRM into account) to one counterpart cannot \nexceed:\n\u2013  the lower of 0.4 per cent of capital base  (as included in the \ncomputation as at the reporting date) or Rs.10 million  at the \ntime of first granting.\n\u2013 This criterion will be applicable for a period of 3 years from  \nadoption.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 35, "year": 2013}, "type": "Document"}
{"page_content": "\u2013 This criterion will be applicable for a period of 3 years from  \nadoption.\n\u2013 From 01.01.201 1, the criterion would be the lower of 0.2 per \ncent or Rs.10 million.\n\u2022 SME Exposures:\n\u2013  The maximum exposure in the case of SME loans would be \nRs.35 million at the time of first granting.\n\u2013 In order to qualify as an SME, the firm\u2019s annual turnover \nshould not be more than Rs.140 million.\n\u2013 The annual turnover should be based on the latest available  \naudited financial statements at the time of granting the \nfacilities.\n\u2013 If audited financial statements are not available, the draft  \naccounts may be used. However, the audited financial \nstatements should be obtained during the year.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 35, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  29\n\u2013 The qualifying criteria is given above should be reviewed in  \nrespect of each financial year.\n (ii) Retail claims that do not qualify for regulatory capital purposes\n  (WBRC 1 1.3.1.8.2.0 )\n  Claims that not qualify for  inclusion in the regulatory retail portfolio:\n  Performing claims  that do not meet the criteria given above do not qualify \nfor inclusion in the regulatory retail portfolio. All such exposures \nqualify for a 100 per cent risk weight.\n6.4.3.1.9  Claims Secur ed by Residential Property\n (WBRC 1 1.3.1.9.0.0)\n All performing claims secured by residential property include: Claims \nthat qualify for regulatory capital purposes and claims that do not qualify for \nregulatory capital purposes.\n However , the exposures secured by mortgages on commercial real estates  \nshall be excluded from here.\n The amount must agree with the sum of the claims secured by residential \nproperty that qualify for regulatory capital purposes and claims secured by \nresidential property  that do not qualify  for regulatory capital purposes.\n (WBRC 1 1.3.1.9.1.0 to 11.3.1.9.2.0)\n (i) Claims that qualify for regulatory capital purposes\n  (WBRC 1 1.3.1.9.1.0)\n (a) Subject to conditions below , residential housing loans fully secured \nby a primary mortgage  over such residential property that is or \nwill be occupied by the borrower, or rented, qualify for a risk \nweight of 50 per cent .\n  The claims should strictly meet the following qualifying criteria  \nto be able to use the preferential risk weight\n\u2013 A  margin of at least 25 per cent on the value of the property \nbased on the latest valuation report\n\u2013 Valuation of property:  valuation of property is carried out by \nan external independent valuer or current internal assessment \nof the value of the properties subject to the conditions stated \nin the Directions on Classification of Advances and Specific \nProvisions issued under Banking Act.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 36, "year": 2013}, "type": "Document"}
{"page_content": "in the Directions on Classification of Advances and Specific \nProvisions issued under Banking Act.\n (b) Mortgages other than primary mortgages  will qualify for the same \nrisk weight, subject to the above conditions, if:\n\u2013 The mortgage is with the same bank\n\u2013 The purpose of the loan is for residential purposes.\n (ii) Claims that do not qualify for regulatory capital purposes\n  (WBRC 1 1.3.1.9.2.0)\n  Performing claims  that do not meet the criteria given above do not qualify \nfor inclusion in the regulatory residential portfolio. All such exposures \nqualify for a 100 per cent risk weight.\n6.4.3.1.10  Claims Secur ed by Commercial Real Estate\n (WBRC 1 1.3.1.10.0.0)\n Commercial real estate exposure is defined as  exposures secured by \nmortgages on commercial real estate  (office buildings, multi-purpose or \nmulti-tenanted commercial premises, multi-family residential buildings,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 36, "year": 2013}, "type": "Document"}
{"page_content": "30 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nindustrial or warehouse space, hotels, land acquisition, land development and \nconstruction).\n Commercial real estate exposures, as defined above will attract a risk weight \nof 100 per cent.\n6.4.3.1.11  Non-Performing Assets (NPAs)\n (WBRC 1 1.3.1.11.0.0)\n The unsecured portion of NPAs, other than a qualifying residential mortgage \nloan which is addressed in item 6.4.2.1.12, net of specific provision will be \nrisk weighted as items ( i) and (ii) below.\n For the purpose of computing the level of specific provisions  of NPAs \nfor deciding the risk-weighting, all funded NPA exposures of a single \ncounterparty (without netting the value of the eligible collateral under CRM) \nshould be reckoned in the denominator.\n For the purpose of defining the secured portion of the NPA , eligible \ncollateral will be the same as recognised for credit risk mitigation purposes. \nHence, other forms of collateral like land, buildings, plant, machinery, \ncurrent assets, etc., will not be reckoned while computing the secured portion \nof NPAs for capital adequacy purposes.\n The amount must agree with the sum of the following items ( i) and (ii).\n (WBRC 1 1.3.1.11.1.0 + 11.3.1.11.2.0)\n (i) Specific provisions are equal or more than 20 per cent\n  (WBRC 1 1.3.1.11.1.0)\n  100 per cent risk weight when specific provisions are equal or more than \n20 per cent of the outstanding amount of the NPA.\n (ii) Specific provisions are less than 20 per cent\n  (WBRC 1 1.3.1.11.2.0 )\n  150 per cent risk weight  when specific provisions are less than 20 per \ncent of the outstanding amount of the NPA.\n6.4.3.1.12  Non-Performing Assets Secured by Residential property\n (WBRC 1 1.3.1.12.0.0)\n The unsecured of portion NPAs  (without netting the value of property \nmortgage), net of specific provision  will be risk weighted as items ( i)  \nand (ii):\n For the purpose of computing the level of specific provisions  in NPAs", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 37, "year": 2013}, "type": "Document"}
{"page_content": "and (ii):\n For the purpose of computing the level of specific provisions  in NPAs \nfor deciding the risk-weighting, all funded NPA exposures of a single \ncounterparty (without netting the value of property mortgage) should be \nreckoned in the denominator.\n The amount must agree with the sum of the following items ( i) and (ii).\n (WBRC 1 1.3.1.12.1.0 + 11.3.1.12.2.0)\n (i) Specific provisions are equal or more than 20 per cent\n  (WBRC 1 1.3.1.12.1.0)\n  50 per cent risk weight  when specific provisions are equal or more than \n20 per cent of the outstanding amount of the NPA.\n (ii) Specific provisions are less than 20 per cent\n  (WBRC 1 1.3.1.12.2.0 )\n  100 per cent risk weight  when specific provisions are less than 20 per \ncent of the outstanding amount of the NPA.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 37, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  31\n6.4.3.1.13  Higher -Risk Categories\n (WBRC 1 1.3.1.13.0.0)\n Exposures to the following segments, which are considered as high-risk  \nexposures, will attract a higher risk weight of 150 per cent:\n (i) V enture capital funds/companies\n (ii) Private equity investments\n6.4.3.1.14  Cash Items and Other  Assets\n (WBRC 1 1.3.1.14.0.0)\n The amount must agree with the sum of cash items ( i) and Other Assets (ii)\n (WBRC 1 1.3.1.14.1.0 to 11.3.1.14.2.0)\n (i) Cash Items\n  (WBRC 1 1.3.1.14.1.0)\n  T otal of cash items from (a) to (c)\n (a) Notes and Coins\n   (WBRC 1 1.3.1.14.1.1)\n  Local currency notes and coins held by tellers, in ATMs, in vault  \nand petty cash.\n  Risk weight is 0 per cent\n (b) Gold and Bullion held in own vault\n   (WBRC 1 1.3.1.14.1.2)\n  Gold and bullion held in the bank\u2019s vaults. Gold items held in safe \ncustody should be excluded.\n  Risk weight is 0 per cent\n (c) Cash Items in the pr ocess of Collection\n  (WBRC 1 1.3.1.14.1.3)\n  Cheques, drafts and other cash items, such as money orders, postal  \norders drawn on banks and other authorized institutions and paid \nimmediately on presentation. Trade bills, such as import bills and \nexport bills, in the process of collection should be excluded from \nthis item and considered as loans and advances.\n  Risk weight is 20 per cent.\n (ii) Other  Assets\n  (WBRC 1 1.3.1.14.2.0)\n  T otal of items ( a) and (b ) below.\n (a) Fixed Assets\n  (WBRC 1 1.3.1.14.2.1)\n  The item includes bank premises, immovable property , machinery \nand equipment, motor vehicles, furniture and fittings and other \nfixed assets, reported at cost or at revalued amount, net of \naccumulated depreciation will attract a risk weight of 100 per \ncent.\n (b) Other  Assets/Exposures\n  (WBRC 1 1.3.1.14.2.2)\n  All other assets/exposures which are not specified elsewhere will \nattract a uniform risk weight of 100 per cent.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 38, "year": 2013}, "type": "Document"}
{"page_content": "32 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.5 Part III ( b) \u2013 Computation of Credit Equivalent Amount of Off-Balance Sheet Items\n6.5.1  General Instructions\n6.5.1.1  The risk-weighted amount of an of f-balance sheet item that gives rise to credit exposure \nis generally calculated by means of a two-step process:\n6.5.1.1.1  The notional amount of the transaction is converted into a credit equivalent  \namount, by multiplying the amount by the specified credit conversion factor \nor by applying the current exposure method, and\n6.5.1.1.2  The resulting credit equivalent amount is multiplied by the risk weight  \napplicable to the counterpart or type of asset.\n6.5.1.2  Where the off-balance sheet item is secured by eligible collateral or guarantee, the CRM \nguidelines detailed in paragraph 6.6 may be applied.\n6.5.2  The cr edit conversion factors to be used will be as follows:\n6.5.2.1  Off-Balance Sheet Items:\n (WBRC 1 1.3.2.0.0.0)\n The exposure on of f-balance sheet items is to be included in the computation of the risk \nweighted capital ratio. The conversion of the credit risk inherent in each off-balance \nsheet item would be converted into an on-balance sheet credit equivalent by multiplying \nthe principal amount by a credit conversion factor. The credit equivalent amount would \nthen be weighted according to the corresponding asset item.\n The amount must agree with the sum of the principal amount of of f-balance sheet items \nand credit equivalent of off-balance sheet items from 6.5.2.1.1 to 6.5.2.1.10.\n (WBRC 1 1.3.2.1.0.0 to11.3.2.10.0.0)\n6.5.2.1.1  Direct Credit Substitutes\n (WBRC 1 1.3.2.1.0.0)\n Total direct credit substitutes of the following items from ( i) to (iv).\n Conversion Factor 100 per cent\n (WBRC 1 1.3.2.1.1.0 to 11.3.2.1.4.0)\n (i) General Guarantees of Indebtedness\n  (WBRC 1 1.3.2.1.1.0)\n  General guarantees of indebtedness where the risk of loss in the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 39, "year": 2013}, "type": "Document"}
{"page_content": "(WBRC 1 1.3.2.1.1.0)\n  General guarantees of indebtedness where the risk of loss in the  \ntransaction may crystallise into a direct liability and become a direct \nclaim on the counterparty. These include Guarantees in respect of \ncounterparties like insurance agents, sales agents, etc., to cover \nany non-payment by them of premium, sales proceeds, etc. to their \nbeneficiaries. Bank Guarantees in favour of customs would cover any \nnon-payment of customs duties by their counterparties.\n (ii) Stand-by LCs serving as Financial Guarantees\n  (WBRC 1 1.3.2.1.2.0)\n  Stand-by Letters of Credit, which are direct, credit substitutes where  \nthe risk of loss in the transaction is equivalent to that of a direct \nclaim on the counterparty. This includes stand-by Letters of Credit \nserving as financial guarantees for loans, securities and other financial \nliabilities.\n (iii) Bank Acceptances\n  (WBRC 1 1.3.2.1.3.0)\n  Liabilities arising from acceptances on accommodation of bills but  \nexcludes bills that have been discounted by the bank itself. Risk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 39, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  33\nparticipation and other similar commitments undertaken to repay the \nfinancial obligation of a customer, on his failure to do so, should be \nincluded.\n (iv) Others\n  (WBRC 1 1.3.2.1.4.0)\n  Any other obligation which carries the same risk of loss in the transaction  \nand is equivalent to that of a direct claim on the counterparty.\n6.5.2.1.2  Transaction-Related Contingencies\n (WBRC 11.3.2.2.0.0)\n Total transaction-related contingencies of following items from ( i) to (iii ).\n Conversion Factor 50 per cent\n (WBRC 11.3.2.2.1.0 to 11.3.2.2.3.0)\n (i) Performance Bonds, Bid Bonds & Warranties\n  (WBRC 1 1.3.2.2.1.0)\n  T ransaction-related contingent items such as Performance Bonds, \nBid Bonds and Warranties, where the risk of loss arises from an \nirrevocable obligation to pay a third party, the non-financial obligation \nof the customer upon his failure to fulfil obligations under a contract \nor a transaction. Such contingencies would crystallise into actual \nliabilities dependent upon the occurrence or non-occurrence of an \nevent other than that of a default in payment by the counterparty.\n (ii) Stand-by LCs r elated to particular transactions\n  (WBRC 1 1.3.2.2.2.0)\n  Contingent liabilities relating to particular transactions. Here too, there  \nis a likelihood of the contingencies crystallizing into actual liabilities \ndepending upon the occurrence or non-occurrence of an event other \nthan that of a default in payment by a counterparty.\n (iii) Others\n  (WBRC 1 1.3.2.2.3.0)\n  Other contingent liabilities arising from an irrevocable obligation to \npay a third party, the non-financial obligation of a customer upon his \nfailure to fulfil such obligation or terms under contract or transaction.\n6.5.2.1.3  Short-T erm Self Liquidating Trade-Related Contingencies\n (WBRC 1 1.3.2.3.0.0)\n Total short-term self liquidating trade-related contingencies of following \nitems from ( i) to (iv).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 40, "year": 2013}, "type": "Document"}
{"page_content": "items from ( i) to (iv).\n Conversion Factor 20 per cent\n (WBRC 1 1.3.2.3.1.0 to 11.3.2.3.4.0)\n (i) Shipping Guarantees\n  (WBRC 1 1.3.2.3.1.0)\n  Guarantees issued by the reporting institution to customers where the  \nreporting institution agrees to indemnify fully, to a named shipping \nagent, against all liabilities arising from the release of goods without \nproduction of Bills of Lading and/or other shipping documents by the \nreceiving party.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 40, "year": 2013}, "type": "Document"}
{"page_content": "34 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (ii) Documentary Letters of Cr edit\n  (WBRC 1 1.3.2.3.2.0)\n  Documentary credits collateralised by the underlying shipments which  \nare short-term self-liquidating and trade-related transactions.\n (iii) T rade-Related Acceptances\n  (WBRC 1 1.3.2.3.3.0)\n  Liabilities arising from acceptances that are based on a specific trade  \ntransaction either domestic or foreign e.g.: Letters of Credit.\n (iv) Others\n  (WBRC 1 1.3.2.3.4.0)\n  Contingent liabilities arising from short-term self-liquidating trade  \nrelated obligations.\n6.5.2.1.4  Sale and Repur chase agreements and Assets sale with recourse where the \ncredit risk remains with the bank\n (WBRC 1 1.3.2.4.0.0)\n Total of following items from ( i) to (vi).\n Conversion Factor 100 per cent\n (WBRC 1 1.3.2.4.1.0 to 11.3.2.4.6.0)\n () Sale and Repur chase Agreements\n  (WBRC 1 1.3.2.4.1.0)\n  Sale and Repurchase Agreement (REPO) is an agreement whereby a \nbank sells an asset to a third party with a commitment to repurchase \nit at an agreed price on an agreed future date. Purchase and Resale \nAgreements (Reverse REPOS) should be considered as collateralised \nloans. The risk is to be measured as an exposure to the counterparty \nunless the underlying asset has been reported as an on-balance sheet \nitem where the risk weight appropriate to the underlying asset should \nbe used.\n (ii) Housing Loans Sold with Recourse\n  (WBRC 1 1.3.2.4.2.0)\n  The amount of housing loans sold to a counterparty with recourse  \nwhere the credit risk remains with the Bank.\n (iii) Other  Assets Sold with Recourse\n  (WBRC 1 1.3.2.4.3.0)\n  Assets sold with recourse where the credit risk remains with the  \nreporting institution. The holder of the asset is entitled to put the assets \nback to the reporting institution within an agreed period or under \ncertain prescribed circumstances \u2013 e.g.: deterioration in the value or \ncredit quality of the asset concerned.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 41, "year": 2013}, "type": "Document"}
{"page_content": "credit quality of the asset concerned.\n (iv) Forward Assets Purchases\n  (WBRC 1 1.3.2.4.4.0 )\n  Co mmitment to purchase, at a specified future date and/or on  \npre-arranged terms, a loan, security or other asset from another party.\n (v) Partly-Paid Shar es/Securities\n  (WBRC 1 1.3.2.4.5.0)\n  Unpaid amounts on partly-paid shares and securities where the issuer  \nmay call upon the bank to pay at a pre-determined or unspecified date \nin the future.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 41, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  35\n (vi) Others\n  (WBRC 1 1.3.2.4.6.0)\n  Placements of forward deposits and other commitments with certain  \ndrawdown. A forward deposit is an agreement between two parties \nwhereby one will place and the other will receive, at a pre-determined \nfuture date, a deposit, at an agreed rate of interest. A commitment to \nplace a forward deposit should be reported under this item and weighted \naccording to the risk-weight appropriate to the counterparty.\n6.5.2.1.5  Obligations under  an On-going Underwriting Agreement\n (WBRC 1 1.3.2.5.0.0)\n Total of following items from ( i) to (iii ).\n Conversion Factor 50 per cent\n (WBRC 1 1.3.2.5.1.0 to 11.3.2.5.3.0)\n (i) Underwriting of Shar es/Securities Issue\n  (WBRC 1 1.3.2.5.1.0)\n  Obligations due to underwriting of shares and securities, net of the  \namount sub-underwritten by another institution.\n (ii) Note Issuance Facilities and Revolving Underwriting Facilities\n  (WBRC 1 1.3.2.5.2.0)\n  Arrangements where a borrower may draw funds up to a prescribed \nlimit over a pre-defined period through the issue of notes which the \nreporting bank has committed to underwrite.\n (iii) Others\n  (WBRC 1 1.3.2.5.3.0)\n  Other obligations due to on-going underwriting agreements.\n6.5.2.1.6  Commitments with an Original maturity of up to one year  or which can \nbe unconditionally cancelled at any time\n (WBRC 1 1.3.2.6.0.0)\n Total of following items from ( i) to (iv).\n Conversion Factor 0 per cent\n (WBRC 1 1.3.2.6.1.0 to 11.3.2.6.4.0)\n (i) Formal Stand-by Facilities and Cr edit Lines\n  (WBRC 1 1.3.2.6.1.0)\n  Commitments include the undrawn portion of any binding arrangements  \nwhich obligate the reporting institution to provide funds at some \nfuture date. Such commitments would have an original maturity of \nless than one year or which can be unconditionally cancelled at any \ntime by the reporting bank at its discretion. Formal stand-by facilities", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 42, "year": 2013}, "type": "Document"}
{"page_content": "time by the reporting bank at its discretion. Formal stand-by facilities \nand credit lines for Letters of Credit, Trust Receipts, etc.; should be \nincluded under the item.\n (ii) Undrawn T erm Loans\n  (WBRC 1 1.3.2.6.2.0)\n  Undrawn portion of a term loans with an original maturity of less than  \none year or which can be unconditionally cancelled  at any time by the \nreporting bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 42, "year": 2013}, "type": "Document"}
{"page_content": "36 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (iii) Undrawn Overdraft Facilities/Unused Cr edit Card Lines\n  (WBRC 1 1.3.2.6.3.0)\n  The undrawn portion of overdraft facilities and credit card lines with an \noriginal maturity of less than one year or which can be unconditionally \ncancelled at any time by the reporting bank.\n (iv) Others\n  (WBRC 1 1.3.2.6.4.0)\n  Any other commitment with an original maturity up to one year or  \nwhich can be unconditionally cancelled at any time.\n6.5.2.1.7  Other  Commitments with an Original maturity of up to one year\n (WBRC 1 1.3.2.7.0.0)\n Total of following items from ( i) to (iii ).\n Conversion Factor 20 per cent\n (WBRC 1 1.3.2.7.1.0 to 11.3.2.7.3.0)\n (i) Formal Stand-by Facilities and Cr edit Lines\n  (WBRC 1 1.3.2.7.1.0)\n  The commitments under formal standby facilities and credit lines with  \nan original maturity is up to one year.\n (ii) Undrawn T erm Loans\n  (WBRC 1 1.3.2.7.2.0)\n  The undrawn portion of term loans where the original maturity is up  \nto one year.\n (iii) Others\n  (WBRC 1 1.3.2.7.3.0)\n  Any other commitment with an original maturity up to one year .\n6.5.2.1.8  Other  Commitments with an Original maturity of over one year\n (WBRC 1 1.3.2.8.0.0)\n Total of following items from ( i) to (iii ).\n Conversion Factor 50 per cent\n (WBRC 1 1.3.2.8.1.0 to 11.3.2.8.3.0)\n (i) Formal Stand-by Facilities and Cr edit Lines\n  (WBRC 1 1.3.2.8.1.0)\n  The commitments under formal standby facilities and credit lines with  \nan original maturity is over one year.\n (ii) Undrawn T erm Loans\n  (WBRC 1 1.3.2.8.2.0)\n  The undrawn portion of term loans where the original maturity is over  \none year.\n (iii) Others\n  (WBRC 1 1.3.2.8.3. 0)\n  Any other commitment with an original maturity over one year .\n6.5.2.1.9  Exchange Rate Contracts\n (WBRC 1 1.3.2.9.0.0)\n Exchange rate contracts shall include the following items ( a to e), but exclude", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 43, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  37\nexchange rate contracts which have an original maturity of 14 calendar days \nor less.\n (a) Forward foreign exchange contracts\n (b) Currency futures\n (c) Currency options purchased\n (d) Cross currency FX swaps\n (e) Other similar instruments\nTo arrive at the credit equivalent amounts of exchange rate contracts, applying \nthe original exposure method, a bank will have to apply one of the conversion \nfactors as given in the table below to the notional principal amounts of each \ninstrument according to the nature of the instrument and its maturity.\nTable 13\nItem WBRC Original Maturity Conversion \nFactor\n(i) 11.3.2.9.1.0 Less than one year 2%\n(ii) 11.3.2.9.2.0 One year and less than two years 5%\n(iii) 11.3.2.9.3.0 For each additional year 3%\n6.5.2.1.10  Inter est Rate Contracts\n (WBRC 1 1.3.2.10.0.0 )\n Interest rate contracts shall include,\n (a) Single currency interest rate swaps\n (b) Basis swaps\n (c) Forward rate agreements\n (d) Interest rate futures\n (e) Interest rate options purchased, and\n (f) Other similar instruments\nTo arrive at the credit equivalent amounts of interest rate contracts, applying \nthe original exposure method, a bank will have to apply one of the conversion \nfactors as given in the table below to the notional principal amounts of each \ninstrument according to the nature of the instrument and its maturity.\nTable 14\nItem WBRC Original Maturity Conversion \nFactor\n(i) 11.3.2.10.1.0 Less than one year 0.5%\n(ii) 11.3.2.10.2.0 One year and less than two years 1.0%\n(iii) 11.3.2.10.3.0 For each additional year 1.0%\nNote: In the case of foreign exchange and interest rate contracts above, the \nnetting of contracts subject to novation would be permitted. Therefore, the net \nrather than the gross claims arising out of swaps and similar contracts (subject \nto novation) with the same counterparts will be weighted. In this context,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 44, "year": 2013}, "type": "Document"}
{"page_content": "to novation) with the same counterparts will be weighted. In this context, \nnovation is defined as a bilateral contract between two counterparties under \nwhich any obligation to each other to deliver a given currency on a given \ndate is automatically amalgamated with all other obligations for the same \ncurrency and value date, legally substituting one single net amount for the \nprevious gross obligations.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 44, "year": 2013}, "type": "Document"}
{"page_content": "38 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.6 Part III ( c) \u2013 Exposures Recognized under Credit Risk Mitigation (CRM)\n6.6.1  Overview of CRM\n6.6.1.1  Banks use a number of techniques to mitigate the credit risks to which they are exposed.  \nFor example, exposures may be collateralised by first priority claims, in whole or in part \nwith cash or securities, a loan exposure may be guaranteed by a third party, or a bank \nmay buy a credit derivative to offset various forms of credit risk. Additionally, banks may \nagree to net loans owed to them against deposits from the same counterpart.\n6.6.1.2  The revised approach to credit risk mitigation allows a wider range of credit risk  \nmitigants to be recognised for regulatory capital purposes than is permitted under Basel \nI, provided that these techniques meet the minimum conditions described below.\n6.6.1.3  While the use of CRM techniques reduces or transfers credit risk, it simultaneously may \nincrease other risks (residual risks). Residual risks include legal, operational, liquidity \nand market risks. Therefore, it is imperative that banks employ robust procedures and \nprocesses to control these risks, including strategy, consideration of the underlying credit, \nvaluation, policies and procedures, systems, control of roll-off risks and management of \nconcentration risk arising from the bank\u2019s use of CRM techniques and its interaction with \nthe bank\u2019s overall credit risk profile.\n6.6.1.4  Legal Certainty:  All documentation used in collateralised transactions and guarantees \nmust be binding on all parties and legally enforceable in all relevant jurisdictions. \nBanks must have conducted sufficient legal review, which should be well documented, \nto verify this. Such verification should have a well founded legal basis for reaching the \nconclusion about the binding nature and enforceability of the documents. Banks should", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 45, "year": 2013}, "type": "Document"}
{"page_content": "conclusion about the binding nature and enforceability of the documents. Banks should \nalso undertake such further review as necessary to ensure continuing enforceability.\n6.6.1.5  T reatment of Pools of CRM Techniques:  In case where a bank has multiple CRM \ntechniques covering a single exposure ( e.g.: a bank has both collateral and guarantee \npartially covering an exposure), the bank will be required to subdivide the exposure into \nportions covered by each type of CRM technique ( e.g.: portion covered by collateral, \nportion covered by guarantee) and the risk-weighted assets of each portion must be \ncalculated separately. When credit protection provided by a single protection provider \nhas differing maturities, they must be subdivided into separate protection as well.\n6.6.2  CRM T echniques\n6.6.2.1  Collateralised T ransactions: A collateralised transaction is one in which:\n\u2022 banks have a credit exposure or potential credit exposure; and\n\u2022 that credit exposure or potential credit exposure is hedged in whole or in part by \ncollateral posted by a counterpart or by a third party on behalf of the counterpart.\n6.6.2.1.1  The Simple Approach will be Followed in Computing the Effects of \nCRM\n (i) In the simple approach, the portions of claims collateralised by the market  \nvalue of recognised collateral receive the risk weight applicable to the \ncollateral instrument. The risk weight on the collateralised portion will \nbe subject to a floor of 20 per cent. The remainder of the claim should \nbe assigned to the risk weight appropriate to the counterparty.\n (ii) Mismatches in the maturity of the underlying exposure and collateral will \nnot be allowed, i.e., the collateral must be pledged for at least the life \nof the exposure.\n6.6.2.1.2  Risk W eights\n (i) The 20 per cent floor for the risk weight on a collateralised transaction  \nwill not be applied and 0 per cent risk weight can be applied provided \nthe exposure and the collateral are denominated in the same currency,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 45, "year": 2013}, "type": "Document"}
{"page_content": "the exposure and the collateral are denominated in the same currency, \nand either:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 45, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  39\n (a) the collateral is cash on deposit and gold or\n (b) the collateral is in the form of Government securities or\n (c) the collateral is in the form provident fund balances.\n6.6.2.1.3  Minimum Conditions\n (i) Legal Certainty: as described in paragraph 6.6.1.4\n (ii) Ability to Liquidate:  The bank should have the right to liquidate or take \nlegal possession of it, in a timely manner, in the event of the default, \ninsolvency or bankruptcy (or one or more otherwise-defined credit \nevents set out in the transaction documentation) of the counterparty (and, \nwhere applicable, of the custodian holding the collateral). Furthermore \nbanks must take all steps necessary to fulfil those requirements under \nthe law applicable to the bank\u2019s interest in the collateral for obtaining \nand maintaining an enforceable security interest.\n (iii) Material Correlation:  In order for collateral to provide protection, the \ncredit quality of the counterparty and the value of the collateral must \nnot have a material positive correlation. For example, securities issued \nby the counter party or by any related group entity - would provide little \nprotection and so would be ineligible.\n (iv) Recovery Procedures:  Banks must have clear and robust procedures for \nthe timely liquidation of collateral to ensure that any legal conditions \nrequired for declaring the default of the counter party and liquidating the \ncollateral are observed, and that collateral can be liquidated promptly. \nWhere the collateral is held by a custodian, banks must take reasonable \nsteps to ensure that the custodian segregates the collateral from its own \nassets.\n6.6.2.1.4  Eligible Financial Collateral\n The following collateral instruments are eligible for recognition in the simple  \napproach:\n (i) Cash (as well as certificates of deposit or comparable instruments,  \nincluding fixed deposit receipts, issued by the lending bank) on deposit", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 46, "year": 2013}, "type": "Document"}
{"page_content": "including fixed deposit receipts, issued by the lending bank) on deposit \nwith the bank, which is incurring the counterparty exposure.\n (ii) Gold: Gold would include both bullion and jewellery .\n (iii) GOSL  securities\n (iv) Provident fund balances\n (v) Debt securities rated by a recognized ECAI where these are either\n\u2013 At  least BB- when issued by sovereigns or PSEs that have been \nrecognized, or\n\u2013 At least BBB- when issued by other entities (including banks), or\n\u2013 At least A-3//P-3 for short-term debt instruments.\n (vi) Debt securities not rated by a ECAI where these are:\n\u2013 Issued by a bank; and\n\u2013 Listed on a recognized exchange, and\n\u2013 Classified as senior debt\n\u2013 Other securities, specified by the Central Bank.\n (vii) Equities those are included in the Milanka index, subject to a discount \nof 25 per cent on the market value.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 46, "year": 2013}, "type": "Document"}
{"page_content": "40 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.6.2.2  On-Balance Sheet Netting - Where a bank,\n6.6.2.2.1  has a well-founded legal basis for concluding that the netting or of fsetting \nagreement is enforceable in each relevant jurisdiction regardless of whether \nthe counterpart is insolvent or bankrupt;\n6.6.2.2.2  is able at any time to determine those assets (loans) and liabilities (deposits)  \nwith the same counterpart that are subject to the netting agreement;\n6.6.2.2.3  monitors and controls its roll-of f risks; and\n6.6.2.2.4  monitors and controls the relevant exposures on a net basis\n6.6.2.2.5  it may use the net exposure of loans and deposits as the basis for its capital  \nadequacy computation.\n6.6.2.3  Guarantees\n6.6.2.3.1  Guaranteed Transactions: Where guarantees are direct, explicit, irrevocable \nand unconditional, banks may take account of such credit protection in \ncalculating capital requirements.\n6.6.2.3.2  Minimum Conditions\n (i) A  guarantee (or counter-guarantee) must represent a direct claim on \nthe protection provider and must be explicitly referenced to specific \nexposures or a pool of exposures, so that the extent of the cover is \nclearly defined and incontrovertible.\n (ii) Other than non-payment by a protection purchaser of money due in  \nrespect of the credit protection contract it must be irrevocable; there \nmust be no clause in the contract that would increase the effective \ncost of cover as a result of deteriorating credit quality in the hedged \nexposure.\n (iii) It must also be unconditional; there should be no clause in the protection  \ncontract outside the control of the bank that could prevent the \nprotection provider from being obliged to pay out in a timely manner \nin the event that the original counterpart fails to make the payment(s) \ndue.\n (iv) In addition to the legal certainty requirements above, the following  \nconditions must also be satisfied:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 47, "year": 2013}, "type": "Document"}
{"page_content": "conditions must also be satisfied:\n\u2013 On the qualifying default or non-payment of the counterpart, the  \nbank may in a timely manner pursue the guarantor for any monies \noutstanding under the documentation governing the transaction. \nThe guarantor may make one lump sum payment of all monies \nunder such documentation to the bank, or the guarantor may \nassume the future payment obligations of the counterpart covered \nby the guarantee. The bank must have the right to receive any such \npayments from the guarantor without first having to take legal \nactions in order to pursue the counterpart for payment.\n\u2013 The guarantee is an explicitly documented obligation assumed by  \nthe guarantor.\n\u2013 Except as noted in the following sentence, the guarantee covers all  \ntypes of payments the underlying obligor is expected to make under \nthe documentation governing the transaction, for example notional \namount, margin payments, etc.\n\u2013 Where a guarantee covers payment of principal only , interests \nand other uncovered payments should be treated as an unsecured \namount.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 47, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  41\n6.6.2.3.3  Eligible Guarantors (counter -guarantors):  Credit protection given by the \nfollowing entities will be recognised: sovereign entities, PSEs and other \nentities with a risk weight of 20 per cent or better and a lower risk weight than \nthe counterpart.\n6.6.2.3.4  Risk W eights\n The protected portion is assigned the risk weight of the protection provider . \nThe uncovered portion of the exposure is assigned the risk weight of the \nunderlying counterpart.\n (i) A  zero risk weight will be applied to that portion of loans guaranteed by \nGOSL and CBSL.\n (ii) The portion of exposures guaranteed by the Sri Lanka Export Credit \nInsurance Corporation (SLECIC) will receive a 50 per cent risk \nweight.\n6.6.3  Specific Instructions for  completion Part III ( c)\n6.6.3.1  T otal CRM Exposure\n (WBRC 1 1.3.3.0.0.0)\n Total exposure of collateralised transactions and other CRM techniques. All exposures \nshould be reported net of specific provisions and interest in suspense that has been \ncharged to the respective counterparty account. Exposures which are reported in this \npart under CRM should not be reported in the other parts of the capital adequacy return.  \nThe amount is automatically shown on web-based return.\n The amount must agree with the sum of items 6.6.3.1.1 and 6.6.3.1.2.\n (WBRC 1 1.3.3.1.0.0 + 11.3.3.2.0.0)\n6.6.3.1.1  Collateralised T ransactions\n (WBRC 1 1.3.3.1.0.0)\n The sum of collateralised retail exposures and collateralised other exposures.  \nThe amount must agree to sum of items (i ) and (ii). The amount is automatically \nshown on web-based return.\n (WBRC 1 1.3.3.1.1.0 + 11.3.3.1.2.0)\n (i) Retail Exposur es\n  (WBRC 1 1.3.3.1.1.0)\n  The total amount of retail exposures against the collateral instruments  \nwhich are eligible for recognition in the simple approach as specified in \nparagraph 6.6.2.1.4. The amount is automatically shown on web-based \nreturn.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 48, "year": 2013}, "type": "Document"}
{"page_content": "paragraph 6.6.2.1.4. The amount is automatically shown on web-based \nreturn.\n  (WBRC 1 1.3.3.1.1.1 to 11.3.3.1.1.7)\n (ii) Other  Exposures\n  (WBRC 1 1.3.3.1.2.0)\n  The total amount of other exposures against the collateral instruments  \nwhich are eligible for recognition in the simple approach as specified in \nparagraph 6.6.2.1.4. The amount is automatically shown on web-based \nreturn.\n  (WBRC 1 1.3.3.1.2.1 to 11.3.3.1.2.7)\n6.6.3.1.2  Other  CRM Techniques\n (WBRC 1 1.3.3.2.0.0)\n The total amount of exposures against the other CRM techniques (other", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 48, "year": 2013}, "type": "Document"}
{"page_content": "42 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nthan collateralized transactions). The amount is automatically shown on  \nweb-based return.\n (WBRC 1 1.3.3.2.1.0 + 11.3.3.2.2.0)\n (i) On-Balance Sheet Netting\n  (WBRC 1 1.3.3.2.1.0)\n  T he total amount of exposures against the on-balance sheet netting \nshould be reported in line with the instructions given in the items under \nparagraph 6.6.2.2 above.\n (ii) Guarantees\n  (WBRC 1 1.3.3.2.2.0)\n  The total amount of exposures against the guarantees should be reported \nin line with the instructions given in the items under paragraph 6.6.2.3 \nabove.\n6.7 Part IV  \u2013 Computation of Risk-weighted Amount for Market Risk\n6.7.1  Capital Charge for  Market Risk  - Market risk is defined as the risk of losses in on-balance sheet \nand off balance sheet positions arising from movements in market prices. The market risk subject \nto the capital charge requirements are:\n6.7.1.1  The risks pertaining to interest rate related instruments  in the trading book\n6.7.1.2  The risks pertaining to equities in the trading book.\n6.7.1.3  The risks pertaining to foreign exchange position  (including gold positions) throughout \nthe bank.\n6.7.2  Scope and Coverage of Capital Charge for  Market Risks\n6.7.2.1  This involves computing capital char ges for interest rate related instruments in the \ntrading book, equities in the trading book and foreign exchange risk (including gold \npositions) throughout the bank. For the purpose of this section, the trading book and \nforeign exchange position will include the following:\n6.7.2.1.1  Se curities classified in the \u2018Trading Account\u2019 in terms of the direction on \nPrudential Norms for Classification, Valuation and Operation of the Bank\u2019s \nInvestment Portfolio issued by the CBSL dated 01 March 2006.\n6.7.2.1.2  Open gold positions\n6.7.2.1.3  Open foreign exchange positions.\n6.7.3  Measur ement of Capital Charge for Interest Rate Risk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 49, "year": 2013}, "type": "Document"}
{"page_content": "6.7.3  Measur ement of Capital Charge for Interest Rate Risk\n6.7.3.1  This section describes the framework for measuring the risk of holding or taking  \npositions in debt securities and other interest rate related instruments denominated in  \nSri Lanka Rupees as well as foreign currencies  in the trading book.\n6.7.3.2  The capital char ge for interest rate related instruments would apply to the current market \nvalue of these items in the bank\u2019s trading book. Since banks are required to maintain \ncapital for market risk on an ongoing basis, they are required to mark-to-market their \ntrading positions on a daily basis. The current market value will be determined according \nto the Direction on Prudential Norms for Classification, Valuation and Operation of the \nbank\u2019s investment portfolio issued by CBSL.\n6.7.3.3  The minimum capit al requirement is expressed in terms of two separately calculated \ncharges, \u201cspecific risk\u201d  charge for each security, which is akin to the conventional \ncapital charge for credit risk, both for short and long positions, and \u201cgeneral market \nrisk\u201d  charge for interest rate risk in the portfolio, where long and short positions in \ndifferent securities or instruments can be offset.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 49, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  43\n6.7.3.3.1  Specific Risk\n (i) The capital char ge for specific risk is designed to protect against an \nadverse movement in the price of an individual security owing to \nfactors related to the individual issuer.\n (ii) The risk charges to be used in the Computation of specific risk will be \nas follows:\n (iii) Specific risk char ge for government securities and central banks:\n (a) Government securities issued by the GOSL  and securities issued \nby the CBSL will be subject to a risk charge of 0 per cent.\n (b) Securities issued by a foreign government or by a foreign central  \nbank will be subject to a risk charge based on the credit rating as \nindicated in the following table:\nTable 15\nSpecific Risk Charge for Securities Issued by Foreign \nGovernments/Central Banks\nSovereign Rate Capital Charge for Specific Risk\nAAA to AA- 0%\nA+ to BBB- 0.25% (residual term to final maturity 6 \nmonths or less)\n1% (residual term to final maturity greater \nthan 6 and up to and including 24 months)\n1.60% (residual term to final maturity \nexceeding 24 months)\nAll others 10.00%\n (iv) The \u2018Qualifying\u2019  category for Corporate entities:\n (a) Corporate entities (Local) will be given a risk char ge for specific \nmarket risk based on their ratings as indicated in the table \nbelow:\nTable 16\nSpecific Risk Charge for Corporates\nSovereign Rate Capital Charge for Specific Risk\nAAA to AA- 0.25%\nA+ to BBB- 1.00% (residual term to final maturity 6 \nmonths or less)\n1.60% (residual term to final maturity \ngreater than 6 and up to and including 24 \nmonths)\n10.00% (residual term to final maturity \nexceeding 24 months)\nAll others 10.00%\n (b) The specific risk char ge for foreign corporates would be one \nnotch less favourable than the risk charge applied to the local \ncorporates.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 50, "year": 2013}, "type": "Document"}
{"page_content": "44 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (v) \u2018Public sector entities\u2019 should be treated like corporate entities unless \nthey are backed by an explicit Treasury guarantee, which warrants a \nrisk charge of 0 per cent.\n (vi) The \u2018 Other\u2019 category:\n  A  capital charge of 10 per cent will apply to all other types of \nexposures.\n (vii) Banks may rely upon the ratings assigned by the ECAIs recognised by  \nCBSL (See paragraph 6.4.2) for the purpose of ratings referred in the \ntable 15 and 16 above.\n6.7.3.3.2  General Market Risk\n The capital requirements for general market risk are designed to capture the  \nrisk of loss arising from changes in market interest rates. The capital charge \nis the sum of four components:\n (i) the net short or long position in the whole trading book;\n (ii) a  smaller proportion of the matched positions in each time-band  \n(the \u201cvertical disallowance\u201d);\n (iii) a lar ger proportion of the matched positions across different timebands \n(the \u201chorizontal disallowance\u201d), and\n (iv) a net char ge for positions in options, where appropriate.\nNote \u2013 Components (ii), (iii) and (iv) will not apply at present.\n6.7.3.4  It has been decided to allow banks to initially adopt the Standardised Measurement \nMethod , as Sri Lankan banks are still at a nascent stage of developing internal risk \nmanagement models. There are two principal methods of measuring market risk under \nthe Standardised Measurement Method, i.e., a \u2018maturity\u2019 method and a \u2018duration\u2019 \nmethod. It has been decided to adopt the \u2018duration\u2019 method to arrive at the capital charge. \nAccordingly, banks are required to measure the general market risk charge by calculating \nthe price sensitivity of each instrument in the trading book separately and adding the \nresulting price sensitivities based on a maturity ladder, subject to disallowances if any.\n6.7.3.5  The steps for the computation are as follows:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 51, "year": 2013}, "type": "Document"}
{"page_content": "6.7.3.5  The steps for the computation are as follows:\n6.7.3.5.1  Calculate the price sensitivity of each instrument in terms of a change in  \ninterest rates between 1.2 and 2.0 percentage points, depending on the \nmaturity of the instrument (see Table 17);\n6.7.3.5.2  slot the resulting price sensitivities into a duration based maturity ladder with  \nthe fifteen time bands as set out in Table 17;\n6.7.3.5.3  subject long and short positions in each time band to a 5 per cent vertical  \ndisallowance designed to capture basis risk; and\n6.7.3.5.4  carry forward the net positions in each time-band for horizontal of fsetting \nsubject to the disallowances set out in Table 18.\nNote \u2013 Steps (6.7.3.5.2) to (6.7.3.5.4) are not required at present since components ii, iii \nand iv under paragraph 6.7.3.3.2 above are currently not applicable.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 51, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  45\nTable 17\nDuration Method \u2013 Time Bands and Assumed Changes in Yield\nTime Bands Assumed Change in Yield\nMaturity Zone 1\n1 month or less 2.00\nOver 1 month to 3 months 2.00\nOver 3 months to 6 months 2.00\nOver 6 months to 12 months 2.00\nMaturity Zone 2\nOver 1.0 year to 1.9 years 1.80\nOver 1.9 years to 2.8 years 1.60\nOver 2.8 years to 3.6 years 1.50\nMaturity Zone 3\nOver 3.6 years to 4.3 years 1.50\nOver 4.3 years to 5.7 years 1.40\nOver 5.7 years to 7.3 years 1.30\nOver 7.3 years to 9.3 years 1.20\nOver 9.3 years to 10.6 years 1.20\nOver 10.6 years to 12 years 1.20\nOver 12 years to 20 years 1.20\nOver 20 years 1.20\nTable 18\nHorizontal Disallowances\nMaturity Zones Time BandWithin\nthe zonesBetween \nadjacent zonesBetween zones\n1 and 3\nMaturity Zone 11 month or less\n40%\n40%\n 100%over 1 month to 3 months\nover 3 months to 6 months\nover 6 months to 12 months\nMaturity Zone 2Over 1.0 year to 1.9 years\n30% Over 1.9 years to 2.8 years\nOver 2.8 years to 3.6 years\nMaturity Zone 3Over 3.6 years to 4.3 years\n30% 40%Over 4.3 years to 5.7 years\nOver 5.7 years to 7.3 years\nOver 7.3 years to 9.3 years\nOver 9.3 years to 10.6 years\nOver 10.6 years to 12 years\nOver 12 years to 20 years\nOver 20 years", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 52, "year": 2013}, "type": "Document"}
{"page_content": "46 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.7.4  Measur ement of Capital Charge for Equities\n6.7.4.1  The minimum capital requirement to cover the risk of holding or taking positions in  \nequities in the trading book is set out below. It applies to all instruments that exhibit \nmarket behaviour similar to equities. The instruments covered include equity shares \n(voting and non-voting), convertible securities that behave like equities ( e.g.: units of \nunit trusts) and commitments to buy or sell equity securities ( e.g.: warrants, right issues \nand bonus issues).\n6.7.4.2  Specific and General Market Risk\n6.7.4.2.1  Specific Equity Risk\n Specific risk is defined as the bank\u2019s gross equity positions ( i.e., the sum of \nall long equity positions and of all short equity positions). The capital charge \nfor specific risk for equities on the Milanka Price Index will be 5 per cent, \nwhile all other equities will have a specific risk charge of 10 per cent.\n6.7.4.2.2  General Equity Risk\n General market risk is defined as the overall net position in an equity market \n(i.e., the difference between the sum of the longs and the sum of the shorts). \nThe general market risk charge will be 10 per cent .\n6.7.5   Measur ement of the Capital Charge for Foreign Exchange and Gold Open Positions\n6.7.5.1  T his section sets out the minimum capital requirement to cover the risk of holding \nor taking positions in foreign currencies, including gold. Gold is treated as a foreign \nexchange position rather than a commodity because its volatility is more in line with \nforeign currencies, and banks manage it in a similar manner.\n6.7.5.2  The  Off-balance sheet position, including forward contracts, will be included in \ncomputation of the capital charge for foreign exchange risks.\n6.7.5.3  Computing the capital requirement for foreign exchange risk consists of two processes.\n6.7.5.3.1  Measuring the Exposur e in a Single Currency Position", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 53, "year": 2013}, "type": "Document"}
{"page_content": "6.7.5.3.1  Measuring the Exposur e in a Single Currency Position\n The bank\u2019s net open position in each currency should be calculated by \nsumming the net position of all on balance sheet and off-balance sheet position, \nincluding forward contracts denominated in that particular currency.\n6.7.5.3.2  Measuring the Risks Inherent in a Bank\u2019s Mix of Long and Short \nPositions in Different Currencies\n Banks are required to adopt the shorthand method of computation. Under the \nshorthand method, the nominal amount of the net position in each foreign \ncurrency and in gold is converted at spot rates into the reporting currency  \n(i.e., LKR). The overall net open position is measured by aggregating:\n (i) the sum of the net short positions or the sum of the net long positions,  \nwhichever is the greater, plus\n (ii) the net position (short or long) in gold, regardless of sign.\n6.7.5.4  The capital char ge will be 10 per cent of the overall net open position of foreign currency \nand gold.\nTable 19\nExample of the Shorthand Measure of Foreign Exchange Risk\nYEN EURO GB INR US$ GOLD\n+50 +100 +150 -20 -180 -35\n+300 -200 -35", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 53, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  47\nIn the above example, the capital charge would be 10 per cent of the higher \nof either the net long currency positions or the net short currency positions  \n(i.e., 300) and of the net position in gold (35) = 335 x 10% = 33.5.\n6.7.6  Aggr egation of the Capital Charge for Market Risks\n The capital charges for specific risk and general market risk are to be computed separately before \naggregation.\n6.7.7  Capital Charge for  Interest Rate Derivatives\n The capital charge for interest rate derivatives will be excluded from the capital charge for market \nrisks at present and will be introduced shortly.\n6.7.8  Specific Instruction for  completion of Part IV return\n (Computation of Risk-weighted amount for  Market Risk)\n6.7.8.1  T otal Capital Charge for Market Risk\n (WBRC 1 1.4.1.0.0.0)\n The total amount of capital char ge for interest rate risk (6.7.8.1.1), capital charge \nfor equity risk (6.7.8.1.2) and capital charge for foreign exchange risk (6.7.8.1.3).  \nThe amount is automatically shown on web-based return.\n (WBRC 1 1.4.1.1.0.0 + 11.4.1.2.0.0 + 11.4.1.3.0.0)\n6.7.8.1.1  Capital Charge for  Interest Rate Risk\n (WBRC 1 1.4.1.1.0.0)\n The total amount of capital char ge for general interest rate risk and capital \ncharge for specific interest rate risk. The amount is automatically shown on \nweb-based return.\n (WBRC 1 1.4.1.1.1.0 + 11.4.1.1.2.0)\n (i) General Interest Rate Risk\n  (WBRC 1 1.4.1.1.1.0)\n  Capital char ge for general interest rate risk should be calculated in line \nwith the specific instruction given in the paragraph 6.7.3.3.2\n (ii) Specific Interest Rate Risk\n  (WBRC 1 1.4.1.1.2.0)\n  Capital char ge for specific interest rate risk should be calculated in line \nwith the specific instruction given in the paragraph 6.7.3.3.1\n6.7.8.1.2  Capital Charge for  Equity Risk\n (WBRC 1 1.4.1.2.0.0)\n The total amount of capital char ge for general equity risk and capital charge", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 54, "year": 2013}, "type": "Document"}
{"page_content": "The total amount of capital char ge for general equity risk and capital charge \nfor specific equity risk. The amount is automatically shown on web-based \nreturn.\n (WBRC 1 1.4.1.2.1.0 + 11.4.1.2.2.0)\n (i) General  Equity Risk\n  (WBRC 1 1.4.1.2.1.0)\n  Capital charge for general equity risk should be calculated in line with the \nspecific instruction given in the paragraph 6.7.4.2.2.\n (ii) Specific Equity Risk\n  (WBRC 1 1.4.1.2.2.0)\n  Capital charge for specific equity risk should be calculated in line with the \nspecific instruction given in the paragraph 6.7.4.2.1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 54, "year": 2013}, "type": "Document"}
{"page_content": "48 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6.7.8.1.3  Capital Charge for  Foreign Exchange & Gold\n (WBRC 1 1.4.1.3.0.0)\n Capital charge for Foreign exchange & gold should be calculated in line with \nthe specific instruction given in the paragraph 6.7.5.\n6.7.8.2  T otal Risk-weighted Amount for Market Risk\n (WBRC 1 1.4.2.0.0.0)\n The total amount of risk-weighted amount for market risk should be ten times the capital  \ncharge for market risk (6.7.8.1*10). The amount is automatically shown on web-based \nreturn.\n (WBRC 1 1.4.1.0.0.0*10)\n6.8 Part V \u2013 Computation of Risk-weighted Amount for Operational Risk.\n6.8.1  Capital Charge for  Operational Risk\n6.8.1.1  Definition of Operational Risk:  Operational risk is defined as the risk of loss resulting \nfrom inadequate or failed internal processes, people and systems or from external events. \nThis definition includes legal risk, but excludes strategic and reputational risk. Legal risk \nincludes, but is not limited to, exposure to fines, penalties, or punitive damages resulting \nfrom supervisory actions, as well as private settlements.\n6.8.1.2  The Basic Indicator  Approach (BIA): To begin with, banks shall compute the capital \nrequirements for operational risk under the BIA. Under the BIA, banks must hold \ncapital for operational risk equal to the average over the previous three years of a fixed \npercentage (denoted \u03b1) of positive annual gross income. Figures for any year in which \nannual gross income is negative or zero should be excluded from both the numerator and \ndenominator when calculating the average.\n6.8.1.3  The char ge may be expressed as follows:\nKBIA = [ \u2211 (GI 1\u2026n x \u03b1.) ] / n\n Where;\nKBIA  = the capital char ge under the Basic Indicator Approach\nGI  = annual gross income, where positive, over the previous three audited financial \nyears\nn  = number of the previous three financial years for which gross income is positive\n\u03b1  = 15%, which is set by the BCBS.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 55, "year": 2013}, "type": "Document"}
{"page_content": "\u03b1  = 15%, which is set by the BCBS.\n6.8.1.4  Gross income is defined as \u201cnet interest income\u201d plus \u201cnet non-interest income\u201d. It is  \nintended that this measure should:\n6.8.1.4.1  be gross of any provisions ( e.g.: for unpaid interest),\n6.8.1.4.2  be gross of operating expenses, including fees paid to outsourcing service  \nproviders, in contrast to fees paid for services that are outsourced, fees \nreceived by banks that provide outsourcing services shall be included in the \ndefinition of gross income,\n6.8.1.4.3  exclude realized profits/losses from the sale of securities in the banking book, \nand\n6.8.1.4.4  exclude extraordinary or irregular items.\n6.8.1.5  Banks are advised to compute the capital char ge for operational risk under the BIA as \nfollows:\n6.8.1.5.1  A verage of [  Gross Income x \u03b1  ] for each of the last three financial years, \nexcluding years of negative or zero gross income", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 55, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  49\n6.8.1.5.2  Gross income = Net interest income + non-interest income \u2013 items (6.8.1.4.3)  \nand (6.8.1.4.4) of above.\n6.8.1.5.3  \u03b1 = 15%\n6.8.2  Specific Instruction for  completion of Part V\n (Computation of Risk-weighted amount for  Operational Risk)\n6.8.2.1  Gr oss Income\n (WBRC 1 1.5.1.0.0.0)\n The total gross income should be total net income (6.8.2.1.1) less total exclude items as \nspecified in the paragraph 6.8.1.4.3 and 6.8.1.4.4. The amount is automatically shown on \nweb-based return.\n (WBRC 1 1.5.1.1.0.0 - 11.5.1.2.0.0)\n6.8.2.1.1  Net Income\n (WBRC 1 1.5.1.1.0.0)\n The total net income should be sum of total net interest income and total non-\ninterest income. The amount is automatically shown on web-based return.\n (WBRC 1 1.5.1.1.1.0 + 11.5.1.1.2.0)\n (i) Net Inter est Income\n  (WBRC 1 1.5.1.1.1.0)\n  The total net interest income should be the total interest income less  \ntotal non-interest expenses as reported in the annual audited profit and \nloss statement.\n (ii) Non-Inter est Income\n  (WBRC 1 1.5.1.1.2.0)\n  The total non-interest income should be the total income other than the  \ninterest income.\n6.8.2.1.2  Less Amount\n (WBRC 1 1.5.1.2.0.0)\n The total aggregate amount of following items, as specified in the paragraph  \n6.8.1.4.3 and 6.8.1.4.4, which banks are required to deduct from total net \nincome.\n6.8.2.2  T otal Capital Charge for Operational Risk\n (WBRC 1 1.5.2.0.0.0)\n The total capital char ge for operational risk should be 15 per cent of gross income \n(6.8.2.1.) above. The amount is automatically shown on web-based return.\n (WBRC 1 1.5.1.0.0.0*15%)\n6.8.2.3  T otal Risk-weighted Amount for Operational Risk\n (WBRC 1 1.5.3.0.0.0)\n The total amount of risk-weighted amount for operational risk should be ten times the  \ncapital charge for operational risk (6.8.2.2*10). The amount is automatically shown on \nweb-based return.\n (WBRC 1 1.5.2.0.0.0*10)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 56, "year": 2013}, "type": "Document"}
{"page_content": "50 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nSchedule II\nCAPITAL ADEQUACY RATIO OF\nLICENSED COMMERCIAL / SPECIALISED BANKS\nBANK ONLY (SOLO Basis) / CONSOLIDATED RETURN", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 57, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  51\nPart I \u2013 Computation of Capital Adequacy Ratio (Rs. \u2019000)\nWeb-based\nReturn CodeItem Amount\n11.1.1.0.0.0 Eligible Core Capital (Eligible Tier I) = 11.2.1.1.0.0 of Part II ( a) \n11.1.2.0.0.0 Capital Base = 11.2.1.5.0.0 of Part II (a )\n11.1.3.0.0.0 Total Risk-weighted Amount\n11.1.3.1.0.0 Risk-Weighted Amount for Credit Risk = 11.3.1.0.0.0 of Part III ( a)\n11.1.3.2.0.0 Risk-Weighted Amount for Market Risk = 11.4.2.0.0.0 of Part IV\n11.1.3.3.0.0 Risk-Weighted Amount for Operational Risk = 11.5.3.0.0.0 of Part V\n11.1.4.0.0.0 Core Capital (Tier 1) Ratio, % = (11.1.1.0.0.0/11.1.3.0.0.0)*100\n11.1.5.0.0.0 Total Capital Ratio, % = (11.1.2.0.0.0/11.1.3.0.0.0)*100 \nPart II (a ) \u2013 Computation of Total Capital Base (Rs. \u2019000)\nWeb-based \nReturn CodeItem Amount\n11.2.1.1.0.0 Eligible Core Capital (Eligible Tier I)\n11.2.1.1.1.0 Core Capital (Tier 1)\n11.2.1.1.1.1 Paid-up Ordinary Shares/ Assigned Capital\n11.2.1.1.1.2 Non-cumulative, Non-redeemable Preference Shares\n11.2.1.1.1.3 Share Premium\n11.2.1.1.1.4 Statutory Reserve Fund\n11.2.1.1.1.5 Published Retained Profits/(Accumulated Losses) (+/-)\n11.2.1.1.1.6 General and Other Reserves\n11.2.1.1.1.7 Gain/(Loss) After Tax arising from the Sale of Fixed and Long-term \nInvestments\n11.2.1.1.1.8 Unpublished Current Year\u2019s Profit/(Loss) (+/-)\n11.2.1.1.1.9 Minority Interests (consistent with the above capital constituents)\n11.2.1.1.1.10 Perpetual Debt Capital Instruments\n11.2.1.1.2.0 Deductions/ Adjustments-Tier 1\n11.2.1.1.2.1 Goodwill\n11.2.1.1.2.2 Net Deferred Tax\n11.2.1.1.2.3 Other Intangible Assets\n11.2.1.1.2.4 Advances granted to employees of the bank for the purchase of \nshares of the bank under a share ownership plan. \n11.2.1.1.2.5 Amount due from head office & branches outside Sri Lanka in Sri \nLanka Rupees \n(applicable only to branches of foreign banks)\n11.2.1.1.2.6 Amount due to head office & branches outside Sri Lanka in Sri Lanka \nRupees (-)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 58, "year": 2013}, "type": "Document"}
{"page_content": "11.2.1.1.2.6 Amount due to head office & branches outside Sri Lanka in Sri Lanka \nRupees (-)\n(applicable only to branches of foreign banks)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 58, "year": 2013}, "type": "Document"}
{"page_content": "52 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nWeb-based \nReturn CodeItem Amount\n11.2.1.1.2.7 Amount due from head office & branches outside Sri Lanka in \nForeign Currency (net)\n(applicable only to branches of foreign banks)\n11.2.1.1.2.8 50% of Investments in Unconsolidated Banking and Financial \nSubsidiary Companies\n11.2.1.1.2.9 50% of Investments in the Capital of Other Banks and Financial \nInstitutions\n11.2.1.2.1.0 Supplementary Capital (Tier II)\n11.2.1.2.1.1 Revaluation Reserves (approved by CBSL)\n11.2.1.2.1.2 General Provisions\n11.2.1.2.1.3 Hybrid Capital Instruments (Debt/Equity)\n11.2.1.2.1.4 Minority Interests arising from Preference Shares\n11.2.1.2.1.5 Approved Subordinated Term Debt\n0.0.0.0.0.0 Actual Amount of Approved Subordinated Term Debts\n11.2.1.2.2.0 Deductions -Tier 1I\n11.2.1.2.2.1 50% of Investments in Unconsolidated Banking and Financial \nSubsidiary Companies\n11.2.1.2.2.2 50% of Investments in the Capital of Other Banks and Financial \nInstitutions\n11.2.1.2.0.0 Total Supplementary Capital \n(Tier II) = (Item 11.2.1.2.1.0 - 11.2.1.2.2.0)\n11.2.1.3.0.0 Eligible Supplementary Capital (Eligible Tier II)\n11.2.1.4.0.0 Short Term Subordinated Debt (Tier III Capital)\n11.2.1.4.1.0 Approved Short Term Subordinated Debt\n11.2.1.4.2.0 Eligible Tier III Capital-Utilised = (item 11.2.2.6.1.0)\n11.2.1.5.0.0 Capital Base\nPart I1 (b ) \u2013 Computation of Eligible Tier III Capital for Market Risk (Rs. \u2019000)\nWeb-based \nReturn CodeItem Amount\n11.2.2.1.0.0 Total Risk Weighted Assets (RWA)\n11.2.2.1.1.0 Total Risk Weighted Assets for Credit and Operational Risks \n11.2.2.1.2.0 Total Risk Weighted Assets for Market Risk\n11.2.2.2.0.0 Minimum Capital Charge\n11.2.2.2.1.0 Capital Charge for Credit and Operational Risk \n11.2.2.2.2.0 Capital Charge for Market Risk \n11.2.2.3.0.0 Total Capital Available to Meet the Capital Charge for Credit \nand Operational Risks \n11.2.2.4.0.0 Total Capital Base Available to meet Market Risk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 59, "year": 2013}, "type": "Document"}
{"page_content": "and Operational Risks \n11.2.2.4.0.0 Total Capital Base Available to meet Market Risk\n11.2.2.5.0.0 Total Available Tier III Capital\n11.2.2.5.1.0 Approved Short-term Subordinated Debt", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 59, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  53\nWeb-based \nReturn CodeItem Amount\n11.2.2.5.2.0 Minimum of 28.5% of Capital Charge for Market Risk to be met \nby Tier 1 Capital that is not Required for Credit Risk\n11.2.2.5.2.1 (a) Limit \n11.2.2.5.2.2 (b) Amount Utilised\n11.2.2.5.3.0 Maximum of 250% of Tier 1 Capital that is not Required for \nCredit and Operational Risks\n11.2.2.5.3.1 (a) Limit \n11.2.2.5.3.2 (b) Amount Utilised\n11.2.2.6.0.0 Eligible Tier III Capital\n11.2.2.6.1.0 Eligible Tier III Capital Utilised\n11.2.2.6.2.0 Eligible but Unutilized Tier III Capital\nPart III (a ) \u2013 Computation of Risk-weighted Amount for Credit Risk\n (Rs. \u2019000)\nWeb-based \nReturn \nCodeItem AmountCredit \nEquivalent \nof  \nOff-balance \nSheet ItemsTotalRisk \nWeight \n%Risk \nWeighted \nAssets \nAmount\n11.3.1.0.0.0 Total Risk-weighted Amount \nfor Credit Risk \n11.3.1.1.0.0 Claims on Government of Sri \nLanka and Central Bank of Sri \nLanka \n11.3.1.1.1.0 Government of Sri Lanka\n11.3.1.1.2.0 Central Bank of Sri Lanka\n11.3.1.2.0.0 Claims on Foreign Sovereigns \nand their Central Banks\n11.3.1.2.1.0 AAA to AA- 0\n11.3.1.2.2.0 A+ to A- 20\n11.3.1.2.3.0 BBB+ to BBB- 50\n11.3.1.2.4.0 BB+ to B- 100\n11.3.1.2.5.0 Below B- 150\n11.3.1.2.6.0 Unrated 100\n11.3.1.3.0.0 Claims on Public Sector \nEntities PSEs)\n11.3.1.3.1.0 AAA to AA- 20\n11.3.1.3.2.0 A+ to A- 50\n11.3.1.3.3.0 BBB+ to BB- 100\n11.3.1.3.4.0 Below BB- 150\n11.3.1.3.5.0 Unrated 100", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 60, "year": 2013}, "type": "Document"}
{"page_content": "54 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nWeb-based \nReturn \nCodeItem AmountCredit \nEquivalent \nof  \nOff-balance \nSheet ItemsTotalRisk \nWeight \n%Risk \nWeighted \nAssets \nAmount\n11.3.1.4.0.0 Claims on Official Entities \nand Multilateral Development \nBanks (MDBs)\n11.3.1.4.1.0 BIS,IMF, ECB, EC and Eligible \nMDBs0\n11.3.1.4.2.0 AAA to AA- 20\n11.3.1.4.3.0 A+ to BBB- 50\n11.3.1.4.4.0 BB+ to B- 100\n11.3.1.4.5.0 Below B- 150\n11.3.1.4.6.0 Unrated 100\n11.3.1.5.0.0 Claims on Banks\n11.3.1.5.1.0 Rupee Exposures less than 3 \nmonths\n11.3.1.5.1.1 AAA to BBB- 20\n11.3.1.5.1.2 BB+ to B- 50\n11.3.1.5.1.3 Below B- 150\n11.3.1.5.1.4 Unrated 100\n11.3.1.5.2.0 Foreign Currency Exposures \nless than 3 months\n11.3.1.5.2.1 AAA to A- 20\n11.3.1.5.2.2 BBB+ to BBB- 50\n11.3.1.5.2.3 BB+ to B- 100\n11.3.1.5.2.4 Below B- 150\n11.3.1.5.2.5 Unrated 100\n11.3.1.5.3.0 Rupee and Foreign Currency \nExposures more than 3 months\n11.3.1.5.3.1 AAA to AA- 20\n11.3.1.5.3.2 A+ to BBB- 50\n11.3.1.5.3.3 BB+ to B- 100\n11.3.1.5.3.4 Below B- 150\n11.3.1.5.3.5 Unrated 100\n11.3.1.6.0.0 Claims on Financial \nInstitutions\n11.3.1.6.1.0 Claims on Primary Dealers/\nFinance Companies/Specialised \nLeasing Companies\n11.3.1.6.1.1 AAA to AA- 20\n11.3.1.6.1.2 A+ to BBB- 50\n11.3.1.6.1.3 BB+ to B- 100", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 61, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  55\nWeb-based \nReturn \nCodeItem AmountCredit \nEquivalent \nof  \nOff-balance \nSheet ItemsTotalRisk \nWeight \n%Risk \nWeighted \nAssets \nAmount\n11.3.1.6.1.4 Below B- 150\n11.3.1.6.1.5 Unrated 100\n11.3.1.6.2.0 Claims on Other Financial \nInstitutions\n11.3.1.6.2.1 AAA to AA- 20\n11.3.1.6.2.2 A+ to A- 50\n11.3.1.6.2.3 BBB+ to BB- 100\n11.3.1.6.2.4 Below BB- 150\n11.3.1.6.2.5 Unrated 100\n11.3.1.7.0.0 Claims on Corporates\n11.3.1.7.1.0 AAA to AA- 20\n11.3.1.7.2.0 A+ to A- 50\n11.3.1.7.3.0 BBB+ to BB- 100\n11.3.1.7.4.0 Below BB- 150\n11.3.1.7.5.0 Unrated 100\n11.3.1.8.0.0 Retail Claims\n11.3.1.8.1.0 Retail claims that qualify  for \nregulatory capital purposes75\n11.3.1.8.2.0 Retail claims that not qualify  for \nregulatory capital purposes100\n11.3.1.9.0.0 Claims Secured by Residential \nProperty\n11.3.1.9.1.0 Claims that qualify for \nregulatory capital purposes50\n11.3.1.9.2.0 Claims that not qualify  for \nregulatory capital purposes100\n11.3.1.10.0.0 Claims Secured by Commercial \nReal Estate100\n11.3.1.11.0.0 Non-Performing Assets (NPAs)\n11.3.1.11.1.0 Specific provisions are equal or \nmore than 20%100\n11.3.1.11.2.0 Specific provisions are less than \n20%150\n11.3.1.12.0.0 Non-Performing Assets \nSecured by Residential \nProperty\n11.3.1.12.1.0 Specific provisions are equal or \nmore than 20%50\n11.3.1.12.2.0 Specific provisions are less than \n20%100", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 62, "year": 2013}, "type": "Document"}
{"page_content": "56 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nWeb-based \nReturn \nCodeItem AmountCredit \nEquivalent \nof  \nOff-balance \nSheet ItemsTotalRisk \nWeight \n%Risk \nWeighted \nAssets \nAmount\n11.3.1.13.0.0 Higher-Risk Categories 150\n11.3.1.14.0.0 Cash Items and Other Assets\n11.3.1.14.1.0 Cash Items \n11.3.1.14.1.1 Notes and Coins\n11.3.1.14.1.2 Gold Bullion held in own vault\n11.3.1.14.1.3 Cash Items in the Process of \nCollection20\n11.3.1.14.2.0 Other Assets \n11.3.1.14.2.1 Fixed Assets 100\n11.3.1.14.2.2 Other Assets/Exposures 100\nPart III (b ) \u2013 Credit equivalent of Off-Balance Sheet Items \n(Rs.\u2019000)\nWeb-based \nReturn CodeDescriptionPrincipal \namount of \nOff-Balance \nSheet ItemsCredit \nConversion \nFactor \n(%)Credit \nequivalent \nof \nOff-Balance \nSheet Items\n11.3.2.0.0.0 Off-balance Sheet Items  \n11.3.2.1.0.0 Direct Credit Substitutes  \n11.3.2.1.1.0 General Guarantees of Indebtedness 100 \n11.3.2.1.2.0 Stand-by LCs serving as Financial \nGuarantees100 \n11.3.2.1.3.0 Bank Acceptances 100 \n11.3.2.1.4.0 Others (please specify) 100 \n11.3.2.2.0.0 Transaction-related Contingencies\n11.3.2.2.1.0 Performance Bonds, Bid Bonds & \nWarranties50 \n11.3.2.2.2.0 Stand-by LCs related to particular \nTransactions50 \n11.3.2.2.3.0 Others (please specify) 50 \n11.3.2.3.0.0 Short-Term Self-Liquidating Trade-\nRelated Contingencies\n11.3.2.3.1.0 Shipping Guarantees 20 \n11.3.2.3.2.0 Documentary Letters of Credit 20 \n11.3.2.3.3.0 Trade related Acceptances 20 \n11.3.2.3.4.0 Others (please specify) 20", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 63, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  57\nWeb-based \nReturn CodeDescriptionPrincipal \namount of \nOff-Balance \nSheet ItemsCredit \nConversion \nFactor \n(%)Credit \nequivalent \nof \nOff-Balance \nSheet Items\n11.3.2.4.0.0 Sale and Repurchase Agreements and \nAssets Sale with Recourse where the \nCredit Risk remains with the Bank\n11.3.2.4.1.0 Sale and Repurchase Agreements 100 \n11.3.2.4.2.0 Housing Loans sold with Recourse 100 \n11.3.2.4.3.0 Other Assets sold with Recourse 100 \n11.3.2.4.4.0 Forward Assets Purchase 100 \n11.3.2.4.5.0 Partly paid Shares/Securities 100 \n11.3.2.4.6.0 Others (please specify) 100 \n11.3.2.5.0.0 Obligations under an On-going \nUnderwriting Agreement\n11.3.2.5.1.0 Underwriting of Shares/Securities Issue 50 \n11.3.2.5.2.0 Note Issuance Facilities and Revolving \nUnderwriting Facilities50 \n11.3.2.5.3.0 Others (please specify) 50 \n11.3.2.6.0.0 Commitments with an Original \nMaturity of up to one year or which \ncan be unconditionally cancelled at \nany time\n11.3.2.6.1.0 Formal Stand-by Facilities and Credit \nLines0 \n11.3.2.6.2.0 Undrawn Term Loans 0 \n11.3.2.6.3.0 Undrawn Overdraft Facilities/Unused \nCredit Card Lines0 \n11.3.2.6.4.0 Others (please specify) 0 \n11.3.2.7.0.0 Other Commitments with an Original \nMaturity up to 1 year\n11.3.2.7.1.0 Formal Stand-by Facilities and Credit \nLines20 \n11.3.2.7.2.0 Undrawn Term Loans 20 \n11.3.2.7.3.0 Others (please specify) 20 \n11.3.2.8.0.0 Other Commitments with an Original \nMaturity of over one year\n11.3.2.8.1.0 Formal Stand-by Facilities and Credit \nLines50 \n11.3.2.8.2.0 Undrawn Term Loans 50 \n11.3.2.8.3.0 Others (please specify) 50", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 64, "year": 2013}, "type": "Document"}
{"page_content": "58 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nWeb-based \nReturn CodeDescriptionPrincipal \namount of \nOff-Balance \nSheet ItemsCredit \nConversion \nFactor \n(%)Credit \nequivalent \nof \nOff-Balance \nSheet Items\n11.3.2.9.0.0 Exchange Rate Contracts\n11.3.2.9.1.0 Original Maturity-less than one year 2 \n11.3.2.9.2.0 Original Maturity-more than one year \nand less than two years5 \n11.3.2.9.3.0 Original Maturity-more than two years \n(For each additional year)3\n(for each \nyear)\n11.3.2.10.0.0 Interest Rate Contracts\n11.3.2.10.1.0 Original Maturity-less than one year 0.5 \n11.3.2.10.2.0 Original Maturity-more than one year \nand less than two years1 \n11.3.2.10.3.0 Original Maturity-more than two years \n(For each additional year)1\n(for each \nyear)\n \nPart III (c ) \u2013 Exposures Recognised under Credit Risk Mitigation (CRM)\n(Rs. \u2019000)\nWeb-based \nReturn CodeCRM techniquesPrincipal \nAmount\n11.3.3.0.0.0 Total CRM Exposure\n11.3.3.1.0.0 Collateralised Transactions\n11.3.3.1.1.0 Retail Exposure\n11.3.3.1.1.1 Cash\n11.3.3.1.1.2 Gold\n11.3.3.1.1.3 Government Securities\n11.3.3.1.1.4 Provident Fund Balances\n11.3.3.1.1.5 Debt Securities Rated by a recognised ECAIs\n11.3.3.1.1.6 Debt Securities not Rated by a recognised ECAIs\n11.3.3.1.1.7 Equities that are included in a Main Index.\n11.3.3.1.2.0 Other Exposures\n11.3.3.1.2.1 Cash\n11.3.3.1.2.2 Gold\n11.3.3.1.2.4 Provident Fund Balances\n11.3.3.1.2.3 Government Securities\n11.3.3.1.2.5 Debt Securities Rated by a recognised ECAIs\n11.3.3.1.2.6 Debt Securities not Rated by a recognised ECAIs\n11.3.3.1.2.7 Equities that are included in a Main Index.\n11.3.3.2.0.0 Other CRM Techniques\n11.3.3.2.1.0 On-balance Sheet Netting\n11.3.3.2.2.0 Guarantees", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 65, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  59\nPart IV \u2013 Computation of Risk-weighted Amount for Market Risk\n(Rs. \u2019000)\nWeb-based \nReturn CodeItemCapital Charge \nAmount\n11.4.1.0.0.0 Total Capital Charge for Market Risk \n= (11.4.1.1.0.0+11.4.1.2.0.0+11.4.1.3.0.0)\n11.4.1.1.0.0 Capital Charge for Interest Rate\n= (11.4.1.1.1.0+11.4.1.1.2.0)\n11.4.1.1.1.0 General Interest Rate Risk\n11.4.1.1.1.1 i) Net Long or Short Position\n11.4.1.1.1.2 ii) Horizontal Disallowance\n11.4.1.1.1.3 iii) Vertical Disallowance\n11.4.1.1.1.4 iv) Options\n11.4.1.1.2.0 Specific Interest Rate Risk\n11.4.1.2.0.0 Capital Charge for Equity = (11.4.1.2.1.0+11.4.1.2.2.0)\n11.4.1.2.1.0 General Equity Risk\n11.4.1.2.2.0 Specific Equity Risk\n11.4.1.3.0.0 Capital Charge for Foreign Exchange & Gold\n11.4.2.0.0.0 Total Risk-weighted Amount for Market Risk \n= (11.4.1.0.0.0*10)\nPart V \u2013 Computation of Risk-weighted Amount for Operational Risk\n(Rs. \u2019000)\nWeb-based \nReturn CodeItemFirst \nYearSecond \nYearThird \nYearTotal Average\n11.5.1.0.0.0 Gross Income     \n11.5.1.1.0.0 Net Income     \n11.5.1.1.1.0 Net Interest Income (Interest \nIncome-Interest Expenses)\n11.5.1.1.2.0 Non-interest Income\n11.5.1.2.0.0 Less  \n11.5.1.2.1.0 Realised Profits from the Sale of \nSecurities in the Banking Book\n11.5.1.2.2.0 Extraordinary / Irregular Items of \nIncome\n11.5.2.0.0.0 Total Capital Charge for \nOperational Risk \n= (11.5.1.0.0.0*15%)\n11.5.3.0.0.0 Total Risk-weighted Amount for \nOperational Risk \n= (11.5.2.0.0.0*10)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 66, "year": 2013}, "type": "Document"}
{"page_content": "60 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex I\nIMPLEMENTATION OF IT INFRASTRUCTURE FOR BASEL II\n1. Implementation of IT  Architecture and Design Principles for Basel II\nImportant requirements for this architecture are as follows;\n\u2022 C reate a robust, scalable & network friendly Basel II technology framework, which can \nsupport a regional user and is extendable to new regulatory compliance requirements as the \nBank increases its presence in the emerging markets.\n\u2022 Rationalise the technologies by choosing common platforms for common requirement across \nall Pillars and common business domain across all Pillars. This will reduce total cost of \nownership, maintenance overheads and will facilitate change management for the bank.\n\u2022 Adopt a robust and centralised data collection and consolidation approach for Basel II through \nthe Banking Data Warehouse (BDW) for risk analytics and Consolidated reporting\n\u2022 Reduce manual data capture methods for Basel II.\n\u2022 Design for Basel II applications should cater for high availabi lity, proper exception handling \nand proper backup/recovery to ensure that potential risk due to data loss during unforeseen \ncircumstances is negligible.\n\u2022 All new core banking applications and credit related applications in all geographical regions \nmust be Basel II compliant.\n\u2022 All Basel II applications must adhere to the bank\u2019s policies for infrastructure security, data \nsecurity, application controls and user administration.\n\u2022 All Basel II applications should demonstrate disaster recovery as a capability.\n2. Requir ements for a Regulatory Capital IT Solution\nThe following eight elements are the system level requirements that a financial services \ninstitution must meet to comply with the Basel II Accord.\n2.1 Storage of Curr ent and Historical Data in a Data Warehouse\nBasel II calls for financial institutions to store a substantial quantity of data. To produce", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 67, "year": 2013}, "type": "Document"}
{"page_content": "Basel II calls for financial institutions to store a substantial quantity of data. To produce \na measure of Risk Weighted Assets, the Bank for International Settlement (BIS) requires \nfinancial institutions to store a comprehensive database of operational loss incidents, \nfinancial instruments, credit losses, and general ledger data. For financial institutions that \nseek to calculate Pillar I capital using the Advanced IRB approach for retail or wholesale \nassets, seven years of default data are required to validate internal ratings models. Beyond \nhistorical data storage requirements, a Basel II compliant IT solution must also provide \nthe ability to store and process multiple versions of data. For example, in the area of stress \ntesting, financial institutions are required to test the assumptions of their models in a variety \nof economic scenarios. Given these requirements, scalable and efficient storage of current, \nhistorical, and alternative scenario data is critical.\n2.2 Auditable and Flexible Risk Weighted Asset Calculations\nThe Basel II Capital Accord defines a large number of rules for calculating Risk Weighted \nAssets and minimum required capital for credit, market and operational risks. However, \nbeyond simply performing calculations, the BIS also requires that financial institutions have \nthe ability to easily adjust these calculations, and the categorisations on which they depend. \nThe Accord also implicitly requires that a financial services institution be able to switch \nbetween the various Pillar I methodologies. Therefore, a regulatory capital IT solution", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 67, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  61\nshould not only provide all of the required calculations within the Accord, but should also \nallow auditors, regulators, and internal users to audit, review and revise these calculations \nas necessary. There are also certain areas where the Accord gives financial institutions the \nflexibility to optimise capital calculations such as in the case of collateral application. \n2.3 Contr ol Management with automatic workflows \nThe Basel II framework requires financial institutions to demonstrate that they have the \nappropriate procedures and controls in place to manage their risks. Therefore, a regulatory \ncapital IT system should allow financial institutions to map controls against their risks.  \nIn such a framework, financial institutions can define automatic workflows where the system \nprompts employees to act based on certain defined key performance indicators (KPIs) or \nuser-defined business events. Finally, the system should also allow financial institutions \nto audit and monitor their controls and procedures in order to periodically assess their risk \nmanagement practices based on actual loss experience.\n2.4 Sophisticated Analytical Tools\nFinancial institutions can implement sophisticated models to assess their risk position and \noptimise usage of capital. The BIS allows qualifying financial institutions to implement \ninternal models for Probability of Default (PD), Loss Given Default (LGD), and Exposure at \nDefault (EAD). Therefore, a regulatory capital IT solution must allow a financial institution \nto implement and test any model that can properly assess its risk position. These external \napplications would also have the ability to write information back to a central data source.\n2.5 Flexible User  Driven methods\nThe Basel II Accord defines a vast range of calculations and options. Examples of these", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 68, "year": 2013}, "type": "Document"}
{"page_content": "The Basel II Accord defines a vast range of calculations and options. Examples of these \noptions include whether to use the Simple or Comprehensive approach for credit risk \nmitigation, to use supervisory or own-estimate haircuts, and to determine the risk weighted \nassets based on a top-down approach. Given the range of possibilities, users must have \nthe flexibility to easily change the methods they use to calculate risk-weighted assets \nand assess the potential impact of those changes. Users should also have the flexibility to \nspecify which specific calculation components are processed in a given job submission.  \nFor example, the system should not force the user to reprocess every single statistic if \nall they seek to do is recalculate a subset of the organisation\u2019s assets. Additionally, the \nuser should have the option to generate detailed auditing output, either for a sampling of \naccounts or an individual transaction at their discretion.\n2.6 Coordinated Pr ocess Flow\nThe Basel II calculations requires data that would generally originate from different \nprocessing systems, including those used to support front office, back office and risk \nmanagement operations. Further, the Accord requires synchronisation of this data to \nperform calculations on a consistent and integrated basis. Once calculations are completed, \nthe system may need to further process the output data through a variety of third party \napplications for further analysis or reporting. Given these complex data workflow \nrequirements, a regulatory capital solution needs to consolidate each of these process flow \nissues without any error.\n2.7 T imely reporting that meets Internal and External Requirements\nSystems and data are irrelevant if they do not provide information in a timely manner. \nUnder the Basel II regime, financial institutions need to meet highly specific and demanding \nexternal and regulatory reporting requirements. Simultaneously, internal management", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 68, "year": 2013}, "type": "Document"}
{"page_content": "external and regulatory reporting requirements. Simultaneously, internal management \nrequires a continuous stream of information to better understand their organization\u2019s", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 68, "year": 2013}, "type": "Document"}
{"page_content": "62 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nrisk profile. Therefore, it is essential that a regulatory capital solution provide a sound \nmanagement reporting platform. A Basel II compliant IT solution must be able to regularly \nand accurately produce the necessary internal and external reports for sound risk and \nprofitability management.\n2.8 Low Cost and Low Risk\nFinancial services management and information systems professionals do not have the time \nor the budget to deal with high priced or unreliable solutions. For this reason, any regulatory \ncapital solution must maintain a low total cost of ownership and be highly reliable.  \nThe major components of the regulatory capital IT solution should be covered through \na single data source so that constant reconciliation of data is avoided. Just as important, \nthe system needs to eliminate the constant administrative management inherent to many \nenterprise systems. It should not have to rely on vigilant system administrators to coordinate \nthe functioning of different applications. \n3. Data Integration and the Data Warehouse\nThere is a need to align the data structures that drive risk and financial data. These are:\n1. Transactional data that covers all types of transaction and links the financial results of \neach transaction with the risk and financial objectives of the financial institution.\n2. Asset data  that covers all types of assets that might be linked to the transaction, the \nvaluation of these assets and the correlation of asset behaviour.\n3. Customer data for all counter-parties, which includes the credit risk of the counterparty \nand makes provisions when new information or circumstances changes that risk. Detailed \ndata on customers are required to support product selection and pricing in addition to other \nrelationship management decisions.\nThe above risk and financial data could be broadly categorised as follows:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 69, "year": 2013}, "type": "Document"}
{"page_content": "The above risk and financial data could be broadly categorised as follows:\nInstrument/Account Data \u2013  These data cover basic information about every financial \ninstrument held by the financial institution, i.e. Data about financial instruments such as \nexposure (provision/allowances, outstanding balances, credit lines, etc.), maturity, asset, \nproduct and industry classifications, interest rates, and so on.\nCustomer/Counterparty Data \u2013  This refers to the relevant data for different parties that a \nfinancial institution may deal with in a financial transaction. In addition, these data cover \ninformation such as industry classification and customer financial information that may be \nused in deriving PD estimates such as debt to equity ratios, current assets, net sales, retained \nearnings, revenues, profits, cost of goods, share price, and bond price. Financial institutions \nmay use these data with regulatory capital data to perform customer-based profitability analysis.\nLedger Data \u2013 These data cover transaction and account balance data stored in a ledger. Ledger \ndata are used to do business unit and product based profitability analysis. Users may analyse \nand report on capital for market, credit, and operational risk. \nRisk Mitigation Data \u2013  These data cover information about collateral, insurance, netting \nagreements, credit derivatives, and guarantees. Among other attributes, these data include \nthe mitigant type, mitigation value, maturity of the instrument, and the specific instrument to \nwhich the collateral maps. Insurance policy data information are relevant for the mitigation of \noperational risks.\nIncident Data \u2013 Analysis of credit and operational loss incidents depends upon having granular \nincident data. This data covers the essential information about loss incidents such as loss \namount, business unit, loss description and risk category.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 69, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  63\nHistorical Data \u2013  If financial institutions opt for the Advanced Internal Ratings based approach \nfor credit risk and the Advance Measurement approach for operational risk, they must store \na substantial volume of historical data. These data will be necessary to test historical default \nexperiences against the forecasted values generated by predictive models. These data cover both \nhistorical credit and operational loss data.\nLimits and Loss Provision Data \u2013  The Basel II requirement is that the financial institutions \nshould limit their exposures for lending based on industries, geography, and specific customers. \nThese data cover the exposure limits and the loan loss provisions. \nExamples of some data fields:\nBorrower Legal Name, Customer Basel segment, Borrower Credit Grade, Consolidated Group \nTurnover, Facility Currency, Limit Amount, Committed Limit Indicator, Collateral Type/Sub \nType, Country of Incorporation, Guarantor Credit Grade, Facility Type External Credit Rating, \nCollateral Currency, Collateral Location, Negative Pledge Indicator, Maturity Date etc.\nA typical Banking Data Warehouse for a financial institution could be as follows:\n4. Data Governance & Management\n4.1 Background\nTo achieve Basel II certification, the data used in all pillars must be effectively \nmanaged. This includes both data management and technology governance. IRBA data  \nself-assessment requires a process to be in place for vetting inputs into internal rating systems. \nIt should include an assessment of the accuracy, completeness and appropriateness of data. \nEstablishment of standards and conducting relevant tests for accuracy, completeness, \ntimeliness and reliability  of data are essential to assess on  an ongoing basis  the risks \narising from potential poor quality data and to ensure that appropriate risk mitigation \nmeasures have been undertaken.\n4.2 Data Quality Management (DQM) framework", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 70, "year": 2013}, "type": "Document"}
{"page_content": "measures have been undertaken.\n4.2 Data Quality Management (DQM) framework\nData quality management is an ongoing process and it consists of the stakeholders,  \nDQM process and DQM tools. \n4.2.1  The Stakeholders\nData owners, system owners, data consumers and data services are the main \nstakeholders. Data owners are responsible for the process of updating data into the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 70, "year": 2013}, "type": "Document"}
{"page_content": "64 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nsystem. They will define the data quality measurements, monitor data quality metrics, \nreport data quality metrics to data services and resolve data quality issues. A data \nconsumer is any stakeholder, who extracts data from another system for processing or \ninformation services. They will report data quality issues to DQ dashboard/DQ log, \nprovide input and take part in the resolution of DQ issues and escalate DQ issues to \ndata service in the event of non-resolution. The owner of the data management policy \nis Data Services. It will administer data ownership, resolve data ownership issues, \nadminister DQ Dashboard and Issues Log, facilitate root cause analysis process and \ntrain data quality management.\n4.2.2  Data Quality Management (DQM) Pr ocess\nThe DQM process can be elaborated under 6 steps.\nStep 1 - Identification of Critical Quality Elements (CQE) \nE.g., CQE for Probability of Default (PD) Drivers; Detailed Drivers \u2013 Borrower PD, \nGuarantor PD, PD validation; Field names \u2013 CRR, Ratings, Date of Ratings etc.\nStep 2 \u2013 Definition of quality (CACTI)\n1. Completeness \u2013 Are all the necessary data captured and present?  \n(E.g., Is this field mandatory?)\n2. Accuracy \u2013 Do the data accurately represent reality or a verified source?   \n(E.g., Is there maker/checker in place?)\n3. Consistency \u2013 Are the data elements consistently defined and understood?  \n(E.g., Is there a drop down list in the system?)\n4. T imeliness \u2013 Are the data available within the required timeframe?  \n(E.g., What is the agreed turnaround time to complete data \ncapture/extraction?)\n5. Integrity - Is the structure of the data and the relationship between fields  \nmaintained consistently?  \n(E.g., Is there data verification on the field?)\nStep 3 \u2013 Controls and checks\nThe business process that support data collection, updating and maintenance should", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 71, "year": 2013}, "type": "Document"}
{"page_content": "The business process that support data collection, updating and maintenance should \nhave the appropriate quality controls and checkpoints in place. This is to ensure \nthat data fit for the purpose is produced as close to the point of entry as possible, \nand avoids or reduces the possibility of data errors and the need for data cleansing. \nExamples of a control point include a maker checker process or mandatory fields in \nthe system. There are 3 defined stages to this step,\na) Document the data process flow\nb) Review control and checks using the CACTI framework\nc) Implement additional control checkpoints if required.\nStep 4 \u2013 Data quality measurement\n1. It will provide quantifiable evidence of an ef fective data management process.\n2. It can be used as a toll to monitor and track the data quality level.\n3. When combined with the data quality tar get, the measurement can be used as a \ntrigger to commence a review of the data management process.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 71, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  65\n4. The standard frequency for a data quality measurement is monthly . However, this \ncan vary depending on the type of data or system. \n    % Quality level =  No. of records meeting requirements              X   100\n                  Total No. of records in universe or sample\n5. The data quality tar get level should be set at a level, which is:\n \u2013 Realistic, given current knowledge of the data quality level;\n \u2013 Represents the next step that the data owner wants to achieve in improving data \nquality given incremental improvement is achievable.\nStep 5 \u2013 Monitoring\n1. Monitoring is critical to ensure the sustainability of any data  quality management effort.\n2. Monitoring can be achieved through periodic data quality measurement, manual or system \nerror reporting\n3. The data quality tar get level can be used as a tool to monitor data quality.\nStep 6 \u2013 Data cleansing, problem resolution and Escalation\nData owners \u2013 To ensure that data cleansing and error correction is performed in a consistent, \nsystematic and methodical manner, a documented error correction procedure is critical.\nData consumers \u2013 Data consumers may put in place a process for error correction.\nData quality escalation \u2013 Within each department, ideally, there should exist an escalation path \nfor dealing with data quality problems. These may include escalation for inaccurate or missing \ninformation, such as to the Business Unit Officer or Business Support Unit.\nData Quality Management Process \u2013 Six broad Data Quality Management (DQM) Process steps to \nguide Data Owners and Consumers to perform data quality management\nIdentify\nCritical\nQuality\nElementsDefine Data\nQuality\nRequirementsDocument\nData\nFlow\nReview\nControls\nand checks\nIn place\nImplement\nAdditional\nControl\ncheckpointsMeasure\nData quality\nlevel\nMonitor\nData quality\nlevel\nIdentifies Critical\nQuality elements\n& provides input for \nmeasurement \ndefinitionMonitors data", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 72, "year": 2013}, "type": "Document"}
{"page_content": "Identifies Critical\nQuality elements\n& provides input for \nmeasurement \ndefinitionMonitors data\nQuality as Data\nOwner of \nDownstream\napplicationCleansing ,\nError\nResolution\nEscalates data\nQuality issues\n& provide \ninputs\non resolution1. Identification 2. Measurement \nDefinition3. Controls \n& Checks4. Measure\n5. Monitoring6. Escalation , \nCleansing & \nResolution\nData Owner\n&\nSystem \nOwner\nData \nComsumerData\nConsumer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 72, "year": 2013}, "type": "Document"}
{"page_content": "66 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n5. T echnology Governance Framework\nThe following are the key requirements to consider from the Basel II Technology framework:\n1. Robustness \u2013 Robustness is the resilience of the system, especially when under stress or  \nwhen confronted with invalid inputs. It is the ability of the software system to maintain \nfunction even with changes in the internal structure or external environment.\n2. Scalability \u2013 Scalability indicates the capability of a system to increase total throughput  \nunder increased load when resources (typically hardware) are added. A scalable system is \none that can easily be altered to accommodate changes in the number of users, resources and \ncomputing entities.\n3. Security & Controls \u2013 The management, operational, and technical controls ( i.e., safeguards \nor countermeasures) prescribed for an information system to protect the confidentiality, \nintegrity, and availability of the system and its information.\n4. System Availability \u2013 Availability means the degree to which a system, sub system or \nequipment is operable and in a committable state at the start of a mission, when the mission \nis called for at an unknown, i.e., a random, time.\n5. Sustainability \u2013 Sustainability is a systemic concept, relating to the continuity of commercial  \nand technology aspects in this context.\n6. Reusability \u2013 Reusability is the likelihood a technology component can be used again to add  \nnew functionalities with slight or no modification. The ability to reuse relies in an essential \nway on the ability to build larger things from smaller parts, and being able to identify \ncommonalities among those parts.\n7. T estability \u2013 An adjective meaning \u201cthe ability to be tested\u201d\n8. T echnology Adequacy \u2013 Refers to the sufficiency of the chosen technology to address a \nspecific business need.\nThe key areas to be focussed under Basel II requirements are as follows:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 73, "year": 2013}, "type": "Document"}
{"page_content": "specific business need.\nThe key areas to be focussed under Basel II requirements are as follows:\n1. The collection of data (data source and data consolidation) \u2013  \n- There should be a consistent and qualified process to collect and consolidate data with  \nproper metadata capture. \n- It should be well defined and automated if possible.  \n- All processes involved should be traceable, accountable and auditable.\n2. The storage of data and Basel II related system \u2013  \n- The storage should be on a robust data infrastructure that allows the financial institution \nto perform backup, restore, archive, replicate, high availability, and perform load \nbalancing when required. \n- The application must be designed with security as the underlying core.  \n- The system must comply with the financial institution\u2019s application and operational \nsecurity policies. \n- Further the system must be designed with proper error handling and a defined process  \nunder adequate control to cleanup and to recover the system to normal state.\n- T echnology used should be in line with the financial institution\u2019s architecture direction.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 73, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  67\n3. Data processing and transmission \u2013  \n- There must be control on all files that are exchanged between systems.  \n- There must be proper file identification for each file that is exchanged between systems.  \n- There should be a HASH total for each file that is exchanged between systems, to be \nconfirmed, if needed, as advised by regulators and internal security standards.\n4. Analytical and reporting for end-user consumption \u2013  \n- Data/report download and manual manipulation is not encouraged, unless justified by \nbusiness and exception sought. \n- \u201cFit-for -purpose\u201d reporting and analytical tools should be used in the technical solution. \n- There should not be any manual report distribution via e-mail or intranet.\n6. Conclusion\nBanks are free to develop, choose and purchase their IT systems and software for the Basel II \nprogramme depending on their risk modelling and data warehouse requirements. However, the \nBasel Committee has categorically outlined the following Supervisory expectations for the use \nof vendor products in IRB processes in their Newsletter No. 8 (March 2006):\n1. Banks must be able to document and explain the role of vendor products and the extent to  \nwhich they are used within their IRB processes. \n2. Banks must be able to demonstrate a thorough understanding of vendor products used in their \nIRB processes. \n3. V endor products must be appropriate to the bank\u2019s exposures and risk rating methodologies \nand suitable for use within the IRB framework. \n4. Banks must have clearly articulated strategies for regularly reviewing the performance of  \nvendor model results and the integrity of external data used in their IRB risk quantification \nprocesses. \n5. Further , the supervisors/regulators will only review and assess the acceptability of estimates \nbased on the system behind the estimates.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 74, "year": 2013}, "type": "Document"}
{"page_content": "68 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76J(1) of the \nBanking Act, No.30 of 1988, as amended.\nSgd. B D W A Silva\nSenior Deputy Governor\nCentral Bank of Sri Lanka\nColombo\n31 October 2011\n \nBANKING ACT DIRECTION NO. 10 OF 2011\nAMENDMENT TO DIRECTIONS ON\nMAINTENANCE OF CAPITAL ADEQUACY RATIO\nThe qualifying criteria for the SME exposures given in paragraph 6.4.3.1.8 ( i)(d) of Schedule I in \nDirection 1(2) of the Banking Act, Directions No. 10 of 2007 is amended by replacing with the following \nparagraph:\nSME Exposures.  i. The maximum credit exposure of the lending bank to an SME shall not exceed \nRs. 200 million. \n ii. The annual turnover of the SME shall not exceed Rs. 600 million.\n iii. The annual turnover should be based on latest available audited financial \nstatements or certified by a Chartered Accountant or an Approved Accountant \nacceptable to the Department of Inland Revenue. In the case of draft financial \nstatements, the turnover certified by a Chartered Accountant or an Approved \nAccountant should be obtained within the year.\n iv. In the case of grant of credit facilities less than Rs. 50 million, the condition \niii above shall not be applicable and banks shall adopt their own internal \nmechanism to verify the SME\u2019s annual turnover.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 75, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  69\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Sections 46(1) and  \n76(J)(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n31 July 2013\nBANKING ACT DIRECTION NO. 5 OF 2013\nSUPERVISORY REVIEW PROCESS (PILLAR 2 OF BASEL II) FOR\nLICENSED COMMERCIAL BANKS AND\nLICENSED SPECIALISED BANKS\nIn the exercise of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act, No. 30 \nof 1988, last amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues Directions \nNo. 5 of 2013 on the implementation of Supervisory Review Process (SRP) for  Licensed Commercial \nBanks (LCBs) and  Licensed Specialised Banks (LSBs), respectively,  in accordance with the Basel II \nCapital Accord \u201cInternational Convergence of Capital Measurement and Capital Standards \u2013 A Revised \nFramework\u201d issued by  the Basel Committee on Banking Supervision of the Bank for International \nSettlements in June 2006. \n1.1 In terms of Sections 19(7) and 76G(7) of the Banking Act, the Monetary Board \nis empowered to determine the capital adequacy ratio to be maintained by every \nLCB and LSB, respectively, as far as practicable by adopting the guidelines for \ncapital adequacy set out by the Bank for International Settlements in Basel.\n1.2 In terms of Sections 46(1) and 76(J)(1) of the Banking Act, in order to ensure \nthe soundness of the banking system, the Monetary Board is empowered to issue \nDirections to all or any LCB and LSB, respectively, regarding the manner in \nwhich any aspect of the business of such banks is to be conducted.\n2.1 Commencing from 1 January 2014, every LCB and LSB shall, at all times, \nmaintain adequate capital to cover its exposure to all risks, notwithstanding that", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 76, "year": 2013}, "type": "Document"}
{"page_content": "maintain adequate capital to cover its exposure to all risks, notwithstanding that \nit has complied with the requirements of the Banking Act, Directions No. 9 and \n10 of 2007 dated 26 December 2007 issued to LCBs and LSBs, respectively.\n2.2 In determ ining the adequate capital referred to in Direction 2.1 above, every \nLCB and LSB shall consider the requirements specified in the Regulatory \nFramework on SRP attached hereto.\n3.1 Every LCB and LSB shall develop and implement a sound Internal Capital \nAdequacy Assessment Process (ICAAP) in accordance with the requirements \nspecified in Part II of the Regulatory Framework on SRP attached hereto.Empowerment \nunder the \nBanking Act.\nMaintain Adequate \nCapital above the \nMinimum Capital \nRequirement.\nImplement \nSound Internal \nCapital Adequacy \nAssessment \nProcess.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 76, "year": 2013}, "type": "Document"}
{"page_content": "70 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n4.1 T he Director of Bank Supervision or examiners of the Bank Supervision \nDepartment shall review and evaluate the following, in accordance with  \nPart III of the Regulatory Framework on SRP attached hereto.\n(a) ICAAP;\n(b) compliance with the requirements set out in these Directions and the  \nRegulatory Framework on SRP attached hereto; and\n(c) adequacy of capital maintained by each bank.\n5.1 The Central Bank of Sri Lanka shall intervene at an early stage to prevent capital  \nof a bank falling below the minimum requirement, in accordance with Part IV \nof the Regulatory Framework on SRP attached hereto.\n6.1 Every LCB and LSB shall submit a Board approved ICAAP Document to the \nDirector of Bank Supervision within six months from the end of its financial \nyear. For the purposes of these Directions and the Regulatory Framework on \nSRP attached thereto, in the case of banks incorporated outside Sri Lanka, the \n\u201cBoard\u201d shall mean the Head Office or the Regional Office that supervises the \nrespective bank.\n6.2 ICAAP  Document shall be prepared in accordance with the format given in \nAppendix I of the Regulatory Framework on SRP attached hereto. However, this \nformat shall be considered as the minimum requirement and ICAAP Document \nof every LCB and LSB shall be comprehensive and relative to its size, nature \nof the business and complexity of business activities.Supervisory \nReview and \nEvaluation \nProcess (SREP).\nSupervisory \nIntervention.\n \nRegulatory \nReporting.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 77, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  71\nREGULATORY FRAMEWORK ON \nSUPERVISORY REVIEW PROCESS\n(PILLAR 2 OF BASEL II)\nATTACHMENT TO THE \nBANKING ACT, \nDIRECTIONS No. 5 of 2013", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 78, "year": 2013}, "type": "Document"}
{"page_content": "72 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nCONTENTS\nPART I \u2013 OVERVIEW\n1. Introduction\n2. Objectives of Supervisory Review Process (SRP)\n3. Principles governing SRP\n4. Scope and Applicability\nPART II \u2013 INTERNAL CAPITAL ADEQUACY ASSESSMENT PROCESS (ICAAP)\n5. Developing and maintaining ICAAP\n6. The Board of Directors and Senior Management Oversight\n  6.1 Board responsibilities for ICAAP\n  6.2 Senior management\u2019 s responsibilities for ICAAP\n7. Comprehensive assessment of risks\n8. Sound Capital Assessment\n9. Monitoring and Reporting\n10. Internal Controls and Independent review\nPART III \u2013 SUPERVISORY REVIEW AND EV ALUATION PROCESS (SREP)\n11. Key Components\n12. Review Methodologies \n13. Objectives\n14. Coverage\n15. Qualitative Assessment\n16. Dialogue with the bank\nPART IV \u2013 SUPERVISORY INTERVENTION\nAppendix I", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 79, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  73\nPART  I  \u2013  OVERVIEW\n1. Introduction \n1.1 The Basel II capital adequacy framework, seeks to harness best practices in risk management into \nthe regulatory process, by providing a spectrum of approaches to measure capital adequacy of banks. \nThe Basel II framework also seeks to provide regulatory capital requirements that are both more \ncomprehensive and more sensitive to risk, and as such, more closely aligned to the risk appetite of \nbanks. \n The Basel II framework is based on three mutually reinforcing pillars:\na. Pillar 1: Minimum capital requirements for three major components of risks that banks face: \ncredit, market and operational risks;\nb. Pillar 2: Supervisory Review Process (SRP): Banks\u2019 own assessments of their capital adequacy \nand encourage banks to develop and use better risk management techniques in monitoring and \nmanaging their risks; and\nc. Pillar 3: Market Discipline: materially increased disclosure requirements.\n1.2 The SRP of licensed commercial banks (LCBs) and licensed specialised banks (LSBs) (hereinafter \nreferred to as \u201cbanks\u201d) is conducted to assess their capital adequacy and to determine whether \nbanks should hold additional capital to cover risks that are not covered or adequately covered by the \nminimum capital requirements under Pillar 1 of Basel II. \n2. Objectives of SRP\n SRP  is intended to:\n2.1 encourage banks to utilise better risk management techniques \u2013 the level of risks a bank is exposed \nto, and the control environment that will determine the level of capital required to be maintained by \nbanks;\n2.2 enhance the risk-based supervision of banks in order to assess the capital adequacy relative to risks;\n2.3 evaluate the bank\u2019s Internal Capital Adequacy Assessment Process (ICAAP) that determines the \nlevel of capital to be maintained against all risks and ensure that banks have adequate capital to \nsupport all risks; and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 80, "year": 2013}, "type": "Document"}
{"page_content": "support all risks; and\n2.4 ensure that banks use ICAAP in more general business decisions and budgets, in more specific \ndecisions such as allocating capital to business units and when evaluating individual credit decision \nprocess.\n3. Principles governing SRP\n SRP  is conducted based on the following four key principles provided in the Pillar 2 of Basel II \ncapital framework:\na. Banks shall have a process for assessing their overall capital adequacy in relation to their risk \nprofiles and a strategy for maintaining their capital levels (Principle 1 of Pillar 2-SRP).\nb. The Central Bank of Sri Lanka (CBSL) as the regulator will review and evaluate bank\u2019s ICAAP \nand strategies, as well as its ability to monitor and ensure compliance with regulatory capital \nratios (Principle 2 of Pillar 2-SRP).\nc. CBSL  expects banks to operate above the minimum regulatory capital ratios and requires banks \nto hold capital in excess of the minimum (Principle 3 of Pillar 2-SRP).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 80, "year": 2013}, "type": "Document"}
{"page_content": "74 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nd. CBSL  will intervene at an early stage to prevent capital from falling below the minimum levels \nrequired to support the risk characteristics of a particular bank (Principle 4 of Pillar 2-SRP).\n4. Scope and Applicability\n This Regulatory Framework shall be applicable to banks on both standalone (\u201cSolo\u201d) level, as well \nas on the consolidated (\u201cGroup\u201d) level.\nPART  II  \u2013  INTERNAL CAPITAL ADEQUACY ASSESSMENT PROCESS (ICAAP)\n5. Developing and maintaining ICAAP\n5.1 Every bank shall develop and maintain a rigorous and well-documented ICAAP proportional to its \noperations and risk profile and consistent with prudential requirements. \n5.2 ICAAP  of a bank shall include the following five main features.\na. Board and senior management oversight\nb. Comprehensive assessment of risks\nc. Sound capital assessment\nd. Monitoring and reporting \ne. Internal controls and independent review\n5.3 A  bank shall design its ICAAP according to the size, complexity and business strategies of the \nrespective bank.\n6. The Board of Dir ectors and Senior Management Oversight \n6.1 Board responsibilities for ICAAP\na. The Board shall ensure that the bank has in place a strategic plan which clearly outlines its \ncurrent and future capital needs, anticipated capital expenditure, desirable capital level, and \nexternal capital sources.\nb. The Board shall review and approve the target level and composition of capital, and the process \nfor setting and monitoring such targets at least, annually.\nc. The Board shall ensure that the senior management:\n (i) performs an analysis of the current and future capital requirements of the bank in relation \nto its strategic objectives;\n (ii) establishes frameworks for assessing the categories of risks faced by the bank and develops \nsystems related to these risks to the capital level of the bank;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 81, "year": 2013}, "type": "Document"}
{"page_content": "systems related to these risks to the capital level of the bank;\n (iii) establishes a method for monitoring compliance with internal policies on risk assessment \nand the processes related to risks to capital levels; and\n (iv) establishes a strong internal control culture throughout the bank.\nd. The Board shall approve and exercise effective oversight over the bank\u2019s stress testing processes.\ne. The Board shall review ICAAP  of the bank periodically, at least annually, to:\n (i) assess the level and trend of material risks and their ef fects on capital levels;\n (ii) evaluate the sensitivity and reasonableness of key assumptions used in the capital \nassessment measurement system;\n (iii) determine that the bank holds adequate capital against the various risks and is in compliance \nwith established capital adequacy goals; and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 81, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  75\n (iv) assess the bank\u2019s future capital requirements based on its reported risk profile and make \nnecessary adjustments to the strategic plan, accordingly.\nf. The Board shall ensure that public disclosures are made in the bank\u2019s audited annual report/\naudited financial statements, both qualitative and quantitative information, to assist in assessing \nthe adequacy of bank\u2019s capital commensurate with all material risks the bank is exposed to in \nrelation to its current and future activities. \ng. The Board shall approve the annual ICAAP  document. \n6.2 Senior management\u2019s responsibilities for ICAAP\n The senior management shall: \na. ensure the appropriateness of ICAAP  on an ongoing basis;\nb. have a good understanding of the design and operation of ICAAP;\nc. be responsible for developing a risk management framework that is appropriate in light of the \nrisk profile and business strategy of a bank and integrating ICAAP with the capital planning and \nmanagement processes of the bank. In this regard, senior management shall, at a minimum:\n (i) establish robust policies and procedures to be approved by the Board to identify, measure \nand report all material risks;\n (ii) evaluate the level and trend of material risks and their ef fects on capital levels;\n (iii) evaluate the sensitivity and reasonableness of key assumptions used in the capital \nassessment and measurement system;\n (iv) determine if the bank holds adequate capital against the risks faced by the bank;\n (v) assess future capital needs based on the risk profile of the bank and propose necessary \nadjustments to its strategic plan; and\n (vi) ensure that ICAAP  is subject to annual independent review for robustness and integrity.\nd. establish comprehensive and adequate written policies and procedures, to be approved by the \nBoard, on its stress testing processes taking an active interest in the development and operation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 82, "year": 2013}, "type": "Document"}
{"page_content": "Board, on its stress testing processes taking an active interest in the development and operation \nof stress-testing and, allocating sufficient skilled and competent resources to the modelling \nfunction.\ne. ensure regular reporting of bank\u2019 s ICAAP to the Board.\nf. prepare the annual ICAAP document in accordance with the specified format given in  \nAppendix I; and\ng. submit the Board approved annual document of ICAAP to the Director of Bank Supervision \nwithin six months from the end of the financial year of the respective bank.\n7. Compr ehensive assessment of risks\n7.1 Bank\u2019 s ICAAP shall identify all material risks, which are arising from both on balance sheet and  \noff-balance sheet exposures, faced by the bank and measure these risks that can be reliably quantified \nunder both normal and stressed conditions. ICAAP shall, therefore, address the following risks.\na. Risks captured under Pillar 1: credit, market and operational risks;\nb. Risks not fully captured under Pillar 1; concentration risk (credit risk), interest rate/rate of return \nrisk in the banking book (market risk) and \nc. Risk types not covered by Pillar 1: risks which are not specifically addressed under Pillar 1, \nwhich includes liquidity risk, concentration risk, reputational risk, compliance risk, strategic and \nbusiness risk, residual risk.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 82, "year": 2013}, "type": "Document"}
{"page_content": "76 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n7.2 A  bank shall be able to identify other external risk factors that may arise from the regulatory, economic \nor business environment. In addition, adequate corporate governance and proper risk management \nincluding internal control arrangements constitute the foundation of an effective ICAAP.\n7.3 The risk measurement systems shall be sufficiently comprehensive and rigorous to capture the \nnature and magnitude of the risks faced by the bank.\n7.4 The risks that are not easily quantifiable shall be evaluated using qualitative assessment and \nmanagement judgment.\n7.5 When measuring risks, comprehensive and rigorous stress tests shall be performed to identify \npossible events or market changes that could have serious adverse effects or significant impact on \nthe bank\u2019s capital and operations.\n7.6 In assessing risks, banks shall also consider the applicable Directions issued under the Banking Act.\n8 Sound Capital Assessment\n Internal capital allocation and assessment process shall meet the following requirements.\n8.1 Banks shall have an explicit Board approved capital plan which states the objectives and the time \nperiod for achieving those objectives, and in broad terms the capital planning process and the \nresponsibilities for that process.\n8.2 The plan shall also lay out how the bank will comply with capital requirements in the future related \nto the level of risk, and a general contingency plan for dealing with divergences and unexpected \nevents such as raising additional capital, restricting business activities or using risk mitigation \ntechniques.\n8.3 The bank shall set capital targets which are consistent with their risk profile, stage of the business \ncycle in which the bank is operating, and business plans. \n8.4 An internal strategy for maintaining capital levels which should not only reflect the desired level of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 83, "year": 2013}, "type": "Document"}
{"page_content": "risk coverage but also incorporate factors such as loan growth expectations, future sources and uses \nof funds, and dividend policy. \n8.5 The amount of capital held shall reflect not only the measured amount of risks but also an additional \namount to account for potential uncertainties in risk measurement. \n8.6 In assessing capital, a bank shall also evaluate the quality and capacity of its capital to absorb losses.\n8.7 The bank shall demonstrate to CBSL that its capital assessment approach is conceptually sound and \nthat outputs and results are reasonable.\n9. Monitoring and Reporting\n9.1 The bank shall establish an adequate system for monitoring and reporting risk exposures and, \nassessing how the bank\u2019s changing risk profile affects the capital requirements.\n9.2 The bank\u2019 s Board and the senior management shall:\na.  receive reports on the bank\u2019s risk profile and capital needs in a manner appropriate to facilitate \nthe conduct of their responsibilities; \nb. evaluate the level and trend of material risks and their ef fects on capital levels;\nc. evaluate the sensitivity and reasonableness of key assumptions used in the capital assessment \nmeasurement system;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 83, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  77\nd. determine that the bank holds adequate capital against the risks and is in compliance with \nestablished capital adequacy goals; and\ne. assess its future capital requirements based on the bank\u2019s reported risk profile and make necessary \nadjustments to the bank\u2019s strategic plan, accordingly.\n10. Internal Contr ols and Independent Review\n10.1 The bank\u2019s internal control structure is essential to the capital assessment process. Effective control \nof the capital assessment process includes an independent review, and where appropriate, with the \ninvolvement of internal or external audits.\n10.2 The person(s) responsible for the development or implementation of ICAAP shall not be involved \nin the independent review.\n10.3 The bank shall conduct periodic independent reviews of its risk management processes to ensure \ntheir integrity, accuracy, and reasonableness. Areas that shall be reviewed include:\na. appropriateness of the bank\u2019s capital assessment process given the nature, scope and complexity \nof its activities;\nb. identification of lar ge exposures and risk concentrations;\nc. accuracy and completeness of data inputs into the bank\u2019 s assessment process;\nd. reasonableness and validity of scenarios used in the assessment process; and\ne. stress testing and analysis of assumptions and inputs.\nPART  III  \u2013  SUPERVISORY REVIEW AND EV ALUATION PROCESS (SREP)\n11. Key Components \n SREP , which consists of the following key components, shall be carried out by the Director of Bank \nSupervision or examiners of the Bank Supervision Department.\na. Review of the bank\u2019 s ICAAP;\nb. Review of the bank\u2019 s risk profile;\nc. Review of the levels and quality of capital held; and\nd. Communication of SREP  results to the bank.\n12. Review Methodologies \n SREP  shall involve a combination of:\na. periodic examinations or inspections;\nb. continuous supervision;\nc. discussions with the bank management;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 84, "year": 2013}, "type": "Document"}
{"page_content": "b. continuous supervision;\nc. discussions with the bank management;\nd. review of work of internal and external auditors; and\ne. periodic reporting.\n13. Objectives \n The objective of the review is to: \na. evaluate the adequacy of bank\u2019s internal capital adequacy assessments and strategies, as well as \ntheir ability to monitor and ensure compliance with regulatory capital ratios;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 84, "year": 2013}, "type": "Document"}
{"page_content": "78 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nb. ensure that the bank operates above the minimum regulatory capital ratios and composition of \ncapital is appropriate for the nature and scale of the bank\u2019s business; \nc. identify existing or potential problems and key risks faced by the bank, deficiencies in their \ninternal control and risk management frameworks, and the degree of reliance that can be placed \non the outputs of ICAAP;\nd. intervene at an early stage to prevent capital from falling below the minimum levels required to \nsupport the risk characteristics of the bank;\ne. take appropriate supervisory action and regulatory measures if results of this process are not \nsatisfactory.\n14. Coverage\n SREP  will cover a quantitative review of bank\u2019s Pillar 1 inherent risk exposures and Pillar 2 inherent \nrisk exposures.\n15. Qualitative Assessment\n If Pillar 2 risks are not readily quantifiable, the supervisory judgment is to be used with respect to \nqualitative assessments of the bank\u2019s ability to contain actual risk exposures within prudent, planned \nlevels through effective risk governance, oversight, management and control practices.\n16. Dialogue with the bank\n16.1 SREP  involves an active dialogue with the bank regarding ICAAP, through which CBSL seeks to:\na. gain deeper insights into the bank\u2019 s overall control and risk management framework;\nb. establish a closer understanding of how the bank approaches the risks that are not covered under \nthe minimum capital requirements and the amount of internal capital allocated to them;\nc. understand the mechanisms the bank has maintained for identifying, measuring, monitoring, \ncontrolling, mitigating and reporting its risks; and \nd. understand whether additional capital on top of that assessed is necessary to cover the banks\u2019 \nexisting risk exposures, as well as future planned sources of capital.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 85, "year": 2013}, "type": "Document"}
{"page_content": "existing risk exposures, as well as future planned sources of capital.\n16.2 The dialogue will provide an opportunity for the bank to make appropriate changes to its ICAAP . \n16.3 Communication of SREP  results:\na. After completion of the SREP, the Director of Bank Supervision may conduct discussions with \nthe bank based on the results of the assessment, including any areas of concern which may lead \nto an increase in bank\u2019s minimum CAR.\nb. The Director of Bank Supervision will explain the outcome of the assessment and recommend \nthe prompt corrective actions to address the concerns of the bank, if any. If there is a proposed \nincrease in the capital, the bank will be notified (with the opportunity to make representations) \nbefore the decision is finalised.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 85, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  79\nPART  IV  \u2013  SUPERVISORY INTERVENTION\n17. Based on the outcome of SREP , CBSL shall intervene at an early stage to:\na. prevent capital from falling below the minimum requirement of the respective bank; and\nb. prevent potential impact to the stability of the financial system.\n18. Depending on the capita l level, a range of supervisory actions including the following shall be \ninitiated.\na. moral suasion to encourage the bank to improve their capital positions and levels;\nb. improve the bank\u2019 s ICAAP including risk management systems and controls;\nc. require the bank to submit a capital restoration plan;\nd. impose restrictions on the payment of dividends, business activities, acquisitions, investments \netc.; and\ne. require the replacement of the Board and/or the senior management.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 86, "year": 2013}, "type": "Document"}
{"page_content": "80 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAppendix I\nSPECIFIED FORMAT FOR THE PREPARATION OF ICAAP DOCUMENT\n1. General\n1.1 The purpose of ICAAP document is to inform the Board/senior management and the CBSL of the \nongoing assessment of the bank's risks, how the bank intends to mitigate those risks and how much \ncurrent and future capital is necessary having considered other mitigating factors.\n1.2 Annual document of ICAAP of a bank shall be prepared in accordance with the contents given in \nparagraph 2 below.\n1.3 However , CBSL expects there to be a fair degree of variation in the length and format of submissions \nsince banks\u2019 business and risk profiles differ from each other and ICAAP document should be \nproportional to the size, nature and complexity of a bank\u2019s business.\n1.4 Use of this format may, therefore, make the review process more efficient for both the bank and \nCBSL.\n1.5 Base period and financial data of ICAAP document shall be in accordance with the audited financial \ndata as at the end of the preceding financial year. \n1.6 The projected financial data of ICAAP  document should be at least for three financial years.\n2. Contents\n2.1 Executive Summary \n2.2 Background\n2.3 Board and Senior Management Oversight\n2.4 Risk Governance\n2.5 Sound stress testing processes\n2.6 Capital Planning\n2.7 Projected financial data and assessment of capital\n3. Executive summary\n This section will present an overview of ICAAP  methodology and results. This overview will \ninclude:\na. The purpose of the report and the group entities which are covered by ICAAP;\nb. Financial forecasts, including the strategic position of the bank, its balance sheet strength, and \nfuture profitability;\nc. Regulatory capital management;\nd. Regulatory capital assessment - Pillar 1;\ne. Internal capital assessment - Pillar 2;\nf. Ratio management: How much and what composition of internal capital the bank considers it", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 87, "year": 2013}, "type": "Document"}
{"page_content": "f. Ratio management: How much and what composition of internal capital the bank considers it \nshould hold as compared with the capital adequacy requirement under Pillar 1;\ng. Risk management processes and assessment;\nh. Descriptions of the capital and dividend plan; the manner in which the bank intends to manage \ncapital going forward and for what purposes;\ni. Stress testing approach; and\nj. Details of the approval.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 87, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  81\n4. Background\n This section will include the relevant organization structure and business lines, group structure \n(legal and operations) and financial data of the bank largely including the profit, dividends, equity, \ncapital resources held and as compared with regulatory requirements, total assets, total loan and \nadvances, total deposits, and any conclusions that can be drawn from trends in the data which may \nhave implications for the bank\u2019s future.\n5. Board and Senior  Management Oversight\n This section would provide the following information:\na. Corporate governance structure;\nb. Board and senior management oversight; \nc. ICAAP  governance structure;\nd. Monitoring and controls; and\ne. Internal controls and independent review . \n6. Risk Governance\n This section will provide the following;\na. Risk appetite;\nb. Risk management framework;\nc. Regulatory risk assessment (Pillar 1); \n i. Credit risk\n ii. Market risk\n iii. Operational risk\nd. Internal risk assessment (Pillar 2);\n i. Concentration risk \n ii. Interest rate risk in the banking book\n iii. Settlement risk\n iv. Liquidity risk\n v . Compliance risk\n vi. Strategic/business risk, and\n vii. Reputation risk\n viii. Residual Risk \n7. Sound str ess testing processes\n This section will provide the following details of bank\u2019 s stress testing practices:\na. Overview of the stress testing process\nb. Stress scenario/types\nc. Discuss the results of stress tests and its impact to the bank capital\nd. Risk mitigation or contingency plans across a range of stressed conditions", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 88, "year": 2013}, "type": "Document"}
{"page_content": "82 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n8. Capital planning\n This section will provide details of bank\u2019s capital planning and management processes, which, at a \nminimum, includes:\na. the bank\u2019s short-term and long-term capital adequacy goals in relation to its risk profile, taking \ninto account its strategic focus and business plan;\nb. the approved capital targets that are consistent with the bank\u2019s overall risk profile and financial \nposition; \nc. the approach for determining the bank\u2019s overall capital adequacy in relation to its risk profile; \nand\nd. conclusions.\n9.\t Projected \tfinancial\tposition\tand\tassessment \tof\tcapital\n This section will explain Pillar 1 and 2 capital requirements, in respect to; \na. the expected changes to the business profile of the bank, the environment in which it expects to \noperate, its projected business plans (by appropriate lines of business), and projected financial \nposition for the next, three to five years; and\nb. given these business plans, this section would also discuss the bank\u2019s assessment as to whether \nadditional capital is necessary on top of that assessed to cover their existing risk exposures,  \nas well as future planned sources of capital.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 89, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  83\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 J(1) of the \nBanking Act, No. 30 of 1988, as amended.\nW A Wijewardena\nSenior Deputy Governor\nCentral Bank of Sri Lanka\nColombo\n24 April 2009.\nDIRECTIONS\nBANKING ACT DIRECTION NO. 2 OF 2009\nAMENDMENT TO DIRECTIONS ON OWNERSHIP OF ISSUED CAPITAL\nCARRYING VOTING RIGHTS FOR LICENSED SPECIALISED BANKS\nIn the exercise of the powers conferred by Section 76 J(1) of the Banking Act No. 30 of 1988,  \nlast amended by the Banking Act No. 46 of 2006, the Monetary Board hereby issues the following \nDirection amending Direction No. 2 of 2007 dated 19 January 2007, issued by the Monetary Board of the \nCentral Bank of Sri Lanka. This Direction may be cited as the Banking Act Direction No. 2 of 2009.\nThe following new Direction shall replace Direction No. 4 of the Banking Act Direction No. 2 of \n2007:\nExceptions. 4. Ne vertheless, in the case of a licensed specialised bank which requires \nrestructuring to avoid inadequacy of capital, insolvency or potential failure, the \nMonetary Board may, subject to terms and conditions it may deem fit, grant \npermission to any of the categories of the shareholders specified in Section \n76J(1)(q) to acquire or hold issued capital carrying voting rights in excess of 15 \nper cent in the licensed specialised bank, subject to the condition that the issued \ncapital so acquired shall be reduced to 15 per cent within a specified period as \nmay be determined by the Monetary Board, on a case-by-case basis.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 90, "year": 2013}, "type": "Document"}
{"page_content": "84 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board under Section 76 j(1) of the Banking Act, No.30 of 1988, \nas amended.\nNivard Ajith Leslie Cabraal\nGovernor\nColombo\n19 January 2007\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 2 OF 2007\nOWNERSHIP OF ISSUED CAPITAL CARRYING VOTING RIGHTS\n  \nIn exercise of the powers conferred by Section 76 j(1) of the Banking Act, No.30 of 1988, last \namended by the Banking Act, No.46 of 2006, the Monetary Board hereby issues Directions as follows:\n1. These Directions may be cited as the Banking Act, Directions No.2 of 2007. The \nSections referred to in these Directions will be those of the Banking Act, No.30 of \n1988, last amended by the Banking Act, No.46 of 2006.\n2. I n terms of Section 76 j(1), the Monetary Board has been empowered to issue \nDirections to licensed specialised banks regarding the manner in which any aspect of \nthe business of such banks is to be conducted, including Directions pertaining to the \nmaximum percentage of the share capital in a licensed specialised bank incorporated \nin Sri Lanka\u2013\n (i) held by a company , an incorporated body, or an individual; \n (ii) held in the aggregate by\u2014\n (a) a company and one or more of the following:\u2014 \n(aa)  its subsidiaries\n(bb)  its holding company; \n(cc)  a subsidiary of its holding company; or \n(dd)  a company in which such company or its subsidiary, or its holding \ncompany, or a subsidiary of its holding company has a substantial \ninterest; or\n (b) an individual and one or more of the following:\u2014 \n(aa) his close relations; \n(bb) a company in which he has a substantial interest or in which his \nclose relation has a substantial interest; \n(cc) the subsidiary of such company; \n(dd) a holding company of such company;\n(ee) a subsidiary of such company\u2019 s holding company; \n(ff) a company in which such company, or its subsidiary, or its holding \ncompany has a substantial interest; orCitation.\nEmpowerment", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 91, "year": 2013}, "type": "Document"}
{"page_content": "company has a substantial interest; orCitation.\nEmpowerment \nunder Section \n76J(1).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 91, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  85\n(gg) an incorporated body other than a company in which such individual \nor his close relation has a substantial interest; or \n(c) companies in each of which an individual or company as the case may \nbe, has either directly, indirectly or beneficially a substantial interest or \nsignificant management interest.\n3. (1) Any of the categories of shareholders referred to in Section 76 j(1)(q) shall not, \neither directly or indirectly or through a nominee or acting in concert with any other \ncategory/categories of shareholders, hold shares carrying voting rights in excess of \n15 per cent of the issued capital carrying voting rights in a licensed specialised bank \nincorporated or established within Sri Lanka by or under any written law without the \nprior written approval of the Monetary Board. \n ( 2)  \u201c Acting in concert\u201d means acting pursuant to an understanding (whether \nformal or informal) to actively co-operate in acquiring or holding of over  \n15 per cent of the issued capital carrying voting rights of a licensed specialised bank \nso as to obtain or consolidate control of the bank.\n4. Nevertheless, in the case of a licensed specialised bank which requires restructuring \nto avoid inadequacy of capital, insolvency or potential failure, the Monetary Board \nmay, subject to terms and conditions it may deem fit, grant permission to any of the \ncategories of the shareholders specified in Section 76 j(1)(q) to acquire or hold issued \ncapital carrying voting rights in excess of 15 per cent in the licensed specialised bank \nsubject to the condition that the issued capital so acquired shall be reduced to 15 per \ncent within a specified period as may be determined by the Monetary Board on a  \ncase-by-case basis, provided also that such period shall not exceed five years from the \ndate of granting permission. \n5.  (1) Any ownershi p of issued capital carrying voting rights previously", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 92, "year": 2013}, "type": "Document"}
{"page_content": "5.  (1) Any ownershi p of issued capital carrying voting rights previously \nacquired in excess of 15 per cent of the issued capital carrying voting rights in \na licensed specialised bank by any of the categories of the shareholders referred \nto in Section 76 j(1)(q) and held at the date of these Directions shall be disposed \nof and/or otherwise reduced by such shareholders to a level not exceeding  \n15 per cent of the issued capital carrying voting rights in the licensed specialised \nbank.\n (2) Such disposal and/or reduction shall be carried out within the period as may be \nspecified by the Monetary Board on a case-by-case basis, provided that such period \nshall not exceed five years from the date of stipulation. \n (3) In the event, any of the categories of the shareholders referred to in Section \n76j(1)(q) fails to comply with the directives of the Monetary Board within the \nstipulated period of time, the voting rights in excess of 15 per cent attributable to the \nownership of shares held by the categories of shareholders subject to this Direction \nshall be deemed invalid with effect from the last date of the period specified by the \nMonetary Board to reduce the ownership of shares carrying voting rights.\n6. (1) W ithin two months of the date of these Directions, each licensed specialised \nbank shall inform the Monetary Board of instances, if any, in its bank where the \ncategories of shareholders referred to in Section 76 j(1)(q) own share capital carrying \nvoting rights exceeding 15 per cent of the issued capital carrying voting rights in its \nbanks and seek a Direction from the Monetary Board as to the period within which Maximum \npercentage \nof ownership \nof shares.\nExceptions.\nProvisions in \nrelation to existing \nownership.\nTransitional \narrangements", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 92, "year": 2013}, "type": "Document"}
{"page_content": "86 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nthe disposal and/or reduction of the issued capital carrying voting rights to the level \nof 15 per cent shall be carried out.\n (2) W ithin two months of receipt of such information and request, the Monetary \nBoard will specify the period within which the disposal and/or reduction should \ntake place as per Direction 5(2) above and inform the licensed specialised bank \naccordingly.\n ( 3)  Immediately thereafter , the licensed specialised bank shall direct the \nshareholders who hold issued capital carrying voting rights in its bank over the 15 \nper cent limit specified in these Directions to dispose of and/or reduce the number \nof shares carrying voting rights in order to comply with these Directions, within the \nperiod as stipulated by the Monetary Board. \n7. Subject to Directions 5 and 6 above, a licensed specialised bank shall not enter in \nits register of members the name of any shareholder referred to in Section 76 j(1)(q) \nas the holder of shares of the bank, who or which has contravened the provisions of \nthese Directions.\n8. Anything contained in these Directions shall not be construed to restrict the  \nownership of issued capital carrying voting rights in\u2013\n(a) Regional Development Banks established under Regional Development Banks \nAct, No.6 of 1997; \n(b) a licensed specialised bank established by a statute or under the Companies  \nAct, No.17 of 1982 in which the ownership of a majority of the shares is held by the \nGovernment or a public corporation or a statutory body.\n9. ( 1)  T he Banking Act, Directions No.3 of 1999 (Share Capital Ownership - \nLicensed Specialised Banks) dated 23 November 1999 issued under Section 76 j(1) \nare hereby revoked. \n (2) The ef fect of revocation of previous Directions shall not affect any penalty or \nliability incurred under those Directions prior to the revocation.Steps to secure \ncompliance. \nNon-application \nof Directions.\nRevocation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 93, "year": 2013}, "type": "Document"}
{"page_content": "compliance. \nNon-application \nof Directions.\nRevocation \nof previous \nDirections.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 93, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  87\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act No. 30 of 1988 as amended by the Banking (Amendment) Act, No. 33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nRESERVE FUND\n1. Every licensed specialised bank having an equity capital as defined in the Banking Act shall \u2013\n 1.1 Maintain a reserve fund.\n 1.2 T ransfer to such reserve fund out of net profits of each year, after payment of taxes due for each \nyear and before the declaration of dividends or the transfer of profits elsewhere :\n  1.2.1  a sum equivalent to not less than five percent of such net profits until the amount of the \nsaid reserve fund is equal to fifty percent of the equity capital of such licensed specialised \nbank and after such percentage is reached :\u2013\n  1.2.2  a sum equivalent to not less than two percent of such net profits until the amount of the \nsaid reserve fund is equal to the equity capital of such licensed specialised bank.\nProvided, however, that an amount not less than twenty five per centum of the net profits shall be \nutilised for setting off such intangible assets as may be determined by the Central Bank, before such \nprofits are transferred to the reserve fund. \n2. For the purposes of this direction \u201cintangible assets\u201d shall mean goodwill, preliminary expenses \nincluding legal and other fees, all capitalized expenses and other items not represented by tangible \nassets.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 94, "year": 2013}, "type": "Document"}
{"page_content": "88 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOur Ref. : 02  / 17 / 500 / 0086  / 001\nBank Supervision Department\n07 December 2012\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nICRA Lanka Limited \u2013 \nRecognition as an External Credit Assessment Institution\nThe Monetary Board of the Central Bank of Sri Lanka (CBSL) has approved ICRA Lanka Limited \nas a recognised External Credit Assessment Institution, for the purpose of all regulatory requirements of \nCBSL applicable to Licensed Commercial Banks and Licensed Specialised Banks.\nAccordingly, Table 1 and Table 3 under the item No. 6.4.2.3.1 of the Guidelines on Computation \nof Capital Adequacy Ratio is revised as in Annex.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 95, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  89\nAnnex\nTable 1\nMapping of Notations of the Credit Rating Agencies in Sri Lanka\nFitch Rating LankaRAM Ratings \n(Lanka) LimitedRating of ICRA \nLanka Limited Rating Scale for CAR\nAAA (lka) AAA (SL) AAA AAA\nAA+ (lka) AA+ (SL) AA+ AA+\nAA (lka) AA (SL) AA AA\nAA- (lka) AA- (SL) AA- AA-\nA+ (lka) A+ (SL) A+ A+\nA (lka) A (SL) A A\nA- (lka) A- (SL) A- A-\nBBB+ (lka) BBB+ (SL) BBB+ BBB+\nBBB (lka) BBB (SL) BBB BBB\nBBB- (lka) BBB- (SL) BBB- BBB-\nBB+ (lka) BB+ (SL) BB+ BB+\nBB (lka) BB (SL) BB BB\nBB- (lka) BB- (SL) BB- BB-\nB+ (lka) B+ (SL) B+ B+\nB (lka) B (SL) B B\nB-(lka) & Lower B- & Lower (SL) B- & Lower B- & Lower\nTable 3\nMapping of Short Term Ratings\nShort term ratings\nRisk \nWeights RAM Ratings \n(Lanka) LimitedStandard and \nPoor\u2019sMoody\u2019sFitch \nRatingsICRA Lanka \nLimited\nP \u2013 1 A \u2013 1+ / A \u2013 1 P \u2013 1 F1+ / F1 (SL) A1+ / A1 20%\nP \u2013 2 A \u2013 2+ / A \u2013 2 P \u2013 2 F2 (SL) A2+ / A2 50%\nP \u2013 3 A \u2013 3+ / A \u2013 3 P \u2013 3 F3 (SL) A3+ / A3 100%\nNP Below A \u2013 3 NP Below F3 (SL) Below A3 150%", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 96, "year": 2013}, "type": "Document"}
{"page_content": "90 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 003 / 0400  / 001\nBank Supervision Department\n13 July 2004\nTo : CEOs of all Licensed Specialised Banks\nDear Sirs,\nCLASSIFICATION OF ADV ANCES AND SPECIFIC PROVISIONS  / \nCRITERIA FOR SELECTION OF V ALUERS UNDERTAKING THE REV ALUATION OF\nFIXED ASSETS FOR THE COMPUTATION OF THE CAPITAL ADEQUACY RATIO\nLicensed Specialised Banks (LSBs) are required to note the following :\u2013\n1.  Current professional valuation reports referred to in the Directions dated 22 August 1997 on \nClassification of Advances and Specific Provisions issued under Section 46 a of the Banking Act shall \nmean current professional valuation reports obtained from external Independent valuers.\n2.  For the Purpose of the Directions referred to in 1 above, the banks are exempted from the  \nrequirement to obtain professional valuation reports in  respect of loans and advances of Rs.250,000 or \nbelow, subject to the condition that a current internal assessment of the value of properties mortgaged for \nsuch loans, signed by the Assistant General Manager or such other senior officer of the bank in charge of \ncredit, is available.\nNote :  Current internal assessment is defined as an assessment that is not more than two years old.\n3.  V aluers referred to in the circular dated 19 April 1999 issued on \u201cCriteria for Selection of Valuers \nUndertaking the Revaluation of Fixed Assets for the Computation of the Capital  Adequacy Ratio\u201d shall \nmean external Independent valuers.\nPlease acknowledge receipt of this circular.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 97, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  91\nRef. No. : BS/69/93\nBank Supervision Dept.\n8th Floor, Renuka Building\nNo. 41 Janadhipathi Mawatha\nColombo 1.\n19th April 1999\nTo : All Licensed Specialised Banks\nDear Sir/Madam,\nCRITERIA FOR SELECTION OF V ALUERS UNDERTAKING THE REV ALUATION OF\nFIXED ASSETS FOR THE COMPUTATION OF THE CAPITAL ADEQUACY RATIO\nAll Licensed Specialised Banks are hereby informed that in the selection of Valuers to undertake the \nrevaluation of the Bank\u2019s fixed assets for the purpose of including 50 per cent of such revaluation reserves \nin the computation of the Capital Adequacy Ratios, the following eligibility criteria would apply:\u2013\nThe Valuer shall be :\u2013\n (a) a Chartered Valuation Surveyor; or\n (b) a Fellow of the Institute of Valuers (Sri Lanka) with a Degree or Diploma in Valuation and \nwork experience of 15 years; or\n (c) a Licentiate of the Institute of Valuers (Sri Lanka) with work experience of over 25 years.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd. Ms. C I Fernando\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 98, "year": 2013}, "type": "Document"}
{"page_content": "92 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 17 / 402 / 0073  / 002\nBank Supervision Department\n29 July 2010\nTo : CEOs of Licensed Specialised Banks\nDear Sir,\nENHANCEMENT OF MINIMUM CAPITAL REQUIREMENT OF BANKS\nWe refer to our Circular No. 02/17/402/0073/001 dated 12 April 2005 on the above subject and \nwrite to inform you that as announced at the meeting held on 24 November 2009, the Monetary Board of \nthe Central Bank of Sri Lanka has decided to require licensed specialised banks to increase their capital \nas follows in the interest of a strong and sound banking system:\n(a) Rs. 2 bn by 31 December 201 1\n(b) Rs. 2.5 bn by 31 December 2013\n(c) Rs. 3 bn by 31 December 2015\nCapital for this purpose shall mean the Core Capital as defined in terms of item No. 6.2.2.2 in \nthe Guidelines that were annexed as Schedule I to the Banking Act, Direction No. 10 of 2007 dated  \n26 December 2007 on Maintenance of Capital Adequacy Ratio.\nYours faithfully,\nSgd, T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 99, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  93\nRef. No. : 02  / 17 / 402 / 0073  / 002\nBank Supervision Department\n01 January 2008\nTo : CEOs of Licensed Specialised Banks\nDear Sir/Madam,\nENHANCEMENT OF MINIMUM CAPITAL REQUIREMENT OF BANKS\nFurther to our circular dated April 12, 2005 on the above, informing Licensed Specialised Banks \n(LSBs) of the decision of the Monetary Board of the Central Bank of Sri Lanka to increase the minimum \ncapital requirement of LSBs to Rs.1,500 million.\nWe write to inform you that \u2018capital\u2019 for the purpose of meeting the minimum capital requirement \nshall mean the Core Capital as defined under item No. 6.2.2.2 in the Guidelines annexed as Schedule I \nof the Banking Act, Direction No.10 of 2007 dated December 26, 2007 issued by the Monetary Board \nof the Central Bank of Sri Lanka. \nYours faithfully,\nSgd, B.D.W.A. Silva\nActg.  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 100, "year": 2013}, "type": "Document"}
{"page_content": "94 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 17 / 800 / 0002  / 001\nBank Supervision Department\n11 December 2006\nTo : the CEOs of All Licensed Specialised Banks\n  (excluding the RDBs)\nDear Sirs,\nMINIMUM CAPITAL REQUIREMENT OF LICENSED SPECIALISED BANKS\nThis is to inform you that considering the difficulties faced by some Licensed Specialised Banks \nthat are in the process of infusing fresh capital to meet the increased minimum capital requirement in \nterms of Circular No. 02/17/402/0073/001, dated 12 April 2005, the Monetary Board of the Central Bank \nof Sri Lanka has decided to grant an extension of time to such banks on a case-by-case basis to meet the \nsaid requirement, on the following basis\u2013\n(a) till end 2008 to infuse at least 50 per cent of the shortfall\n(b) till end 2009 to meet the total capital requirement of Rs.1,500 million \n The banks which require an extension of time may submit their requests to the Director of Bank \nSupervision for consideration of the Monetary Board, along with a time-bound capital infusion plan to \nmeet the minimum capital requirement by the new dates stipulated above. The Monetary Board may \ngrant extensions subject to such terms and conditions as it may deem necessary.\nYours faithfully,\nSgd, Mrs. L K Gunatilake\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 101, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  95\nRef. No. : 02  / 17 / 402 / 0073  / 001\nBank Supervision Department\n12 April 2005\nTo : The CEOs of all Licensed Specialised Banks\nDear Sirs,\nENHANCEMENT OF MINIMUM CAPITAL REQUIREMENTS OF BANKS\nAs intimated to you at the meeting held on 08.04.2005, as part of its responsibility to maintain \nfinancial system stability and in the interest of a strong and sound banking system, the Monetary Board \nof the Central Bank of Sri Lanka has decided to require all licensed specialised banks to increase their \ncapital to Rs.1,500 mn.  For this purpose capital shall mean the Tier I capital (Core Capital) as defined \nby the Directions dated 21.11.1997 issued by the Monetary Board under Section 76 j(1) of the Banking \nAct as amended from time to time.  Specialised banks that do not currently meet this requirement may \nenhance their capital in the following manner.\n\u2022 The current capital should be enhanced by at least 50% of the deficiency by the end of 2006; \nand\n\u2022 the balance of the  deficiency should be met by the end of 2007. \nAll specialised banks are required to meet the enhanced capital requirements within the stipulated \nperiods.\nThe Monetary Board has also decided that with immediate effect the required equity capital for a \nnew specialized bank should be Rs.1,500 mn.   \nThe enhanced capital requirements will not apply to the Regional Development Banks for the \ntime being.\nYou are kindly requested to assess the present position of your bank vis-\u00e0-vis the enhanced capital \nrequirements based on the audited financials for the last financial year and inform me of the position \nby 30 June 2005, along with a time bound plan for capital augmentation in case the level of capital is \nbelow the stipulated minimum capital requirement.\nFurther, you are requested to be mindful of the enhanced capital requirements when deciding on \ndeclaration of dividends.\nPlease acknowledge receipt.\nYours faithfully,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 102, "year": 2013}, "type": "Document"}
{"page_content": "declaration of dividends.\nPlease acknowledge receipt.\nYours faithfully,\nSgd, Director of Bank Supervision\ncc \u2013 Mr . Upali De Silva\n Secretary-General\n Sri Lanka Bankers\u2019  Association (Gte) Ltd.\n Level 8, Ceylinco House\n Colombo 01.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 102, "year": 2013}, "type": "Document"}
{"page_content": "96 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 002 / 0005  / 003\nBank Supervision Department\n06 January 2004\nTo : All Domestic Licensed Commercial Banks and\n       all Licensed Specialised Banks\nDear Sir  / Madam,\nINTERPRETATION OF CAPITAL FUNDS\nAll Domestic Licensed Commercial Banks and Licensed Specialised Banks are hereby informed \nthat the proceeds of redeemable cumulative preference shares would constitute part of Capital Funds of \nbanks for the purpose of Banking Act, and the direction issued thereunder, relating to the basis for the \ncomputation of the Single Borrower Limit and Investments in Equity in terms of section 46 and 17  a \nrespectively and, section 76 j(1) of the Banking Act.\nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 103, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  97\n02/04/003/0400/002\nBank Supervision Department\n16 December 2004\nTo : CEOs of Licensed Commer cial Banks\n CEOs of Licensed Specialised Banks\n Panel of Approved Auditors\n Secr etary-General / SLBA\nDear Sirs,\nSHIPPING GUARANTEES ISSUED BY BANKS\nFurther to the discussion of the above subject at the Meetings of the Chief Executive Officers \nof Licensed Commercial Banks and Licensed Specialised Banks, the amendment to the Directions \non Single Borrower Limit and Risk Weighted Capital Adequacy Ratio to enable the banks to include \nshipping guarantees issued at the invoice value of goods, are included herewith.\nPlease acknowledge receipt.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 104, "year": 2013}, "type": "Document"}
{"page_content": "98 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nCONDITIONS FOR GRANT OF ACCOMMODATION\n1. No licensed specialised bank shall grant any accommodation -\n 1.1 on the security of its own shares;\n 1.2 on the security of the shares of any of its subsidiaries;\n 1.3 to purchase its own shares;\n 1.4 on the security of shares of a company in which a company referred to in 1.2 above has a \nshareholding, in excess of ten percent of the paid up capital of the former company.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 105, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  99\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nINVESTMENTS IN EQUITY\n1. Subject to paragraphs 2 and 3 below a licensed specialised bank having an equity capital as defined \nin the Banking Act shall not invest in the equity of any institution other than a public company and\n 1.1 any shareholding acquired by such bank shall not be in excess of ten per cent of its capital \nfunds; and\n 1.2 the aggregate amount invested in the shares of public companies shall not exceed fifty per cent \nof its capital funds:\nProvided that such acquisition or holding of shares in terms of paragraph 1.1 above shall not exceed \ntwenty per cent of the paid up capital of the public company: \nProvided further a licensed specialised bank may, without exceeding the limits specified above, \nacquire shares in a company other than a public company if such acquisition becomes necessary for \nthe purpose of rehabilitating such company to make it financially viable.\n2.\n 2.1 A  licensed specialised bank is permitted to invest in the equity of a private company subject \nto sub paragraph 2.2 below of this paragraph, provided such investment does not exceed 20% \nof the paid up capital of the private company and 10% of the capital fund of the licensed \nspecialised bank provided further that the aggregate amount of such investments in the private \ncompanies shall not exceed 25% of the capital funds of the licensed specialised bank and the \ntotal aggregates of its investments in private and public companies shall not exceed 75% of its \ncapital funds.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 106, "year": 2013}, "type": "Document"}
{"page_content": "capital funds.\n 2.2 Any equity investment in a private company by a licensed specialised bank shall be subject \nto the condition that before the lapse of five years from the date of such investments or such \nlonger period extended by the Central Bank :\n2.2.1  the entire investment in the company shall be purchased by the other shareholders of \nthe company or\n2.2.2  the private company be converted to a public company . \n3. The provisions of paragraph 1 above shall not apply to \u2013\n 3.1 investment in a subsidiary or associate company of the bank acquired or formed prior to the \nissue of these directions. \n 3.2 investments in any other subsidiary or associate company acquired or formed with the approval \nof the Central Bank of Sri Lanka.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 106, "year": 2013}, "type": "Document"}
{"page_content": "100 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n 3.3 any shareholding which the bank has acquired or might acquire in the course of the satisfaction \nof any debt due to such bank, or as a consequence of the underwriting of a share issue:\n  Provided that, where as a result of the acquisition of these shares the total investment of the \nbank exceeds the percentage of capital funds as determined by the Monetary Board under \nparagraph 1 above, the bank shall dispose of such excess shares within two years or such longer \nperiod as may be determined by the Central Bank of Sri Lanka, from the date of this direction \nor the date of the acquisition whichever is later.\n 3.4 Any equity which the bank has acquired or might acquire consequent to a statutory provision \nin an Act establishing a financial institution.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 107, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  101\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka in terms of Section 76 J(1) of \nthe Banking Act, No.30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board / \nGovernor of the Central Bank of Sri Lanka\nColombo\n27 September 2010\nBANKING ACT DIRECTION NO. 4 OF 2010\nAMENDMENTS TO DIRECTIONS ON CLASSIFICATION OF LOANS AND ADV ANCES,\nINCOME RECOGNITION AND PROVISIONING FOR\nLICENSED SPECIALISED BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 76J(1) of the Banking Act, No. 30 of 1988,  \nlast amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues the following \nDirection replacing Directions No. 6(1)(I) of the Banking Act, Direction No. 4 of 2008 dated 8 May 2008 \nissued by the Monetary Board.  \n6(1)(I)  General Pr ovisions\n Banks shall maintain general provisions in the following manner:\n (i) Commencing 01 January 2012, 0.5% of total outstanding of on-balance sheet PLAs as \nreferred to in Direction 3(4) above and total outstanding of special mention on-balance \nsheet credit facilities as referred to in Direction 4(6)(I) above net of interest in suspense \nthat has been debited to the respective accounts.\n (ii) For this purpose banks shall reduce the existing general provision requirement of  \n1% to 0.5% at a rate of 0.1% per quarter during the five quarters commencing 01 October \n2010.\n (iii) Banks are exempted from maintaining a general provision in respect of credit facilities \nsecured by cash deposits, gold or Government Securities with the same bank. Banks shall, \nfor this purpose, meet the following conditions to be eligible for the exemption:\n (a) Bank shall have the right to take legal possession of such securities in the event of \ndefault, insolvency or bankruptcy of borrower.\n (b) All documentation used in such collateralised transactions shall be binding on all", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 108, "year": 2013}, "type": "Document"}
{"page_content": "(b) All documentation used in such collateralised transactions shall be binding on all \nparties and be legally enforceable in all relevant jurisdictions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 108, "year": 2013}, "type": "Document"}
{"page_content": "102 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka in terms of Section 76 j(1) of \nthe Banking Act, No.30 of 1988, as amended. \nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\nMay 8, 2008.\nDIRECTIONS\nBANKING ACT, DIRECTION NO. 4 OF 2008\nCLASSIFICATION OF LOANS AND ADV ANCES, INCOME RECOGNITION AND\nPROVISIONING\nIn the exercise of the powers conferred by Sections 76 j(1) of the Banking Act, No.30 of 1988, last \namended by the Banking Act, No.46 of 2006, the Monetary Board hereby issues Directions as follows:\n1(1) These Directions may be cited as the Banking Act, Direction No.4 of 2008. \nThe Section referred to in these Directions will be those of the Banking Act, \nNo.30 of 1988, last amended by the Banking Act, No.46 of 2006.\n2(1) In terms of Section 76 j(1) of the Banking Act, the Monetary Board is \nempowered to issue Directions to licensed specialised banks regarding \nthe manner in which any aspect of the business of such banks is to be \nconducted.\n3(1) The following definitions shall be applicable for the purposes of these \nDirections.\n3(2) T otal credit facilities shall mean on-balance sheet credit facilities and  \noff-balance sheet credit facilities as specified below:\n3(2)(I)  On-balance sheet credit facilities:\n   On-balance sheet credit facilities shall mean Term loans, Block \nloans, Packing credits, Pledge loans, Revolving loans, Bills financed, \nDiscounting facilities, Hire purchase loans, Leasing facilities, Trust \nreceipts, Pawning advances, Credit card facilities, Reverse repurchase \nfacilities, Lending for debt instruments under stand by credit lines and \nother instruments of a similar nature.\n3(2)(II)  Of f-balance sheet credit facilities:\n   Off-balance sheet credit facilities shall mean a commitment to accept \ncontingent liabilities, and include guarantees, bonds, warranties,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 109, "year": 2013}, "type": "Document"}
{"page_content": "contingent liabilities, and include guarantees, bonds, warranties, \nletters of credit and acceptances. \n3(3) Borrower shall mean individuals, single companies, the Government of Sri \nLanka, public corporations, statutory bodies, firms, associations of persons \nand any other institutions.Citation.\nEmpowerment \nunder Sections \n76J(1) of the \nBanking Act.\nDefinitions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 109, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  103\nClassification of \ncredit facilities.3(4) Performing loans and advances (PLA) shall mean all credit facilities other \nthan non-performing loans and advances (NPL) classified in terms of \nDirection 3(5).\n3(5) NPL  shall mean bad and doubtful debts. For this purpose, all credit \nfacilities, excluding exempted credit facilities referred to in Direction 4(2), \nare classified as non-performing on the following basis:\n3(5)(I)  Based on period\n (i) C redit facilities repayable in monthly instalments: when  \n3 consecutive instalments, principal and/or interest, have not \nbeen paid.\n (ii) Credit facilities repayable in quarterly/half yearly instalments: \nwhen an instalment is not paid within 90 days from the due date.\n (iii) Credit facilities repayable in one instalment at the end of a  \nspecified period or on a due date (bullet payments): when the \npayment is not made within 90 days from the end of the agreed \nperiod or the due date.\n (iv) Credit cards: when the minimum payment is in arrears for   \n90 days from the due date.\n3(5)(II)  Based on potential risk\n   In addition to the classification requirements for NPL  as set out \nin Direction 3(5)(I), banks shall classify PLA as NPL where full \nrecoverability in accordance with the agreed terms is in doubt due to \ncircumstances affecting the repayment capacity.\n3(6) New c redit facility shall mean any credit facility granted to borrowers \nwith the involvement of cash/fund movements. A facility granted for the \ncapitalisation of accrued and unpaid interest or to convert an overdraft to a \nterm loan shall not be considered as a new credit facility.\n4(1) Classification of performing and non-performing credit facilities:\n  Banks shall classify all credit facilities granted to a borrower, for monitoring \nand risk mitigation purposes, into the two categories of (a) performing loans", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 110, "year": 2013}, "type": "Document"}
{"page_content": "and risk mitigation purposes, into the two categories of (a) performing loans \nand advances and (b) non-performing loans and advances, as specified in \nDirections 3(4) and 3(5) above.\n4(2) Exempted credit facilities:\n  When classifying credit facilities as NPL under Direction 4(1) above, credit \nfacilities secured on cash deposits shall be exempted. Banks shall, for this \npurpose, meet the following conditions to be eligible for the exception: \n (i) Banks  shall have the right to take legal possession of such cash \ndeposit, in the event of default, or insolvency or bankruptcy of \nborrower.\n (ii) Al l documentation used in cash collateralised transactions shall \nbe binding on all parties and legally enforceable in all relevant \njurisdictions. A duly signed lien in the bank\u2019s favour and a letter of \nset-off shall be available.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 110, "year": 2013}, "type": "Document"}
{"page_content": "104 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (iii) Such cash deposit shall be set-of f against the credit facilities within \n3 months from the date on which the credit facilities would have \notherwise been classified as non-performing.\n (iv) During the period referred to in Direction 4(2)( iii) above, if the \noutstanding exceeds the deposit, such excess shall be classified as \nnon-performing.\n4(3) The availability of security or net worth of the borrower/guarantor shall not \nbe considered in the application of Direction 3(5) except as permitted by \nDirection 4(2) above.\n4(4) Classification of rescheduled credit facilities:\n  When rescheduling occurs before a credit facility is classified as NPL,  \nthe rescheduled credit facility shall be classified as non-performing when, \nin aggregate, the period of time the credit facility was in arrears before \nrescheduling and after rescheduling exceeds the time period specified in \nthe Direction 3(5) in respective credit facilities. In the case of capitalisation \nof accrued and unpaid interest, banks shall classify a credit facility created \nby way of capitalisation of accrued and unpaid interest as NPL in terms of \nDirections 3(5) and 4(5) and categorise as required by Direction 4(6).\n4(5) Classification of multiple credit facilities granted to a single borrower:\n (i) Banks shall classify all credit facilities extended to a borrower as NPL, \nwhen one or more credit facilities has/have been classified as NPL in \nterms of Direction 3(5) and if the aggregate amount outstanding of \nsuch NPL exceeds 30 per cent of the total credit facilities extended \nto such borrower. Banks are required to comply with this Direction \ncommencing 01 January 2009. \n (ii) In the computation of the percentage threshold as specified in  \nDirection 4(5)( i) above, banks shall exclude all accrued interest \ncredited to an interest in suspense account from both numerator and \ndenominator.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 111, "year": 2013}, "type": "Document"}
{"page_content": "credited to an interest in suspense account from both numerator and \ndenominator.\n4(6) Categorisation of non-performing credit facilities:\n  Banks shall categorise NPL, which are classified in terms of Directions  \n3(5) and 4(5) above, into the four categories mentioned below based on  \n(a) the period which the credit facilities have remained non-performing and \n(b) the potential risk of credit facilities. However, multiple credit facilities \ngranted to a single borrower, which are classified in terms Direction 4(5), \nshall be categorised as follows:\n (i) Facilities classified in terms of Direction 3(5), shall be categorised as \nper Directions 4(6)(I) to 4(6)(IV). \n (ii) Other facilities of such borrower shall initially be categorised into \nthe \u201cSpecial Mention\u201d category. Subsequent categorisation of such \nfacilities shall be in terms of Directions 4(6)(I) to 4(6)(IV). \n4(6)(I)  \u201cSpecial Mention\u201d credit facilities: \n (i) The period which the credit facilities have remained non-per -\nforming.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 111, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  105\nFacility Type Determinant\nCredit facilities, \nrepayable in monthly \ninstalments3 instalments or more but less than  \n6 instalments, principal and/or interest \nare due and unpaid.\nCredit Cards The minimum payment is in arrears for \n90 days or more but less than 120 days \nfrom the due date.\nOther credit facilities The payments are in arrears for 90 days \nor more but less than 180 days from the \ndue date.\n4(6)(II)  Sub-standard credit facilities: \n (i) The period which the credit facilities have remained non-per -\nforming.\nFacility Type Determinant\nCredit facilities, \nrepayable in monthly \ninstalments6 instalments or more but less than  \n12 instalments, principal and/or interest \nare due and unpaid.\nCredit Cards The minimum payment is in arrears for \n120 days or more but less than 180 days \nfrom the due date.\nOther credit facilities The payments are in arrears for 180 \ndays or more but less than 360 days \nfrom the due date.\n (ii) The potential risk of credit facilities:\n  Where the situation of the borrower makes it uncertai n that part or \nthe entirety of the facility will be repaid and involves more than \nnormal risk of loss due to unsatisfactory debt servicing record or \nfinancial condition of the borrower, insufficiency of collateral or \nany other factors which give rise to some doubts as to the ability \nof the borrower to comply with the present repayment terms.\n4(6)(III)  Doubtful credit facilities: \n (i) The period which the credit facilities have remained non-per -\nforming.\nFacility Type Determinant\nCredit facilities, \nrepayable in monthly \ninstalments12 instalments or more but less than  \n18 instalments, principal and/or interest \nare due and unpaid.\nCredit Cards The minimum payment is in arrears for \n180 days or more but less than 240 days \nfrom the due date.\nOther credit facilities The payments are in arrears for 360 \ndays or more but less than 540 days \nfrom the due date.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 112, "year": 2013}, "type": "Document"}
{"page_content": "106 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (ii) The potential risk of credit facilities:\n  Where there is a high risk of partial default or where full collection \nis improbable and there is a high risk of default.\n4(6)(IV)  Loss credit facilities: \n (i) The period which the credit facilities have remained non-per -\nforming.\nFacility Type Determinant\nCredit facilities, \nrepayable in monthly \ninstalments18 instalments or more principal and/or \ninterest are due and unpaid.\nCredit Cards The minimum payment is in arrears for \n240 days or more.\nOther credit facilities The payments are in arrears for 540 \ndays or more.\n (ii) The potential risk of credit facilities:\n  Where the situation of the borrower makes it virtually certain that \nthe facility will not be repaid, as in the following circumstances:\n (a) The customer is in a weak financial position or the ability of \nthe customer to earn income is low, which indicates that the \ncustomer may not be able to service the debt.\n(b) The business of the customer has become uncertain or the  \ncustomer has used the funds obtained for purposes other than \nfor which they were meant.\n(c) The customer is deceased  and there are no assets to repay the \ndebt.\n(d) The customer has ceased or dissolved his business and is in debt \nto other creditors with preferential rights over the whole of the \ncustomer\u2019s assets, where the said creditors\u2019 total claims exceed \nthe value of the customer\u2019s assets.\n (e) The customer \u2019s business is under liquidation.\n (f) The bank has filed a bankruptcy suit against the customer or \nhas applied for participation in property with other creditors \nwho have filed for bankruptcy, where the parties have agreed to \nrestructure the debt with approval from the Court.\n (g)  The bank has applied for participation in property with other \ncreditors who have sued the debtor.\n (h) The bank is unable to contact or find the borrower .\n4(7) Reclassification of credit facilities:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 113, "year": 2013}, "type": "Document"}
{"page_content": "4(7) Reclassification of credit facilities:\n4(7)(I)  Re-classification of NPL  as PLA:\n  Banks shall reclassify NPL as PLA, if interest and principal in arrears \nare paid by the borrower in relation to classified NPLs.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 113, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  107\n4(7)(II)  Re-classification of rescheduled NPL  as PLA:\n  The NPL  accounts which have been subjected to rescheduling, whether \nin respect of principal instalment or interest amount, would be eligible \nto be upgraded to the PLA category only after the specified periods \nin respect of following category, subject to satisfactory performance \nduring such period. \nRescheduled NPL in Upgrade to the PLA\nSpecial mention \ncategoryPeriod of 90 days after the date when \nfirst payment of interest or of principal, \nwhichever is earlier, falls due under the \nrescheduled terms.\nSub-standard and \nDoubtful categoriesPeriod of 180 days after the date when \nfirst payment of interest or of principal, \nwhichever is earlier, falls due under the \nrescheduled terms.\nLoss category Period of 360 days after the date when \nfirst payment of interest or of principal, \nwhichever is earlier, falls due under the \nrescheduled terms.\nThe amount of specific provision made earlier, in respective of \nrescheduled NPL of above categories, could also be reversed after the \nperiod specified above. \n4(8) Granting of new credit facilities:\n  Banks shall not grant new credit facilities for repayment of NPL in the name \nof the same borrower or any party, unless the credit facility so created is also \nclassified as NPL and categorised into the same category of the repaid NPL \nhad been categorized under Direction 4(6). The reclassification of such NPL \nas PLA shall be subject to Directions (4)(7)(I) and 4(7)(II).\n5(1) Banks shall recognise interest on an account which has been classified as \nNPL as income, as and when the interest is collected by the bank, if it is \ncollected on a cash basis.\n5(2) Ba nks shall suspense all interest accrued but uncollected from the date \na credit facility is classified as NPL and credit such accrued interest to \nthe \u201cInterest in Suspense Account\u201d and debit such accrued interest to the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 114, "year": 2013}, "type": "Document"}
{"page_content": "the \u201cInterest in Suspense Account\u201d and debit such accrued interest to the \n\u201cInterest Receivable Account-NPL\u201d.\n5(3) Banks shall continue the present practice of debiting the overdraft/credit \ncard facilities classified as NPL with interest receivable and crediting to \nInterest in Suspense Account.\n5(4) At the time of classifying the credit facilities as NPL, bank shall reverse the \naccrued interest and credit the same to Interest in Suspense Account. The \nreversal of unearned income identified after the close of a financial year \ncould be accounted for in the financial year in which the advances were \nidentified as NPL.Recognition of \nInterest on NPL.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 114, "year": 2013}, "type": "Document"}
{"page_content": "108 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n6(1) Banks shall maintai n (a) General provisions and ( b) Specific provisions, for \ncredit risk mitigation purposes.\n6(1)(I)  General Provisions\n  Banks shall maintain general provisions in the following manner:\n (i) 1% of total outstanding of on-balance sheet PLAs as referred to \nin Direction 3(4) above and total outstanding of special mention \non-balance sheet credit facilities as referred to in Direction 4(6)(I) \nabove, net of interest in suspense that has been debited to the \nrespective accounts. \n (ii) Banks shall have a general provision of 0.7% of total credit  \nfacilities as specified in Direction 6(1)(I)( i) above by 30.06.2008 \nand, thereafter, make an incremental provision of 0.1% every \nquarter till 31.03.2009. In effect, banks shall meet the total \nrequirement of 1% not later than 31.03.2009.\n (iii) Banks are exempted from maintaining a general provision in  \nrespect of credit facilities secured by cash deposits, gold or \nGovernment Securities with the same bank. Banks shall, for \nthis purpose, meet the following conditions to be eligible for the \nexemption: \n (a) Bank shall have the right to take legal possession of such \nsecurities, in the event of default, insolvency or bankruptcy \nof borrower.\n (b) All documentation used in such collateralised transactions \nshall be binding on all parties and be legally enforceable in \nall relevant jurisdictions. \n6(1)(II)  Specific Provisions\n  Ba nks shall maintain specific provisions, as per the credit facilities \ncategorised in accordance with Direction 4(6), on the amount \noutstanding, net of realisable security value as specified in Direction \n7(1) and interest suspensed in the event of such interest being debited \nto the credit facility as per the following: \nCategories of Non-performing \nCredit FacilitiesMinimum Specific \nProvisioning Requirement\nSubstandard\n   Credit card \n   Others 25%\n20%\nDoubtful 50%\nLoss 100%", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 115, "year": 2013}, "type": "Document"}
{"page_content": "Provisioning Requirement\nSubstandard\n   Credit card \n   Others 25%\n20%\nDoubtful 50%\nLoss 100%\n6(2) In respect of any cr edit facilities falling within the ambit of Direction 4(8), \nbanks shall maintain specific provisions as follows:\n (i) Where credit facilities are applied for the repayment of the capital  \nsum outstanding, provisions shall be maintained at a level not less \nthan what would have been required to be maintained under Direction \n6(1)(II) at the time of repayment of the NPL. \n (ii) Where credit facilities  are applied for the repayment of interest, \nprovision shall be maintained at 100% of the outstanding facility.\n (iii) Where credit facilities are applied for the repayment of capital and \ninterest (e.g., in the c ase of an overdraft), provisions for capital and Provisions for \ncredit facilities.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 115, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  109\ninterest shall be provided for in accordance with Directions 6(2)( i) and \n6(2)(ii).\n7(1) V aluation of security for provisioning purposes shall be as specified below.\n7(1)(I)  Primary Mortgage over Immovable Property \n (i) The value of security is based on progressive discounts on the  \nforced sale value (FSV) of immovable property and on a current \nvaluation report as specified below. \n (ii) The progressive discounts shall be as follows:\nItem% of FSV of immovable property \nthat can be considered as the value \nof security\nFreehold PropertyLeasehold \nProperty \nAt the first time of \nProvisioning 75 60\nPeriod in the Loss Section\nLess than 12 months 75 60\nMore than 12 but less \nthan 24 months60 50\nMore than 24 but less \nthan 36 months50 40\nMore than 36 but less \nthan 48 months40 30\nMore than 48 monthsProperty should be \nreviewed on a regular \nbasis, and discounted \nfurther at the discretion \nof the bank\u2019s manage-\nment.Nil\n (iii) Current external professional valuation report:\n  The valuation repor t shall meet the following conditions.\n (a) Banks shall obtain a current external professional valuation \nreport in respect of a facility/ies where the capital outstanding \namount is equal to or more than Rs.5,000,000/- or 0.1% of \nthe bank\u2019s capital base, whichever is less. Capital base shall \nbe the same as that appearing in the computation of the \nCapital Adequacy Ratio subject to certification by the bank\u2019s \nExternal Auditor. \n (b) Such report shall be from an External Independent Valuer. \n  An External Independent Valuer shall be:\n (aa) A  Chartered Valuation Surveyor; or \n (ab) A  Fellow of the Institute of Valuers of Sri Lanka \n(IVSL) with 5 years experience\n (ac) A  Graduate member of IVSL with 10 years \nexperienceValuation of \nSecurity.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 116, "year": 2013}, "type": "Document"}
{"page_content": "110 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (ad) An Associate member of IVSL with 20 years \nexperience.\n (c) The period of the valuation report shall be:\n (aa) In respect of credit facil ities granted against residential \nproperty which is occupied by the borrower for \nresidential purposes: a report that is not more than four \nyears old.\n (ab) In re spect of credit facilities granted for all other \npurposes: a report that is not more than three years \nold.\n (iv) Current internal valuation report: \n  The valuation report shall meet the following conditions.\n (a) Banks shall obtain a current internal valuation report in  \nrespect of a credit facility/ies where the capital outstanding \namount is less than Rs.5,000,000/- or 0.1% of the bank\u2019s \ncapital base, whichever is less.\n (b) I t shall be a current internal assessment of the value of \nproperties mortgaged for such credit facilities, carried out \nby an independent officer who has not been involved in the \ncredit decision and signed by a senior officer of the bank.\n (c) A  current internal assessment is defined as an assessment \nthat is not more than two years old.\n7(1)(II)  Mortgages other than Primary Mortgages \n  Mortgages other than primary mortgages over immovable property will \nqualify for the above purpose subject to complying with the conditions \nin Direction 7(1)(I) above and if such property is mortgaged to the \nsame bank.\n7(1)(III)  Deposit of Title Deeds of Property with an Undertaking to Mortgage\n  No value shall be assigned until a property mortgage is executed in \nfavour of the bank.\n7(1)(IV)  Assignment over Life Insurance Policies \n  90 per cent of the surrender value shall be considered as value of  \nsecurity, provided confirmation of surrender value from the insurer is \navailable and the assignment in favour of the bank is duly registered.\n7(1)(V)  Secured on Gold\n  The market price of gold, subject to an adequate insurance cover .", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 117, "year": 2013}, "type": "Document"}
{"page_content": "7(1)(V)  Secured on Gold\n  The market price of gold, subject to an adequate insurance cover .\n7(1)(VI)  Assignment of Shares\n (i) Quoted \n (a) 90 per cent of the latest market price", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 117, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  111\n (b) If trading has  been suspended (other than temporary \nsuspension), the net realisable tangible asset value, as \nper the latest audited financial statements (not more than  \n18 months old), is to be used, provided an auditor\u2019s certificate \nevidencing the value per share is available. No value shall be \ngiven if appropriate financial statements/certificates are not \navailable and if sales are temporarily suspended. \n (ii) Unquoted\n  V alue may be given, provided the shares are marketable. \nAppropriate value may be determined on the basis of 75 per \ncent of the net tangible asset value per share as certified by the \ncompany\u2019s auditors.\n7(1)(VII)  Mortgage over Plant, Machinery and Equipment\n  V alue based on an external valuation report or, in the absence of \nsuch valuation, the net book value calculated by using a 20 per cent \ndepreciation rate on the straight-line basis taking into account the date \nof acquisition and the acquisition price shall be applicable.\n7(1)(VIII)  Mortgage over Motor Vehicles \n  Based on an external valuation report or , in the absence of such \nvaluation, the net book value calculated by using a 25 per cent \ndepreciation rate on the straight line basis taking into account the date \nof original registration and the acquisition price on that date, would be \napplicable.\n7(1)(IX)  Pledge over Stocks/Goods under the Bank\u2019 s Control\n  50 per cent of the market value determined on a case-by-case basis may \nbe applicable.\n7(1)(X)  Hypothecation of Stock-in-T rade\n  30 per cent of the current value of stocks provided that the level of \nstock-in-trade is closely monitored by the bank.\n7(1)(XI)  Quoted Debentures \n (i) 90 per cent of the latest market price\n (ii) If trading has been suspended (other than temporary suspension), \nthe net realisable tangible asset value, as per the latest audited \nfinancial statements (not more than 18 months old), is to be", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 118, "year": 2013}, "type": "Document"}
{"page_content": "financial statements (not more than 18 months old), is to be \nused, provided an auditor\u2019s certificate evidencing the value \nper share is available. No value shall be given if appropriate \nfinancial statements/certificates are not available and if sales are \ntemporarily suspended.\n7(1)(XII)  Guarantees\n (i) Licensed Banks \u2013 incorporated locally or outside Sri Lanka\n  Eligible value of guarantee is based on a rating given by an eligible", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 118, "year": 2013}, "type": "Document"}
{"page_content": "112 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\ncredit rating agency recognition under the Direction issued on \nmaintenance of capital adequacy ratio (Basel II), as follows:\nBank\u2019s credit rating Value of security\nAAA to AA- or equivalent 80%\nA+ to A- or equivalent 50%\n (ii) Government Guarantee\n  Full value.\n7(1)(XIII)  Other Types of Security\n  As specifically approved by the Director of Bank Supervision on a  \ncase-by-case basis.\n8(1) Banks incorporated or established within Sri Lanka shall have a well-designed \nwrite-off/write down policy established by the Board of Directors, delineating \nthe approach, authority, accountability for negligence and inappropriate  \nfollow-up, independent review and audit, continuous monitoring, reporting, \netc. This policy should aim at recovering maximum salvage value through \nenforcement of collateral / guarantees, etc.\n Banks, incorporated outside Sri Lanka, are required to follow write-off/write \ndown policy duly laid down by their head office.\n9(1) Banks shall segregate all credit facilities ( a) classified as non-performing  \n(b) rescheduled ( c) written off/written down from other credit facilities to \nfacilitate close follow-up action and to monitor recoveries.\n10(1)  Banks shall submit the information on classification of loans and advances to \nthe Central Bank of Sri Lanka on a monthly basis, in accordance with reporting \nformat and instructions at Annex attached hereto. The returns for a given period \nshould be submitted to the Central Bank on or before the 15th day of the month \nfollowing the month to which the information relates.\n11(1)  The following Directions and Circulars issued to licensed specialised banks are \nhereby revoked:\n (i) Directions on Suspension of interest on non-performing advances and  \nclassification of bad and doubtful advances for provisioning purposes \n(Schedule I) and valuation of securities for provisioning purposes", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 119, "year": 2013}, "type": "Document"}
{"page_content": "(Schedule I) and valuation of securities for provisioning purposes  \n(Schedule II) dated 21 November 1997, issued under Section 76 j(1) of the \nBanking Act, as amended.\n (ii) Circular letter dated 15 August 2003 amending Direction 11(1)( i) above.\n (iii) Circular letter dated 13 July 2004 on criteria for selection of Valuers.\n (iv) Circular letter dated 8 September 2004 on classification of bad and doubtful \nadvances for provisioning purposes (classification of medium and long-term \nproject loans).\n (v) Circular letter dated 29 March 2006 on reversal of unearned income and \nclassification of advances as non-performing.\n (vi) Direction dated 6 Decem ber 2006 on the requirement to maintain a general \nprovision for advances.Write Off  / Write \ndown of \nnon-performing \ncredit facilities.\nSegregation of \nnon-performing \ncredit facilities.\nReporting \nRequirement.\nRevocation \nof Previous \nDirections and \nCirculars.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 119, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  113\nAnnex\nLicensed Specialised Banks\nBanking Act, Direction No.4 of 2008\nClassification \tof\tLoans\tand\tAdvances, \tIncome\tRecognition \tand\tProvisioning\nReporting Format\nName of Bank:\nAs at: DD/MM/YYYY\n Amount in \u2019000\nCredit FacilitiesPerforming \nLoans and \nAdvances \n(PLA)Categorisation of Non-performing \nLoans and Advances (NPL) Total \nNPLsTotal \nCredit \nFacilitiesSpecial \nMentionSub-\nstandardDoubt-\nfulLoss\nOn-balance Sheet Credit Facilities\nCheques purchased\nImport bills\nExport bills\nCredit card \nShort-term loans\nMedium and long-term loans\nHousing loans\nStaff loans\nRe-scheduled loans\nLease rentals (net)\nLoans against debt securities\nPawning advances\nLoans to Banks and Financial \nInstitutions\nOther credit exposures\nInterest receivables\nLoans and Advances (gross)\nSuspended Interest (-)\nSpecific provisions (-)\nGeneral provisions (-)\nLoans and Advances (net)\nValue of Security\nOff-balance Sheet Credit Facilities\nGuarantees\nBonds\nLetters of Credit\nAcceptances\nInterest Receivables\nLoans and Advances (gross)\nSuspended Interest (-)\nSpecific provisions (-)\nGeneral provisions (-)\nLoans and Advances (net)\nValue of Security", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 120, "year": 2013}, "type": "Document"}
{"page_content": "114 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) of the \nBanking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nGovernor\nColombo\n01 November 2007\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 8 OF 2007\nMAXIMUM AMOUNT OF ACCOMMODATION\nIn exercise of the powers conferred by Section 76 j(1) of the Banking Act, No.30 of 1988, last \namended by the Banking Act, No.46 of 2006, the Monetary Board hereby issues Directions as follows:\n1. T hese Directions may be cited as the Banking Act, Directions No.8 of 2007.  \nThe Sections referred to in these Directions will be those of the Banking Act, \nNo.30 of 1988, last amended by the Banking Act, No.46 of 2006.\n2. In terms  of Section 76 j(1), the Monetary Board has been empowered to give \nDirections to licensed specialised banks or to any category of licensed specialised \nbanks regarding the manner in which any aspect of the business of such banks \nis to be conducted. Accordingly, the Monetary Board hereby gives Directions to \nlicensed specialised banks pertaining to the maximum amount of accommodation \nas may be made by such banks\u2013\n (i) to any single company, public corporation, firm, association of persons or an \nindividual; or \n (ii) in the aggregate to \u2013\n (a) an individual, his close relations or to a company or firm in which he has \na substantial interest; \n (b) a company and one or more of the following:\u2013\n (aa) its subsidiaries; \n (bb) its holding company; \n (cc) its associate company; \n (dd) a subsidiary of its holding company; or \n (ee) a company in which such company or its subsidiary , or its holding \ncompany, or a subsidiary of its holding company, has a substantial \ninterest.Citation\nEmpowerment \nunder 76J(1)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 121, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  115\n3. The maximum amount of accommodation that may be granted by a licens ed \nspecialised bank shall not exceed the following percentage of the capital base of \nthe licensed specialised bank subject to the Directions 7, 8 and 9.\n (i) 30 per cent in respect of customers referred to in Section 2(i) above. \n (ii) 33 per cent in respect of customers referred to in Section 2(ii) above. \n4. (1) Notwithstanding the provisions of Direction 3(ii) above, a licensed specialised \nbank may grant accommodation in excess of 33 per cent of the capital base of \nthe licensed specialised bank to customers referred to in paragraph 2(ii) above, \non the basis of a sum of scores assigned for the following as determined in \nDirection 4(2) below.\n ( i) T he Credit Rating and Capital Adequacy Ratio of the bank granting \naccommodation and, \n ( ii) The Credit Rating of the holding company of the customers referred  \nto in paragraph 2(ii) above. In the event the relationships within the \ncompanies in respect of whom accommodation shall be aggregated in \nterms of paragraph 2(ii) above do not lead to a holding company, the \ncredit ratings of each of the companies that comprise such aggregate \nshall be considered and the lowest credit rating assigned to any company \nwithin such aggregate shall be deemed to be the credit rating that shall be \napplicable for the purpose of giving effect to this Direction.\n(2) The scores referred to in Direction 4(1) above shall be assigned as follows.Maximum limits of \naccommodation \nto customers \nreferred to in \nparagraphs 2(i) \nand 2(ii) above.\nEnhanced limits \nof accommodation \nin aggregate to \ncustomers referred \nto in paragraph \n2(ii) above.\nAggregate \nlimit of large \naccommodation.Bank\u2019s\nCredit RatingCustomers\u2019\nCredit RatingBank\u2019s Capital \nAdequacy \nRatioScore \nAssigned for \nEach Column\nAAA to AA- or \nequivalentAAA to AA- or \nequivalent> 12% 1\nA+ to A- or \nequivalentA+ to A- or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 122, "year": 2013}, "type": "Document"}
{"page_content": "AAA to AA- or \nequivalentAAA to AA- or \nequivalent> 12% 1\nA+ to A- or \nequivalentA+ to A- or \nequivalent11% - 12% 2\nBBB+ or \nequivalent and \nbelowBBB+ or \nequivalent and \nbelow or unrated10% - <11% 3\n(3) The maximum amount of accommodation that may be granted by a licensed \nspecialised bank under Direction 4(1) above to customers referred to in \nparagraph 2(ii) above shall not exceed the following percentages of the \ncapital base of the licensed specialised bank, based upon the sum of the \nscores assigned for the three columns as per the Table set out in Direction \n4(2) above.\n (i) 40 per cent if the sum of scores is between 3 and 5.\n (ii) 36 per cent if the sum of scores is between 6 and 8.\n5. In the case of amount of accommodations granted as at any given date to any \ncategory of customers referred to in paragraphs 2(i) and 2(ii) above excluding \nthe Government of Sri Lanka in excess of 15 per cent of the capital base of \nthe licensed specialised bank, the sum total of the outstanding amount of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 122, "year": 2013}, "type": "Document"}
{"page_content": "116 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\naccommodation granted to such customers shall not exceed 55 per cent of the \ntotal outstanding amount of accommodation granted by the licensed specialised \nbank to all customers excluding the Government of Sri Lanka as at the end of the \nimmediately preceding month.\n6. ( 1) No twithstanding the provisions of Directions 3 and 4 above, a licensed \nspecialised bank may grant accommodation in excess of the maximum limits \nspecified under Directions 3 and 4 above to the categories of customers referred to \nin paragraphs 2(i) and 2(ii) above, provided that the prior approval of the Monetary \nBoard has been sought and obtained. The Monetary Board may grant such \napproval on a case-by-case basis, subject to terms and conditions it may deem fit, \ntaking into consideration, inter-alia, instances of national priorities and/or national \ninterest and the ability of the licensed specialised bank to withstand the potential \nrisk arising from the exposure to such enhanced accommodation, provided that the \nassessment of risks arising out of such accommodation to the licensed specialised \nbank has been analysed in detail and such analysis is furnished by the licensed \nspecialised bank to the Monetary Board when seeking approval of the Monetary \nBoard.\n ( 2)  Subject to Direction 6(1) above, a licensed specialised bank may grant  \naccommodation to the categories of customers referred to in paragraphs 2(i) and \n2(ii) above up to 50 per cent of the capital base of the licensed specialised bank \nfor the purpose of direct funding of infrastructure projects referred to in Annex 1 \nhereto for the commencement or expansion of the projects, provided that,\n (i) the customer(s) has (have) been awarded a contract to directly engage in \nan infrastructure development project in Sri Lanka, and,\n (ii) such project is funded to the extent of at least 50 per cent by sources", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 123, "year": 2013}, "type": "Document"}
{"page_content": "(ii) such project is funded to the extent of at least 50 per cent by sources \noutside Sri Lanka or by a consortium of licensed banks excluding the \nbank providing the accommodation.\n7. When computing the maximum amount of accommodation under Directions 3 and \n4 above that may be granted to any category of customers referred to in paragraphs  \n2(i) and 2(ii) above, the following accommodations shall be excluded.\n ( i) Ac commodation granted against the security of cash, gold, Government \nSecurities, Central Bank Securities, Treasury Guarantees, Central \nBank Guarantees and Guarantees issued by the World Bank, the Asian \nDevelopment Bank, International Development Association or any other \ninternational institution acceptable to the Director of Bank Supervision.\n ( ii) Ac commodation granted against the security of a guarantee or similar \ninstrument Director of Bank Supervision issued by a bank incorporated \nwithin or outside Sri Lanka other than the bank granting accommodation, \nsubject to the following:\u2013\n (a) The bank that provides the guarantee having a credit rating of AAA to \nA- or equivalent.\n (b) T he amount of accommodation that shall be excluded from the \ncomputation of accommodation being 80 per cent in the event the \ncredit rating of the bank that provides the guarantee is in the rank of \nAAA to AA- or equivalent and 50 per cent in the event the bank\u2019s \ncredit rating is in the rank of A+ to A- or equivalent.Exclusions of \naccommodations \nfrom maximum \nlimits under \nDirections 3 and 4.Monetary Board \nto approve \naccommodation \nin excess of the \nspecified limits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 123, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  117\n (c) The aggregate amount of all accommodation that shall be excluded in \nrespect of all such instances not exceeding 100 per cent of the capital \nbase of the licensed specialised bank.\n (d) The licensed specialised bank being satisfied that the credit rating of \nthe bank providing the guarantee has been obtained within 15 months \nof providing accommodation and the accommodation be revised \nimmediately if there is any change in such credit rating.\n8. The maximum limits of accommodation specified in these Directions shall not \napply to the following persons / institutions.\n (i) The Government of Sri Lanka.\n (ii) The Ceylon Petroleum Corporation and the Ceylon Electricity Board for a \nmaximum period of two years from the date of these Directions.\n (iii) Other licensed banks in respect of accommodation granted with a contractual \nmaturity of less than two years.\n9. The following definitions shall be applicable for the purposes of these  \nDirections.\n (i) Accommodations: As defined and provided for in Section 86 of the Banking \nAct, accommodations shall mean credit exposure and investment exposure \nas specified below.\n ( a) C redit exposure shall include all on-balance sheet accommodations \nsuch as any loan, overdraft or advance inclusive of finance lease, hire \npurchase and reverse repurchase agreements against debt securities \nand all off-balance sheet accommodations such as any commitment to \ngrant any loan, overdraft or advance or such other facility including a \ncommitment to accept a contingent liability.\n (b) Investments exposure shall include all financial investments excluding \ninvestments in equity (only ordinary shares).\n ( ii) Amount of accommodations: The amount of accommodations shall be \nthe total of on-balance sheet accommodations and off-balance sheet \naccommodations.\n ( a) Amount of on-balance sheet accommodations: The amount of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 124, "year": 2013}, "type": "Document"}
{"page_content": "accommodations.\n ( a) Amount of on-balance sheet accommodations: The amount of  \non-balance sheet accommodations shall mean the total of the accommo-\ndation limits prevailing at any given time or the total outstanding \namount of all accommodations, whichever is higher. In the case of \nfully drawn term loans, the outstanding amount of accommodations \nshall be reckoned as the amount of accommodations.\n ( b) Amount of of f-balance sheet accommodations: The amount of  \noff-balance sheet accommodations shall mean the credit equivalent \namount of total of the accommodation limits prevailing at any given \ntime or the outstanding amount of accommodations, whichever is \nhigher.\n (iii) Outstanding amount of accommodations: The outstanding amount of \naccommodations shall be the total of outstanding on-balance sheet \naccommodations and outstanding off-balance sheet accommodations.Definitions.Persons/\nInstitutions \nexempted from \nmaximum limits \nunder Directions \n3 and 4.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 124, "year": 2013}, "type": "Document"}
{"page_content": "118 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n ( a) Outstanding on-balance sheet accommodations: The outstanding \namount of on-balance sheet accommodations shall be the capital \noutstanding.\n ( b) Outstanding of f-balance sheet accommodations: The outstanding  \namount of off-balance sheet accommodations shall be the \ncredit equivalent amount of the outstanding off-balance sheet \naccommodations. \n (iv) Credit equivalent amount of off-balance sheet accommodations: The credit \nequivalent amount computed using the credit conversion factors applicable \nto off-balance sheet accommodations in the computation of the Capital \nAdequacy Ratio shall be applicable.\n ( v) Capital Base and Capital Adequacy Ratio: Capital Base and Capital \nAdequacy Ratio appearing in the computation of the Capital Adequacy \nRatio shall be applicable, provided that those shall be as at end of the \npreceding financial year or immediately preceding quarter or other latest \nquarter preceding the applicable quarter, whichever is available, subject to \ncertification by the licensed specialised bank\u2019s external auditor. \n (vi) Credit Rating: The credit rating shall be the credit rating obtained from a \ncredit rating agency listed in the Annex 2 hereto and shall be one that has \nbeen obtained within the past 15 months of providing accommodation.\n10. (1) In instances where the accommodation granted to a customer has to be revised \ndue to a reduction in the applicable accommodation limit, the accommodation \ngranted shall be reduced at the next facility review date or within six months, \nwhichever occurs earlier.\n (2) In the event a merger or acquisition between any institutional customers results \nin existing accommodations exceeding the applicable maximum limits, the \nlicensed specialised bank shall reduce such accommodations to be within the \napplicable maximum limits before expiry of six months from the date of such \nmerger or acquisition.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 125, "year": 2013}, "type": "Document"}
{"page_content": "applicable maximum limits before expiry of six months from the date of such \nmerger or acquisition.\n11. In the event the accommodation that has been granted to any category of  \ncustomers referred to in paragraphs 2( i) and 2( ii) above as at the date of these \nDirections exceeds the limits, i.e., maximum limits or aggregate limit, specified in \nthese Directions, the licensed specialised bank shall reduce such accommodation \nto be within the respective limits before the expiry of three months from the date \nof these Directions. \n12. Where the Monetary Board has determined that a licensed specialised bank has \ncontravened these Directions and the determination of such contravention has \nbeen conveyed to the licensed specialised bank, such licensed specialised bank \nshall not pay dividends until the contravention is rectified and such rectification is \nconfirmed by the Director of Bank Supervision.\n13. The Banking Act, Direction No.4 of 2007 dated 20 February 2007 of Maximum \nAmount of Accommodation is hereby revoked.Review of \nAccommodation.\nTransitional \nArrangements\nSteps to secure \ncompliance with \nDirections\nRevocation of \nPrevious Direction", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 125, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  119\nAnnex 1\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 8 OF 2007\nMAXIMUM AMOUNT OF ACCOMMODATION\nSpecification \tof\tInfrastructure \tProjects\nAny project that involves in developing or operating and maintaining or developing, operating, \nupgrading and maintaining any infrastructure facility listed below shall qualify for the accommodation \nunder the Direction 6(2) of the above Directions, provided that the accommodation referred to in the \nDirection shall be for the purpose of meeting direct cost of the project which shall not include repayment \nof any accommodation already granted by other banks or financial institutions or meeting the cost of \npurchase of a project already in operation. \n (i) a road, including toll road, a bridge or a rail system;\n (ii) a highway project including other activities being an integral part of the highway project;\n (iii) a port, airport, inland waterway or inland port;\n ( iv)  a wat er supply project, irrigation project, water treatment system, sanitation and sewerage \nsystem or solid waste management system;\n ( v)  telecommunication services whether basic or cellular , including radio paging, network of \ntrunking, network and internet services; \n (vi) an industrial park or special economic zone;\n (vii) generation or generation and distribution of power;\n (viii)  transmission or distribution of power by laying a network of new transmission or distribution \nlines; \n (ix) construction relating to projects involving agro-processing and supply of inputs to agriculture;\n (x) construction of educational institutions and hospitals;\n (xi) any other infrastructure project as may be specified by the Monetary Board from time to time.\nAnnex 2\nDIRECTIONS\nBANKING ACT DIRECTIONS NO. 8 OF 2007\nMAXIMUM AMOUNT OF ACCOMMODATION\nList of Credit Rating Agencies Acceptable to the Monetary Board\n1. Fitch Ratings Lanka Ltd.\n2. Lanka Ratings Agency Ltd.\n3. Standard & Poors", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 126, "year": 2013}, "type": "Document"}
{"page_content": "1. Fitch Ratings Lanka Ltd.\n2. Lanka Ratings Agency Ltd.\n3. Standard & Poors\n4. Moody\u2019 s Investors Service\n5. Credit Rating Information Services of India (CRISIL)\n6. Investment Information & Credit Rating Agency (ICRA)\n7. Fitch Ratings India Ltd.\n8. Pakistan International Credit Rating Agency\n9. Rating Agency Malaysia\n10. Japan Credit Rating Agency Ltd.\n11. Any other credit rating agency as may be accepted by the Monetary Board from time to time.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 126, "year": 2013}, "type": "Document"}
{"page_content": "120 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBank Supervision Department\n17 March 2005\nTo : The CEOs of Licensed Specialised Banks\nDear Sirs,\nACCOMMODATION TO DIRECTORS & RELATED COMPANIES\nAs intimated to you at the Meeting of the CEOs of Licensed Commercial Banks (LCBs) and \nLicensed Specialised Banks (LSBs) held on 17.03.2005, the Directions to LSBs on the above subject \nhave been amended to be consistent with the Directions issued to the LCBs in this regard.\nPlease find enclosed the amendment to the Direction issued under Section 76J (1) of the Banking \nAct.\nYours faithfully,\nSgd, Director of Bank Supervision\ncc \u2013 Secretary-General/SLBA\nENCL:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 127, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  121\nBANKING ACT, NO.30 OF 1988\nAs amended by Banking (Amendment) Act No.33 of 1995 and  \nAct No.2 of 1995\nAmendment to the Directions issued by the Monetary Board of the Central Bank of Sri Lanka under \nSection 76J(1) of the Banking Act No.30 of 1988 as amended by Act No. 33 of 1995 and Act No.2 of \n2005.\nSgd. Sunil Mendis\nGovernor\nColombo\n17 March 2005.\nAMENDMENT TO DIRECTIONS UNDER SECTION 76J(1)\nACCOMMODATION TO DIRECTORS AND RELATED COMPANIES\nDirection on Accommodation to Directors and Related Companies dated 21.11.97 issued by the \nMonetary Board is hereby amended as follows:\n1. By the repeal of subsection 1.1 and substitution therefor of the following: \n1.1 \u201cany of its directors or to a close relation of such director exceeding Rupees Five Hundred \nThousand (Rs.500,000/-), and except where such accommodation is provided by the issue of \na credit card, such accommodation is secured by such specified security as set out in section 7 \nbelow.\nWhere the accommodation is provided by the issue of a credit card, the limit applicable shall \nbe Rupees Five Hundred Thousand (Rs.500,000/-) provided that such accommodation is on the \nsame terms and conditions as for other customers of the respective bank.\nHowever, where the accommodation is secured by the security specified at subsection 7.1 \nto 7.5 below, accommodation may be granted upto the limit of the security permitted in the \nrelevant subsection.\u201d\n2. By the insertion of section 6.1 immediately after section 6:\n6.1 \u201cWhere any accommoda tion is granted by a licensed specialised bank under section 1 during the \ncourse of any financial year, such accommodation shall be disclosed in the accounts for that \nfinancial year and for each subsequent financial year till such accommodation has been repaid \nor settled in full.\u201d\nThe above amendment will be operative with immediate effect.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 128, "year": 2013}, "type": "Document"}
{"page_content": "122 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nACCOMMODATION TO DIRECTORS & RELATED COMPANIES\n1. No licensed specialised bank shall grant accommodation to \u2013 \n 1 .1  any director or to a close relation of such director an amount exceeding the amount of  \naccommodation, if any, extended to him or such close relation, outstanding on the day prior \nto the date of his appointment as a director or the date of this direction whichever is later or \nRs.1 million, whichever is more and such accommodation is secured by such specified security \nreferred to at paragraph 7 below. \n 1.2 any concern in which such director or his close relation \u2013\n 1.2.1  has a shareholding in excess of 10 per cent of the paid up capital of the concern if such \nconcern is a company;\n 1.2.2  is the sole proprietor or is a partner;\n  unless such accommodation is secured by specified security referred at paragraph 7 \nbelow. \n2. Any accommodation granted in accordance with paragraph 1 above shall be sanctioned at a meeting \nof the Board of Directors with not less than two-thirds of the number of the directors constituting \nthe Board of Directors of the licensed specialised bank (other than the director concerned) voting in \nfavour of such accommodation.\n3. Where any accommodation has been granted by a licensed specialised bank to a person or close \nrelation of a person or to any concern mentioned at paragraph 1.2.1 or 1.2.2 above, and if that person \nis a director of a licensed specialised bank on the date of this direction or appointed a director after", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 129, "year": 2013}, "type": "Document"}
{"page_content": "the date of this direction, steps shall be taken to obtain such specified security referred to at paragraph \n7 below within one year from the date of this direction or from the date of appointment as a director \nas may be applicable or such longer period as may be given by the Monetary Board.\n4. Where such special security at paragraph 7 below has not been provided within the time period \ngranted or any extension granted by the Monetary Board, such director shall be deemed to have \nvacated office on the expiry of the period granted /extended to obtain such specified securities under \nparagraph 3 above.\n5. Provisions of paragraph 3 & 4 above shall not apply if and when the director concerned vacates such \noffice by death, retirement, resignation or otherwise.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 129, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  123\n6. No accommodation or any part thereof, granted by a licensed specialised bank to a director or a \nclose relation of the director or to any concern mentioned at paragraph 1.2.1 & 1.2.2 above, shall \nbe remitted without the prior approval of the Monetary Board and any such remission without such \napproval shall be null and void.\n7. The specified securities referred to at paragraphs 1, 3 & 4 above shall be \u2013\n 7.1 Sri Lanka Government Guarantees;\n 7.2 Bank Guarantees;\n 7.3 Guarantees of International Financial Institutions;\n 7.4 Government or Central Bank Securities provided that the accommodation granted would not \nexceed 90 per cent of the face value or market value, whichever is lower of such securities;\n 7.5 Cash Deposits held under lien to the order of the lending licensed specialised bank provided \nthat the accommodation granted would not exceed 90 per cent of such cash deposits;\n 7.6 Life Insurance Policies issued in Sri Lanka and assigned to the lending licensed specialised \nbank provided that the accommodation granted would not exceed 75 per cent of the surrender \nvalue of such policy;\n 7.7 Immovable property held on a freehold basis and on which a primary mortgage has been taken \nby the lending licensed specialised bank provided that the accommodation granted would not \nexceed 60 per cent of the value of such property;\n 7.8 Immovable property held on a leasehold basis provided that \u2013\n 7.8.1  the lease has been granted by a statutory body;\n 7.8.2  the unexpired period of lease is at least 50 years;\n 7.8.3  there is no prohibition on the mortgage of the leasehold rights contained in the Deed of \nLease, or if the Deed of Lease requires the prior approval of the Lessor for the mortgage \nof the leasehold rights such approval has been obtained from the Lessor; \n 7.8.4  a primary mortgage has been taken on the leasehold rights by the lending licensed \nspecialised bank;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 130, "year": 2013}, "type": "Document"}
{"page_content": "specialised bank;\n  and provided further that the accommodation granted does not exceed 60 per cent of \nsuch property.\n 7.9 Shares of Public Companies quoted on the Colombo Securities Exchange provided that the \naccommodation granted would not exceed 50 per cent of the market value of such shares;\n 7.10 Mortgage of Stock-in-Trade provided that the accommodation granted would not exceed 30 per \ncent of the market value of such stock-in-trade;\n 7 .11  Pledge of non-peris hable goods of a commercial nature which are readily marketable, \nexcluding all manufactured foods and other items with a limited shelf life, provided that the \naccommodation granted would not exceed 40 per cent of the market value of such goods;\n 7.12 Mortgage of Plant and Machinery provided that the accommodation granted shall not exceed \n50% of the value of such plant and machinery as at date of accommodation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 130, "year": 2013}, "type": "Document"}
{"page_content": "124 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 J(1) of the \nBanking Act, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n2nd September 2009.\nBANKING ACT DIRECTION NO. 4 OF 2009\nLEASED-BACKED TRUST CERTIFICATES / LEASE RECEIV ABLES AS\nAPPROVED SECURITY FOR ACCOMMODATION TO \nANY DIRECTOR OR CLOSE RELATION OF A DIRECTOR OR TO \nANY CONCERN IN WHICH THE DIRECTOR HAS SUBSTANTIAL INTEREST\nIn the exercise of the powers conferred by Section 76 J(1) of the Banking Act, No. 30 of 1988, last \namended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues Directions to licensed \nspecialised banks.\n1. These Directions may be cited as the Banking Act, Direction No. 4 of 2009.  \nThe Sections referred to in this Direction will be those of the Banking Act  \nNo. 30 of 1988, last amended by the Banking Act No. 46 of 2006.\n2. In the exercise of the powers conferred by Section 76 J(1) of the Banking Act, the \nMonetary Board is empowered to issue Directions to licensed specialised banks \nregarding the manner in which any aspect of the business of such banks is to be \nconducted.\n3. The  following new Direction shall be inserted immediately after Direction \n7.12 of the Directions issued in terms of Section 76 J(1) of the Banking Act on \nAccommodation to Directors and Related Companies issued dated 21 November \n1997.\n 7.13 Lease-backed trust certificates/lease receivables provided that\u2013\n 7 .13.1  The total accommodation granted on the lease-backed trust  \ncertificates/lease receivables shall not exceed 50 per cent of the \nvalue of such lease backed trust certificates/lease receivables.\n7.13.2  The total accommodation granted on the lease-backed trust  \ncertificates/lease receivables shall not exceed 50 per cent of \nthe aggregate amount of the total outstanding accommodation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 131, "year": 2013}, "type": "Document"}
{"page_content": "the aggregate amount of the total outstanding accommodation \ngranted to the individual company.\n7.13.3  Lease-backed trust certificates/lease receivables shall be based \non the un-encumbered (performing) lease portfolio.\n7.13.4  Lease-backed trust certificates/lease receivables shall be \nmortgaged to the lending bank.\n7.13.5  The lending bank should be a registered establish ment under the \nFinance Leasing Act No. 56 of 2000.Citation.\nEmpowerment \nunder Section \n76J(1).\nApproved Security.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 131, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  125\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) and  \n76J(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n04 April 2013\nBANKING ACT DIRECTION NO. 1 OF 2013\nEXPOSURE TO THE STOCK MARKET BY\nLICENSED COMMERCIAL BANKS AND\nLICENSED SPECIALISED BANKS\nIn the exercise of the powers conferred by Sections 46(1) and 76J(1) of the Banking Act, No. 30 \nof 1988, last amended by the Banking (Amendment) Act, No. 46 of 2006, the Monetary Board hereby \nissues the following Directions on Exposure to Stock Market by Licensed Commercial Banks and \nLicensed Specialised Banks (hereinafter referred to as Licensed Banks), having reviewed the exposures \nof Licensed Banks to the stock market and decided to require Licensed Banks to adopt appropriate risk \nmanagement standards to mitigate any potential risks at prudent levels with a view to promoting the \nsafety and soundness of the banking system.\n1. These Directions may be cited as the Banking Act, Directions No. 1 of 2013.\n2. A  Licensed Bank may extend margin trading facilities on shares to customers/\ninvestors, provided that:\n (i) the Licensed Bank shall have internal limits in respect of:\n(a) individual customer/investor margin trading exposure based on the \nmarket value of such customer\u2019s/investor\u2019s share portfolio subject to \nany statutory limits in place; and\n(b) aggregate mar gin trading exposures based on the total outstanding \namount of loans and advances granted by a licensed bank.\n (ii) all shares purchased from margin trading facility shall be under pledge to \nthe Licensed Bank providing margin trading facility.\n3.1 A  Licensed Bank may issue guarantees for the purpose of purchase of shares \nfrom Initial Public Offerings not exceeding fifty percent of the value of such", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 132, "year": 2013}, "type": "Document"}
{"page_content": "from Initial Public Offerings not exceeding fifty percent of the value of such \nInitial Public Offering.\n3.2 The guarantees issued against cash deposits shall be exempted from the above \nlimit, provided that: \n (i) the cash deposit is not less than the value of the guarantee;\n (ii) the cash deposit is not financed from any loans from the bank; andCitation.\nInternal limits on \nMargin trading \non Shares.\nLimit on issue \nof guarantees \nfor purchase \nof shares.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 132, "year": 2013}, "type": "Document"}
{"page_content": "126 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (iii) the Licen sed Bank has the right to take possession of such cash deposits \nin the event of default of commitments by the customer.\n4. The Board of Directors of Licensed Banks incorporated in Sri Lanka and the \nHead Office/Regional Office of the branches of banks incorporated outside \nSri Lanka shall formulate a Board/Head Office/Regional Office approved risk \nmanagement policy, guidelines and internal controls on their exposures to \nstock market activities including prudential limits for margin trading as per 2(i) \nabove and assess risk exposures, such as credit, liquidity and concentration with \nappropriate risk management information on an on-going basis.\n5. Every Licensed Bank shall spread margin trading facilities among a reasonable \nnumber of customers with diversified portfolios of shares to mitigate risky \nconcentrations.\n6. Every Licensed Bank shall report to the Director of Bank Supervision details \nof exposure to the stock market in accordance with the reporting format at  \nAnnex A on or before the 15th day of the month following each quarter.\n7. The following Banking Act Directions are hereby revoked:\n (i) Banking Act Direction No. 5 of 2011, dated 26 August 2011 on Exposure \nto Stock Market and Banking Act, Direction No. 11 of 2011, dated  \n16 December 2011 on Amendments to Direction on Exposure to Stock \nMarket issued to Licensed Commercial Banks; \n (ii) Banking Act Direction No. 6 of 2011, dated 26 August 2011 on Exposure  \nto Stock Market and Banking Act, Direction 12 of 2011, dated  \n16 December 2011 on Amendments to Direction on Exposure to Stock \nMarket issued to Licensed Specialised Banks.Role of Board \nof Directors.\nControl on \nConcentrations.\nReporting.\nRevocation of \nDirections.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 133, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  127\nTo  :  Director of Bank Supervision, Central Bank of Sri Lanka\nName of Licensed Bank :  \nQuarter ended  : \nQuarterly Statement of Exposure to the Stock Market\nA.  Exposure to the Stock Market\nItemOn Balance Sheet Exposure Off Balance Sheet Exposure\nTotal \nExposure\n(h) = (d + g)Margin \nTrading \nFacilities\n(a)Other loans \ngranted for \npurchase of \nlisted shares\n(b)Others (i)\n(c)Sub Total \n(d) =\n(a + b + c)Total \nvalue of \nguarantees \nissued\n(e)Under-writing \nand other \ncommitments, \ncredit lines, etc .\n(f)Sub Total \n(g) = (e + f)\nAmount outstanding (Rs. mn)\nAs a % of outstanding amount of  \ntotal loans and advances\nB.   Guarantees issued for purchase of shares at IPO\nName of IPO (i)Size of \nIPO (j)Fully cash backed\n guarantees \n(Rs. Mn) (k)Guarantees issued \nwithout cash deposits \n(Rs. mn) (l)Total value of guarantees issued \n(Rs. mn) \n(m) = (k + l)\nTotal\nNote : (i)  if any, please provide details separately.\nThis statement should be submitted to the Bank Supervision Department by the 15th day of the month following end of each quarter. Please e-mail to \nbanksup@cbsl.lk or fax to 2477711Annex  A", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 134, "year": 2013}, "type": "Document"}
{"page_content": "128 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBank Supervision Department\n31 December 2004\nTo : All Licensed Commercial Banks\n       Licensed Specialised Banks;\n       Approved Auditors\nDear Sirs,\nACCOUNTING FOR PROPERTIES ACQUIRED BY FORECLOSURE OF\nCOLLATERAL / PART SETTLEMENT OF DEBT\nIt has been observed that the accounting treatment adopted by some banks with respect to \nimmovable property acquired by foreclosure of collateral from defaulting customers or which have \ndevolved on the banks as part settlement of debt, leads to a misrepresentation of the bank\u2019s assets and \nthe level of non performing advances of the bank.\n2. In order to create a uniform practice among the banks in accounting for such assets, and \nto avoid misrepresentation of the level of non performing advances, all banks are hereby informed to \nadhere to the following procedure in accounting for such property;\n2.1 Immovable property acquired by foreclosure of collateral from defaulting customers, or \nwhich have devolved on the banks as part settlement of debt should not be accounted for as investment \nproperty or as part of the assets of the bank.  Such property should be recorded on a memorandum \nbasis.\n2.2 The related facility should remain classified in the books of the bank until such property is \ndisposed of and the proceeds realized by the bank.\n3. Y our attention is drawn to section 48 a of the Banking Act, No.30 of 1988, as amended by \nAct, No.33 of 1995, which requires banks to dispose of property acquired by foreclosure of collateral \nfrom defaulting customers or which have devolved on the banks as part settlement of debt, at the \nearliest opportunity.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 135, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  129\nRef. No. : 02  / 17 / 800 / 008 / 001\nBank Supervision Department\n05 January 2009\nTo\t:\t\t Chief\tExecutive \tOfficers\tof\tall\tState\tBanks\nESTABLISHMENT OF A REVOLVING FUND TO GRANT LOANS TO\nACQUIRE PROPERTY TO THE STATE SECTOR EMPLOYEES\nHis Excellency the President, at the discussions held on 21 October 2008 with the state sector \nemployees union, has directed the Central Bank to inform all state banks to establish a Revolving \nFund for the purpose of granting loans to acquire property, to state sector employees. Accordingly, we \nrequest all state banks to accede to the above.\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 136, "year": 2013}, "type": "Document"}
{"page_content": "130 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 17 / 600 / 0002  / 001\nBank Supervision Department\n30 January 2009\nTo :  All  Licensed Commer cial Banks and\n Licensed Specialised Banks\nDear Sir  / Madam,\nCONCESSIONS GRANTED TO TOURISM INDUSTRY\nIn view of the major setback in global economic activities and their impact on the tourism \nindustry, the Monetary Board has requested all licensed commercial banks and licensed specialised \nbanks to grant the following concessions to those institutions in the tourism industry, that wish to avail \nthemselves of such concessions:\n (i) Grant a moratorium of 6 months from January 2009 to June 2009, in respect of outstanding credit \nfacilities to tourist hotel companies and the holding companies of such hotel companies, provided \nthat the hotel companies concerned retain their employees at levels prevailing as at December \n2008. \n (ii) Recover the capital and interest falling due during the moratorium period, from January 2010 \nonwards in thirty-six equal instalments and a concessionary rate of interest be charged for this \nfacility.\n (iii) W aive the penal interest imposed on any defaulted credit facilities taken by the tourist hotel \ncompanies, and the holding companies of such hotel companies. \n (iv) Continue to maintain any non-performing loans in the same category for provisioning purposes, \nduring the six-month moratorium period. \nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 137, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  131\nRef. No. : 02  / 17 / 800 / 007 / 001\nBank Supervision Department\n03 March 2009\nTo :  CEOs of Licensed Commer cial Banks and\n Licensed Specialised Banks\nDear Sir  / Madam,\nGRANTING CREDIT FACILITIES TO PRIV ATE SECTOR\nIt has been brought to our notice that some banks have informed their customers that the Central \nBank has required banks to curtail credit to their customers.  \nThe recent trends show that growth in credit to the private sector has decelerated significantly.  \nInflation and inflation expectations are also moderating. In view of these developments and to mitigate \nthe negative consequences of the global financial turmoil on the domestic economy, the Central Bank has \nalso taken several measures to ease conditions in the domestic financial markets.\nAccordingly, you may take appropriate measures to expand credit to the private sector, based on the \nevaluation of credit risk of the customers.  \nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 138, "year": 2013}, "type": "Document"}
{"page_content": "132 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOrder made by the Monetary Board of the Central Bank of Sri Lanka under Section 101(1) of the \nMonetary Law Act, No. 58 of 1949, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n12 March 2012.\nMONETARY LAW  ACT, ORDER NO. 1 OF 2012\nCEILING ON CREDIT GROWTH OF LICENSED BANKS\nIn view of the higher than desired increase in credit extended by licensed banks and its impact \non the monetary aggregates and inflation, the Monetary Board in the exercise of powers conferred by  \nSection 101(1) of the Monetary Law Act, No. 58 of 1949, as amended, hereby issues Orders No. 1 of \n2012 as follows:  \n1. The credit growth of a licensed bank in the year 2012 shall not exceed   \n18 per cent of the total outstanding of credit as at end of year 2011 or Rs. \n800 million, whichever is higher. Provided however, that a licensed bank \nmay grant credit in the year 2012 in excess of 18 per cent or Rs. 800 million, \nup to 23 per cent of the total outstanding of credit as at end of year 2011 or  \nRs. 1,000 million, whichever is higher, where corresponding funds are raised \nfrom overseas sources.  \n2. The following definitions shall be applicable for the purposes of this Order .\n  i. \u201cCredit\u201d shall mean all on-balance sheet rupee credit facilities such as any \nloan, overdraft or advance inclusive of finance leases, hire purchase and \ntrade finance. \n ii. \u201cOutstanding amount of credit\u201d shall mean:\na. In  the case of overdrafts and credit card receivables, the total \nof outstanding amount after deducting all accrued interest of all  \nnon-performing overdrafts and credit card receivables.\nb. I n the case of other loan and advances (other than overdrafts and \ncredit card receivables), the total of capital outstanding amount after \ndeducting all accrued interest on performing and non-performing loans \nand advances.Credit growth \nlimits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 139, "year": 2013}, "type": "Document"}
{"page_content": "and advances.Credit growth \nlimits.\nDefinitions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 139, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  133\nRef. No. : 02/04/004/0005/001\nCentral Bank of Sri Lanka\nBank Supervision Department\nTo : All Licensed Commer cial Banks and\n Licensed Specialised Banks\nGUIDELINES ON THE GRANT OF FACILITIES FOR THE ISSUE OF\nCOMMERCIAL PAPER AND OTHER FORMS OF PROMISSORY NOTES\nAll Licensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) are hereby \nrequired to observe the following guidelines when they provide accommodation for the issue of \nCommercial Paper and other forms of Promissory Notes (CP/PN) by their corporate customers by \naccepting, endorsing, guaranteeing, underwriting or purchasing such CP/PN, or where they support the \nissue of such instruments by acting as issuing/paying agents, dealers, or by authenticating signatures of \nthe issuers.\n1. Form of Commercial Paper/Promissory Notes \u2013  CP/PN shall take the form of a usance promissory \nnote negotiable by delivery or endorsement and delivery, in accordance with the Bills of Exchange \nOrdinance.\n2. Eligibility Criteria \u2013  The LCBs and LSBs shall observe the following criteria when supporting the \nissue of CP/PN referred to above:\n 2.1 The issuing corporate customers should not be LCBs, LSBs or Finance Companies.\n 2.2 All existing credit facilities enjoyed by the issuing company with any LCB/LSB should be \n\u201ccurrent\u201d in terms of the Central Bank\u2019s Directions on Non-Performing Advances issued under \nSection 46 a and Section 76 j(I) of the Banking Act for LCBs and LSBs, respectively.\n 2 .3  In the case of providing accommodation, the issuing company should have an approved   \nstand-by credit line from the LCB/LSB supporting the issue, to the full redemption value, which \nshould be specifically reserved for the purposes of redemption of such CP/PN. Such credit line \nshould be for a period longer than the maturity date of CP/PN.\n  OR\n  An \u2018investment grade rating\u2019  by a Rating Agency approved by the Central Bank of Sri Lanka.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 140, "year": 2013}, "type": "Document"}
{"page_content": "OR\n  An \u2018investment grade rating\u2019  by a Rating Agency approved by the Central Bank of Sri Lanka.\n  \u201cfull redemption value\u201d refers to the amount of the principal, interest and any other \ncharges which is payable upon redemption of such CP/PN.\n3. Pr ocedures \u2013  A LCB\u2019s/LSB\u2019s support for the issue of CP/PN does not require the prior approval of \nthe Central Bank of Sri Lanka. However, in supporting the issue of these instruments, LCBs/LSBs \nshall ensure that:\n 3.1 The company intending to issue such CP/PN submits to LCBs/LSBs \u2013\n (a) A  written request indicating the nature of support applied for in respect of each issue \nof CP/PN;\n (b) Com prehensive financial information which would include company profiles and \nfinancial data including a projected cash flow statement;\n (c) The value of CP/PN already issued and outstanding;\n (d) Board resolution for the issue of CP/PN concerned.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 140, "year": 2013}, "type": "Document"}
{"page_content": "134 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n 3 .2  The LCBs/LSBs should also ensure that the company profiles and financial data are made \navailable to investors upon request.\n 3.3 An adequate appraisal of the financial condition of the issuer is carried out and due caution is \nexercised before lending the support of the LCB/LSB. For this purpose, the LCB/LSB should, \namong other things, obtain a report from the Credit Information Bureau (CRIB).\n 3.4 The CP/PN are printed on good quality security paper incorporating adequate security features, \nthat necessary precautions have been taken to keep documents in safe custody, preventing \naccess by unauthorised persons.\n 3.5 The issue of CP/PN is completed within a period of 14 calendar days from the date of issue. \nThus, any unsold portion of the issue after the 14 day cannot be issued.\n 3.6 Each single issue of CP/PN should have the same maturity date.\n 3.7 The issuing company should discharge the obligations on the CP/PN on the date of maturity. \nNo grace period shall be given to the issuer in this regard.\n 3.8 The CP/PN shall contain the following minimum information/features:\n (a) The description of debt instrument should be clearly printed on it;\n (b) Name of the issuing company;\n (c) Serial number;\n (d) Place of payment (of interest and principal);\n (e) Date of issue;\n (f) Amount (in words and figures);\n (g) Date of maturity;\n (h) Names of the issuing and paying agents;\n (i) If the repayment of principal and payment of interest are guaranteed, name of the  \nguarantor;\n (j) Signatures of authorised signatories of the issuing company\n (k) W here the LCB/LSB does not accept any obligation for the payment on the  \nCP/PN, as when it only authenticates the signature, such fact should be conspicuously \nstated on the CP/PN;\n (l) The counterfoil of CP/PN should also contain the information at ( a) to (k). In the case \nof (j), the signature/initials of the respective signatories.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 141, "year": 2013}, "type": "Document"}
{"page_content": "of (j), the signature/initials of the respective signatories.\n (m) Adequate space should be provided for endorsements on the reverse of the CP/PN.\n3.9 (a) The LCB\u2019s/LSB\u2019s accounts in respect of CP/PN should be in conformity with \napplicable/accepted accounting practices and non fund based support for CP/PN \nshould be recorded and reported as off-balance sheet items.\n (b) The LCB\u2019s/LSB\u2019s obligations/commitments on CP/PN shall be reported in the statutory \nreturns submitted to the Central Bank of Sri Lanka.\n (c) Details of the LCB/LSB support for the issue of CP/PN outstanding monthly, shall be \nreported to the Director of Bank Supervision in a monthly statement as in the annexed \nformat. This statement shall be submitted by the 15th of the following month, duly \ncertifying that the obligations of the LCB/LSB under the different categories of issue, \nas recorded in the General Ledger, are correctly reflected in the statement. A \u2018nil\u2019 \nstatement should be sent if there are no outstanding balances.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 141, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  135\n 3.10 The LCBs/LSBs supporting the issue of CP/PN should conform to all legal requirements.\n 3.1 1  Roll-over of CP/PN should be considered as a new issue.\n4. Prudential Requir ements of the Central Bank\n 4.1 All credit facilities extended, and commitments made, by LCBs/LSBs relating to the issue of \nCP/PN will be treated as accommodation granted to the issuing company and shall be subject \nto directions issued from time to time under the Banking Act and to all prudential guidelines \nissued by the Central Bank.\n5. These Guidelines shall be ef fective from 05 January 2001.\n6. Guidelines to Licensed Commercial Banks in Sri Lanka on the grant of facilities for the issue of \nCommercial Paper dated 05.06.1995 are hereby rescinded.\n7. Any clarifications/queries with regard to these Guidelines should be addressed to the Director of \nBank Supervision. \nSgd. P. T. Sirisena\nDirector of Bank Supervision\n05 January 2001", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 142, "year": 2013}, "type": "Document"}
{"page_content": "136 Directions, Determinations, and Circulars issued to Licensed Specialised Banks(Amounts in Rupees Thousands)  \n Name of  Legal Status  Type of  Amount  Amount  Date of  Date of  Rate of  Nature of\n Issuing Company  of Issuing  Promissory   of the Issue  Subscribed  Issue  Maturity  Interest (%)  Support \n  Company  Notes Issued  (Face Value)   (YY/MM/DD)  (YY/MM/DD)\n (1) (2) (3) (4) (5) (6) (7) (8) (9)\nWe hereby certify that this statement reflects the value of support extended to the Bank\u2019s customers and that the statement figures tally with the General \nLedger Balances as at the end of the month.\nDate :  Name of Bank :  Authorised Officer :* Column (9)\nPlease indicate using the following \nCodes :\nNature of Support  Code\nAccepting  AC\nEndorsing  EN\nGuaranteeing  GT\nUnderwriting  UN\nPurchasing  PR\nIssuing Agent  IA\nPaying Agent  PA\nDealer  DE\nAuthenticating  AUInstructions :\n* Column (2)\nPlease indicate using the following Codes :\nPrivate Company  \u2013  PR\nPublic Unquoted Company  \u2013  PU\nPublic Quoted Company  \u2013  PQ\nPeoples Company  \u2013  PC\n* Column (3) : Please indicate whether Commercial Paper (CP), Promissory Notes (PN), or any other form \n(Please specify)\n* This statement should reach the Director, Bank Supervision Department on or before the 15th of the following \nmonth.\n* A \u2018nil\u2019 statement should be submitted if there are no outstanding amounts.Monthly Statement of Commercial Paper / Promissory Notes\nAs at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 in terms of Guidelines dated 5 January 2001", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 143, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  137\n Bank Supervision Department\n 31 December 2007\nMr. S A Weerasinghe\nGeneral Manager\nState Mortgage and Investment Bank\n269, Galle Road\nColombo 3.\nDear Sir,\nDIRECTION ON LIQUID ASSETS\nWith a view to strengthening the safety and soundness of the State Mortgage and Investment \nBank (SMIB), the Monetary Board of the Central Bank of Sri Lanka has decided to revoke the separate \nDirection issued to SMIB on the maintenance of the Statutory Liquid Assets on 21 November 1997 under \nSections 76 j(3) of the Banking Act and replace the same with the Direction issued to other Licensed \nSpecialised Banks (LSBs), with effect from 1st January 2008. The applicable Direction issued under \nSection 76 j(1) of the Banking Act is attached herewith.\nThe Monetary Board has also decided to grant time till 31 December 2008 to comply with the \nrequirements contained in the new Directions. If SMIB is unable to comply with the newly applicable \nDirection, it shall comply with requirements contained in the relevant previous Direction until the \nexpiration of the time granted to comply with the new Direction.\nYours faithfully,\nSgd, B D W A Silva\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 144, "year": 2013}, "type": "Document"}
{"page_content": "138 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : BS/31/90 V ol. IV \nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha\nColombo 1.\n18th May, 1998 \nTo :  Licensed Specialised Banks\nLIQUID ASSETS\nDIRECTION UNDER SECTION 76 j(3) OF THE\nBANKING ACT, NO. 30 OF 1988 AS AMENDED BY ACT, NO. 33 OF 1995\n The Monetary Board, in terms of Paragraph 3.10 of the above mentioned Directions dated  \n21st November 1997, has determined that Treasury Bonds issued under Section 21 a of the Registered \nStock and Securities Ordinance shall be liquid assets.\n The Licensed Specialised Banks may, therefore, take into account the Treasury Bonds they hold \non their account for the purpose of complying with the provisions of the Directions issued under Section \n76j(3) of the Banking Act, No.30 of 1988 as amended by Act, No.33 of 1995, relating to their obligation \nto maintain the required amount in liquid assets.\nYours faithfully,\nSgd. Y. A. Piyatissa\nDirector of Bank Supervision\nNSB\n    Section 76 j(3)\nSMIB\uf8f1\n\uf8f2\n\uf8f3", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 145, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  139\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nLIQUID ASSETS\n1. Every licensed specialised bank shall maintain minimum average monthly, liquid assets of not less \nthan 20 per cent of its total monthly deposit liabilities.\n2. Every licen sed specialised bank shall furnish to the Director of Bank Supervision a monthly return \nin a format to be released by him, certifying the total monthly deposit liabilities and the average total \nmonthly liquid assets as at close of business on the last working day of that month. Such return should \nbe forwarded before the 15th day of the month following the month to which the statement relates.\n3. Liquid Assets for purpose of this direction shall mean \u2013\n 3.1 Cash in hand.\n 3.2 Balance in a current account in a licensed commercial bank.\n 3.3 Balance in a deposit account in a licensed specialised bank or a licensed commercial bank \nprovided such deposit account have a maturity not exceeding one year.\n 3.4 Money at call in Sri Lanka.\n 3.5 T reasury bills and securities issued or guaranteed by the Government of Sri Lanka which have \na maturity not exceeding one year.\n 3.6 Goods receipts.\n 3.7 Import and export bills.\n 3.8 Inland bills.\n 3.9 Cash items in process of collection. \n 3.10 T reasury Bonds issued under Section 21 a of the Registered Stock and Securities Ordinance. \n 3.1 1  Such other assets as may be determined by the Monetary Board.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 146, "year": 2013}, "type": "Document"}
{"page_content": "140 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 17 / 500 / 0540  / 001\nBank Supervision Department\n15 October, 2012\nTo :  The CEOs of all Licensed Specialised Banks\nDefinition \tof\tLiquid\tAssets\tunder\tSection\t76J(1)\tof\tthe\nBanking Act, No. 30 of 1988, as Amended\nThe Monetary Board has determined that Reverse Repurchase Agreements in Treasury bills and \nTreasury bonds shall be treated as liquid assets in terms of item 3.11 of the Liquid Assets Direction of \nlicensed specialised banks issued under Section 76J(1) of the Banking Act, No. 30 of 1988.\nLicensed specialised banks may, therefore, take into account the daily outstanding amount of the \nReverse Repurchase Agreements or the market value of the underlying securities held under Reverse \nRepurchase Agreements, whichever is less, in computing their liquid assets ratio.\nLicensed specialised banks are further informed that, the eligible value of the Reverse Repurchase \nAgreements in Treasury bills and Treasury bonds should be reported under code number 4.1.2.4.0.0  \nand 4.1.2.13.0.0, respectively, of the monthly web based return on Statutory Liquid Assets Ratio  \n(BSD-MF-04-LD).\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 147, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  141\nRef. No. : 02  / 17 / 500 / 0540  / 001\nBank Supervision Department\n05 April, 2013\nTo :  The CEOs of all Licensed Specialised Banks\nDefinition \tof\tLiquid\tAssets\tunder\tSection\t76J(1)\tof\tthe\t\nBanking Act, No. 30 of 1988, as Amended\nThe Monetary Board has determined that investments in Gilt Unit Trusts (GUTs) by LSBs  \nshall be treated as liquid assets in terms of item 3.11 of the Liquid Assets Direction of licensed specialised \nbanks issued under Section 76J(1) of the Banking Act, No. 30 of 1988, subject to the following conditions.\n(a) GUTs should be open ended mutual funds.\n(b) Underlying investment portfolio of GUTs should always be Sri Lanka Government \nSecurities (Treasury bills and Treasury bonds).\n(c) Only 90% of investments in GUTs should be treated as liquid assets. \nLicensed Specialised Banks are further informed that, the eligible value of the investments in \nGUTs be reported under code number 4.1.2.4.0.0 of the monthly web based return on Statutory Liquid \nAssets Ratio for Domestic Banking Unit (BSD-MF-04-LD).\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 148, "year": 2013}, "type": "Document"}
{"page_content": "142 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT\nDirections made by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) of \nthe Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995 and Act, \nNo.2 of 2005.\nSgd. Sunil Mendis\nGovernor\nColombo\n01-03-2006.\nDIRECTION ON THE PRUDENTIAL NORMS FOR CLASSIFICATION, V ALUATION\nAND OPERATION OF THE BANK\u2019S INVESTMENT PORTFOLIO\n1. W ith effect from 31 March 2006, all Licensed Specialised Banks are required to classify their \ninvestment portfolio under two categories: i.e., the Investment Account and the Trading Account. All \nbanks are required to maintain two separate books of accounts for this purpose. \n2. Banks should decide on the category of investment at the time of acquisition and the decision should \nbe documented. Classification is not a free choice but is based on facts and the management\u2019s intent at \nthe date of purchase. Transfers between categories after initial recognition are restricted. \n3. The criteria for classifying and valuation of the bank\u2019 s investment portfolio are as provided below: \nA. Investment Account  \n (a) All securities acquired with the positive  intent  and ability  to hold till maturity  shall be \nclassified under the Investment Account. \n (i) Positive intent cannot be demonstrated if: \n \u2022 the bank has the intent to hold the securities for only an undefined period; or \n \u2022 the bank stands ready to sell the securities in response to changes in market interest \nrates or risks, liquidity needs, changes in the availability of the yield on alternative \ninvestments, changes in financing sources or terms, or changes in foreign currency \nrisk; or \n \u2022 the issuer has a right to settle the securities at an amount significantly below its \namortised cost. \n (ii) The ability to hold the securities to maturity cannot be demonstrated if:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 149, "year": 2013}, "type": "Document"}
{"page_content": "amortised cost. \n (ii) The ability to hold the securities to maturity cannot be demonstrated if: \n \u2022 the bank does not have the financial resources available to continue to finance the \ninvestment until maturity; or\n \u2022 the bank is subject to legal or other constraints that could frustrate its intention to \nhold the securities to maturity. \n (iii) When a bank\u2019s actions cast doubt on its intent or ability to hold investments to maturity, \nthe Central Bank of Sri Lanka shall retain the right to reclassify all or part of the \nInvestment Account as Trading and require appropriate provisioning.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 149, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  143\n (b) All unlisted securities ( eg.: shares, debentures) should generally be classified under the \nInvestment Account. However, government securities will have to be classified based on the \nrules specified under point A(a) above.\n (c) Securities in the Investment Account may be used for repurchase transactions. \n (d) Securities in the Investment Account shall be carried and reported at acquisition cost over \nthe period of redemption. \n (i) Carrying values of interest bearing securities in the Investment Account may be adjusted \nto account for the accretion of discount (or depletion of premium). The adjustments \nshould be amortised annually on a straight-line basis over the period to maturity. \n (ii) All other securities should be maintained at cost. Any impairment in value which is \nconsidered to be permanent should be fully provided for in the Profit & Loss Account \nimmediately. The following conditions should be taken into consideration in deciding on \nwhether there is an impairment of value. \n \u2022 T rack record of dividends/returns \u2013 Non receipt of dividends/returns for a \nconsecutive period of three years, should be considered as an impairment and the \ninvestment should be classified as non performing.\n \u2022 Market prices \u2013 A continuously declining trend in market prices, with the investment \nvalue being below cost for over three years should be considered as an impairment \nin value. \n (iii) The Central Bank of Sri Lanka will retain the flexibility to consider specific requests/\nexceptions in this regard. \n (iv) Any impairment in value or losses on the sale of investments held in the Investment \nAccount should be taken to the Profit & Loss Account. \n (e) Sale of securities classified under the Investment Account should only be an insignificant \namount of the investment portfolio and should be limited to circumstances that do not taint", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 150, "year": 2013}, "type": "Document"}
{"page_content": "amount of the investment portfolio and should be limited to circumstances that do not taint \nthe rest of the portfolio. These circumstances are: \n \u2022 if the investment was close enough to maturity or call date so that changes in the market \nrate of interest could not have a significant effect on the investment's market value; \n \u2022 the sale is made after the entity has collected substantially all of the investment\u2019s original \nprincipal through scheduled payments or prepayments; \n \u2022 the sale was due to an isolated event that was beyond the entity's control, non-recurring \nand could not have been reasonably anticipated. \nB. T rading Account  \n (a) All securities acquired for the specific purpose of trading on a regular basis (at least every \nquarter), to take advantage of the short-term changes in market prices and yields, shall \nbe classified under the Trading Account. The classification of Trading assets is based on \noriginal intention and these are not transferred to the Investment category because intention \nsubsequently changes. \n (b) Securities held in the Trading Account must be revalued or marked to market on a daily \nbasis. In the case of securities for which daily prices are not available, banks are advised to", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 150, "year": 2013}, "type": "Document"}
{"page_content": "144 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nmark to market at least on a weekly basis. Where two-way quotes are published (eg.: Rates \nfor government securities), the middle rate should be adopted. \n (c) Any gains or losses on the sale of investments held in the Trading Account should be taken \nto the Profit & Loss Account. \nC. T ransfer of Securities \nThe transfer of securities between portfolios will generally not be permitted, except under \nspecified circumstances. This is to limit the opportunities to manipulate the recognition of gains \nor losses or to mask changes in market value. \n (a) T ransfer of securities between the Trading Account and the Investment Account must be \njustifiable, documented and authorised. \n (b) Port folio transfers to or from the Investment Account shall only be undertaken rarely \n(preferably at the beginning of the accounting year), with the approval of the Board \nof Directors, the Assets and Liability Committee or the Investment Committee. The \ncircumstances justifying such transfers are given below: \n (i) A  change in the statutory and regulatory requirements. \n (ii) A  significant increase in the capital requirements that may oblige the Bank to reduce \nits investment holdings. \n (iii) A  major business occurrence that necessitates the transfer of securities to maintain the \nBank\u2019s risk profile. \n (iv)  Exceptional circumstances such as tight liquidity conditions and extreme volatility .\n (c) The carrying value of securities transferred from the Trading Account into the Investment \nAccount shall be marked to market prior to the transfer. Therefore, any gains or losses due \nto revaluation would have been recognised in earnings prior to the transfer. The market \nvalue of the securities at the point of transfer into the Investment Account then becomes \nthe \u2018acquisition cost\u2019 for accounting purposes.\n (d) A  statement on portfolio transfers, if any, shall be signed by the Chief Executive Officer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 151, "year": 2013}, "type": "Document"}
{"page_content": "(d) A  statement on portfolio transfers, if any, shall be signed by the Chief Executive Officer \nof the Bank and submitted to the Bank Supervision Department of the Central Bank of Sri \nLanka, on a quarterly basis. \n (e) The Central Bank of Sri Lanka will retain the right to review the statement of portfolio \ntransfers and require the bank to make provisions if considered necessary.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 151, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  145\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 46(1) and  \n76(J)(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n21 December 2012\nBANKING ACT DIRECTION NO. 2 OF 2012\nOUTSOURCING OF BUSINESS OPERATIONS OF\nA LICENSED COMMERCIAL BANK AND\nA LICENSED SPECIALISED BANK\nIn the exercise of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act, No. 30  \nof 1988, last amended by the Banking (Amendment) Act, No. 46 of 2006, the Monetary Board hereby \nissues the following Directions on Outsourcing of Business Operations of a Licensed Commercial Bank \nand a Licensed Specialised Bank, respectively (hereinafter referred to as a Licensed Bank).\n1(1) These Directions may be cited as the Banking Act, Directions No. 2 of 2012. \n2(1) An \u2018outsourcing arrangement\u2019 is an agreement between a licensed bank and \na third party \u2018service provider\u2019, whereby the service provider performs an \nactivity, function or process connected with the operations of a licensed bank. \n2(2) \u2018Service provider\u2019 includes the  Head Office, parent institution, another \nbranch or related company of a Licensed Bank, or an unrelated institution, \nwhether located in Sri Lanka or elsewhere.\n2(3) These Directions shall not apply to outsourced arrangements that are not  \ndirectly related to the provision of financial services such as Mail, Courier \nservices, Catering of staff, Housekeeping and janitorial services, Security \nof premises, Printing services ( e.g., Application forms, brochures etc.), \nRecruitments on contract and temporary basis and Communication services.\n2(4) Outsourcing arrangem ents shall be entered into only with service providers \nwho have specialised resources and skills to perform the related activities.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 152, "year": 2013}, "type": "Document"}
{"page_content": "who have specialised resources and skills to perform the related activities.\n2(5) Outsourcing arrangements shall not be entered into with a service provider \nof which the majority of the ownership is held by employees and/or close \nrelatives of an employee of the respective licensed bank.\n2(6) Every Licensed Bank that decides to outsource its functions/operations shall \ncomply with Directions 3 to 9 below.\n3(1) A  Licensed Bank may outsource its functions/operations other than the \nfollowing functions/operations or activities:Citation.\nOutsourcing \u2013 \ndefinition and \napplicability.\nFunctions or \nactivities that can \nbe outsourced.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 152, "year": 2013}, "type": "Document"}
{"page_content": "146 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (i) Services associated with acceptance of deposits and withdrawals  \nexcluding the agency arrangements approved under the provisions of \nsection 12(1)(b) of the Banking Act.\n (ii) Assets and Liabilities management \n (iii) Compliance function\n (iv) Customer due diligence and Know Your Customer (KYC) procedures\n (v) T reasury functions, foreign exchange trading and management\n (vi) Risk Management\n (vii) Strategic planning and decision-making\n (viii) Sanctioning of loans except where the basis of approval has been  \npreviously approved by the Board\n (ix) Internal Audit Function subject to Directions 3(2) and 3(3) below\n (x) Information Technology (IT) related services subject to Directions \n3(4) and 3(5) below.\n3(2) A  Licensed Bank shall not outsource its Internal Audit Function other than in \nkeeping with the following:\n (i) A Licensed Bank may outsource its Internal Audit Function, where \nthe size of the bank and the extent of the risks do not justify the \ninternal audit function to operate with a full time internal audit staff.\n (ii) A Licensed Bank may outsource certain activities or specialised areas \nof its internal audit function such as branch and/or department audits, \nInformation System (IS) audits, where the bank is in a position to \njustify the cost savings, improved efficiency and better management \nof resource constraints.\n3(3)  The outsourcing of the internal audit function or activities as per 3(2)( i) and  \n3(2)(ii) above shall be subject to the following conditions:\n (i) The responsibility and control of the outsourced audit assignments \nin the case of 3(2)(ii) above shall continue to be with the Head of \nInternal Audit.\n (ii) The selection of audit firms or staff shall be made from the panel of \nexternal auditors approved by the Central Bank of Sri Lanka (CBSL) \nother than the bank\u2019s own external auditor.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 153, "year": 2013}, "type": "Document"}
{"page_content": "other than the bank\u2019s own external auditor.\n (iii) Any such appointment as per 3(3)( ii) above shall be made after a \n\u201ccooling off\u201d period of 2 years if such audit firm or staff had been \npreviously engaged in the external audit assignment of the bank.\n (iv) The internal audit service provider shall not perform any management \nfunction or act, directly or indirectly, in a capacity equivalent to that \nof a member of management or an employee of the bank.Outsourcing of \nInternal Audit.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 153, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  147\n (v) The internal audit service provider shall not provide consultancy  \nservices to a function or activity of the bank it is expected to audit or \nvice versa  within a period of 2 years.\n (vi) The Head of Internal Audit shall ensure that, whenever practicable, \none or more members of the bank\u2019s internal audit staff are also \ninvolved in the bank\u2019s internal audit related work of the internal audit \nservice provider with the view to gather the relevant knowledge to \nperform such work by themselves in the future.\n (vii) The Licensed Bank shall be able to provide the internal audit plan, \nfollow-ups, reports and related working papers, etc., to CBSL as and \nwhen required.\n3(4)  A  Licensed Bank may outsource the following IT and business processing \nfunctions:\n (i) Application/Systems development, testing, maintenance and support \n (ii) T echnology infrastructure management, maintenance and support, \nHelp Desks\n (iii) Maintenance and support to data centre operations \n (iv) Network administration \n (v) Disaster recovery support services \n (vi) Data entry operations\n (vii) Database maintenance and support\n (viii) Data warehousing\n (ix) Statements printing\n (x) Electronic banking systems ( e.g., Internet banking, Mobile banking \nand Tele-banking) development, maintenance and support\n (xi) W eb hosting and maintenance\n (xii) Credit/Debit/A TM card printing. \n3(5)  A  Licensed Bank shall ensure in its security policies, procedures and controls \nthat a service provider exercises a high standard of care and diligence to \nprotect the confidentiality and security of banks\u2019 sensitive information \nespecially relating to customers, hardware, operating systems and application \nsoftware.\n4(1) A  Licensed Bank shall have a comprehensive policy to guide the assessment \nas to how its operations are to be outsourced. The policy shall contain at least \nthe following:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 154, "year": 2013}, "type": "Document"}
{"page_content": "as to how its operations are to be outsourced. The policy shall contain at least \nthe following:\n (i) The placing of overall responsibility on the Board of Directors or  \nthe Audit Committee and senior management for the outsourcing of \nactivities and for the formulation of policy therefor. Outsourcing \nof Information \nTechnology.\nOutsourcing \nPolicy.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 154, "year": 2013}, "type": "Document"}
{"page_content": "148 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (ii) A  framework for identification and effective management of risks that \ncould arise from outsourcing of activities.\n (iii) Cost-benefit analysis on each activity or function or process to be \noutsourced.\n (iv) T ender procedures to be followed for the procurement of outsourced \nservices.\n (v) Setting up of a monitoring and control unit in the event of having \nseveral outsourcing arrangements.\n (vi) A  framework to conduct KYC and due diligence process on the \nservice provider.\n (vii) A  procedure to assess the service provider\u2019s capacity, capability \nand mode/basis of payment to perform the obligations under the \noutsourcing arrangement.\n (viii) A  format of the legally binding contract/agreement for outsourcing \narrangement which should include at least the following:\n (a) Service standards,\n (b) Rights, responsibilities and expectations of all parties, \n (c) Dispute resolution mechanism, \n (d) Confidentiality and security of information, \n (e) T ermination of contract, \n (f) Subcontracting, if involved, and \n (g) Business continuity management.\n (ix) A  specific contingency plan to bring the outsourced activity back \nin-house in an emergency situation which could arise due to service \nprovider\u2019s inability to provide, and the costs, time and resources that \nwould be involved.\n (x) A  framework for cross-border outsourcing, taking into account the \ndifferences in country environments.\n (xi) Limits on maximum exposure to a single service provider both in  \nterms of value and the number of contracts.\n5(1) A  Licensed Bank shall ensure that the bank\u2019s Business Continuity Plan (BCP) \ncontains all relevant operations including outsourcing arrangements. \n5(2) A  Licensed Bank shall ensure that the service provider has a satisfactory BCP \nand performs regular tests on its BCP. \n6(1) A  Licensed Bank shall have a specifically designated unit/division at the Head", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 155, "year": 2013}, "type": "Document"}
{"page_content": "6(1) A  Licensed Bank shall have a specifically designated unit/division at the Head \nOffice to handle all outsourcing arrangements. A Licensed Bank incorporated \noutside Sri Lanka shall have the designated unit/division at the local Head \nOffice.Business \nContinuity \nManagement.\nMonitoring & \nControl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 155, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  149\n6(2) The monitoring unit s hall handle complaints, maintain records of such \ncomplaints and carry out periodic supervision over outsourced activities.\n6(3) A  Licensed Bank shall establish an effective management information \nsystem that would on a regular basis provide information such as the type of \noutsourced service activity, costs, volume, deliverables and expiry or renewal \ndates of the contracts, the complaints, and the financial and operational \nconditions of the service providers. \n7(1) A  Licensed Bank shall be responsible for submitting transactions reports and \nsuspicious transactions reports to the Financial Intelligence Unit (FIU) in \nrespect of its customer transaction activities, even if such activities are under \noutsourced arrangements. \n8(1)  A  Licensed Bank shall ensure that marketing and recovery personnel \nemployed by the service providers are properly trained to handle their \nresponsibilities with care and prudence. \n9(1) A  Licensed Bank shall inform the proposed outsourcing arrangements during \na particular calendar year to CBSL by 31 January of that year for concurrence. \n9(2) A  Licensed Bank shall use the format annexed to this Direction for its \nreporting requirements at 9(1) above to CBSL.\n10(1)  The Banking Act Directions No. 7 of 2010 on Outsourcing of Business \nOperations of Licensed Commercial Banks and the Banking Act Directions \nNo. 8 of 2010 on Outsourcing of Business Operations of Licensed Specialised \nBanks, issued on 02 November 2010 are hereby revoked.Reporting to \nFIU.\nOutsourcing \narrangements \nrelating to \nMarketing & \nRecovery.\nReporting \nRequirements.\nRevocation of \nprevious Directions", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 156, "year": 2013}, "type": "Document"}
{"page_content": "150 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex\nBusiness Operations that are to be Outsourced during the year \u2026\u2026\u2026\u2026..\nName of the Bank : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026...\nActivity/Function/\nProcess\nto be OutsourcedName of the \nService ProviderAddressDate of \nCommence-\nmentPeriodNo. of persons \ninvolved/\nauthorisedDeliverables/\nServicesCost \n(per annum)\n1.\n2.\n3.\n4.\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n CEO / CCO / GM  Compliance Officer\nDate : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  Date : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 157, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  151\nRef. No. : 02  / 04 / 004 / 0012  / 001\nBank Supervision Department\n23rd July 2003\nTo : All Licensed Commercial Banks and\n        Licensed Specialised Banks\nDear Sir  / Madam,\nACCEPTANCE OF CERTIFICATES OF DEPOSIT (CD s)\nFurther to our even numbered letters dated 12 June and 16 June 2003 on the above subject, and \nthe discussions at the monthly meeting of the Chief Executive Officers of Licensed Commercial Banks \n(LCBs) and Licensed Specialised Banks (LSBs).\nAll LCBs and LSBs are hereby informed that the requirement to maintain details pertaining \nto customer identification of persons encashing CDs shall not apply in respect of CDs issued before  \n30 June 2003. \nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 158, "year": 2013}, "type": "Document"}
{"page_content": "152 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 004 / 0012  / 001\nBank Supervision Department\n16th June 2003\nTo : All Licensed Commercial Banks and\n        Licensed Specialised Banks\nDear Sir  / Madam,\nACCEPTANCE OF CERTIFICATES OF DEPOSIT\nFurther to our letter No. 02/04/004/0012/001 dated June 12, 2003 on the above subject, all \nlicensed commercial banks and licensed specialised banks are hereby informed that they should satisfy \nthemselves with KYC in respect of customers who invest in CDs with banks, and maintain records of \nadequate details pertaining to customer identification of the persons making investment in CDs with \nthe banks, and of persons encashing the CDs from the banks at the date of maturity. The banks are \nrequested to refrain from advertising the issue of CDs with anonymity.\nThe operating instructions BD/13/93 dated 5/10/1993 issued by the Central Bank on the Scheme \nof Certificates of Deposit will remain effective. \nYours faithfully,\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 159, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  153\nRef. No. : 02  / 04 / 004 / 0012  / 001\nBank Supervision Department\n12th June 2003\nTo : All Licensed Commercial Banks and\n        Licensed Specialised Banks\nDear Sir  / Madam,\nACCEPTANCE OF CERTIFICATES OF DEPOSIT\n W e refer to the discussions held at the Bank Managers\u2019 meetings on the above subject and the \nneed to adhere to Know-Your-Customer rules (KYC) in respect of acceptance of certificates of deposits \n(CDs).\nAll licensed commercial banks and licensed specialised banks are hereby informed that they may \nsatisfy themselves with KYC in respect of customers who invest in CDs with banks, and maintain \nrecords of adequate details pertaining to customer identification of the persons making investment \nin CDs with the banks, and of persons encashing the CDs from the banks at the date of maturity.  \nThe banks are requested to refrain from advertising the issue of CDs with anonymity.\nThe operating instructions BD/13/93 dated 5/10/1993 issued by the Central Bank on the Scheme \nof Certificates of Deposit will remain effective. \nYours faithfully,\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 160, "year": 2013}, "type": "Document"}
{"page_content": "154 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBank Supervision Department\n16 June 2006\nTo :  CEOs of All Licensed Banks\nDear Sirs,\nCONDUCT OF NON-GOVERNMENT ORGANIZATIONS (NGOs) ACCOUNTS\nBY LICENSED BANKS\nFurther to our circular dated 31 May, 2006 on the above subject, the attention of all licensed banks \nis drawn to the following:\n\u2022 In order to scrutinize the legitimacy of financial transactions undertaken by NGOs who receive \nfunding assistance from external sources, the Ministry of Finance & Planning has requested \nthe relevant line Ministries to establish a proper monitoring procedure and ascertain the work \nundertaken by them.\n\u2022 Accordingly all licensed banks are requested to obtain a clearance letter from the relevant line \nMinistry and External Resources Department before releasing such funds to the respective \nNGOs, where it is evident that such NGO is operating outside its scope of activity. Copy of \nclearance letter may be forwarded to Central Bank of Sri Lanka.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 161, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  155\nBank Supervision Department\n31 May 2006\nTo :  All Licensed Banks\nDear Sirs,\nCONDUCT OF NON-GOVERNMENT ORGANIZATIONS (NGO) ACCOUNTS BY\nLICENSED BANKS\nThe immediate attention of all licensed banks is drawn to the need to observe strict due diligence \nand the \u201cKnow Your Customer\u201d (KYC) Rules with regard to inward remittances and outward transfers \nor withdrawal of funds from accounts operated by NGOs.\nIn this regard the attention of all licensed banks is drawn to the provisions of Section 15 subsection \n(2) of the Financial Transactions Reporting Act, No.6 of 2006 and Section 3 of the Convention on the \nSuppression of Terrorist Financing Act, No.25 of 2005 which are annexed for ease of reference.\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 162, "year": 2013}, "type": "Document"}
{"page_content": "156 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nSection 15 subsection (2) of the Financial Transactions Reporting Act, No. 6 of 2006 reads as \nfollows:\u2013\n15 (2)  Where the Financial Intelligence Unit has reasonable grounds to suspect that a transaction or \nattempted transaction may\u2014\n(a) involve the proceeds, which are attributable to any unlawful activity ; or \n(b) be connected to the commission of the money laundering offence under the Money \nLaundering Act, No.5 of 2006; or\n(c) be prepara tory to the commission of an offence under the Convention on the Suppression of \nTerrorist Financing Act, No.25 of 2005,\nit may direct the Institution in writing or by telephone to be confirmed in writing within twenty-\nfour hours, not to proceed with the carrying out of that transaction or attempted transaction or any \nother transaction in respect of the funds affected by that transaction or attempted transaction for \na period to be determined by the Financial Intelligence Unit, which may not be more than seven \ndays, in order to allow the Financial Intelligence Unit \u2014\n (i) to make any necessary inquiries concerning the transaction or attempted transaction; and\n (ii) if  the Financial Intelligence Unit deems it appropriate, to consult or advise the relevant law \nenforcement agency in the inquiries.\n  (3)  T he Financial Intelligence Unit may make an ex-parte  application to the High Court of the \nWestern Province, holden in Colombo, for an extension of the period of time stipulated in \nsubsection (2) setting out the grounds for such application.\n For the purposes of subsection 15 (2) (a) quote above \u201c unlawful activity \u201d interalia includes: \u2013\n (a) .\n (b) any law or regulation  for the time being in force relating to the prevention and suppression \nof terrorism \nHence, in view of the above provisions of law, if there is adequate proof that funds transferred", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 163, "year": 2013}, "type": "Document"}
{"page_content": "Hence, in view of the above provisions of law, if there is adequate proof that funds transferred \nfrom a company to an individual would finance terrorism, it is possible for the FIU to inform the \nBank concerned which holds the funds for the company which proposes to release such funds \nto an individual to carry out any act of terrorism, to suspend the account for a period of 7 days.  \nBefore the expiry of 7 days, the FIU should apply to the High Court of Colombo for an extension \nof the time if the time is insufficient to take in appropriate action to seize the funds in the account.\nFurther, Section 3 of the Convention on the Suppression of Terrorist Financing Act, No.25 of 2005 \nreads as follows:\u2013\n3. (1)  A ny person who, by any means, directly or indirectly, unlawfully and willfully provides or \ncollects funds, with the intention that such funds should be used, or in the knowledge that they \nare to be used or having reason to believe that they are likely to be used, in full or in part, in order \nto commit, \u2013\n (a) an act which constitutes an offence within the scope of, or within the definition of any one \nof the Treaties specified in Schedule I hereto;\n (b) any other act, intended to cause death or serious bodily injury, to civilians or to any other \nperson not taking an active part in the hostilities, in a situation of armed conflict, and the \npurpose of such act, by its nature or context is to intimidate a population or to compel a \ngovernment or an international organization, to do or to abstain from doing any act,\nshall be guilty of the offence of financing of terrorists or terrorist organizations:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 163, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  157\nProvided that, for an act to constitute the offence set out above, it shall not be necessary to show \nthat the funds collected were actually used in the commission of an offence.\n(2) Any person who\u2013\n (a) Attempts to commit;\n (b) Aids or abets the commission of; or\n (c) Acting with a comm on purpose with another person or a group of persons, contributes to the \ncommission of,\nthe offence of financing of terrorists or terrorist organizations, shall be guilty of an offence under \nthis Act.\nIn this subsection \u201c abet\u201d has the same meaning as in sections 100 and 101 of the Penal Code.\n(3) Where an offence specified in subsection (1) or subsection (2) of this section is committed \nby a body of persons, then, every member, Director, Manager, Secretary, officer or servant of \nsuch body of persons shall be guilty of such offence, unless it can be proved that the offence \nwas committed without their knowledge or that they exercised all due diligence to prevent the \ncommission of such offence.\n(4) A  person guilty of an offence under subsection (1) or subsection (2) of this section, shall on \nconviction after trial on indictment by the High Court, be punished with imprisonment for a term \nnot less than fifteen years and not exceeding twenty years, and also be liable to a fine.\n4. (1)  On indictment of any person in the High Court, for an offence under this Act, all funds collected \nin contravention of the provisions of section 3, shall, with effect from the date of filing of such \nindictment \u2013\n (a) if such funds are lying in an account with any Bank, be subject to an order of freezing; or\n (b) if such funds are in the possession or control of any person be liable to seizure;\n(2) The freezing or seizure of funds in terms of subsection (1) shall be in force until the conclusion \nof the trial.\n(3) On the filing of indictment, the Attorney-General shall notify the Central Bank of the freezing or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 164, "year": 2013}, "type": "Document"}
{"page_content": "seizure as the case may be.\n(4) The Central Bank shall thereupon take steps to give adequate publicity to the order of freezing or \nseizure as the case may be, as it shall think fit.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 164, "year": 2013}, "type": "Document"}
{"page_content": "158 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nMy No. : 02  / 04 /004 / 0012  / 001\nBank Supervision Department\n19 January 2007\nTo : All Licensed Commercial Banks and\n  Licensed Specialised Banks\nDear Sirs,\nCUSTOMER DUE DILIGENCE \u2013 \u2018KNOW YOUR CUSTOMER\u2019 PROCEDURES\nIn view of the potential risks on the banking and financial system stability that may arise from  \ncross-border financial transactions, all licensed banks shall conduct due diligence on all customers involved \nin cross-border financial transactions and ensure that all requirements under the relevant statutes including \nPrevention of Money Laundering Act, No.5 of 2006, financial Transactions Reporting Act, No.6 of 2006 \nand Convention on the Suppression of Terrorist Finance Act, No.25 of 2005 and the Exchange Control Act,  \nNo.24 of 1953 are complied with.\nAccordingly, the licensed banks shall report any transaction of suspicious nature to the relevant \nauthorities in terms of the above statutes immediately.\nYours faithfully,\nSgd, P. Samarasiri\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 165, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  159\nBank Supervision Department\nCentral Bank of Sri Lanka\n3rd December, 2001\nTo :  All Licensed Commer cial Banks and\n Licensed Specialised Banks\nCUSTOMER DUE DILIGENCE \u2013\n\u2018KNOW YOUR CUSTOMER\u2019 PROCEDURES\nYour attention is drawn to the discussion on the above subject at the Bank Managers\u2019 Meetings \nheld in the months of October and November 2001. Please find enclosed a Guideline on Customer Due \nDiligence - \u2018Know Your Customer\u2019 procedures, which set out the minimum criteria to be adopted by \nbanks.\nThese guidelines will be effective immediately.\nYours faithfully\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 166, "year": 2013}, "type": "Document"}
{"page_content": "160 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 004 / 0012  / 001\nBank Supervision Department\nCentral Bank of Sri Lanka\n3rd December, 2001\nTo :  All Licensed Commer cial Banks and\n Licensed Specialised Banks\nGUIDELINES ON CUSTOMER DUE DILIGENCE \u2013\n\u2018KNOW YOUR CUSTOMER\u2019 PROCEDURES\nIn order to prevent the unchecked use of the financial system for money laundering and \ntransactions related to terrorism and subversive activities, it is recommended that all banks follow these \nguidelines on customer identification at the time of opening an account for a prospective customer, \nor before establishing a business relationship with a prospective customer, or thereafter when there is \na material change in the way an account is operated. In addition to minimising the risk of use of the \nbanking system for illicit activities, the adoption of these guidelines will provide protection against \npossible frauds, and enable the timely recognition of suspicious transactions and protect the bank from \nreputational, legal and financial risks.\n1. All banks are encouraged to document their policies on customer acceptance, customer  \nidentification/risk management and monitoring of high risk accounts.\n2. In order to \u2018know their customers\u2019 the banks are expected to:\n (i) Have sufficient information on the identity of the customer .\n (ii) Be satisfied that a prospective customer is who he/she claims to be. If the customer is acting \non behalf of another, sufficient evidence on the identity of both parties should be obtained.\n (iii) Ensure that information obtained in respect of a customer in the normal course of business is \nused effectively for the prevention of money laundering/terrorism funding.\n3.\t Customer \tIdentification\n3.1 Personal Accounts\n The following information should be obtained from all prospective personal customers:\n\u2022 Customer \u2019s name from an original of a document issued by an official authority, preferably", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 167, "year": 2013}, "type": "Document"}
{"page_content": "\u2022 Customer \u2019s name from an original of a document issued by an official authority, preferably \nbearing a photograph of the customer, such as the national identity card, passport or the \ndriving license. The reference number of such document should be recorded by the bank.\n\u2022 Cust omer\u2019s permanent mailing address and supporting evidence which should be \nconfirmed through correspondence.\n\u2022 The authenticity and integrity of an introducer and his own identity should be established \nto the satisfaction of the bank.\n\u2022 I ndependent verification of introducer\u2019s address should be made and filed with the \nmandate.\n3.2 Corporate Customers\n The following documents should be obtained:\n\u2022 Certificate of Incorporation, Memorandum and Articles of Association or Partnership \nAgreement, as appropriate, to establish the legal status of the customer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 167, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  161\n\u2022 Resolution by the Board of Directors \n\u2022 Duly completed application form containing authorised specimen signatures\n\u2022 The identity of each director and those authorised to operate the account, should be \nestablished.\n\u2022 For companies, businesses or partnerships registered outside Sri Lanka, similar documents \nshould be obtained, taking into consideration any soft regulatory system in the country of \norigin.\n3.3 In the case of accounts operated by:\n\u2022 A  Power of Attorney\n\u2022 Joint account holders\n\u2022 Partnerships\n\u2022 T rust accounts/Fiduciary accounts\nThe identity should be established in respect of each signatory to the account. \n3.4 More  stringent customer identification policies should be established in the following \ncircumstances:\n\u2022 Accounts opened by post or in any other circumstances where there is no face to face \ncontact with the customer.\n\u2022 In the case of one-off transactions for non-account holders of the bank, in particular where \nsuch transactions involve large amounts of cash, or the receipt of unusually large foreign \nremittances, the customer should be asked to produce documentary evidence of identity, \nand copies of such documents should be retained by the bank.\n\u2022 Where safe custody facilities are made available to non-account holders, identification \nprocedure for non-account holders, as above, should be followed.\n\u2022 In accommodating requests for remittances of funds between accounts using electronic \npayment systems, where such transactions are of a large size, the bank should establish the \nidentity of the sender and ascertain the identity of the recipient.\n4. In instances where the bank cannot establish the true identity of the customer to its satisfaction, it \nshould not commence any business relationship with such customer.\n5. Other  Recommendations\n5.1 In respect of all types of accounts, returned letters and statements should be followed-up.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 168, "year": 2013}, "type": "Document"}
{"page_content": "5.1 In respect of all types of accounts, returned letters and statements should be followed-up.\n5.2 Where after opening an account, the features of the transactions, as known at the time of \nopening of the account changes significantly, causing grounds for suspicion of criminal \nactivity, inquiries should be made with regard to the changes in the financial position and \nnature of activities, which should be recorded. \n5.3 Retention of records: All evidence of identification as set out above should be maintained for \na minimum period of five (05) years even after an account is closed.\n5.4 Where the officer handling the account opening has reasons to believe that a new relationship \nmay expose the bank to significant reputational risk, he may refer such request to an officer of \nhigher authority before opening the account.\n5.5 The internal controller/auditor may be required to ensure compliance with the bank\u2019s policies \non customer acceptance and identification.\nP.T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 168, "year": 2013}, "type": "Document"}
{"page_content": "162 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBank Supervision Department\n13 June 2006\nTo :  CEOs of All Licensed Banks\nDear Sirs,\nPREVENTION OF FRAUDS USING ELECTRONIC CARDS\nRecent reports have highlighted the use of credit cards and ATM cards for fraudulently withdrawing \nlarge sums of money from banks in many countries, especially in the South East Asian region.\nThe Presidential Secretariat, by its letter dated 06 June 2006 has drawn the attention of the Central \nBank to the need to take precautionary measures to avert the possibility of such attempts being made \neven in Sri Lanka, considering the particular danger of terrorist groups using them as a means of creating \na sense of insecurity in a vital sector of the economy.\nAccordingly, Licensed Banks that issue electronic cards to customers should, as soon as is \npracticable take steps to:\n1. Introduce security features such as tamper-proof micro chips for electronic cards, and in the \ninterim.\n2. T ake appropriate steps to educate their customers with regard to the safety of their electronic \ncards and remind them at regular intervals the steps that should be taken by them, in order to \navoid being victims of fraudulent use of such cards.\n3. Ensure that adequate provision is made annually for the necessary investment in technology .\nThe banks are also encouraged to introduce other relevant security measures in respect of ATM \ncards/machines. It is suggested that CCTV cameras be installed at all ATM outlets in order to enhance \nthe surveillance at ATM outlets.\nYour views on this matter are welcome for discussion at the forthcoming monthly meeting of CEOs \non the 22 June 2006.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 169, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  163\nSP\nJune 6, 2006\nDeshamanya Sunil Mendis\nGovernor\nCentral Bank of Sri Lanka\nThe recently reported ATM scams in Singapore (Divaina \u2013 25.05.2006) as well as other countries such as \nNew Zealand, indicate the likelihood of such practices spreading across the world.\nIt seems prudent to take precautionary measures to avert the possibility of such attempts being made \neven in Sri Lanka, considering the particular danger of terrorist groups using them as means of creating \na sense of insecurity in a vital sector of the economy.\nAccordingly, it may be worth taking early action to request the banks in the country to take the following \nmeasures and any other, if they have so far not taken any initiatives in this regard.\n1. Expedite the process of introducing tamper-proof micro chip Bank cards (being done in many \ncountries now).\n2. Keep the customers remi nded at regular intervals the steps they should take in order to avoid \nbeing victims of ATM robberies.\nWe hope you would understand that our observations and suggestions are guided by the fact that it is vital \nto reduce the risk of any form of instability that would affect the Banks, their customers or the country.\nSincerely,\nSgd. Lalith Weeratunga\nSecretary to the President", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 170, "year": 2013}, "type": "Document"}
{"page_content": "164 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 004 / 0012  / 001\n08 October 2008\nTo CEOs of all Licensed Banks\nUSE OF BANKING SYSTEM BY INSTITUTIONS AND PERSONS\nNOT AUTHORISED TO ACCEPT DEPOSITS\n A number of institutions and persons, that are not authorised to accept deposits from the public, \nare mobilising funds from the public in the guise of offering investment products/schemes.  We find that \nsuch institutions and persons have used the banking system for their operations and that some banks have \naccommodated these transactions without identifying the legality of these transactions or the potential \nrisks.  \n As you are aware, permitting these institutions and persons to use the banking system to resort to \nsuch practices can tarnish the image of your institution and thereby weaken public confidence in the \nbanking system. \n In this regard, we wish to draw your attention to the Circulars on Customer Due Diligence dated \n3 December 2001 and Know Your Customer Procedures dated 19 January 2007 issued by the Director \nBank Supervision and Know your Customer and Customer Due Diligence Rules issued by the Director, \nFinancial Intelligence Unit dated 18 May 2007. We wish to emphasise that special attention should be \npaid to strengthen Customer Due Diligence and Know Your Customer Procedures and to comply with \nsuch Circulars/Rules to ensure that sources of income and movement of funds are monitored, as required \nin these instructions.\n H A Karunaratne  B D W A Silva\n Dir ector of Financial Intelligence Unit  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 171, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  165\nRef. No. : 02  / 17 / 800 / 0007  / 01\nBank Supervision Department \n06 November 2008\nTo: The CEOs of All Licensed Commercial Banks and\n       Licensed Specialised Banks \nDear Sirs,\nREGULATIONS MADE UNDER THE PUBLIC SECURITY ORDINANCE\nPROSCRIPTION OF TAMIL REHABILITATION ORGANISATION\n We write to inform you that His Excellency the President has promulgated Emergency (Proscription \nof Tamil Rehabilitation Organisation) Regulations, No. 9 of 2007 on December 26, 2007 proscribing the \nTamil Rehabilitation Organisation in Sri Lanka. A copy of the relevant Extraordinary Gazette  No.1529/13 \ndated December 26, 2007 is attached herewith for your information.\n In this regard, w e wish to draw your special attention to Regulation 3 of these Regulations and advise \nyou to refrain from carrying out any transactions with the above proscribed organisation.\nYours faithfully,\nActg. Director of Bank Supervision\nEncl:\ncc: Secretary-General / SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 172, "year": 2013}, "type": "Document"}
{"page_content": "166 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nPART I : SECTION (I) \u2013 GENERAL\nGovernment Notifications\nCF 1/64\nTHE PUBLIC SECURITY ORDINANCE (CHAPTER 40)\nREGULATIONS made by the President under Section 5 of the Public Security Ordinance \n(Chapter 40).\nMahinda  Rajapaksa ,\nPresident.\nColombo,\n26th December, 2007.\nREGULATIONS\n1. These regulations may be cited as the Emer gency (Proscription of Tamil Rehabilitation Organization) \nRegulations, No.9 of 2007.\n2. For the purposes of ensuring public security, for the preservation of public order and for upholding \nthe Rule of Law, the Organization styled as the \u201cTamil Rehabilitation Organization\u201d is hereby \nproscribed.\n3. From and after the date of the coming into operation of these regulations, any person who,\u2013\n (a) wears any uniform, dress, symbol or other emblem, which signifies or indicates any association \nwith, or membership of, or adherence to the \u201cTamil Rehabilitation Organization\u201d (hereinafter \nreferred to as the \u201cproscribed organization\u201d) ; or\n (b) summons or attends any meeting of the proscribed organization or participates or engages in \nany activity of, or any activity connected with or related to the said proscribed organization ; \nor", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 173, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  167\n (c) s upports the proscribed organization, by inviting or exhorting persons to be enrolled as members, \nor by contributing or collecting funds, or by furnishing information or securing any other \nassistance to the said proscribed organization ; or\n (d) harbours, conceals or in any other manner assists any member of the proscribed organization, \nwith intention thereby to prevent, hinder or interfere with the apprehension, trial or punishment \nof such member ; or\n (e) makes, prints, distributes or is in any way connected with or concerned in the making, printing, \ndistribution or publication of any written or printed matter, which is or which purports to be \nprinted, by or on behalf of the proscribed organization or by any member thereof ; or\n (f) communicates or attempts to communicate to any other person in any manner whatsoever, any \norder, decision, declaration or exhortation made or purported to have been made by the proscribed \norganization or by any member thereof, or any information relating thereto, for the purpose of \nadvancing the objectives of the said proscribed organization,\nshall be guilty of an offence and shall on conviction be liable to imprisonment for a period not \nexceeding fifteen years.\n4. (1) Where the Minister is satisfied, after such inquiry as he thinks fit, that any person has custody \nof any money, securities or credits which are being used or which are intended to be used, for \nthe purposes of the proscribed organization, the Minister may by order in writing declare that \nsuch moneys, securities, and credits as are in the custody of such person, or any such moneys, \nsecurities and credits which may come into his custody after the making of such order and any \nother movable or immovable property belonging to the said proscribed organization, shall be \nforfeited to the State.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 174, "year": 2013}, "type": "Document"}
{"page_content": "forfeited to the State.\n (2) The decision of the Minister under paragraph (1) shall be conclusive and shall not be called in \nquestion in any court by way of writ or otherwise.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 174, "year": 2013}, "type": "Document"}
{"page_content": "168 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76J(1) of \nthe Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n12 April 2013\nBANKING ACT DIRECTION NO. 4 OF 2013\nAMENDMENTS TO DIRECTIONS ON\nCORPORATE GOVERNANCE ISSUED TO\nLICENSED SPECIALISED BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 76J(1) of the Banking Act, No. 30 of 1988,  \nlast amended by the Banking (Amendment) Act, No. 46 of 2006, the Monetary Board hereby issues  \nthe following Directions amending Direction 3(3)( ii) of the Banking Act, Direction No. 12 of 2007,  \ndated 26 December 2007 on Corporate Governance for Licensed Specialised Banks in Sri Lanka.  \n1. These Directions may be cited as the Banking Act, Direction No. 4 of 2013.\n2. The following new Direction shall replace Direction 3(3)( ii) of the Banking Act, Direction \nNo. 12 of 2007, dated 26 December 2007.\n3(3)(ii)  A  person shall not hold office as a director of more than 20 companies/entities/institutions \ninclusive of subsidiaries or associate companies of the bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 175, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  169\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76J(1) of \nthe Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n24 October  2008\nDIRECTIONS\nBANKING ACT DIRECTION NO. 8 OF 2008\nAMENDMENTS TO DIRECTIONS ON CORPORATE GOVERNANCE FOR\nLICENSED SPECIALISED BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 76J(1) of the Banking Act, No. 30 of 1988, last \namended by the Banking Act, No. 46 of 2006 and in terms of the Supreme Court order delivered on \nSeptember 1, 2008, the Monetary Board hereby issues the following Direction amending Direction  \nNo. 6 of 2008 dated August 15, 2008, issued by the Monetary Board of the Central Bank of Sri \nLanka. This Direction may be cited as the Banking Act, Direction No. 8 of 2008.  \n1. The following new Direction shall replace Direction No. 5 of the Banking Act, Direction No. \n6 of 2008, dated August 15, 2008.\n3(9)(v)  If for any reason such as ill health or any incapacity as provided in the Banking Act, \nthe Monetary Board considers that exemptions referred to in Directions 3(2)(ii)B, 3(3)\n(i)A and 3(3)(ii)A should not be availed of, such ground may be notified to the person \nby the Monetary Board, and after a hearing, the Monetary Board may limit the period \nof exemption.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 176, "year": 2013}, "type": "Document"}
{"page_content": "170 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section \n76J(1) of the Banking Act, No.30 of 1988 as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n15 August 2008.\nDIRECTIONS\nBANKING ACT DIRECTION NO. 6 OF 2008\nAMENDMENTS TO DIRECTIONS ON CORPORATE GOVERNANCE FOR\nLICENSED SPECIALISED BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 76J(1) of the Banking Act, No.30 of 1988, last amended \nby the Banking Act, No.46 of 2006 and in terms of the Supreme Court order delivered on July 8, 2008, \nthe Monetary Board hereby issues the following Directions in lieu of Direction No.2 of 2008 dated  \nApril 23, 2008, issued by the Monetary Board of the Central Bank of Sri Lanka. These Directions \nmay be cited as the Banking Act, Direction No.6 of 2008.\n1. The Banking Act Direction No. 2 of 2008 dated April 23, 2008 described as \u201cProvisions \nregarding executive directors and transitional provisions for founding directors, incumbent \nchairmen and executive directors\u201d, is hereby revoked.\n2. The following new Direction shall replace the present Direction 3(2)(ii) (B) of the Banking Act, \nDirection No.12 of 2007.\n3(2)(ii)  (B)   In this context, the following general exemption shall apply:\nA director who has completed nine years as at January 1, 2008, or who completes \nsuch term at any time prior to December 31, 2008, may continue for a further \nmaximum period of 3 years commencing January 1, 2009.\n3. The following new Direction shall replace Directions 3(3)(i)(A) and 3(3)(i)(B) of the Banking  \nAct, Direction No.12 of 2007.\n3(3)(i) (A)  In this context, the following general exemption shall apply:\nA director who has reached the age of 70 years as at January 1, 2008 or who would \nreach the age of 70 years prior to December 31, 2008 may continue in office for a", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 177, "year": 2013}, "type": "Document"}
{"page_content": "reach the age of 70 years prior to December 31, 2008 may continue in office for a \nfurther maximum period of 3 years commencing January 1, 2009.\n4. The fol lowing new Direction shall be included immediately after Direction 3(3)(ii) of the \nBanking Act, Direction No.12 of 2007.\n3(3)(ii) (A)  In this context, the following general exemption shall apply:  \nIf any person holds posts in excess of the limitation as above, such person shall \nwithin a maximum period of three years from 1 January 2009 comply with the \nabove-mentioned limitation and notify the Monetary Board accordingly.\n5. The following new Direction shall be included immediately after Direction 3(9)(iv) of the  \nBanking Act, Direction No.12 of 2007.\n3(9)(v)  If for any reason such as ill health or other incapacity, the Monetary Board considers \nthat exemptions referred to in Directions 3(2)(ii)B, 3(3)(i)A and 3(3)(ii)A should \nnot be availed of, such ground may be notified to the person by the Monetary Board, \nand after a hearing, the Monetary Board may limit the period of exemption.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 177, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  171\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section \n76j(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nGovernor\nColombo\n26 December 2007\nDIRECTIONS\nBANKING ACT DIRECTION NO. 12 OF 2007\nCORPORATE GOVERNANCE FOR LICENSED SPECIALISED BANKS IN SRI LANKA\nIn the exercise of the powers conferred by Section 76 j(1) of the Banking Act, No.30 of 1988, last \namended by the Banking Act, No.46 of 2006, the Monetary Board hereby issues the following \nDirections on Corporate Governance for Licensed Specialised Banks in Sri Lanka. These \nDirections may be cited as the Banking Act, Direction No.12 of 2007. The Sections referred to in \nthese Directions will be those of the Banking Act, No.30 of 1988, last amended by the Banking \nAct, No.46 of 2006.\n1. Responsibilities and Empowerment under  the Banking Act and the Monetary Law Act \n1(1) In terms of Section 76 j(1) of the Banking Act, No.30 of 1988 last amended by No.46 of 2006, \nthe Monetary Board has been empowered to issue Directions to licensed specialised banks \nor to any category of licensed specialised banks, regarding the manner in which any aspect \nof the business of such banks is to be conducted.\n1(2)  In terms of Section 5 of the Monetary Law Act, No.58 of 1949, the Central Bank of Sri Lanka \nis charged with the duty of securing, as far as possible by action authorised by such Act, the \ntwo objectives, namely, ( a) economic and price stability and ( b) financial system stability.\n1(3) In terms of Section 10(c) of the Monetary Law Act, the Monetary Board, in the exercise \nof its powers, duties, functions and responsibilities, is empowered to make such rules \nand regulations as the Monetary Board may consider necessary, in relation to any matter \naffecting or connected with or incidental to the exercise, discharge, or performance of the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 178, "year": 2013}, "type": "Document"}
{"page_content": "affecting or connected with or incidental to the exercise, discharge, or performance of the \npowers, functions, and duties of the Central Bank of Sri Lanka.\n1(4) Under the provisions of the Monetary Law Act, No.58 of 1949, the supervision of banks \nhas been made a duty of the Central Bank on account of specific reasons as stated in John \nExter\u2019s Report on the Monetary Law Act which states, inter-alia, as follows: \u201cBanking is an \neconomic activity which affects the public welfare to an unusual degree; it touches in one \nway or another, almost every phase of a country\u2019 s economic life. Sound banking is essential \nto healthy and vigorous economic development. Supervision of banks helps to protect the \npublic against mismanagement, bank failures, and loss of confidence in the banking system. \nIt helps to protect depositors and stock-holders against loss and frequently enables bank \ndirectors and officers to manage the affairs of their banks more wisely and intelligently.\u201d\n1(5) Accordingly , in order to enhance the overall banking sector stability which is the fundamental \nto financial system stability, the Monetary Board, hereby issues Directions under Section \n76j(1) of the Banking Act, No. 30 of 1988 to improve and sustain the corporate governance \nprocesses and practices of the licensed specialised banks in Sri Lanka.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 178, "year": 2013}, "type": "Document"}
{"page_content": "172 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n1(6) For purposes of this Direction, Corporate Governance processes and practices shall be  \ndeemed to be the management framework that facilitates the conduct of the banking business \nin a responsible and accountable manner so as to promote the safety and soundness of the \nindividual banks, thereby leading to the stability of the overall banking sector.\n1(7) The rules of corporate governance as contained in Direction 3 of these Directions have,  \ntherefore, been developed on the basis of certain fundamental principles as set out in \nDirection 2 of these Directions with a view to facilitating the underlying supervisory \nresponsibilities of the Central Bank and to promote safety and soundness of the banking \nsystem.\n2. The Principles upon which the rules of Corporate Governance have been based upon  \nand developed are the following: \n The principles set out in this Dir ection 2 should be referred to for explanatory purposes and/or  \nfor clarification purposes only, so as to understand the rationale for the rules as \ncontained in Direction 3 hereof. Hence, strict compliance under these Directions shall \nonly be in respect of the rules that are set out under Direction 3.\n2(1) Principle: The Responsibilities of the Board\n2(1)(i)  T he board of directors should assume the overall responsibility and accountability \nin respect of: ( a) the management of the affairs of the bank, i.e., conduct of business \nand maintenance of prudent risk management mechanisms; and ( b) the safety and \nsoundness of the bank.\n2(1)(ii)  T owards this end, the board should: ( a) determine the structure of the management \nof affairs of the bank; (b ) delegate business operations to key management personnel \nled by the chief executive officer designated by the board; ( c) assume policy making \nand risk management for the business; and ( d) ensure the effective role of the key", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 179, "year": 2013}, "type": "Document"}
{"page_content": "and risk management for the business; and ( d) ensure the effective role of the key \nmanagement personnel. Key management personnel shall mean such key executives of \nthe bank as defined in the International Accounting Standards. \n2(1)(iii)  T he overall responsibility of the board should not be construed as an obligation to \nundertake the inspection of day-to-day activities, but should rather be understood as an \nobligation to oversee and ensure that the key management personnel are carrying out \nthe day-to-day activities of the bank in a safe and sound manner in accordance with the \npolicies set by the board.\n2(1)(iv)  Directors should understand the business and risk management mechanism of the  \nbank and take objective decisions in the interest of the bank\u2019s depositors, creditors, \nshareholders and other stakeholders. Further, they should ensure that the bank does not \nact in a manner that is detrimental or prejudicial to the interests of, and obligations to, \ndepositors and creditors.\n2(1)(v)  The board should take the responsibility for compliance with accepted rules of  \ncorporate governance. They should also ensure compliance with all regulatory and \nsupervisory requirements. Further, they should ensure that an effective combination of \nprofessionals with practical experience in relevant subjects such as banking, finance, \neconomics, business management, human resource management, law, marketing, \ninformation technology or any other discipline relevant or complementary to banking \noperations, is available in the bank to undertake its operations and discharge its \nresponsibilities. \n2(1)(vi)  The directors should be aware of potential civil and criminal liabilities that may arise  \nfrom their failure to discharge their duties diligently. They should also understand that \nthey should act with due care and prudence. In addition, the directors of state owned \nbanks should be aware of the additional liabilities that arise from the status of such", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 179, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  173\nbanks being state enterprises and consequently being accountable to the public. It is, \ntherefore, necessary that directors commit sufficient time and energy to fulfilling the \nboard\u2019s responsibilities in managing the affairs of the bank in a prudent manner.\n2(2) Principle: The Board\u2019s composition\n2(2)(i)  The board should be composed of a healthy mix of executive directors and   \nnon-executive directors. Some of the non-executive directors should also be independent \nso that there is strong independent element brought into the decision-making process.\n2(2)(ii)  The board\u2019s composition should ensure a balance of skills and experience as may be \ndeemed appropriate and desirable for the requirements of the bank.\n2(2)(iii)  The banking indus try worldwide is making tremendous progress and undergoing \nrapid change with new innovations, instruments, technologies, products, systems and \nprocesses being introduced regularly. It is vital therefore, that the directors should be \npersons who would: (a ) be able to keep abreast with these changes, and ( b) provide \ncontinuous contribution and guidance to the board decision-making process. \n2(2)(iv)  There should be a gradual infusion of new ideas into the board. There should also be \nassurance that the relationships between the directors amongst themselves as well as \nbetween the directors and the key management personnel is at a level that does not \nsuggest the existence of excessive familiarity, undue influence or coercion. In this \ncontext, it should be noted that very long-standing relationships could sometimes \nimpair the high sense of values, independence and objectivity that is needed in the \ndischarge of the duties of a director of a bank.\n2(3)  Principle: Criteria to assess the Fitness and Propriety of Directors\n2(3)(i)  In addition to the principles under the board\u2019s composition in Direction 2(2) above,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 180, "year": 2013}, "type": "Document"}
{"page_content": "2(3)(i)  In addition to the principles under the board\u2019s composition in Direction 2(2) above, \ndirectors should be fit and proper persons in order to be eligible to hold office as \ndirectors of a bank and no person should serve as a director unless such person is a fit \nand proper person. \n2(3)(ii)  There is strong need for commitment and ef fective contribution to the prudent \nmanagement of the affairs of the bank. It is very likely that the effectiveness of such \ncommitment and contribution would tend to decrease with advanced age of directors \nand more particularly, if the age of such director is well beyond the normal age of \nretirement, as generally accepted in the country.\n2(4) Principle: Management functions delegated by the Board\n2(4)(i)  T he board should have a formal schedule of matters specifically reserved to it for \ndecision. The board should also give clear directions to key management personnel, as \nto the matters that should be approved by the board before decisions are made by key \nmanagement personnel, on behalf of the bank. \n2(5)  Principle: The Chairman and the Chief Executive Officer\n2(5)(i)  T here are two key aspects of the management of every bank, viz., ( a) the overall \ngovernance by the board, and ( b) the day-to-day management of the bank\u2019s business \nby the CEO, in line with board approved strategic objectives, corporate values, overall \nrisk policy and risk management procedures. \n2(5)(ii)  There should be a clear division of these responsibilities at the board level and the  \nexecutive management level to ensure a greater balance of power and authority, so that \npowers are not concentrated in any one individual.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 180, "year": 2013}, "type": "Document"}
{"page_content": "174 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n2(5)(iii)  The board should appoint a chairman as well as a chief executive of ficer. The division \nof responsibilities between the chairman and chief executive officer should be clearly \nestablished and set out in writing.\n2(6)  Principle: Board appointed Committees \n2(6)(i)  The board should appoint separate board committees for audit, selection, remuneration,  \nintegrated risk management and such other subjects as determined by the Board to \nensure its oversight and control over the affairs of the bank. \n2(6)(ii)  Where the board appoints a committee, it should set out the authority of the committee, \nand in particular, whether the committee has the authority to act on behalf of the board \nor simply has the authority to examine a particular issue and report back to the board \nwith recommendations. \n2(6)(iii)  Each committee should be chaired by a non-executive director who has some expertise \nin the relevant subject, and who preferably should be independent too. The majority \nof the members of the board committee should consist of non-executive directors with \nat least one independent director in the committee. If a need arises, professionals from \noutside may be invited or hired to serve in a committee. Bank staff may be present at \nthe board committees for advice or special assignments, on invitation.\n2(7)  Principle: Related party transactions\n2(7)(i)  The board should ensure that the bank does not engage in transactions with \u201crelated \nparties\u201d in a manner that would grant such parties \u201cmore favourable treatment\u201d than \nthat accorded to other constituents of the bank carrying on the same business.\n2(8) Principle: Disclosures\n2(8)(i)  The objective of disclosure is the transparency of information relating to af fairs and \nrisk management of banks which would help to promote market discipline of the \nrespective banks.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 181, "year": 2013}, "type": "Document"}
{"page_content": "risk management of banks which would help to promote market discipline of the \nrespective banks. \n2(8)(ii)  Since market disclosure is the focus of the Pillar III of the risk management based  \ncapital standard known as Basel II recommended by the Basel Committee on Banking \nSupervision at the Bank for International Settlements, (which is the globally accepted \nbody on introducing international standards on Bank Supervision), the extent of \ndisclosures should be commensurate with the size, ownership structure, systemic \nimportance, risk profile and the business model of the bank. Accordingly, it should be \nnoted that the adequate and timely public disclosure of relevant information by banks \nwould facilitate enhanced market discipline and lead to better and more effective \ncorporate governance.\n2(8)(iii)  Disclosures by banks should generally include disclosures relating to capital adequacy , \nkey performance indicators, business concentrations, transactions with related \nparties, corporate governance statements, financial statements, etc., and should be \nconsistent with accounting standards, regulatory requirements as well as with any other \ninformation disclosed on voluntary basis. \n3. The following rules of Corporate Governance shall be complied by all licensed \nspecialised banks in Sri Lanka and such compliance shall be as provided for in \nDirection 3(9)(i) hereof. \n3(1)  The Responsibilities of the Board\n3(1)(i)  The board shall strengthen the safety and soundness of the bank by ensuring the  \nimplementation of the following:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 181, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  175\n a ) Approve and oversee the bank\u2019s strategic objectives and corporate values and \nensure that these are communicated throughout the bank;\n b) Approve the overall business strategy of the bank, including the overall risk policy \nand risk management procedures and mechanisms with measurable goals, for at \nleast the next three years;\n c) Identify the principal risks and ensure implementation of appropriate systems to  \nmanage the risks prudently;\n d ) Approve implementation of a policy of communication with all stakeholders,  \nincluding depositors, creditors, share-holders and borrowers;\n e) Review the adequacy and the integrity of the bank\u2019s internal control systems and \nmanagement information systems; \n f) Identify and designate key management personnel, as defined in the International  \nAccounting Standards, who are in a position to: ( i) significantly influence policy; \n(ii) direct activities; and ( iii) exercise control over business activities, operations \nand risk management;\n g ) Define the areas of authority and key responsibilities for the board directors  \nthemselves and for the key management personnel;\n h ) Ensure that there is appropriate oversight of the af fairs of the bank by key \nmanagement personnel, that is consistent with board policy;\n i ) Periodically assess the effectiveness of the board directors\u2019 own governance \npractices, including: ( i) the selection, nomination and election of directors and key \nmanagement personnel; ( ii) the management of conflicts of interests; and ( iii) the \ndetermination of weaknesses and implementation of changes where necessary;\n j ) Ensure that the bank has an appropriate succession plan for key management  \npersonnel; \n k) Meet regularly, on a needs basis, with the key management personnel to review \npolicies, establish communication lines and monitor progress towards corporate \nobjectives;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 182, "year": 2013}, "type": "Document"}
{"page_content": "policies, establish communication lines and monitor progress towards corporate \nobjectives;\n l ) Understand the regulatory environment and ensure that the bank maintains an  \neffective relationship with regulators;\n m) Exercise due diligence in the hiring and oversight of external auditors.\n3(1)(ii)  The board shall appoint the chairman and the chief executive of ficer and define and \napprove the functions and responsibilities of the chairman and the chief executive \nofficer in line with Direction 3(5) of these Directions.\n3(1)(iii)  The board shall meet regularly and board meetings shall be held at least twelve times  \na year at approximately monthly intervals. Such regular board meetings shall normally \ninvolve active participation in person of a majority of directors entitled to be present. \nObtaining the board\u2019s consent through the circulation of written resolutions/papers \nshall be avoided as far as possible.\n3(1)(iv)  The board shall ensure that arrangements are in place to enable all directors to include  \nmatters and proposals in the agenda for regular board meetings where such matters and \nproposals relate to the promotion of business and the management of risks of the bank.\n3(1)(v)  The board procedures shall ensure that notice of at least 7 days is given of a regular  \nboard meeting to provide all directors an opportunity to attend. For all other board \nmeetings, reasonable notice may be given.\n3(1)(vi)  T he board procedures shall ensure that a director who has not attended at least  \ntwo-thirds of the meetings in the period of 12 months immediately preceding or has not", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 182, "year": 2013}, "type": "Document"}
{"page_content": "176 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nattended the immediately preceding three consecutive meetings held, shall cease to be \na director. Participation at the directors\u2019 meetings through an alternate director shall, \nhowever, be acceptable as attendance. \n3(1)(vii)  The board shall appoint a company secretary who satisfies the provisions of Section  \n43 read with Section 76 h of the Banking Act, No. 30 of 1988, whose primary \nresponsibilities shall be to handle the secretariat services to the board and shareholder \nmeetings and to carry out other functions specified in the statutes and other regulations. \n3(1)(viii)  All directors shall have access to advice and services of the company secretary with \na view to ensuring that board procedures and all applicable rules and regulations are \nfollowed.\n3(1)(ix)  The company secretary shall maintain the minutes of board meetings and such minutes  \nshall be open for inspection at any reasonable time, on reasonable notice by any \ndirector. \n3(1)(x)  Minutes of board meetings shall be recorded in sufficient detail so that it is possible \nto gather from the minutes, as to whether the board acted with due care and prudence \nin performing its duties. The minutes shall also serve as a reference for regulatory \nand supervisory authorities to assess the depth of deliberations at the board meetings. \nTherefore, the minutes of a board meeting shall clearly contain or refer to the following: \n(a) a summary of data and information used by the board in its deliberations; ( b) the \nmatters considered by the board; ( c) the fact-finding discussions and the issues of \ncontention or dissent which may illustrate whether the board was carrying out its duties \nwith due care and prudence; ( d) the testimonies and confirmations of relevant executives \nwhich indicate compliance with the board\u2019s strategies and policies and adherence to", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 183, "year": 2013}, "type": "Document"}
{"page_content": "which indicate compliance with the board\u2019s strategies and policies and adherence to \nrelevant laws and regulations; ( e) the board\u2019s knowledge and understanding of the \nrisks to which the bank is exposed and an overview of the risk management measures \nadopted; and ( f) the decisions and board resolutions.  \n3(1)(xi)  There shall be a procedure agreed by the board to enable directors, upon reasonable  \nrequest, to seek independent professional advice in appropriate circumstances, at the \nbank\u2019s expense. The board shall resolve to provide separate independent professional \nadvice to directors to assist the relevant director or directors to discharge his/her/their \nduties to the bank.  \n3(1)(xii)  Directors shall avoid conflicts of interests, or the appearance of conflicts of interest,  \nin their activities with, and commitments to, other organisations or related parties. If \na director has a conflict of interest in a matter to be considered by the board, which \nthe board has determined to be material, the matter should be dealt with at a board \nmeeting, where independent non-executive directors [refer to Direction 3(2)(iv) of \nthese Directions] who have no material interest in the transaction, are present. Further, \na director shall abstain from voting on any board resolution in relation to which he/she \nor any of his/her close relation or a concern in which a director has substantial interest, \nis interested and he/she shall not be counted in the quorum for the relevant agenda item \nat the board meeting.\n3(1)(xiii)  The board shall have a formal schedule of matters specifically reserved to it for decision  \nto ensure that the direction and control of the bank is firmly under its authority.\n3(1)(xiv)  The board shall, if it considers that the bank is, or is likely to be, unable to meet its \nobligations or is about to become insolvent or is about to suspend payments due to \ndepositors and other creditors, forthwith inform the Director of Bank Supervision of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 183, "year": 2013}, "type": "Document"}
{"page_content": "depositors and other creditors, forthwith inform the Director of Bank Supervision of \nthe situation of the bank prior to taking any decision or action.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 183, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  177\n3(1)(xv)  The board shall ensure that the bank is capitalised at levels as required by the Monetary \nBoard in terms of the capital adequacy ratio and other prudential grounds.\n3(1)(xvi)  The board shall publish in the bank\u2019s Annual Report, an annual corporate governance \nreport setting out the compliance with Direction 3 of these Directions.\n3(1)(xvii)  The board shall adopt a scheme of self-assessment to be undertaken by each director  \nannually, and maintain records of such assessments.\n3(2) The Board\u2019s Composition\n3(2)(i)  The number of directors on the board shall not be less than 7 and not more than 13.\n3(2)(ii)   (A) The total period of service of a director other than a director who holds the position  \nof chief executive officer shall not exceed nine years, and such period in office shall \nbe inclusive of the total period of service served by such director up to 01 January \n2008.\n  (B) In this context, the following transitional provisions shall apply:\n a) In the event that there is only one director on the board who has served more \nthan nine years as at 01 January 2008, he/she shall be deemed to have vacated \nthe office as a director as at 31 December 2008. \n b) In the event that there are two or more directors on the board who have served  \nmore than nine years as at 01 January 2008, the following provisions shall \napply:\n I. Of those directors whose period of service has exceeded nine years, the  \nlongest serving director, shall be deemed to have vacated office as a \nDirector on 31 December 2008. \n II. Thereafter , at the end of each succeeding year, the remaining directors \nshall be deemed to have vacated office in sequence, at least one director \neach year, (on the basis of the longest to the shortest length of service as \na director), until all directors who have served a period in excess of nine \nyears as at 01 January 2008, have been deemed to have vacated office.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 184, "year": 2013}, "type": "Document"}
{"page_content": "years as at 01 January 2008, have been deemed to have vacated office. \nProvided also, that all directors of the bank who have served more than \nnine years as at 01 January 2008 shall be deemed to have vacated their \noffice by or before 31 December 2011.\n c) In the event there are any directors who are due to complete nine years of service  \nbetween 01 January 2008 and 31 December 2010, such directors shall also be \ndeemed to have vacated office, in sequence, at least one director each year, \n(on the basis of the longest to the shortest length of service as a director), \nafter the directors as set out in Direction 3(2)(ii)(B)(b) have vacated their \noffice as directors. Provided, however, that all such directors covered by this  \nsub-direction ( c) shall also be deemed to have vacated their office by or before \n31 December 2011. \n3(2)(iii)  An employee of a bank may be appointed, elected or nominated as a director of the  \nbank (hereinafter referred to as an \u201cexecutive director\u201d) provided that the number of \nexecutive directors shall not exceed one-third of the number of directors of the board. \nIn such an event, one of the executive directors shall be the chief executive officer of \nthe bank. \n3(2)(iv)  The board shall have at least three independent non-executive directors or one third of the  \ntotal number of directors, whichever is higher. This sub-direction shall be applicable from  \n01 January 2010 onwards.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 184, "year": 2013}, "type": "Document"}
{"page_content": "178 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n  A  non-executive director shall not be considered independent if he/she: \n a) has direct and indirect shareholdings of more than 1 per cent of the bank;\n b) currently has or had during the period of two years immediately preceding his/her \nappointment as director, any business transactions with the bank as described in \nDirection 3(7) hereof, exceeding 10 per cent of the regulatory capital of the bank.\n c) has been employed by the bank during the two year period immediately preceding  \nthe appointment as director;\n d) has a close relation who is a director or chief executive officer or a member of key \nmanagement personnel or a material shareholder of the bank or another bank.  \nFor this purpose, a \u201cclose relation\u201d shall mean the spouse or a financially \ndependant child; \n e)  represents a specific stakeholder of the bank;\n f) is an employee or a director or a material shareholder in a company or business  \norganization:\n I. which currently has a transaction with the bank as defined in Direction 3(7) of  \nthese Directions, exceeding 10 per cent of the regulatory capital of the bank, \nor \n II. in which any of the other directors of the bank are employed or are directors or  \nare material shareholders; or \n III. in which any of the other directors of the bank have a transaction as defined  \nin Direction 3(7) of these Directions, exceeding 10 per cent of regulatory \ncapital in the bank; \n3(2)(v)  In the event an alternate director is appointed to represent an independent director, the \nperson so appointed shall also meet the criteria that applies to the independent director.\n3(2)(vi)  Non-executive directors shall be persons with credible track records and/or have \nnecessary skills and experience to bring an independent judgment to bear on issues of \nstrategy, performance and resources.\n3(2)(vii)  A  meeting of the board shall not be duly constituted, although the number of directors", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 185, "year": 2013}, "type": "Document"}
{"page_content": "3(2)(vii)  A  meeting of the board shall not be duly constituted, although the number of directors \nrequired to constitute the quorum at such meeting is present, unless more than one \nhalf of the number of directors present at such meeting are non-executive directors.  \nThis sub-direction shall be applicable from 01 January 2010 onwards. \n3(2)(viii)  The independent non-executive directors shall be expressly identified as such in all  \ncorporate communications that disclose the names of directors of the bank. The bank \nshall disclose the composition of the board, by category of directors, including the \nnames of the chairman, executive directors, non-executive directors and independent \nnon-executive directors in the annual corporate governance report.\n3(2)(ix)  T here shall be a formal, considered and transparent procedure for the appointment \nof new directors to the board. There shall also be procedures in place for the orderly \nsuccession of appointments to the board.\n3(2)(x)  All directors appointed to fill a casual vacancy shall be subject to election by  \nshareholders at the first general meeting after their appointment.\n3(2)(xi)  If a director resigns or is removed from of fice, the board shall: ( a) announce the \ndirector\u2019s resignation or removal and the reasons for such removal or resignation \nincluding but not limited to information relating to the relevant director\u2019s disagreement", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 185, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  179\nwith the bank, if any; and ( b) issue a statement confirming whether or not there are any \nmatters that need to be brought to the attention of shareholders.\n3(2)(xii)  A  director or an employee of a bank shall not be appointed, elected or nominated \nas a director of another bank except where such bank is a subsidiary company or an \nassociate company of the first mentioned bank.\n3(3) Criteria to assess the fitness and propriety of directors \n  In addition to provisions of Section 42 read with Section 76 h of the Banking Act, No.30 \nof 1988, the criteria set out below shall apply to determine the fitness and propriety of a \nperson who serves or wishes to serve as a director of a bank. Non-compliance with any \none of the criteria as set out herein shall disqualify a person to be appointed, elected or \nnominated as a director or to continue as a director.\n3(3)(i)  The age of a person who serves as director shall not exceed 70 years.  \n (A) Where a director who is currently serving at a bank is over 70 years of age as at   \n01 January 2008, the following transitional provisions shall apply, subject, \nhowever, to the provisions as set out in Direction 3(2)(ii) hereof. \n a) If a director is over 75 years of age as at 01 January 2008, such director may \ncontinue to serve as a director for a further period that shall not extend \nbeyond 31 December 2008, and shall be deemed to have vacated office on \n31 December 2008;\n b) If a director is between 70 and 75 years of age as at 01 January 2008, such \ndirector may continue to serve as a director for a further period that shall \nnot extend beyond 31 December 2009, and shall be deemed to have vacated \noffice on 31 December 2009.\n(B) Where a director who is currently serving at a bank reaches the age of 70 years,  \nbetween 01 January 2008 and 31 December 2009, such director may, subject to the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 186, "year": 2013}, "type": "Document"}
{"page_content": "between 01 January 2008 and 31 December 2009, such director may, subject to the \nprovisions as set out in Direction 3(2)(ii) hereof, continue to serve as a director \nfor a further period that shall not extend beyond 31 December 2010 and shall be \ndeemed to have vacated office on 31 December 2010.\n3(3)(ii)  A  person shall not hold office as a director of more than 20 companies/entities/\ninstitutions inclusive of subsidiaries or associate companies of the bank. Of such  \n20 companies/entities/ institutions, not more than 10 companies shall be those \nclassified as Specified Business Entities in terms of the Sri Lanka Accounting and \nAuditing Standards Act, No. 15 of 1995.\n3(4) Management functions delegated by the Board\n3(4)(i)  The directors shall carefully study and clearly understand the delegation arrangements  \nin place. \n3(4)(ii)  The board shall not delegate any matters to a board committee, chief executive officer, \nexecutive directors or key management personnel, to an extent that such delegation \nwould significantly hinder or reduce the ability of the board as a whole to discharge its \nfunctions.\n3(4)(iii)  The board shall review the delegation processes in place on a periodic basis to ensure  \nthat they remain relevant to the needs of the bank.\n3(5) The Chairman and Chief Executive Officer\n3(5)(i)  The roles of chairman and chief executive of ficer shall be separate and shall not be \nperformed by the same individual.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 186, "year": 2013}, "type": "Document"}
{"page_content": "180 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n3(5)(ii)  The chairman shall be a non-executive director and preferably an independent director  \nas well. In the case where the chairman is not an independent director, the board shall \ndesignate an independent director as the Senior Director with suitably documented \nterms of reference to ensure a greater independent element. The designation of the \nSenior Director shall be disclosed in the bank\u2019s Annual Report.\n3(5)(iii)  The board shall disclose in its corporate governance report, which shall be an integral  \npart of its Annual Report, the identity of the chairman and the chief executive officer \nand the nature of any relationship [including financial, business, family or other \nmaterial/relevant relationship(s)], if any, between the chairman and the chief executive \nofficer and the relationships among members of the board.\n3(5)(iv)  The chai rman shall: ( a) provide leadership to the board; ( b) ensure that the board \nworks effectively and discharges its responsibilities; and ( c) ensure that all key and \nappropriate issues are discussed by the board in a timely manner.\n3(5)(v)  The chairman shall be primarily responsible for drawing up and approving the agenda  \nfor each board meeting, taking into account where appropriate, any matters proposed by \nthe other directors for inclusion in the agenda. The chairman may delegate the drawing \nup of the agenda to the company secretary.\n3(5)(vi)  The chairman shall ensure that all directors are properly briefed on issues arising at  \nboard meetings and also ensure that directors receive adequate information in a timely \nmanner. \n3(5)(vii)  The chairman shall encourage all directors to make a full and active contribution to the  \nboard\u2019s affairs and take the lead to ensure that the board acts in the best interests of the \nbank. \n3(5)(viii)  T he chairman shall facilitate the effective contribution of non-executive directors", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 187, "year": 2013}, "type": "Document"}
{"page_content": "3(5)(viii)  T he chairman shall facilitate the effective contribution of non-executive directors \nin particular and ensure constructive relations between executive and non-executive \ndirectors.\n3(5)(ix)  T he chairman, shall not engage in activities involving direct supervision of key \nmanagement personnel or any other executive duties whatsoever. \n3(5)(x)  T he chairman shall ensure that appropriate steps are taken to maintain effective \ncommunication with shareholders and that the views of shareholders are communicated \nto the board. \n3(5)(xi)  T he chief executive officer shall function as the apex executive-in-charge of the  \nday-to-day-management of the bank\u2019s operations and business. \n3(6) Board appointed Committees\n3(6)(i)  Each bank shall have at least four board committees as set out in Directions 3(6)(ii), \n3(6)(iii), 3(6)(iv) and 3(6)(v) of these Directions. Each committee shall report directly \nto the board. All committees shall appoint a secretary to arrange the meetings and \nmaintain minutes, records, etc., under the supervision of the chairman of the committee. \nThe board shall present a report of the performance on each committee, on their duties \nand roles at the annual general meeting.\n3(6)(ii)  The following rules shall apply in relation to the Audit Committee:\n a) The chairman of the committee shall be an independent non-executive director  \nwho possesses qualifications and experience in accountancy and/or audit.\n b) All members of the committee shall be non-executive directors.\n c ) The committee shall make recommendations on matters in connection with:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 187, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  181\n(i) the appointment of the external auditor for audit services to be provided in \ncompliance with the relevant statutes; ( ii) the implementation of the Central Bank \nguidelines issued to auditors from time to time; ( iii) the application of the relevant \naccounting standards; and ( iv) the service period, audit fee and any resignation or \ndismissal of the auditor; provided that the engagement of the Audit partner shall \nnot exceed five years, and that the particular Audit partner is not re-engaged for \nthe audit before the expiry of three years from the date of the completion of the \nprevious term.\n d ) T he committee shall review and monitor the external auditor\u2019s independence \nand objectivity and the effectiveness of the audit processes in accordance with \napplicable standards and best practices.\n e) The committee shall develop and implement a policy on the engagement of an  \nexternal auditor to provide non-audit services that are permitted under the relevant \nstatutes, regulations, requirements and guidelines. In doing so, the committee \nshall ensure that the provision by an external auditor of non-audit services does \nnot impair the external auditor\u2019s independence or objectivity. When assessing \nthe external auditor\u2019s independence or objectivity in relation to the provision of  \nnon-audit services, the committee shall consider:\n I. whether the skills and experience of the audit firm make it a suitable provider \nof the non-audit services; \n II. whether there are safeguards in place to ensure that there is no threat to the  \nobjectivity and/or independence in the conduct of the audit resulting from the \nprovision of such services by the external auditor; and\n III. whether the nature of the non-audit services, the related fee levels and the fee  \nlevels individually and in aggregate relative to the audit firm, pose any threat", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 188, "year": 2013}, "type": "Document"}
{"page_content": "levels individually and in aggregate relative to the audit firm, pose any threat \nto the objectivity and/or independence of the external auditor. \n f) The committee shall, before the audit commences, discuss and finalise with the \nexternal auditors the nature and scope of the audit, including: ( i) an assessment \nof the bank\u2019s compliance with the relevant Directions in relation to corporate \ngovernance and the management\u2019s internal controls over financial reporting; \n(ii) the preparation of financial statements for external purposes in accordance \nwith relevant accounting principles and reporting obligations; and ( iii) the  \nco-ordination between firms where more than one audit firm is involved.\n g ) The committee shall review the financial information of the bank, in order to  \nmonitor the integrity of the financial statements of the bank, its annual report, \naccounts and quarterly reports prepared for disclosure, and the significant \nfinancial reporting judgments contained therein. In reviewing the bank\u2019s annual \nreport and accounts and quarterly reports before submission to the board, the \ncommittee shall focus particularly on: ( i) major judgmental areas; ( ii) any changes \nin accounting policies and practices; ( iii) significant adjustments arising from the \naudit; ( iv) the going concern assumption; and ( v) the compliance with relevant \naccounting standards and other legal requirements.\n h) The committee shall discuss issues, problems and reservations arising from the  \ninterim and final audits, and any matters the auditor may wish to discuss including \nthose matters that may need to be discussed in the absence of key management \npersonnel, if necessary.\n i ) The  committee shall review the external auditor\u2019s management letter and the \nmanagement\u2019s response thereto.\n j ) T he committee shall take the following steps with regard to the internal audit \nfunction of the bank:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 188, "year": 2013}, "type": "Document"}
{"page_content": "182 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n I. Review the adequacy of the scope, functions and resources of the internal audit  \ndepartment, and satisfy itself that the department has the necessary authority \nto carry out its work;\n II. Review the internal audit programme and results of the internal audit process  \nand, where necessary, ensure that appropriate actions are taken on the \nrecommendations of the internal audit department;\n III. Review any appraisal or assessment of the performance of the head and senior  \nstaff members of the internal audit department;\n IV . Recommend any appointment or termination of the head, senior staff members \nand outsourced service providers to the internal audit function;\n V . Ensure that the committee is appraised of resignations of senior staf f members \nof the internal audit department including the chief internal auditor and any \noutsourced service providers, and to provide an opportunity to the resigning \nsenior staff members and outsourced service providers to submit reasons for \nresigning;\n VI. Ensure that the internal audit function is independent of the activities it audits  \nand that it is performed with impartiality, proficiency and due professional \ncare;\n k) The committee shall consider the major findings of internal investigations and  \nmanagement\u2019s responses thereto;\n l) The chief finance of ficer, the chief internal auditor and a representative of the \nexternal auditors may normally attend meetings. Other board members and \nthe chief executive officer may also attend meetings upon the invitation of the \ncommittee. However, at least twice a year, the committee shall meet with the \nexternal auditors without the executive directors being present.\n m) The committee shall have: ( i) explicit authority to investigate into any matter \nwithin its terms of reference; (ii) the resources which it needs to do so; ( iii) full", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 189, "year": 2013}, "type": "Document"}
{"page_content": "within its terms of reference; (ii) the resources which it needs to do so; ( iii) full \naccess to information; and ( iv) authority to obtain external professional advice and \nto invite outsiders with relevant experience to attend, if necessary.\n n) The committee shall meet regularly , with due notice of issues to be discussed and \nshall record its conclusions in discharging its duties and responsibilities.\n o) The board shall disclose in an informative way , (i) details of the activities of the \naudit committee; ( ii) the number of audit committee meetings held in the year; and \n(iii) details of attendance of each individual director at such meetings.\n p) The secretary of the committee (who may be the company secretary or the head  \nof the internal audit function) shall record and keep detailed minutes of the \ncommittee meetings. \n q) The committee shall review arrangements by which employees of the bank may , \nin confidence, raise concerns about possible improprieties in financial reporting, \ninternal control or other matters. Accordingly, the committee shall ensure that \nproper arrangements are in place for the fair and independent investigation of such \nmatters and for appropriate follow-up action and to act as the key representative \nbody for overseeing the bank\u2019s relations with the external auditor.\n3(6)(iii)  The following rules shall apply in relation to the Human Resources and Remuneration  \nCommittee:\n a) The committee shall determine the remuneration policy (salaries, allowances and  \nother financial payments) relating to directors, Chief Executive Officer (CEO) and \nkey management personnel of the bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 189, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  183\n b ) The committee shall set goals and tar gets for the directors, CEO and the key \nmanagement personnel.\n c) The committee shall evaluate the performance of the CEO and key management \npersonnel against the set targets and goals periodically and determine the basis \nfor revising remuneration, benefits and other payments of performance-based \nincentives.\n d) The CEO shall be present at all meetings of the committee, except when matters  \nrelating to the CEO are being discussed.\n3(6)(iv)  The following rules shall apply in relation to the Nomination Committee:\n a ) The committee shall implement a procedure to select/appoint new directors,  \nCEO and key management personnel.\n b) The committee shall consider and recommend (or not recommend) the re-election  \nof current directors, taking into account the performance and contribution \nmade by the director concerned towards the overall discharge of the board\u2019s \nresponsibilities.\n c) The committee shall set the criteria such as qualifications, experience and key \nattributes required for eligibility to be considered for appointment or promotion \nto the post of CEO and the key management positions. \n d) The committee shall ensure that directors, CEO and key management personnel  \nare fit and proper persons to hold office as specified in the criteria given in \nDirection 3(3) and as set out in the Statutes.\n e) The committee shall consider and recommend from time to time, the requirements  \nof additional/new expertise and the succession arrangements for retiring directors \nand key management personnel.\n f) The Committee shall be chaired by an Independent Director and preferably be  \nconstituted with a majority of Independent Directors. The CEO may be present at \nmeetings by invitation.\n3(6)(v)  The following rules shall apply in relation to the Integrated Risk Management \nCommittee:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 190, "year": 2013}, "type": "Document"}
{"page_content": "3(6)(v)  The following rules shall apply in relation to the Integrated Risk Management \nCommittee:\n a ) The committee shall consist of at least three non-executive directors, chief  \nexecutive officer and key management personnel supervising broad risk categories, \ni.e., credit, market, liquidity, operational and strategic risks. The committee shall \nwork with key management personnel very closely and make decisions on behalf \nof the board within the framework of the authority and responsibility assigned to \nthe committee.\n b) The committee shall assess all risks, i.e., credit, market, liquidity, operational and \nstrategic risks to the bank on a monthly basis through appropriate risk indicators \nand management information. In the case of subsidiary companies and associate \ncompanies, risk management shall be done, both on a bank basis and group basis.\n c) The committee shall review the adequacy and effectiveness of all management \nlevel committees such as the credit committee and the asset-liability committee to \naddress specific risks and to manage those risks within quantitative and qualitative \nrisk limits as specified by the committee.\n d ) T he committee shall take prompt corrective action to mitigate the effects of \nspecific risks in the case such risks are at levels beyond the prudent levels \ndecided by the committee on the basis of the bank\u2019s policies and regulatory and \nsupervisory requirements.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 190, "year": 2013}, "type": "Document"}
{"page_content": "184 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n e) The committee shall meet at least quarterly to assess all aspects of risk management  \nincluding updated business continuity plans.\n f)  The committee shall take appropriate actions against the officers responsible for \nfailure to identify specific risks and take prompt corrective actions as recommended \nby the committee, and/or as directed by the Director of Bank Supervision.\n g) The committee shall submit a risk assessment report within a week of each meeting  \nto the board seeking the board\u2019s views, concurrence and/or specific directions.\n h ) T he committee shall establish a compliance function to assess the bank\u2019s \ncompliance with laws, regulations, regulatory guidelines, internal controls and \napproved policies on all areas of business operations. A dedicated compliance \nofficer selected from key management personnel shall carry out the compliance \nfunction and report to the committee periodically.\n3(7) Related party transactions\n3(7)(i)  The board shall take the necessary steps to avoid any conflicts of interest that may arise  \nfrom any transaction of the bank with any person, and particularly with the following \ncategories of persons who shall be considered as \u201crelated parties\u201d for the purposes of \nthis Direction: \n a) Any of the bank\u2019 s subsidiary companies; \n b) Any of the bank\u2019 s associate companies;\n c) Any of the directors of the bank;\n d) Any of the bank\u2019 s key management personnel;\n e) A  close relation of any of the bank\u2019s directors or key management personnel;\n f) A  shareholder owning a material interest in the bank; \n g) A  concern in which any of the bank\u2019s directors or a close relation of any of the \nbank\u2019s directors or any of its material shareholders has a substantial interest.\n3(7)(ii)  The type of transactions with related parties that shall be covered by this Direction shall \ninclude the following:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 191, "year": 2013}, "type": "Document"}
{"page_content": "include the following:\n a ) The grant of any type of accommodation, as defined in the Monetary Board\u2019s \nDirections on maximum amount of accommodation,\n b) The creation of any liabilities of the bank in the form of deposits, borrowings and  \ninvestments,\n c) The provision of any services of a financial or non-financial nature provided to the  \nbank or received from the bank,\n d) The creation or maintenance of reporting lines and information flows between  \nthe bank and any related parties which may lead to the sharing of potentially \nproprietary, confidential or otherwise sensitive information that may give benefits \nto such related parties. \n3(7)(iii)  The board shall ensure that the bank does not engage in transactions with related parties  \nas defined in Direction 3(7)(i) above, in a manner that would grant such parties \u201cmore \nfavourable treatment\u201d than that accorded to other constituents of the bank carrying on \nthe same business. In this context, \u201cmore favourable treatment\u201d shall mean and include \ntreatment, including the:\n a ) Granting of \u201ctotal net accommodation\u201d to related parties, exceeding a prudent percentage  \nof the bank\u2019s regulatory capital, as determined by the board. For purposes of this  \nsub-direction:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 191, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  185\n I. \u201cAccommodation\u201d shall mean accommodation as defined in the Banking Act, \nDirections, No.8 of 2007 on Maximum Amount of Accommodation. \n II. The \u201ctotal net accommodation\u201d shall be computed by deducting from the total  \naccommodation, the cash collateral and investments made by such related \nparties in the bank\u2019s share capital and debt instruments with a maturity of 5 \nyears or more.\n b) Char ging of a lower rate of interest than the bank\u2019s best lending rate or paying \nmore than the bank\u2019s deposit rate for a comparable transaction with an unrelated \ncomparable counterparty;\n c) Providing of preferential treatment, such as favourable terms, covering trade losses  \nand/or waiving fees/commissions, that extend beyond the terms granted in the \nnormal course of business undertaken with unrelated parties;\n d) Providing services to or receiving services from a related-party without an evaluation  \nprocedure; \n e) Ma intaining reporting lines and information flows that may lead to sharing potentially \nproprietary, confidential or otherwise sensitive information with related parties, \nexcept as required for the performance of legitimate duties and functions.\n3(7)(iv)  A  bank shall not grant any accommodation to any of its directors or to a close relation \nof such director unless such accommodation is sanctioned at a meeting of its board of \ndirectors, with not less than two-thirds of the number of directors other than the director \nconcerned, voting in favour of such accommodation. This accommodation shall be \nsecured by such security as may from time to time be determined by the Monetary \nBoard as well.\n3(7)(v)  a) Where any accommodation has been granted by a bank to a person or a close \nrelation of a person or to any concern in which the person has a substantial \ninterest, and such person is subsequently appointed as a director of the bank, steps", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 192, "year": 2013}, "type": "Document"}
{"page_content": "interest, and such person is subsequently appointed as a director of the bank, steps \nshall be taken by the bank to obtain the necessary security as may be approved for \nthat purpose by the Monetary Board, within one year from the date of appointment \nof the person as a director. \n  b) Where such security is not provided by the period as provided in Direction 3(7)(v)\n(a) above, the bank shall take steps to recover any amount due on account of any \naccommodation, together with interest, if any, within the period specified at the \ntime of the grant of accommodation or at the expiry of a period of eighteen months \nfrom the date of appointment of such director, whichever is earlier. \n  c )  Any director who fails to comply with the above sub-directions shall be deemed to have   \nvacated the office of director and the bank shall disclose such fact to the public. \n  d) This sub-direction, however , shall not apply to a director who at the time of the grant \nof the accommodation was an employee of the bank and the accommodation was \ngranted under a scheme applicable to all employees of such bank.\n3(7)(vi)  A  bank shall not grant any accommodation or \u201cmore favourable treatment\u201d relating \nto the waiver of fees and/or commissions to any employee or a close relation of such \nemployee or to any concern in which the employee or close relation has a substantial \ninterest other than on the basis of a scheme applicable to the employees of such bank \nor when secured by security as may be approved by the Monetary Board in respect of \naccommodation granted as per Direction 3(7)(v) above.\n3(7)(vii)  No accommodation granted by a bank under Direction 3(7)(v) and 3(7)(vi) above, nor  \nany part of such accommodation, nor any interest due thereon shall be remitted without \nthe prior approval of the Monetary Board and any remission without such approval \nshall be void and of no effect.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 192, "year": 2013}, "type": "Document"}
{"page_content": "186 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n3(8) Disclosures\n3(8)(i)  The board shall ensure that: ( a) annual audited financial statements and quarterly \nfinancial statements are prepared and published in accordance with the formats \nprescribed by the supervisory and regulatory authorities and applicable accounting \nstandards, and that ( b) such statements are published in the newspapers in an abridged  \nform, in Sinhala, Tamil and English. \n3(8)(ii)  The board shall ensure that the following minimum disclosures are made in the Annual \nReport:\n a) A  statement to the effect that the annual audited financial statements have been \nprepared in line with applicable accounting standards and regulatory requirements, \ninclusive of specific disclosures.\n b ) A  report by the board on the bank\u2019s internal control mechanism that confirms \nthat the financial reporting system has been designed to provide reasonable \nassurance regarding the reliability of financial reporting, and that the preparation \nof financial statements for external purposes has been done in accordance with \nrelevant accounting principles and regulatory requirements. \n c ) The external auditor\u2019s certification on the effectiveness of the internal control \nmechanism referred to in Direction 3(8)(ii)(b) above, in respect of any statements \nprepared or published after 31 December 2008.\n d) Details of directors, including names, fitness and propriety , transactions with the \nbank and the total of fees/remuneration paid by the bank.\n e) T otal net accommodation as defined in 3(7)(iii) granted to each category of related \nparties. The net accommodation granted to each category of related parties shall \nalso be disclosed as a percentage of the bank\u2019s regulatory capital. \n f) The aggregate values of remuneration paid by the bank to its key management  \npersonnel and the aggregate values of the transactions of the bank with its key", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 193, "year": 2013}, "type": "Document"}
{"page_content": "personnel and the aggregate values of the transactions of the bank with its key \nmanagement personnel, set out by broad categories such as remuneration paid, \naccommodation granted and deposits or investments made in the bank.\n g) The external auditor\u2019s certification of the compliance with these Directions in the \nannual corporate governance reports published after 01 January 2010.\n h ) A  report setting out details of the compliance with prudential requirements, \nregulations, laws and internal controls and measures taken to rectify any material \nnon-compliances.\n i) A  statement of the regulatory and supervisory concerns on lapses in the bank\u2019s risk \nmanagement, or non-compliance with these Directions that have been pointed out \nby the Director of Bank Supervision, if so directed by the Monetary Board to be \ndisclosed to the public, together with the measures taken by the bank to address \nsuch concerns.\n3(9) Transitional and other general provisions\n3(9)(i)  Compliance with this Direction shall commence from 01 January 2008 onwards and \nall licensed commercial banks shall fully comply with the provisions of this Direction \nby or before 01 January 2009 except where extended compliance dates have been \nspecifically provided for in this Direction.\n3(9)(ii)  In respect of the banks that have been incorporated by specific statutes in Sri Lanka, the  \nboards as specified in such statutes shall continue to function in terms of the provisions \nof the respective statutes, provided they take steps to comply with all provisions of this \nDirection that are not inconsistent with the provisions of the respective statutes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 193, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  187\n3(9)(iii)  This Direction shall apply to the branches of the foreign banks operating in Sri Lanka  \nto the extent that it is not inconsistent with the regulations and laws applicable in such \nbank\u2019s country of incorporation. The branch of a foreign bank shall also publish its \nparent bank\u2019s annual corporate governance report together with its annual report and \naccounts of the branch operations in Sri Lanka. \n3(9)(iv)  In the event of a conflic t between any of the provisions of this Direction and the \nArticles of Association (or Internal Rules) pertaining to any bank, the provisions of this \nDirection shall prevail. However, if the Articles of Association of an individual bank \nset a more stringent standard than that specified in this Direction, such provisions in \nthe Articles of Association may be followed.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 194, "year": 2013}, "type": "Document"}
{"page_content": "188 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRequirement of \nthe Framework.Directions issued by the Monetary Board of the Central Bank of Sri Lanka in terms of Sections 46(1) and \n76(J)(1) of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n05 October 2011\nBANKING ACT DIRECTION NO. 7 OF 2011\nINTEGRATED RISK MANAGEMENT FRAMEWORK FOR\nLICENSED BANKS\nIn order to ensure the soundness of the banking system, Sections 46(1) and 76( J)(1) of the Banking \nAct, No. 30 of 1988, last amended by the Banking Act, No. 46 of 2006, empowers the Monetary Board \nto issue Directions to licensed banks regarding the manner in which any aspect of the business of such \nbanks is to be conducted. Accordingly, the Monetary Board issues this Direction to all licensed banks \non integrated risk management as management of risks on banking business operations in an integrated \nmanner would promote the soundness of banks and the banking system. \n1. All licensed banks shall adopt a specific Integrated Risk Management (IRM) \nframework in compliance with guidelines annexed to this Direction in addition \nto risk management principles and rules required in regulatory and supervisory \nprocedures and other market best practices of bank risk management.\n2. The IRM framework which shall be documented shall cover various potential \nrisks, possible sources of such risks, mechanism of management information and \nreporting to identify and monitor such risks, effective measures to control and \nmitigate risks at prudent levels and relevant officers and committees responsible \nfor such control and mitigation.\n3. The IRM framework shall be approved by the Board of Directors (BOD) and \nreviewed and updated at least annually.\n4. Through the IRM framework, the BOD shall assess the integrated risk profile", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 195, "year": 2013}, "type": "Document"}
{"page_content": "4. Through the IRM framework, the BOD shall assess the integrated risk profile \nof the bank and its management at least quarterly and be responsible for overall \noversight of the orderly implementation of the IRM framework.\n5. All banks shall implement the IRM framework within 6 months from the date \nof this Direction.\n6. In the event of any material lapses in the IRM framework in the opinion of the \nDirector of Bank Supervision, the fitness and propriety of those who are found to \nbe responsible for such lapses will be re-assessed under the relevant provisions \nof the Banking Act. Nature of the \nFramework.\nOversight of \nthe Borad.\nSteps to secure \nCompliance.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 195, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  189\nAnnexure\nINTEGRATED RISK MANAGEMENT SYSTEMS IN BANKS\nA. Integrated Risk Management\n1. Introduction\n1.1 Banks are exposed to various risks during their business operations. Under the Basel II  \nframework, the major categories of risks are credit, market and operational risks. However, the \nbanks are also facing other risks such as liquidity, interest rate, foreign exchange rate, legal, \nregulatory, reputational etc. All these risks are highly interdependent.\n1.2 Risk management is a complex function, which requires specialised skills and expertise.  \nInternationally, banks have been moving towards the use of sophisticated models for measuring \nand managing risks in an integrated manner with a view to ensuring a comprehensive Internal \nCapital Adequacy Assessment Process (ICAAP) under Pillar 2 of the Basel II framework. \n1.3 The capital adequacy ratio prescribed by the Central Bank of Sri Lanka (CBSL) under the Pillar \n\u2013 I of the Basel II framework is the regulatory minimum level, which addresses only credit, \nmarket and operational risks on an average basis. Thus, the need for banks to have their own \nassessment of various integrated risk exposures and maintain adequate capital as a cushion for \nsuch risks has become an urgent necessity.\n1.4 The objec tive of these guidelines is to encourage banks to develop integrated risk management \ntechniques for monitoring and managing their risks and to assure CBSL that adequate capital is \nheld to meet various risks to which they are exposed.\n2. Integrated Risk Management oversight\n2.1 Board and Senior Management \u2013  The responsibility of understanding the risks assumed by \nthe bank and ensuring that the risks are appropriately managed should be vested with the Board \nof Directors (BOD). The Board should: \n (a) Ensure that the bank has established a robust and pervasive risk culture and clear policies", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 196, "year": 2013}, "type": "Document"}
{"page_content": "(a) Ensure that the bank has established a robust and pervasive risk culture and clear policies \nthat define risk management as the responsibility of each bank\u2019s senior management, \nsubject to the oversight of the Board.\n (b) Establish risk limits based on risk appetite of the bank.\n (c) Ensure that the Senior Management of the bank:\n i . establishes an integrated framework in order to assess and appropriately manage  \nvarious risk exposures of the bank;\n i i. develops a system to monitor the bank\u2019s risk exposures and to relate them to the \nbank\u2019s capital;\n i ii. e stablishes a method to monitor the bank\u2019s compliance with internal policies, \nparticularly with regard to risk management; and\n iv . ef fectively communicates all relevant policies and procedures throughout the bank.\n (d) Adopt and support strong internal controls. \n2.2 Integrated Risk Management Committee (IRMC) \u2013 The overall risk management should \nbe assigned to an independent Integrated Risk Management Committee (IRMC) of the BOD, \nestablished as per Rules 3(6)(v) of the Banking Act Directions Nos.11&12 of 2007 on Corporate \nGovernance for Licensed Banks in Sri Lanka with the responsibilities stated therein. \n2.3 Internal Audit \u2013  Integrated risk management policies and procedures as well as the \nfunctionalities at various levels of the risk management function should be reviewed by", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 196, "year": 2013}, "type": "Document"}
{"page_content": "190 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nthe internal audit function of banks on an on-going basis while the external audit makes an \nindependent review at least on an annual basis.\n2.4 Operational Level \u2013 Risk management in operational areas viz. front office, loan origination \nfunction etc. should be confined to the operational procedures and guidelines set forth by the \nBOD and the Senior Management. \n3. Integrated Risk management framework priorities and pr ocesses\n3.1 Given the diversity of balance sheet profile of banks in Sri Lanka, it is neither prudent nor \ndesirable to adopt a uniform framework for management of risks. The architecture of an \nintegrated risk management function should be bank-specific, dictated by the size, complexity \nof functions, operating environment and technical expertise of staff. \n3.2 All relevant factors that present a material source of risk should be incorporated in a   \nwell-developed integrated risk management system. \n3.3 All measurements of risk incorporate both quantitative and qualitative elements, but to the \nextent possible, a quantitative approach should form the foundation of a bank\u2019s measurement \nframework. \n3.4 Quanti tative tools can include the use of large historical databases; when data are scarcer,  \na bank may choose to rely more heavily on the use of stress testing and scenario analyses. \n3.5 Banks should understand when measuring risks that measurement error always exists, and in \nmany cases the error itself is difficult to quantify. In general, an increase in uncertainty related \nto modelling and business complexity should result in a larger capital cushion.\n3.6 Qua ntitative approaches that focus on most likely outcomes for budgeting, forecasting, or \nperformance measurement purposes may not be fully applicable for capital adequacy because \nthe ICAAP under Pillar 2 of the Basel II framework should also take less likely events into \naccount.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 197, "year": 2013}, "type": "Document"}
{"page_content": "account. \n3.7 Stress testing and scenario analysis can be effective in gauging the consequences of outcomes \nthat have low probability of occurrence but would have a considerable impact on safety and \nsoundness of the banks. \n3.8 T o the extent that risks cannot be reliably measured with quantitative tools \u2013 for example, where \nmeasurements of risk are based on scarce data or unproven quantitative methods \u2013 qualitative \ntools, including experience and judgment, may be more heavily utilised. \n3.9 Banks should be cognisant that qualitative approaches have their own inherent biases and  \nassumptions that affect risk assessment; accordingly, banks should recognise the biases and \nassumptions embedded in, and the limitations of the qualitative approaches used. \n4.\t Risk\taggregation \tand\tdiversification \teffects\n4.1 An ef fective risk management system should assess risks across the entire bank. A bank \nchoosing to conduct risk aggregation among various risk types or business lines should \nunderstand the challenges in such aggregation. \n4.2 In addi tion, when aggregating risks, banks should ensure that any potential concentrations \nacross more than one risk dimension are addressed, recognizing that losses could arise in \nseveral risk dimensions at the same time, stemming from the same event or a common set of \nfactors. \n4.3 In considering the possible effects of diversification, management should be systematic and \nrigorous in documenting decisions, and in identifying assumptions used in each level of risk \naggregation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 197, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  191\n4.4 Assumptions about diversification should be supported by analysis and evidence. The bank \nshould have systems capable of aggregating risks based on the bank\u2019s selected framework. \nFor example, a bank calculating correlations within or among risk types should consider data \nquality and consistency, and the volatility of correlations over time and under stressed market \nconditions.\n5. Disclosure \n CBSL strongly considers that the market discipline could play an important role in maintaining \nfinancial system stability. However, market discipline could be achieved only through meaningful \ndisclosures by licensed banks which would also provide a more meaningful picture of the extent and \nnature of various risks that banks are exposed to and of the efficiency of banks\u2019 risk management \npractices.\nB. Cr edit Risk Management\n1. Management Oversight\n The BOD should put in place and periodically review the credit risk strategy and significant credit \nrisk policies of the bank. \n1.1 The strategy shall include:\n (a) a statement of the bank\u2019 s willingness to grant loans based on the type;\n (b) identification of tar get markets and business sectors; \n (c) preferred levels of diversification and concentration;\n (d) the cost of capital in granting credit and bad debts; and\n (e) the cyclical aspects and the resulting shifts in the composition and quality of the loan \nportfolio. This strategy should be viable in the long run and across business cycles. \n1.2 The credit risk policies and procedures shall be consisted with following elements, at a  \nminimum.\n (a) W ritten policies that define target markets, risk acceptance criteria, credit approval \nauthority, credit origination and maintenance procedures and guidelines for portfolio \nmanagement and remedial management.\n (b) Proactive credit risk management practices such as annual/half yearly industry studies and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 198, "year": 2013}, "type": "Document"}
{"page_content": "(b) Proactive credit risk management practices such as annual/half yearly industry studies and \nsingle borrower reviews, periodic credit calls and customer visits that are documented, \nand carry out at least quarterly management reviews of troubled exposures/ weak credits.\n (c) V esting accountability with the business managers for managing risk and, in conjunction \nwith the credit risk management framework, for establishing and maintaining appropriate \nrisk limits and risks arrangement procedures. \n (d) Delegation of lending powers to individual credit officers based upon a consistent set of \nstandards of experience, judgment and ability.\n (e) Requirement for higher level of authority to approve credit limits as risk ratings worsen.\n (f) Requirement for every extension of credit, other than small value consumer/retail loans \nto be approved by at least two authorized credit officers, one of whom must be an officer \nfrom business and another invariably from an independent Credit Risk Management \nDepartment (CRMD).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 198, "year": 2013}, "type": "Document"}
{"page_content": "192 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (g) Requirement for every obligor and facility to be assigned a risk rating.\n (h) Consistent standards for the origination, documentation and maintenance of documents \nfor extensions of credit.\n (i) Consistent approach towards early problem recognition, classification of problem  \nexposures, and remedial action.\n (j)  Emphasis on maintaining a diversified portfolio of risk assets in line with the capital \ndesired to support such a portfolio.\n (k) Credit risk limits by obligor , concentration, industry or geography.\n (l) Responsibility of the credit function to report the comprehensive set of credit risk data into \nthe independent risk system.\n1.3 The credit risk strategy and policy should be approved and periodically reviewed by the BOD. \nThese documents should be effectively disseminated throughout the banking organisation. All \nrelevant personnel should clearly understand the bank\u2019s approach to granting credit and should \nbe held accountable for complying with established policies and procedures. \n2. Risk Management \n2.1 Structure \u2013  In a well functioning integrated risk management framework, credit risk \nmanagement is vested with an independent unit and each bank should, depending on the size \nof the organisation or loan book, constitute a high level Credit Policy Committee (CPC) also \ncalled Credit Risk Management Committee or Credit Control Committee with the following \nresponsibilities:\n (a) The committee should be headed by the Chief Executive Officer (CEO)/General Manager \n(GM) and should comprise Heads of Credit Departments, including Consumer Banking, \nTreasury and CRMD.\n (b) The committee should, inter alia , formulate clear credit policies including standards on \npresentation of credit proposals, financial covenants, rating standards and benchmarks, \ndelegation of credit approving powers, prudent limits on large credit exposures, assets", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 199, "year": 2013}, "type": "Document"}
{"page_content": "delegation of credit approving powers, prudent limits on large credit exposures, assets \nconcentrations and lending to related parties, standards for loan collateral, portfolio \nmanagement, loan review mechanism, risk concentrations, risk monitoring and evaluation, \npricing of loans, provisioning, regulatory/legal compliance, etc. for BOD\u2019s approval.\n (c) The committee will be responsible for the setting up of CRMD which should lay down \nrisk assessment systems, monitor quality of loan portfolio and prudential limits set by \nCPC, identify problems and correct deficiencies, develop management Information \nSystem (MIS) and undertake loan review/audit.\n2.2 Prudential Limits \u2013  Credit risk can be mitigated to a great extent by stipulating prudential risk \nlimits on various risk parameters. Banks should consider stipulating:\n (a) Benchmark financial ratios, with flexibility for deviation in deserving cases. The \nconditions subject to which deviations are permitted and the authority for permitting such \ndeviations should be clearly spelt out in the Credit Policy.\n (b) Single/related party borrower limits, which could even be more stringent than the limits \nprescribed by CBSL, to provide a filtering mechanism. \n (c) Substantial exposure limit, i.e., aggregate of large exposures should not exceed a \npercentage of the Tier \u2013 II capital of the banks, depending upon the degree of concentration \nrisk the bank is exposed to.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 199, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  193\n (d) Maximum exposure limits to industry, regions, country, etc. There must also be systems \nin place to evaluate the exposure at reasonable intervals and the limits should be adjusted \nespecially when a particular sector or industry faces a slowdown or other specific problem. \n (e)  Maturity and currency profile of the loan book, keeping in mind the market risk inherent \nin the balance sheet, risk management capability, liquidity etc.\n2.3 Risk Rating \u2013 Banks should develop a robust internal credit-risk grading system that serves as \na single point indicator of diverse risk factors of counterparty and for taking credit decisions \nin a consistent manner while communicating the default risk associated with an exposure.  \nThe risk rating, in short, should:\n (a) reflect the underlying credit risk of the loan book ; and\n (b) be drawn up in a structured manner, incorporating both quantitative (financial ratios) and \nqualitative standards (industry, payment history, credit reports, management, purpose of \nthe loan, quality of financial information, facility characteristics etc.).\n2.4 Risk Pricing \u2013 Risk pricing is a fundamental tenet of credit risk management. Thus, banks \nshould:\n (a) evolve scientific systems to price the credit risk, which should have a bearing on the \nexpected Probability of Default (PD); and\n (b) establish the maximum expected loss in each product line and linking the capital to this \nloss, thus making it possible to compare products of different risk levels.\n2.5 Portfolio Management \u2013  The need for credit portfolio management emanates from the \npotential adverse impact of concentration of exposures and necessity to optimise the benefits \nassociated with diversification. In this regard, banks should consider the following measures to \nmaintain the portfolio quality:\n (a) Stipulate quantitative ceilings on aggregate exposure in specified rating categories,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 200, "year": 2013}, "type": "Document"}
{"page_content": "(a) Stipulate quantitative ceilings on aggregate exposure in specified rating categories,  \ni.e., certain percentage of total advances in the rating category 1 to 4 or to 6 etc.\n (b) Evaluate the rating-wise distribution of borrowers in various industries, business, personal \nsegments, etc .\n (c) Expos ure to one industry/sector should be evaluated on the basis of overall rating \ndistribution of borrowers within the sector/group. In cases where portfolio exposure to \na single industry/segment is performing badly or the concentration of borrowers is in \nthe lower notches of ratings, the bank may increase the quality standards for the specific \nindustry or group.\n (d) T arget rating-wise volume of loans, probable defaults and provisioning requirements \nas a prudent planning exercise. For any deviation/s from the expected parameters,  \nan exercise for restructuring the portfolio may immediately be undertaken and if \nnecessary, the entry-level criteria could prudently be enhanced to insulate the portfolio \nfrom further deterioration.\n (e) Undertake rapid portfolio reviews, stress tests and scenario analyses when the external \nenvironment undergoes rapid changes (rise in oil prices, global/country specific \nslowdowns, international/market risk events, extreme liquidity conditions, war situation \netc.). \n (f) Introduce discriminatory time schedules for review/renewal of borrower exposures. \nLower rated borrowers whose financials show signs of weakness should be subject to \nrenewal control twice/thrice a year.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 200, "year": 2013}, "type": "Document"}
{"page_content": "194 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n2.6 Risk models \u2013 Credit risk models offer banks a framework for quantifying, aggregating and \nmanaging risk across geographical and product lines in a timely manner. Therefore, banks \nshould evaluate the utility of various models with suitable modifications to the environment \nin Sri Lanka and build up adequate internal expertise and databases to facilitate the models \nutilisation.\n2.7 Loan Review Mechanism (LRM) \u2013  LRM is an effective tool for constantly evaluating the \nquality of the loan book and bringing about qualitative improvements in credit administration. \nIn this regard, banks should formulate a loan review policy under the review of BOD, annually. \nThe policy should, inter alia , address:\n (a) Qualification \tand\tIndependence \t\u2013 Loan Review Officers should be independent in \nreporting to the BOD and have sound knowledge of the credit appraisal, lending practices \nand loan policies of the bank. \n (b) Frequency and Scope of Reviews \u2013  Reviews of high value loans should be undertaken \nusually within three months of sanction/renewal, or more frequently when factors indicate \na potential for deterioration in the credit quality. The scope of the review should cover all \nperforming loans above a cut-off limit. At least 30% \u2013 40% of the loan portfolio should \nbe subjected to LRM each year to provide reasonable assurance that all major credit risks \nembedded in the balance sheet have been tracked. \n (c) Depth of Reviews \u2013 Loan reviews should focus on: the approval process, accuracy and \ntimeliness of credit ratings assigned by loan officers, adherence to internal policies and \nprocedures, and applicable laws/regulations, compliance with loan covenants, post-\nsanction follow-up, sufficiency of documentation, portfolio quality and recommendations \nfor improving portfolio quality.\n2.8 Risk in Investment banking \u2013 A significant degree of credit risk, in addition to market risk,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 201, "year": 2013}, "type": "Document"}
{"page_content": "2.8 Risk in Investment banking \u2013 A significant degree of credit risk, in addition to market risk,  \nis inherent in investment banking. Therefore, banks should stipulate entry level minimum \nratings/quality standards, industry, maturity, duration, issuer-wise, etc. limits in investment \nproposals as well, to mitigate the adverse impacts of concentration and risk of illiquidity.\n2.9 Inter-Bank Exposure \u2013  A suitable framework should be evolved to provide a centralised \noverview on the aggregate exposure to other banks. Bank-wise exposure limits could be set on \nthe basis of external or internal ratings.\n2.10 Risk in Off-balance sheet exposure \u2013  Mechanics involved in the assessment of non-funded \nlines should be similar to the assessment of funded lines. Utmost care must be taken whilst \nextending these facilities. Banks should, therefore, evolve adequate frameworks for managing \ntheir exposure in off-balance sheet products such as Forex forward contracts, forward rate \nagreements, swaps, options, futures etc . as a part of credit appraisal, limits and monitoring \nprocedures.\nC. Market Risk Management\n1. Management Oversight\n The BOD should clearly articulate market risk management policies, procedures, prudential risk \nlimits, review mechanisms and reporting and auditing systems. \n1.1 policies should address the following:\n (a) as sessment of bank\u2019s exposure on a consolidated basis, considering issues related to \ninterest rate, currency, equity price and liquidity risks; and\n (b) ris k measurement systems capture all material sources of market risk and assess the \neffects on bank\u2019s capital.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 201, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  195\n1.2 The BOD should ensure that bank\u2019s overall market risk exposure is maintained at prudent levels \nand consistent with the available capital. The operating prudential limits and the accountability \nof line management should also be clearly defined.\n2. Risk Management\n2.1 Structure \u2013 Each bank should establish an organizational set up for market risk management, \nincluding the following:\n (a) Asset-Liability Management Committee (ALCO) \u2013 The ALCO, consisting of the bank\u2019s \nsenior management, including the CEO/GM must function as the top-end operational unit \nfor managing the balance sheet within the performance/risk parameters laid down by the \nBOD. The ALCO should also articulate the bank\u2019s view on various market variables and \nbase its decisions for future business strategy.\n (b) Middle\tOffice\t\u2013 The banks should set up an independent Middle Office to track the \nmagnitude of market risk on a real time basis. The Middle Office should:\n i. consist of experts in market risk management, economists, statisticians and general \nbankers and may be functionally placed directly under the ALCO; and \n i i. be  separated from the Treasury Department and should not be involved in the  \nday-to-day management of the treasury; \n i ii. appri se the top management/ALCO/Treasury about adherence to prudential/risk \nparameters and also aggregate the total market risk exposures assumed by the bank at \nany point of time.\n2.2 Foreign Exchange (Forex) Risk \u2013  Forex risk could be mitigated through fixing appropriate \nlimits on open positions, gaps, adopting risk measurement methods and monitoring exposures. \nIn this regard, the banks are encouraged to adopt the following measures:\n (a) Fix appropriate limits (even less than the limits set by CBSL) depending upon the capital \nposition, overall risk profile and risk management capabilities.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 202, "year": 2013}, "type": "Document"}
{"page_content": "position, overall risk profile and risk management capabilities.\n (b) Fix appropriate limits on individual and aggregate gaps on major currencies, linked to \ncapital.\n (c) Adopt the Value at Risk (VaR) technique to measure the risk associated with exposures.\n (d) Monitor Forex risk exposures with the preparation of the statement of Maturity of Assets \nand Liabilities (MAL) (Attachment -1), statement of Sensitivity of Assets and Liabilities \n(SAL) (Attachment \u2013 2) and statement of Forex Position (FXP) (Attachment \u2013 3).\n (e) Ensure clear-cut and well-defined division of responsibility between front, middle and \nback offices.\n2.3 Foreign Currency Liquidity Risk Management \u2013 In running multi currency balance sheets, \nand particularly when domestic currency assets are funded with foreign currency liabilities, \nbanks are exposed to another layer of complexity to liquidity management. Banks should, \ntherefore, be vigilant in creating understandable currency mismatches to avoid liquidity crises. \nD. Operational Risk Management\n1. Management Oversight\n An effective operational risk management strategy requires that BOD should recognise that \noperational risk is distinct and controllable, and should put in place appropriate risk management \npolicies, procedures and practices and an independent audit and review mechanism.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 202, "year": 2013}, "type": "Document"}
{"page_content": "196 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n1.1 BOD should put in place well defined policies on operational risk management. These policies \nand procedures should be based on common elements across business lines or risks. The policy \nshould address:\n (a) product review processes; \n (b) business involved; \n (c) risk management; and \n (d) internal control functions.\n2. Risk Management\n2.1 Structure \u2013 Taking into account institution-specific factors, banks should consider establishing \nan independent bank-wide Operational Risk Committee or Unit under Integrated Risk \nManagement Committee (IRMC) or Chief Risk Officer, with the following responsibilities:\n (a) Establish consistent definitions for operational risk across business units.\n (b) Develop policies, procedures and practices.\n (c) Report and review risk exposures.\n (d) Oversee and ensure the integrity of risk management procedures.\n (e) Allocate and maintain economic capital.\n (f) Develop strategies for risk mitigation techniques.\n2.2 Risk Measurement \u2013 Since, there is no uniformity of approach in measuring operational risk in \nthe banking system, and a number of breakdowns in internal controls and corporate governance \nevidenced lately, need for more advanced techniques for allocating capital in this regard has \nbecome an important issue. Therefore, during the measurement of operational risks, banks \nshould:\n (a) Consider both internal factors (such as complexity of structure, nature of activities, quality \nof personnel, organisational changes and employee turnover) and external factors (such as \nfluctuating economic conditions, changes in the industry and technological advances) that \ncould adversely affect the banks\u2019 stated objectives.\n (b) Make clear distinction between controllable and uncontrollable operational risk events.\n (c) Assess their operational activities against a menu of operational risk events ( i.e., internal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 203, "year": 2013}, "type": "Document"}
{"page_content": "and external frauds, employment practices and work place safety, clients, products and \nbusiness practices, damage to physical assets, business distribution and system failures, \nexecution, delivery and process management, etc.).\n (d) Review key risk indicators such as failed trades, staff turnover rates, frequency and/or \nseverity of errors and omission to track the magnitude of risk concerns, with thresholds or \nlimits set on key risk indicators.\n (e) Develop simple benchmarks based on an aggregate measure of business activity such \nas gross revenue, fee income, operating costs, total assets adjusted for off-balance sheet \nexposures or a combination of these variables, in the event the bank does not have so far \nevolved any scientific methods for quantifying the risk.\n (f) Carry out  Business Impact Analysis (BIA) with its Recovery Time Objectives (RTO) \nunder the proposed Business Continuity and Disaster Recovery Plan.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 203, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  197\n2.3 Risk Monitoring \u2013 The operational risk monitoring system should:\n (a) Focus on operational performance measures such as volume, turnover, settlement facts, \ndelays and errors.\n (b) Monitor operational loss directly with an analysis of each occurrence and description of \nthe nature and causes of the loss.\n (c) Integrate internal controls into the bank\u2019s operations and produce regular reports to the \nSenior Management.\n (d) Undertake compliance reviews by the Internal Audit and the Risk Management \nDepartment, separately.\n2.4 Internal Control \u2013  Banks should adopt well-established internal control systems, which \ninclude segregation of duties, clear management reporting lines and adequate operating \nprocedures in order to mitigate operational risks. As per Directions Nos. 3(8)( ii)(b)&(c) of the \nBanking Act, Direction Nos. 11 & 12 of 2007 on Corporate Governance for licensed banks:\n (a) a report by the Board should be included in the Annual Report on the bank\u2019s internal \ncontrol mechanism that confirms that the financial reporting system has been designed \nto provide reasonable assurance regarding the reliability of financial reporting and that \nthe preparation of financial statements for external purposes has been done in accordance \nwith relevant accounting principles and regulatory requirements; and\n (b) the external auditor\u2019s certification on the effectiveness of the internal control mechanism \nreferred to in ( a) above, in respect of any statements prepared or published.\n A  proper internal control system should:\n (a) promote ef fective and efficient operation;\n (b) provide reliable financial information;\n (c) safeguard assets;\n (d) minimise the operating risk of loss from irregularities, fraud and errors;\n (e) ensure ef fective risk management systems; and\n (f) ensure compliance with relevant laws, regulations and internal policies.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 204, "year": 2013}, "type": "Document"}
{"page_content": "(f) ensure compliance with relevant laws, regulations and internal policies.\n2.5 Risk Mitigation Techniques \u2013  Risk mitigation techniques or tools should be used to contain \nthe severity of operational risk events. Investment in appropriate information technology under \nBusiness Continuity and Disaster Recovery Plan is also important for risk mitigation. \n2.6 Insurance Policies \u2013 Innovative insurance policies could be used to externalise the risk of \u2018low \nfrequency and high severity losses\u2019, which may occur as a result of events such as errors and \nomissions, physical loss of securities, frauds and natural disasters.\n2.7 Outsourcing \u2013  Banks should establish sound policies for managing risks associated with \noutsourcing activities in line with the Banking Act, Directions Nos. 7 & 8 of 2010 on \nOutsourcing of Business Operations.\n2.8 Contingency Plan \u2013 An enterprise-wide contingency plan should be in place to handle failures \nand switch to alternative service providers at short notice.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 204, "year": 2013}, "type": "Document"}
{"page_content": "198 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nE. Liquidity Risk Management\n1. Management Oversight\n(a) Managing liquidity is no longer purely the responsibility of the treasury function. Effective \noversight by the BOD and the Senior Management is a critical element of the liquidity risk \nmanagement process. \n(b) The ALCO should be mandated to execute liquidity management policies, procedures and \npractices approved by the BOD, effectively. \n(c) The BOD should, however, periodically monitor the liquidity profile to assess the liquidity risk \nmore frequently where significant funding concentrations have been observed.\n2. Risk Management\n2.1 Structure \u2013 Liquidity risk management could either be centralized or decentralized, or a \ncombination of the two. The structure should be commensurate with the size and complexity of \nthe bank\u2019s operations. It should be flexible while ensuring that the liquidity strategy approved \nby the BOD can be effectively implemented.\n2.2 Liquidity Measurement \u2013  Liquidity measurement is a difficult task and can be measured \nthrough stock or flow approaches. \n (a) Stock Approach \u2013 Under the stock approach, liquidity is measured in terms of key ratios \nwhich portray the liquidity stored in the balance sheet. Banks should calculate and analyse \nfollowing ratios during their risk management process:\n i. Net loans to total assets\n ii. Loans to customer deposits\n iii. Liquid assets to short-term liabilities\n iv . Lar ge liabilities (minus) temporary investments to earning assets (minus) temporary \ninvestments, where large liabilities represent wholesale deposits which are market \nsensitive and temporary investments which are those maturing within one year and \nthose investments which are held in the trading book and are readily sold in the \nmarket.\n v . Purchased funds to total  assets, where purchased funds include the entire", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 205, "year": 2013}, "type": "Document"}
{"page_content": "market.\n v . Purchased funds to total  assets, where purchased funds include the entire  \ninter-bank and other money market borrowings, including certificates of deposits and \ninstitutional deposits.\n vi. Commitments to total loans, where the commitment in the nature of Letter of Credits \n(LCs), guarantees and acceptances.\n (b) Flow approach \u2013  Banks should prepare a statement of Maturities of Assets and Liabilities \n(MAL) placing all cash inflows and outflows in the time bands according to the residual \ntime to maturity. A format for the MAL is attached. (Attachment \u2013 1). The time bands may \nbe distributed as under: \n i. Up to one month\n ii. Over one month and up to 3 months\n iii. Over 3 months and up to 6 months\n iv . Over 6 months and up to 9 months\n v . Over 9 months and up to 1 year\n vi. Over 1 year and up to 3 years", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 205, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  199\n vii. Over 3 years and up to 5 years\n viii. Over 5 years\n  (Assumptions to be made \u2013  Some of the assets and liability items like overdraft, savings \nand current deposits etc., lack any definite contractual maturity. Similarly, a part of \ntime deposits are also rolled over on maturity while the consumer loans are topped-up \nat frequent intervals. Thus, while determining the likely cash inflows/outflows, banks \nshould make a number of assumptions according to the behaviour of assets and liabilities. \nAt least, assumptions should be validated, bi-annually. Such assumptions may be  \nfine-tuned, over a period, to facilitate near reality predictions about future behaviour of \non/off-balance sheet positions).\n (c) Net funding requirement \u2013 \n i. The difference between cash inflows and outflows in each time band, the excess or \ndeficit of funds, becomes a starting point for a measure of a bank\u2019s future liquidity \nsurplus or deficit, at a series of points in time. \n ii. While the mismatches up to one year would be relevant as these provide early warning \nsignals of impending liquidity problems, the main focus should be on mismatches up \nto three months. \n iii. Banks, however, are expected to fix prudential mismatch limits appropriate to the \nsize, complexity and financial conditions across all time bands. \n iv . The liquid ity position should be measured in all major currencies in which banks deal \nat both individual and aggregate levels. Banks which are reliant on short-term funding \nshould, however, concentrate primarily on managing their liquidity in the very  \nshort-term horizons and preferably on a day-to-day basis.\n (d) Alternate Scenarios \u2013 \n i. Banks should evaluate liquidity profile under different stress situations, viz. normal \nsituation, bank specific crisis and market crisis scenarios. \n ii. Under each scenario, banks should account for any significant positive or negative", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 206, "year": 2013}, "type": "Document"}
{"page_content": "ii. Under each scenario, banks should account for any significant positive or negative \nliquidity swings that could occur on account of factors that are both internal (bank \nspecific) and external (market-related). \n i ii. In this regard, banks must assign the timing of cash flows for each type of asset \nand liability by assessing the probability of the behaviour of those cash flows under \nalternative scenarios. \n iv . For each funding source, banks would have to decide whether a liability would be  \n(a) repaid in full at maturity, (b) gradually run off over the next few weeks or  \n(c) virtually certain to be rolled over or available, if tapped.\n (e) Contingency Plan \u2013 \n i. Banks should prepare liquidity contingency plans to measure their ability to withstand \nbank-specific or market crisis scenarios. \n ii. The blue-print for assets sales, market access, capacity  to restructure the maturity and \ncomposition of assets and liabilities should be clearly documented and alternative \noptions of funding in the event of the bank\u2019s failure to raise liquidity from existing \nsources should be clearly articulated.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 206, "year": 2013}, "type": "Document"}
{"page_content": "200 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n i ii. Liquidity from CBSL, as the lender of last resort, should not be reckoned for  \ncontingency plans. \n iv . A vailability of back-up liquidity support in the form of committed lines of credit, \nreciprocal arrangements, liquidity support from other external sources, liquidity of \nassets etc. should also be clearly established.\nF. Inter est Rate Risk Management\n1. Management Oversight\n Management of interest rate risk should be one of the critical components of market risk management \nof banks. The BOD should clearly articulate interest rate risk management policies, procedures, \nreview mechanisms and reporting systems.\n Policies and prudential limits should include the following.\n(a) Clear policies with regard to volume, maximum maturity, holding period, duration, position \nlimits, stop loss, rating standards, etc. for classifying securities in the trading book.\n(b) Bank-wide VaR exposure limits to the trading portfolio (including Forex derivatives and \ncommodities, if any, etc .).\n(c) Loss making tolerance limits for trading book.\n2. Risk Management\n2.1 Forms of Risk \u2013  The Net Interest Income (NII) or Net Interest Margin (NIM) of banks are \ndependent on the movements of interest rates. Any mismatches in the cash flows (fixed rate \nassets or liabilities) or re-pricing dates (floating rate assets or liabilities) expose banks\u2019 NII \nor NIM to variations. As financial intermediaries, banks encounter interest rate risk in many \nforms:\n (a) Gap or Mismatch Risk\n (b) Basis Risk\n (c) Embedded Option Risk\n (d) Y ield Curve Risk\n (e) Price Risk\n (f) Reinvestment Risk\n (g) Net Interest Position Risk\n2.2 Measuring Risk \u2013 Before the interest rate risk (IRR) is to be managed, same should be \nidentified and quantified. In this regard, banks need to adopt an IRR measurement system which \nshould:\n (a) Address all material sources of interest rate risk including gap or mismatch, basis,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 207, "year": 2013}, "type": "Document"}
{"page_content": "should:\n (a) Address all material sources of interest rate risk including gap or mismatch, basis,  \nembedded option, yield curve, price, reinvestment and net interest position risks, \nexposures associated with assets, liabilities and off-balance sheet positions.\n (b) T ake into account the specific characteristics of each individual interest rate sensitive \nposition.\n (c) Capture the full range of potential movements in interest rates, in detail.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 207, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  201\n (d) Use dif ferent techniques, ranging from the traditional maturity Gap Analysis (to measure \nthe interest rate sensitivity of earnings), Duration (to measure interest rate sensitivity of \ncapital), Simulation and VaR.\n (e) Match on a daily basis the potential loss in Present Value Basis Points (PVBP) vis-\u00e0-vis \nprudential limits for trading book.\n (f) Undertake scenario analysis with specific possible stress situations by linking hypothetical, \nsimultaneous and related changes in multiple risk factors present in the trading portfolio \nto determine the impact of moves on the rest of the portfolio.\n (g) Adopt VaR as an analytical tool for measuring and managing currency risk in the Banking \nBook.\n2.3 Measuring Techniques \u2013 \n (a) Maturity Gap Analysis \u2013 The simplest analytical technique for calculating IRR exposure \nbegins with Maturity Gap analysis that distributes interest rate sensitive assets, liabilities \nand off-balance sheet positions into a number of pre-defined time-bands according to  \ntheir residual term to maturity (fixed rate) or residual term for their next re-pricing \n(floating rate). Gaps may be identified in the following time bands:\n i. Up to one month\n ii. Over one month and up to 3 months\n iii. Over 3 months and up to 6 months\n iv . Over 6 months and up to 1 year\n v . Over 1 year and up to 2 years\n vi. Over 2 years and up to 3 years\n vii. Over 3 years and up to 4 years\n viii. Over 4 years and up to 5 years\n ix. Over 5 years and up to 7 years \n x. Over 7 years and up to 10 years \n xi. Over 10 years and up to 15 years \n xii. Over 15 years and up to 20 years \n xiii. Over 20 years \n xiv . Non-sensitive \n  V arious items of rate sensitive assets and liabilities and off-balance sheet positions may be \nclassified in line with their sensitivity to interest rates. A reporting format for Sensitivity of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 208, "year": 2013}, "type": "Document"}
{"page_content": "classified in line with their sensitivity to interest rates. A reporting format for Sensitivity of \nAssets and Liabilities (SAL) for interest rate sensitive assets and liabilities is also attached \n(Attachment \u2013 2).\n (b) Duration Gap Analysis \u2013  Matching the duration of assets and liabilities, instead of \nmatching the maturity or re-pricing dates, is a more effective way to protect the economic \nvalues of banks from exposure to IRR than the simple gap model.\n (c) Simulation \u2013 Simulation is a popular tool among banks to gauge the effect of market \ninterest rate variations on reported earnings/economic values over different time zones. \nSimulation techniques attempt to overcome the limitation of gap analysis and duration \napproach by computer modelling the bank\u2019s interest rate sensitivity.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 208, "year": 2013}, "type": "Document"}
{"page_content": "202 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nG. Str ess Testing\n1. Management Oversight\n(a) BOD or a committee formed under the Board with delegated authority should put in place a \n\u2018Stress Testing Framework\u2019 as a part of integrated risk management system with approved \n\u2018Stress Testing Policy\u2019, procedures to be followed and the methodology to be adopted.\n(b) BOD and the Senior Management should regularly review the results of stress tests, including \nmajor assumptions that underpin them.\n(c) BOD and Senior Management should put in place appropriate fall-back mechanisms for \nmitigating tail-end risks, considering an organised approach to manage extreme systemic risks.\n1.1 Stress Testing Policy should include the following aspects:\n (a) Frequency and procedure for identifying the principal risk factors, which affect the bank\u2019s \nportfolio and required to be stressed.\n (b) Methodology for constructing stress tests.\n (c) Procedure for setting the stress tolerance limits. \n (d) Process of monitoring the stress loss limits.\n (e) Necessary remedial/trigger actions to be taken at various risk levels as revealed by the \nstress tests.\n (f) Delegation of authority to ensure timely execution of remedial/trigger action.\n1.2 Roles and responsibilities of the persons involved in the exercise must be defined by well \nconstituted organisational structure and they should be independent.\n1.3 An effective Management Information System (MIS) is necessary to ensure flow of information \nto take necessary measures to avoid certain difficult conditions by the Senior Management.\n2. Fr equency of Stress Testing \n Banks may apply stress tests at varying frequencies dictated by their respective business \nrequirements, relevance and cost. In general, stress tests on market-sensitive portfolios should be run \nmore frequently (eg.: daily, weekly). These may include trading portfolios in marketable securities,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 209, "year": 2013}, "type": "Document"}
{"page_content": "foreign exchange and interest rate exposures. Other portfolios which are less volatile in nature could \nbe stress-tested at longer intervals ( eg.: monthly, quarterly). Further, ad-hoc  stress tests may be \nwarranted when there are any special circumstances. \n3. Scope of Str ess Tests \n Stress testing can and should be applied to the full range of material risks that a bank runs both at \nbusiness unit level and on an aggregated group basis. Stress testing can be commonly used for interest \nrate, equity, liquidity, foreign exchange, credit and market instruments. Further, it is also important to \nintroduce stress testing for operational risk. There are three different hypothetical scenarios that can \nbe used in stress testing:\n(a) Major Level Shocks: It involves large shocks to all the risk factors and is also defined for \nseparately for each risk factor.\n(b) Moderate Level Shocks: It involves medium level shocks and the level is defined for each risk \nfactor separately.\n(c) Minor Level Shocks: It involves small shocks to risk factors.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 209, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  203\n4. Methodology and Calibration of Shocks\n4.1 Credit Risk\n Stress test for credit risk assesses the impact of increase in the level of non-performing loans of \nthe bank on Capital Adequacy Ratio (CAR). This involves three types of shocks, namely;\n (a) T ype One deals with the increase in the Non-Performing Loans (NPLs) and the respective \nprovisioning. \n (b) T ype Two deals with the negative shift in the NPL categories and hence the increase in \nrespective provisioning. \n (c) T ype Three deals with the fall in the Forced Sale Value (FSV) of mortgaged collateral. \n4.2 Liquidity Risk\n Stress test for liquidity risk evaluates the resilience of the banks towards the fall in liquid  \nliabilities. The ratio \u201cliquid assets to liquid liabilities\u201d should be calculated before and after \nthe shocks by dividing the liquid assets with liquid liabilities. They include cash and balances \nwith banks, call money lending, lending under repo and investment in government securities.  \nLiquid liabilities include deposits and borrowings. \n4.3 Equity Price Shock\n Stress test for equity price risk assesses the impact of the fall in the stock market index.   \nThe impact of resultant loss should be calculated after shocks on current market value of all the \non-balance sheet and off-balance sheet securities listed on stock exchanges including shares, \nmutual funds, etc. and it should be calibrated in terms of the CAR.\n4.4 Exchange Rate Risk\n Stress test for exchange rate assesses the impact of change in exchange rate on the value of \nequity. To model direct foreign exchange risk, only, the overall Net Open Position (NOP) of the \nbank including the on-balance sheet and off-balance sheet exposures should be given adverse \nshocks. The overall NOP is measured by aggregating the sum of net short positions or the sum \nof net long positions, whichever is greater regardless of sign. The impact of the respective", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 210, "year": 2013}, "type": "Document"}
{"page_content": "of net long positions, whichever is greater regardless of sign. The impact of the respective \nshocks should be calibrated in terms of the CAR. The revised CAR should be calculated after \nadjusting total loss from the risk-weighted assets of the bank.\n4.5 Interest Rate Risk\n I nterest rate risk is the potential that the value of the on-balance sheet and the off-balance \nsheet positions of the bank would be negatively affected with the change in the interest rates.  \nThe vulnerability of an institution towards the adverse movements of the interest rate can be \ngauged by using duration gap analysis. Banks should follow the under mentioned steps in \ncarrying out the interest rate stress tests.\n (a) Estimate the market value of all on-balance sheet rate sensitive assets and liabilities of the \nbank to arrive at market value of equity.\n (b) Calculate the durations of each class of asset and the liability of the on-balance sheet \nportfolio.\n (c) Arrive at the aggregate weighted average duration of assets and liabilities.\n (d) Calculate the duration gap by subtracting aggregate duration of liabilities from that of \nassets.\n (e) Estimate the changes in the economic value of equity due to change in interest rates on \non-balance sheet positions along the three interest rate changes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 210, "year": 2013}, "type": "Document"}
{"page_content": "204 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (f) Ca lculate surplus/(deficit) on off-balance sheet items under the assumption of three \ndifferent interest rate changes, i.e., 1%, 2%, and 5%.\n (g) Estimate the impact of the net change (both for on-balance sheet and off-balance sheet) in \nthe market value of equity on the CAR.\n (h) Market value of the assets or liabilities should be assessed, by calculating its present value \ndiscounted at the prevailing interest rate. The outstanding balances of assets and liabilities \nshould be taken along with their respective maturity or reprising period, whichever is \nearlier.\n4.6 Interpretation of Stress Testing Results\n (a) Before interpretation of stress testing results, it is important to the banks to be aware of \nits limitations as stress testing is influenced by the judgment and experience of the risk \nmanagers designing the stress tests. Therefore, the effectiveness of the stress tests will \ndepend upon whether banks have identified their major risks and they have chosen the \nright level of stress/stress scenarios.\n (b) Senior Management should review the results of the various stress tests and report to the \nBoard. It is important to document the results of each of the sensitivity tests and scenario \nanalysis undertaken and should also document, as part of the details of those tests and \nanalyses, the key assumptions including the aggregation of the results. These should be \npreserved for a considerable period as mentioned in the policy document. \n4.7 Review & Update\n (a) Regular review  and updating is important to ensure effectiveness of the stress testing \nprogramme of the bank. \n (b) Such review should be done at least once a year or more frequently if the portfolio or the \nenvironment changes are significant. Following should be covered in the review process. \n i. The integrity of the management information system.\n ii. Completeness and accuracy of the data used.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 211, "year": 2013}, "type": "Document"}
{"page_content": "ii. Completeness and accuracy of the data used.\n iii. Consistency , timeliness and reliability of data sources.\n iv . The approval process for the stress testing programme.\n v . Integration of stress testing into risk management.\n vi. Interpretation of stress testing results.\nH. Disclosur e Requirements\n1. Principles\n1.1 Banks should adopt a formal disclosure policy approved by the BOD that addresses the bank\u2019s \napproach for determining what disclosures to be made and internal controls over the disclosure \nprocess. \n1.2 Banks should implement a process for assessing the appropriateness of their disclosures,  \nincluding validation and frequency of them.\n1.3 In order to enhance the role of market discipline, banks should take into account the following \nnorms to improve their disclosure practices.\n (a) A  balance between quantitative and qualitative disclosures - Disclosures should be \nconsistent with banks\u2019 own risk management practices.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 211, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  205\n (b) Banks should endeavour to disclose information about inter -period exposures \u2013 \nparticularly in the form of high, median and low observations \u2013 which could provide a \nmore meaningful view of licensed banks\u2019 risk profile than period end data alone. \n1.4 Banks should decide relevant disclosures based on the materiality concept. \n1.5 Qual itative disclosures such as bank\u2019s risk management objectives and policies, reporting \nsystems and definitions set out here should be made at least bi-annually . \n2. Disclosur e Requirements\n2.1 Risk Exposure and Assessment\n (a) General Qualitative Disclosure Requirement\n  For each separate risk area viz. credit, market, operational, liquidity etc.. Licensed banks \nshould describe their risk management objectives and policies, including:\n \u2013 strategies and policies;\n \u2013 structure and nature of the relevant risk management function;\n \u2013 scope and nature of risk reporting and/or management system;\n \u2013 policies for hedging and/or mitigating risk and strategies and processes for monitoring \nthe continuing effectiveness of hedges / mitigants.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 212, "year": 2013}, "type": "Document"}
{"page_content": "206 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nTable - 1\nCredit Risk \u2013 General Disclosures\nQualitative \nDisclosures(a) Definition of past due and  impaired (for LKAS 32 & 39 purposes).\n(b) Description of approaches followed for specific and general loan loss provisioning \nand statistical methods. \n(c) Discussion of the bank\u2019 s credit risk management policy.\n(d) Policies and processes for, and an indication of the extent to which the bank makes \nuse of, on-balance sheet and off-balance sheet netting.\n(e) Policies and processes for  collateral valuation and management.\n(f) A  description of the main types of collateral taken by the bank.\n(g) Main types of guarantor/c redit derivative counterparty and their creditworthiness.\n(h) Information about (market or credit) risk concentrations within the mitigation taken.\nQuantitative \nDisclosures(a) Total gross credit risk exposures, plus average gross exposure over the period broken \ndown by major types of credit exposure.\n(b) Geographic distribution of exposures, broken down in significant areas by types of \ncredit exposure.\n(c) Industry or counter -party type distribution of exposures, broken down by major types \nof credit exposure.\n(d) Residual contractual maturity breakdown of the whole credit portfolio, by major types  \nof credit exposure.\n(e) By major industry or coun terparty types:\n   \u2013 Amount of past due loans and if available impaired loans, provided separately , \n   \u2013 Specific and general loan loss provisioning, and\n   \u2013 Char ges for specific loan loss provisions and charges-offs during the reporting \nperiod.\n(f) Amount of past due loans and, if available, impaired loans provided separately broken \ndown by significant geographic area including the amount of specific and general loan \nloss provisions related to each geographical area.\n(g) Reconciliation of changes  in the provisions for loan losses/impairment.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 213, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  207\nTable - 2\nMarket Risk \u2013 General Disclosures\nQualitative \nDisclosures (a) The general qualitative di sclosure requirement described in Para 2.1( a) above.\n(b) Dif ferentiation between holdings on which capital gains are expected and those \ntaken under other objectives including for relationship and strategic reasons.\n(c) Discussion of important policies covering the valuation and accounting of equity \nholdings in the Banking Book. This includes the accounting techniques and \nvaluation methodologies used, including key assumptions and practices affecting \nvaluation as well as significant changes in these practices.\nQuantitative\nDisclosures(a) Interest rate risk, including Interest Rate Sensitivity Gap Analysis of local and \nforeign currency denominated assets and liabilities in the format given in Attach -\nment \u2013 1&2.\n(b) Equity position risk \u2013 \n\u2022 V alue disclosed in the balance sheet of investments, as well as the fair value \nof those investments; for quoted securities, a comparison to publicly quoted \nshare value where the share price is materially different from fair value.\n\u2022 T ypes and nature of investments, including the amount that can be classified \nas:\n\u2013 Publicly traded; and\n\u2013 Privately held.\n\u2022 The cumulative realised gains (losses) arising from sales and liquidations in \nthe reporting period.\n\u2022 T otal unrealised gains (losses).\n\u2022 T otal latent revaluation gains (losses).\n\u2022 Any amounts of the above included in Tier 1 and/or Tier 2 capital.\n(c) Foreign exchange risk, including statements of foreign exchange position   \n(Attachment \u2013 3), Maturity Gap Analysis of foreign currency denominated assets \nand liabilities. \n(d) Commodity risk.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 214, "year": 2013}, "type": "Document"}
{"page_content": "208 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nTable - 3\nOperational Risk \u2013 General Disclosures\nQualitative \nDisclosures (a) The general qualitative di sclosure requirement described in Para 2.1( a) above.\n(b) Description of the use of insurance for the purpose of mitigating operational risk.\n(c) Details of activities that have been outsourced together with parties and basis for \npayment for such services. \n(d) Details of investment in appropriate information technology, if any, and other risk \nmitigation techniques taken during the reporting period. \n(e) Details of due diligence te sts of third party service providers. \n(f) Details of a contingency p lan in place to handle failure situations.\nQuantitative \nDisclosures(a) Major operational viz. system or human, failures and financial losses incurred by \nthe bank due to such failures during the reporting period.\n \nTable - 4\nLiquidity Risk \u2013 General Disclosures\nQualitative \nDisclosures (a) The general qualitative di sclosure requirement described in Para 2.1( a) above.\n(b) Details of a liquidity contingency plan in place to bridge unforeseen liquidity \ndifficulties. \nQuantitative \nDisclosures(a) T rends in the following indicators: \n\u2022 Net loans to total assets\n\u2022 Loans to customer deposits\n\u2022 Liquid assets to short term liabilities\n\u2022 Lar ge liabilities (minus) temporary investments to earning assets (minus) \ntemporary investments\n\u2022 Purchased funds to total assets. \n\u2022 Commitments to total loans.\n(Please refer to  Section 1.4 of Appendix for definitions)\n(b) Maturities of Assets and Liabilities (MAL) in the format given in Attachment-1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 215, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  209\nAttachment 1\nMaturities of Assets and Liabilities (MAL)\n(Currency ..................) *\nHeads of Accounts Upto 1 \nmonth1\u20133 months 3\u20136 months 6\u20139 months 9\u201312 months 1\u20133 years 3\u20135 years Over 5 years\nSr. Item\nA Inflows\n1.Cash on hand\n2.Deposits with CBSL\n3.Balances due from Head Office, Affiliates and Own Branches\n4.Balances due from Other Banks\n5.Investments (Net of provisions)\n6.Bills of Exchange\n7.Overdraft\n8.Loans and Advances\n9.NPLs\n10. Net Inter-Branch Transactions\n11. Other Assets\n12. Lines of credit committed from institutions\n13. Other \u2013 Please Specify ,\nTotal (a) xx xx xx xx xx xx xx xx\nB Outflows\n1.Demand Deposits\n2.Savings Deposits\n3.Balances due to Head Office / Affiliates / Own Branches\n4.Balances due from Other Banks\n5.Time Deposits\n6.Certificates of Deposits, Borrowings and Bonds\n7.Net Inter-branch Transactions\n8.Bills Payable\n9.Interest Payable\n10.Provisions other than for loan losses and depreciation in the \nvalue of investment portfolio\n11. Other Liabilities\n12. Lines of credit committed to institutions\n13. Unutilized portion of Overdraft, Loans and Advances\n14. Letters of Credit / Guarantees / Acceptances\n15. Repo / Bills Rediscounted / Swaps / Forward contracts\n16. Other \u2013 Please Specify\nTotal (b) xx xx xx xx xx xx xx xx\nGap = (a) - (b) xx xx xx xx xx xx xx xx\nCumulative Gap xx xx xx xx xx xx xx xx\nCumulative Liabilities xx xx xx xx xx xx xx xx\nCumulative gap as a % of cumulative liabilities x% x% x% x% x% x% x% x%\n* Separate returns for LKR, USS and all other major currencies should be prepared.( \u2026\u2026 Million )", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 216, "year": 2013}, "type": "Document"}
{"page_content": "210 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAttachment 1 (A)\nMaturities of Assets and Liabilities\nGuidelines \ton\tClassification \tof\tAssets\tand\tLiabilities \tinto\tTime\tBands\nSr. Heads of Accounts Details sought\nAInflows\n1.Cash on Hand Up to one-month time band.\n2.Deposits with CBSL While the excess balance in the Clearing Account over the \nrequired statutory reserves could be placed under the \u2018up to  \none-month\u2019 time band, the statutory reserve against deposit should \nbe distributed amongst various time bands, corresponding to the \nbehavioral maturity profile of deposits. \n3.Balances due from the Head \nOffice,\tAffiliates \tand\town\t\nbranches Demand balances may be placed under the \u2018up to one-month\u2019 \ntime band, all other balances should be distributed across the time \nbands as per the respective residual maturities.\n4.Balances due from Other \nBanksRespective maturity time bands.\n5.Investments \n(Net of provisions)Respective residual maturities. Investment \u2018held-for-trading\u2019 may \nbe placed in the first three time bands, on the basis of liquidity \nprofile of the instruments, irrespective of their residual maturities.\n6.\n7.\n8.Advances (performing)\n(a) Bills of Exchange and \npromissory notes\n(b) Overdraft\n(c) Loans and Advances  \n(a) Respective residual maturities bands. \n(b) 7.5% each of the outs tanding should be distributed under  \none-month, 1-3 months, 3-6 months, 6-9 months, and  \n9-12 months time bands, respectively and the balance 62.5%, \nbeing the core component, should be shown equally under  \n1-3 years, 3-years and over 5 years time bands, respectively.  \n(c) Respect ive residual maturities. However, 50% of the consumer \nloans, including credit cards, should be shown under over  \n5 years time band. The balance amount of 50% should be \nshown under respective time bands, on the basis of residual \nmaturities.\n9.NPLs 25% and 75% of the balances, net of reserved interest and specific", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 217, "year": 2013}, "type": "Document"}
{"page_content": "maturities.\n9.NPLs 25% and 75% of the balances, net of reserved interest and specific \nloan loss provisions should be shown in the 9-12 months and over \nfive years time bands, respectively.\n10. Net Inter-Branch \nTransactionsUp to one-month time band.\n11. Other Assets As per pattern of cash flows. However, intangible assets and assets \nnot representing cash receivables should be shown in over five \nyears time band.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 217, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  211\nSr. Heads of Accounts Details sought\nBOutflows \t\n1. Demand Deposits 75% of the balances in demand deposits should be distributed \nunder the first five time bands, at the rate of 20%, 20%, 15%, \n10% and 10%, respectively and the balance of 25% in over 5 \nyears time band. \n2.Savings Deposits 25% of the saving deposits should be distributed equally under \none-month, 1-3 months, 3-6 months, 6-9 months, and 9-12 \nmonths, respectively, and the balance of 75%, being the core \ncomponent, should be shown equally under 1-3 years, 3-5 years \nand over 5 years time bands, respectively. \n3.Balances \tdue\tto\tHead\tOffice/\nAffiliates/Own \tBranchesRespective residual maturity time bands.\n4.Balances due to other Banks Respective residual maturity time bands.\n5.Time Deposits 30% of the time deposits from individual depositors and pension \nfunds, irrespective of their residual maturities, should be shown \nunder over 5 years time band. The balance amount of 70% \nshould be shown under respective time bands, on the basis of \nresidual maturities. \n6.Certificates \tof\tDeposits, \t\nborrowings and Bonds \n(including subordinated debts)Respective residual time bands. Where call/put options are \nbuilt into the issue structure of any instrument/s, the call/put \ndate/s should be reckoned as the residual maturity date/s and \nthe balance should be shown in the respective residual maturity \ntime bands.\n7.Net Inter-branch Transactions Up to one month time band.\n8.Bills Payable Up to one month time band.\n9.Interest Payable Respective residual maturity time bands.\n10. Provisions other than for loan \nlosses and depreciation in the \nvalue of investment portfolioRespective residual maturity time bands depending on the \npurpose.\n11. Other Liabilities Respective maturity time bands. Items not representing cash \npayables ( i.e., income received in advance etc.) should be placed \nover 5 years time band.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 218, "year": 2013}, "type": "Document"}
{"page_content": "212 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nSr. Heads of Accounts Details sought\nCContingent \tLiabilities/Lines \tof\tcredit\tcommitted/available \tand\tother\tin-flows\t&\tout-flows\n12. Lines of Credit Committed \nto institutions and other \nborrowersUp to one month time band\n13. Unutilized portion of \nOverdraft, Loans and \nAdvancesProbable disbursements should be shown in the respective time \nbands on the basis of historical databases.\n14. Letters of credit /guarantees /\nacceptancesProbable funding obligations should be shown in the respective \ntime band on the basis of past experiences.\n15. Repo / Bills Rediscounted / \nSwaps / Forward contracts \n(LKR against Other \nCurrencies)Respective maturity bands.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 219, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  213\nAttachment 2\nSensitivity of Assets and Liabilities (SAL)\n(Currency*) \nName of Bank  : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nPeriod Ended  : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nNo. Assets and OBSUp to\n1 month1 \u2013 3\nmonths3 \u2013 6\nmonths6 \u2013 12\nmonths1 \u2013 2\nyears2 \u2013 3\nyears3 \u2013 4\nyears4 \u2013 5\nyears5 \u2013 7\nyears7 \u2013 10\nYears10 \u2013 15\nyears15 \u2013 20\nyearsOver\n20 yearsNon\nSensitiveTotal\n1. Cash on Hand\n2. Deposits with CBO\n3. Balances due from HO / Affiliates / Branches\n4. Balances due from Other Banks\n5. Investments\n6. Bills of Exchange and Promissory Notes\n7. Overdrafts\n8. Loans and Advances\n9. Non Performing Loans\n10. Fixed Assets\n11. Net Inter-branch Transactions\n12. Accrued Interest\n13. Other Assets\n14. Reverse Repos\n15. FRAs\n16. Swaps\n17. Futures\n18. Options\n19. Others (Specify)\nTotal\nLiabilities and OBS\n1. Demand Deposits\n2. Savings Deposits\n3. Time Deposits\n4. Other Deposits\n5. Balances due to HO / Affiliates / Branches\n6. Balance due to other Banks\n7. Certificate of Deposits\n8. Other Borrowings\n9. Net Inter-branch Transactions\n10. Bills Payable\n11. Interest Payable\n12. Provisions (others)\n13. Capital\n14. Reserves\n15. Retained Earnings\n16. Subordinated Debts\n17. Other (Specify)\n18. Repos\n19. FRAs\n20. Futures\n21. Swaps\n22. Options\nTotal \nGap \n*  Separate returns for LKR, US$ and all other major currencies should be prepared.( \u2026\u2026 Million )", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 220, "year": 2013}, "type": "Document"}
{"page_content": "214 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nSensitivity of Assets and Liabilities\nGuidelines \ton\tClassification \tof\tAssets\tand\tLiabilities \tinto\tTime\tBands\nSr. Heads of Accounts Rate Sensitivity and Time Band\nAInflows\n1.Cash on Hand Non-sensitive\n2.Deposits with CBSL Non-sensitive\n3.Balances \tdue\tfrom\thead\toffice,\t\nAffiliates \tand\tOwn\tbranches \tInterest payable portion is sensitive and should be shown \nunder the time band corresponding to the remaining term \nto maturity or repricing. The non-interest paying portion is \nnon-sensitive.\n4.Balances due from Other Banks Interest payable portion is sensitive and should be shown \nunder the time band corresponding to the remaining term \nto maturity or repricing. The non-interest paying portion is \nnon-sensitive.\n5.Investments (Net of provisions)\n(a) Fixed rate/Zero coupons.\n(b) Floating rate\n(c) Shares and investments in \nunits(a) Se nsitive and should be shown under the time band \ncorresponding to residual term to maturity.\n(b) Se nsitive and should be shown under the time band \ncorresponding to residual term to maturity.\n(c) Non-sensitive.\n6.\n7.\n8.Advances (performing)\n(a) Bills of Exchange and pr om-\nissory notes\n(b) Overdraft/loans (Fixed \nrates)\n(c) Overdraft/ Loans and \nAdvances (Floating rates)   \n(a) Sensitive on maturity . \n(b) S ensitive and should be shown under the time bands \ncorresponding to the interim and final cash flows.  \n(c) Se nsitive and should be shown under the time band \ncorresponding to the interim and final cash flows.\n9.NPLs\n(a) Special mentioned\n(b) Substandard\n(c) Doubtful\n(d) Loss(a) Over 1-2 years time band\n(b) Over 3-5 years time bands\n(c) Over 5 years time band\n(d) Non-sensitive\n10. Fixed Assets Non-sensitive\n11. Net Inter-Branch Transactions Non-sensitive\n12. Accrued interest Non-sensitive\n13. Other Assets \n(a) Leased assets\n(b) Other(a) Sensitive on interim and final cash flows. The amount \nshould be distributed to the respective maturity bands", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 221, "year": 2013}, "type": "Document"}
{"page_content": "should be distributed to the respective maturity bands \ncorresponding to the cash flows. \n(b) Non-sensitive\n14. Reverse repos, Swaps, (Buy/sell), \nand bills discountedSensitive on maturity.Attachment  2(A)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 221, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  215\n15.\n16.\n17.FRAs\nFutures\nOptionsThese instruments should be treated as a combination of loan \n(assets) and short (liabilities) positions. The maturity of a \nFuture or a FRA will be the period until delivery or exercise \nof the contract. The corresponding positions should undergo \nchanges with passage of time.\nSwaps should be treated as two notional positions with \nrelevant maturities. For e.g. an interest rate swap under \nwhich a bank is receiving floating rate of interest and paying \nfixed will be treated as long floating rate position of maturity \nequivalent to the period until the next interest fixing and a \nshort position of maturity equivalent to the residual life of \nthe swap.  \nThe notional underlying of the given option should be placed \nunder the respective time band. \nSr. Heads of Accounts Rate Sensitivity and Time Band\n1.Demand Deposits Non-sensitive\n2.Savings Deposits Sensitive and reprices when interest rate is reset.\n3.\n4.\n7.Time Deposits,\nCertificate \tof\tDeposits, \tand\t\nOther DepositsSensitive and reprices on maturity. The amounts should be \ndistributed to different time bands on the basis of remaining \nterm to maturity. However, in case of floating rate term \ndeposits, the amounts should be shown under the time band \nwhen deposits contractually become due for repricing.\n5.Balances \tdue\tto\tHead\tOffice\t/\t\nAffiliates/Own \tBranchesInterest payable portion is sensitive and should be shown \nunder the time band corresponding to the remaining term \nto maturity or repricing. The non-interest paying portion is \nnon-sensitive.\n6.Balances due to other Banks Interest payable portion is sensitive and should be shown \nunder the time band corresponding to the remaining term \nto maturity or repricing. The non-interest paying portion is \nnon-sensitive.\n8.Borrowings\n(a) Fixed rate borr owings\n(b) Floating rate borr owings\n(c) Zer o Coupon borrowings", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 222, "year": 2013}, "type": "Document"}
{"page_content": "8.Borrowings\n(a) Fixed rate borr owings\n(b) Floating rate borr owings\n(c) Zer o Coupon borrowings\n(d) Borr owings from CBSL(a) Sensitive and reprices on maturity. The amounts should \nbe distributed to different time bands on the basis of \nremaining term to maturity.\n(b) Se nsitive and reprices when interest rate is reset. The \namounts should be distributed to the appropriate time \nbands, coinciding with the contracted repricing date.\n(c) Sensitive and reprices on maturity. The amounts should \nbe distributed to the respective maturity bands.\n(d) Up to one month time band.\n9.Net-inter branch transactions Non-sensitive\n10. Bills Payable Non-sensitive\n11. Interest Payable Non-sensitive", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 222, "year": 2013}, "type": "Document"}
{"page_content": "216 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n12. Provisions Non-sensitive\n13. Capital Non-sensitive\n14. Reserves Non-sensitive\n15. Retained earnings Non-sensitive\n16. Sub-ordinated debts Please refer to Item (8) above.\n17. Reverse Repos, and other \nderivatives instrumentsReprices only on maturity and should be distributed to \nrespective maturity bands.\nSr. Heads of Accounts Details sought\nCContingent \tLiabilities \t/\tLines\tof\tcredit\tcommitted \t/\tavailable \tand\tother\tinflows\t&\tout\tflows\n3.Lines of Credit Committed to \ninstitutions and other borrowersUp to one month time band.\n4.Unutilized portion of Overdraft, \nLoans and Advances.Probable disbursements should be shown in the respective \ntime bands on the basis of historical databases.\n5.Letters of credit / guarantees / \nacceptancesProbable funding obligations should be shown in the \nrespective time band on the basis of past experiences.\n6.Repo / Bills Rediscounted / \nSwaps / Forward Contracts \n(LKR against other currencies)Respective maturity bands.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 223, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  217\n(Rs. million)Attachment 3\nForeign Exchange Position\nBank  : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nAs at end of  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 :  \nCurrency\n(1)Spot Forward (a)Net\nOpen\nPosition\n(8)Net \nposition \nin other \nexchange \ncontracts \n(b)\n(9)Overall \nexposure \nin respec-\ntive foreign \ncurrency\n(10)Overall \nexposure in \nSri Lankan \nrupees(d)\n(11)Assets\n(2)Liabilities\n(3)Net\n(4) = (2) - \n(3)Assets\n(5)Liabilities\n(6)Net\n(7) = (5) - \n(6)\nUS Dollars\nPound Sterling\nEuro\nJapanese Yen\nIndian Rupee\nAustralian Dollar\nCanadian Dollar\nOther currencies(c)\nTotal Exposure (e)\nTotal capital funds as per the latest audited financial statements\nTotal exposure as a % of total capital funds as per the latest audited financial statements (should not exceed 30%) X%\n(a) Unsettled tom and spot transactions also should be included under  forward operations\n(b) Report the net for eign exchange position in other foreign exchange contracts such as currency options, futures etc.\n(c) The Sri Lankan rupee equivalent of other  currencies should be shown under column 11. \n(d) Column 1 1 should show the Sri Lankan rupee equivalent of column 10.\n(e) The exposur e indicated against each currency in column 11 should be added ignoring signs to arrive at exposure under (e).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 224, "year": 2013}, "type": "Document"}
{"page_content": "218 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section \n76J(1) of the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 \nof 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76J(1)\nDISQUALIFICATION FOR APPOINTMENT AS MANAGER,\nSECRETARY OR OTHER OFFICIAL OF A LICENSED SPECIALISED BANK\n1. No person shall be appointed as Manager, Secretary or other official of a licensed \nspecialised bank and any person appointed as Manager, Secretary or other official of such bank \nshall be removed from office if he \u2013\n1.1 is a person who, having been declared insolvent or a bankrupt under any law in Sri  \nLanka or in any other country, is an undischarged insolvent or bankrupt; or\n1.2 is serving or has served a sentence of imprisonment imposed by any court in Sri Lanka  \nor by any other country; or\n1.3 has been convicted of any act which is of a fraudulent or illegal character .\n2. No person who has been a director or has been a chief executive of ficer of a licensed \nspecialised bank which has been would up by an order of court shall, without the written approval \nof the Central Bank, act as a director or chief executive officer of a licensed specialised bank.\n3. No licensed specialised bank shall employ or be managed by a managing agent other than  \nan employee of such licensed specialised bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 225, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  219\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section \n76j(1) of the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 \nof 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nDISQUALIFICATION FOR BEING APPOINTED OR ELECTED DIRECTOR\n1. No person shall be appointed or elected as a director of a licensed specialised bank if he \u2013\n 1.1 has been under any written Law in force in Sri Lanka, found or declared to be of  \nunsound mind; or\n 1.2 is a person who, having been declared insolvent or bankrupt under any law in force in  \nSri Lanka or in any other country, is an undischarged insolvent or bankrupt; or\n 1.3 has been convicted of an of fence involving moral turpitude and punishable with a term \nof imprisonment; or\n 1.4 is an employee or a director of any other licensed specialised bank or an employee \n(other than the chief executive officer) of the licensed specialised bank.\nProvided a director or employee of any licensed specialised bank shall not be disqualified \nof being a director of a licensed specialised bank only if the latter licensed specialised bank \nis a subsidiary of the first mentioned licensed specialised bank\n2. A  director of a licensed specialised bank shall be removed from the office of director if \u2013\n 2.1 he becomes subject to any of the disqualifications mentioned in paragraph (1) above;  \nor\n 2.2 he becomes permanently incapable of performing his duties; or\n 2.3 he has done an act or thing which is manifestly opposed to the objectives and interests  \nof the licensed specialised bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 226, "year": 2013}, "type": "Document"}
{"page_content": "220 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section \n76j(1) of the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 \nof 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nSECRETARY OF A LICENSED SPECIALISED BANK\n1. Subject to paragraph 3 of this direction no licensed specialised bank shall appoint as its  \nSecretary, a person \u2013\n 1.1 unless such person possesses such qualifications as may be prescribed for a Secretary  \nof a company under Sub section (1) of Section 176 of the Companies Act, No.17 of \n1982, and;\n 1.2 Unless such person is an employee of that licensed specialised bank.\n2. Such person so appointed as Secretary shall not become an employee of any other institution \nso long as such person continues to be employed as the Secretary of that licensed specialised \nbank.\n3. This direction shall not apply to the person presently employed as the Secretary of any  \nInstitution specified in Schedule III of the Banking Act.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 227, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  221\nDeterminations made by the Monetary Board of the Central Bank of Sri Lanka under  \nSection 76 H read with Section 44 A of the Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n24 November 2010\nBANKING ACT, DETERMINATION NO. 4 OF 2010\nASSESSMENT OF FITNESS AND PROPRIETY OF  \nOFFICERS PERFORMING EXECUTIVE FUNCTIONS IN\nLICENSED SPECIALISED BANKS\n1. This Determination may be cited as the Banking Act, Determination No.4 \nof 2010. The Sections referred to in this Determination will be those of the \nBanking Act, No. 30 of 1988, as amended.\n2.1 In terms of Section 76 H read with Section 44 A of the Banking Act, officers \nof a licensed specialised bank performing executive functions as may be \ndetermined by the Monetary Board shall be fit and proper persons. Section \n42(2) of the Act shall apply in determining whether officers performing \nexecutive functions are fit and proper persons.\n2.2 In addition, criteria set out in the Direction No.12 of 2007 on Corporate  \nGovernance for Licensed Specialised Banks in Sri Lanka will also be \napplicable.\n3. Of ficers holding following designations  / positions are determined as \nofficers performing executive functions in a licensed commercial bank:\n (i) Additional General Manager  \n (ii) Senior Deputy General Manager  \n (iii) Deputy General Manager  \n (iv) Assistant General Manager\n (v) Chief Operating Of ficer \n (vi) Chief Risk Of ficer\n (vii) Chief Accountant\n (viii) Chief Financial Of ficer\n (ix) Chief Internal Auditor\n (x) Compliance Of ficer\n (xi) Head of Treasury\n (xii) Head of Legal\n (xiii) Head of Information Technology\n (xiv) Board SecretaryCitation.\nEmpowerment.\nOfficers \nPerforming \nExecutive \nFunctions.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 228, "year": 2013}, "type": "Document"}
{"page_content": "222 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (xv) Of ficers serving as consultants  / advisor to the Board or bank\n (xvi) Any other of ficers falling under the definition of section 3(1)( i)(f) \nof the Banking Act, Direction No. 12 of 2007 on Corporate \nGovernance for Licensed Specialised Banks in Sri Lanka.\n4.1 Fitness and propriety of such of ficers performing executive functions shall \nbe assessed and decided by the Director of Bank Supervision as has been \nprovided for in the Banking Act and be applicable to those officers:\n (i) currently in of fice,\n (ii) at the time of appointment on a permanent or contract basis,\n (iii) at the time of renewal of employment contracts, and\n (iv) at any other time where there are supervisory concerns in respect  \nof any officer as may be determined by the Director of Bank \nSupervision.\n4.2 E ach bank shall obtain from the respective officers an affidavit and a \ndeclaration as in Annex I and Annex II, respectively, and submit to the \nDirector of Bank Supervision. \n4.3 In addition, at the time of first appointment of an of ficer, a letter from the \nformer employer immediately preceding the appointment (if the former \nemployer is not a licensed bank in Sri Lanka) regarding the level of \nperformance of duties assigned to him  / her in the particular institution \nshould be submitted to the Director of Bank Supervision.\n4.4 In the case of expatriate of ficers appointed to branches of banks incorporated \noutside Sri Lanka (foreign banks), a letter obtained from the home country \nregulator with regard to any supervisory concerns on the suitability of \nsuch officers should be submitted.\n4.5 W ith respect to officers, currently performing executive functions, banks \nshall obtain and submit affidavits and declarations to Director of Bank \nSupervision before 31 December 2010.Procedure to \nbe followed in \nassessing the \nfitness and \npropriety.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 229, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  223\nAnnex I\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nAffidavit to be submitted by officers performing executive functions in  \nLicensed Specialised Banks in terms of Section 76H read with Section 44A of the Banking Act \nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( full name )\nholder of National Identity Card No.  / Passport No. \u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026..\u2026\u2026\u2026..\u2026\u2026..\u2026\u2026 of\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. ( address) \nbeing a (Buddhist  / Hindu do hereby solemnly, sincerely and truly declare and \naffirm  / Christian  / Catholic  /Muslim make oath and state) as follows :\n1. I am the [affirmant  / deponent] above named and I am the \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( designation) of\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. ( name of bank ) \nwhich is a specialised bank licensed under the Banking Act, No. 30 of 1988. \n2. I [af firm  / state] that I possess the following academic and  / or professional qualification/s: \n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n3. I [affirm  / state] that the effective experience that I possess in banking, finance, business or \nadministration or of any other relevant discipline is as follows:\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n4. I [affirm  / state] that there is no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka \nor abroad, to the effect that I have committed or have been connected with the commission of, \nany act which involves fraud, deceit, dishonesty or any other improper conduct.\n5. I [affirm  / state] that I am not subject to an investigation or inquiry consequent upon being \nserved with notice of a charge involving fraud, deceit, dishonesty or other similar criminal \nactivity, by any regulatory authority, supervisory authority, professional association, any", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 230, "year": 2013}, "type": "Document"}
{"page_content": "activity, by any regulatory authority, supervisory authority, professional association, any \nCommission of Inquiry, tribunal or other body established by law, in Sri Lanka or abroad.\n6. I [af firm  / state] that I have not been convicted by any Court in Sri Lanka or abroad in respect \nof a crime committed in connection with financial management or of any offence involving \nmoral turpitude.\n7. I [affirm  / state] that I am not an undischarged insolvent nor have I been declared a bankrupt in \nSri Lanka or abroad.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 230, "year": 2013}, "type": "Document"}
{"page_content": "224 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n8. I [affirm  / state] that I have not failed, to satisfy any judgment or order of any Court whether \nin Sri Lanka or abroad, or to repay a debt.\n9. I [affirm  / state] that I have not been declared by a Court of competent jurisdiction in Sri Lanka \nor abroad, to be of unsound mind.\n10. I [affirm  / state] that I have not been removed or suspended by an order of a regulatory or \nsupervisory authority from serving in a licensed bank or any other financial institution or \ncorporate body, in Sri Lanka or abroad.\n11. I [affirm  / state] that I have not been a Director, Chief Executive Officer or held any other \nposition of authority in any bank or financial institution \u2013 \n (i) Whose license has been suspended or cancelled; or\n (ii) Which has been wound up or is being wound up, or which is being compulsorily liquidated;  \nwhether in Sri Lanka or abroad.\n12. I [affirm  / state] that to the best of my knowledge I am a fit and proper person to hold office \nas \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. (designation ) of a licensed specialised \nbank in terms of the provisions of Section 76H read with Section 44A of the Banking Act. \nThe averments contained \nherein were read over to the \n[affirmant/deponent] who \nhaving understood the contents \nhereof and having accepted \nsame as true, affirmed/swore \nto and placed his/her signature \nat Colombo on this \u2026\u2026\u2026 day \nof \u2026\u2026\u2026\u2026\u2026\u2026\u2026..\n                            JUSTICE OF THE PEACEAffix Stamps\nas applicable\nBefore me", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 231, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  225\nAnnex II\nName of Bank:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration to be submitted by officers performing executive functions  \nin Licensed Specialised Banks in terms of the Banking Act \n(with enclosures as appropriate as of \u2026\u2026\u2026\u2026\u2026\u2026\u2026.)\n1. Personal Details  \n 1.1 Full name:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.2 NIC / Passport number:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.3 Date of birth :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.4 Permanent address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.5 Present address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n2. Appointment to the Bank\n 2.1 Date of appointment to the present position:  \n  (please attach a certified copy of the appointment letter)\n 2.2 Designation : \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 2.3 Local or expatriate :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n3. Personal Details of Close Relations in terms of Section 86 of the Banking Act \n 3.1 Full name of spouse :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 3.2 NIC / Passport number :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \n 3.3 Names of dependant children :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nFull name NIC/ Passport number\n3.3.1\n3.3.2\n3.3.3\n3.3.4\n4. Backgr ound and Experience\n Name/s of licensed bank/s, its subsidiaries in terms of the Banking Act and associates if any, in \nwhich he  / she is or has been employed as an officer performing executive functions:\nName of the institution Period of office Designation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 232, "year": 2013}, "type": "Document"}
{"page_content": "226 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n5. Shar eholdings in Banks and their Related Companies\n Share ownerships in licensed banks, their subsidiaries and associates if any , presently held: \nName of the institution No. of shares Percentage holding\n6. Business T ransactions 1/ \n Any business transaction the of ficer performing executive functions presently has with the bank \nand its subsidiaries and associates if any.\nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-\nperforming)Type and \nvalue of \ncollateral \n(Rs. mn)% of Bank\u2019 s \nregulatory \ncapital\nLimit Out-standing\nAccommodations\nInvestments\nDeposits\n7. Appointment, Shar eholdings and Business Transactions of Close Relations \n7.1 Any close relations presently employed as of ficers performing executive functions in \nlicensed banks their subsidiaries and associates if any.\nName of the bank Full name of the close relation Position held\n1/ \u201cBusiness transaction\u201d shall mean any accommodations, borrowing s, investments and deposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 233, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  227\n7.2 Direct or indirect share ownership in the bank, its subsidiaries and associates if any , \npresently held by any close relation.\nFull name of the close relationNo. of Shares Percentage holding\nDirect Indirect Direct Indirect\n7.3 Any business transaction, the close relation currently has with the bank, its subsidiaries and  \nassociates if any. \nFull name \nof the close \nrelationNature of \nbusiness \ntransactionDate of \ntran-\nsaction Limit\nas at \n\u2026\u2026\u2026\u2026\u2026 \n(Rs. mn)Out-\nstanding \nas at \n\u2026\u2026\u2026\u2026\n(Rs. mn)Type and \nvalue of \ncollateral \n(Rs. mn)% of \nBank\u2019 s \nregulatory \ncapital \n8. A ny other explanation/information in regard to the information furnished above and other \ninformation considered relevant for assessing the suitability of the officer performing executive \nfunctions in the bank. \nDECLARATION:\nI confirm that the above information is to the best of my knowledge and belief true and complete.  \nI undertake to keep the bank fully informed, as soon as possible, of all events, which take place \nsubsequently, which is relevant to the information provided above.\nI state that I am not prevented by any Statute from being appointed to the above post. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signatur e of Officer Performing Executive Functions in the Bank\nTO BE FILLED BY THE CHIEF EXECUTIVE OFFICER\n1. Any other explanation  / information in regard to the information furnished above and other \ninformation considered relevant for assessing the suitability of the person performing executive \nfunctions in the bank.\n2. I confirm that, in terms of Section 76H read with Section 44A  of the Banking Act, the officer \nreferred to above is fit and proper to carry out executive functions of the bank. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signatur e of Chief Executive Officer\n and the official stamp", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 234, "year": 2013}, "type": "Document"}
{"page_content": "228 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 17 / 600 /0017  / 001\nBank Supervision Department\n27 August 2010\nTo : CEOs of all Licensed Banks;\nDear Sir  / Madam\nAPPOINTMENT OF DIRECTORS\nReference our letter No. 02/04/002/0012/002 dated 31 March 2005 on the above subject.\nWe enclose herewith a revised declaration, which incorporates additional information, \nto enable the licensed banks to ascertain compliance with the provisions of the Directions on \nCorporate Governance by Directors of banks.\nPlease replace Annex 2 of the letter under reference with the revised declaration effective \nfrom 01.09.2010.\nYours faithfully,\nSgd, (Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nc.c. -  Mr . Upali De Silva\n Secretary General \u2013 Sri Lanka Banks\u2019  Association\n Level 8, Ceylinco House \n No. 69, Janadhipathi Mawatha\n Colombo 01.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 235, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  229\nAnnex 2\nName of Bank:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration to be submitted in terms of Section 42 of the Banking Act \nby persons proposed to be appointed  / elected  / nominated as a Director of\na Licensed Bank\n(with enclosures as appropriate as of \u2026\u2026\u2026\u2026\u2026\u2026\u2026.)\n1. Personal Details  \n 1.1 Full name:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.2 NIC / Passport number:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.3 Date of birth :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.4 Age :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.5 Permanent address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.6 Present address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.7 Occupation :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n2. Appointment as a Dir ector of the Bank\n 2.1 Date of initial appointment as a Director to the Board of Directors of the bank :  \u2026\u2026\u2026\n2.2 Nature of the appointment (Executive Director  / Independent Director  / Non-independent \nDirector  /Non-executive Director  / Alternate Director) :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n3. Personal Details of Close Relations 1/ in terms of Section 86 of the Banking Act \n 3.1 Full name of spouse :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 3.2 NIC / Passport number :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \n 3.3 Names of dependant children :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nFull name NIC / Passport number\n3.3.1\n3.3.2\n3.3.3\n3.3.4\n4. Backgr ound and Experience\n4.1 Name/s of Licensed Bank/s, its subsidiaries2/ in terms of the Banking Act and associates if any, in \nwhich he  / she is or has been a member of the Board of Directors:\nName of the institution Period of office\n1/ \u201cClose relation\u201d shall mean the spouse or financially dependant  children.\n2/ \u201cSubsidiary\u201d as defined by Section 17(3) of the Banking Act.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 236, "year": 2013}, "type": "Document"}
{"page_content": "230 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n4.2 Names of entities in which he/she presently is a Director:\n4.2.1  Names of specified business entities in terms of the Sri Lanka Accounting and \nAuditing Standards Act, No. 15 of 1995.\n(a)\n(b)\n(c)\n(d)\n4.2.2  Names of other institutions  / entities\n(a)\n(b)\n(c)\n(d)\n4.3 Name/s of Licensed Bank/s, its subsidiaries 2/ and associates if any, in which he  / she is or \nhas been employed as an officer performing executive functions:\nName of the institution Position  / Designation Period of office\n5. Shar eholdings in Banks and their Related Companies\n5.1 Direct or indirect share ownerships in licensed banks, their subsidiaries 2/ and associates if \nany, presently held:  \nName of the institutionNo. of Shares Percentage holding\nDirect Indirect Direct Indirect\n2/ \u201cSubsidiary\u201d as defined by Section 17(3) of the Banking Act.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 237, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  231\n6. Business T ransactions 3/ \n6.1 Any business transaction the Director  / proposed Director currently has  / had with the \nlicensed banks, their subsidiaries 2/ and associates if any, and finance and leasing companies \nregistered with Central Bank of Sri Lanka during the last two years immediately preceding \nthe appointment as Director.\nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-performing)Type and \nvalue of \ncollateral \n(Rs. mn)% of \nBank\u2019 s \nregulatory \ncapital Limit Outstanding\nAccommodations\nBorrowings\nInvestments\nDeposits\n6.2 Any business transaction the Director  / proposed Director currently has  / had during the \nlast two years immediately preceding the appointment as Director, with \u201crelated parties\u201d as \ndefined by Section 3(7)(i ) of the Banking Act, Direction No.11 and 12 of 2007 on Corporate \nGovernance for Licensed Banks in Sri Lanka.\nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-performing)Type and \nvalue of \ncollateral \n(Rs. mn)% of \nBank\u2019 s \nregulatory \ncapitalLimit Outstanding\nAccommodations\nBorrowings\nInvestments\nDeposits\n3/ \u201cBusiness transaction\u201d shall mean any accommodations, borrowing s, investments and deposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 238, "year": 2013}, "type": "Document"}
{"page_content": "232 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n7. Appointment, Shar eholdings and Business Transactions of Close Relations \n7.1 Any close relation presently appointed as a Director or Chief Executive Of ficer or a \nmember of the key management of licensed bank/s their subsidiaries and associates if any.\nName of the bank Full name of the close relation Position held\n7.2 Direct or indirect share ownership in licensed banks, its subsidiaries and associates if any , \npresently held by any close relation.\nName of the institutionFull name of the \nclose relationNo. of Shares Percentage holding\nDirect Indirect Direct Indirect\n7.3 Any business transaction, the close relation currently has or had with licensed banks its  \nsubsidiaries and associates if any during the last two years immediately preceding the \nappointment as Director. \nName \nof the \ninstitutionFull \nname of \nthe close \nrelationNature of \nbusiness \ntransactionDate \nof \ntran-\nsaction Limit\nas at \n\u2026\u2026\u2026\u2026\u2026 \n(Rs. mn)Out-standing \nas at \n\u2026\u2026\u2026\u2026\n(Rs. mn)Type and \nvalue of \ncollateral \n(Rs. mn)% of \nBank\u2019 s \nregulatory \ncapital \n8. Any other explanation  / information in regard to the information furnished above and other \ninformation considered relevant for assessing the suitability of the Director  / proposed Director. \nDECLARATION:\nI confirm that the above information is to the best of my knowledge and belief true and complete.  \nI undertake to keep the bank fully informed, as soon as possible, of all events, which take place \nsubsequently, which is relevant to the information provided above.\nI state that I am not prevented by the Articles of Association of the Company and or by any other \nStatute from being appointed to the above post. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signatur e of Director  / Proposed Director", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 239, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  233\nTO BE FILLED BY THE COMPANY SECRETARY\n1. Any other explanation  / information in regard to the information furnished above and other \ninformation considered relevant for assessing the suitability of the Director  / proposed Director.\n2. Submitted to the Board of Directors of the Bank.  \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signatur e of Company Secretary\n and the official stamp", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 240, "year": 2013}, "type": "Document"}
{"page_content": "234 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 0012  / 002\nBank Supervision Department\n12 April 2005\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks;\nDear Sirs,\nAPPOINTMENT OF DIRECTORS OF BANKS\nI refer to my letter of 31 March 2005 on the above subject, enclosing the affidavit and the declaration \nto be submitted in respect of directors of banks.\nEnclosed please find a fresh affidavit which incorporates the Committee stage amendments to the \nBanking (Amendment) Bill. Please replace the affidavit attached to the above letter with this version.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 241, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  235\nAffidavit \tto\tbe\tsubmitted \tin\tterms\tof\tSection\t42(2)\tof\tthe\tBanking\tAct\nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. Being a [Buddhist \n/ Hindu solemnly, sincerely and truly declare and affirm / Christian / Catholic / Muslim make oath and \nstate] as follows :\n (a) I am the [affirmant / deponent] above named and I [am a director / have been elected as a \ndirector / have been nominated as a director] of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 which is a licensed \ncommercial bank / licensed specialised bank, licensed under the Banking Act, No.30 of 1988.\n (b) I [af firm/state] that I possess the following academic and / or professional qualifications :\n (c) I [affirm/state] that the effective experience that I possess in banking, finance, business or \nadministration or of any other relevant discipline is as follows :\n (d) I [affirm/state] that there is no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or \nabroad, to the effect that I have committed or have been connected with the commission of, any \nact which involves fraud, deceit, dishonesty or any other improper conduct;\n (e) I [affirm/state] that as such I am not subject to any investigation or inquiry consequent upon \nbeing served with notice of a charge involving fraud, deceit, dishonesty or other similar criminal \nactivity, by any regulatory authority, supervisory authority, professional association, Commission \nof Inquiry, tribunal or other body established by law, in Sri Lanka or abroad;\n (f) I [affirm/state] that I have not been convicted by any Court in Sri Lanka or abroad in respect of \na crime committed in connection with financial management or of any offence involving moral \nturpitude;\n (g) I [affirm/state] that I am not an undischarged insolvent nor have I been declared a bankrupt in Sri \nLanka or abroad;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 242, "year": 2013}, "type": "Document"}
{"page_content": "236 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (h) I [affirm/state] that I have not failed, to satisfy any judgment or order of any court whether in Sri \nLanka or abroad, or to repay a debt;\n (i)  I [affirm/state] that I have not been declared by a court of competent jurisdiction in Sri Lanka or \nabroad, to be of unsound mind;\n (j) I [affirm/state] that I have not been removed or suspended by an order of a regulatory or \nsupervisory authority from serving as a director, Chief Executive Officer or other officer in any \nbank or financial institution or corporate body, in Sri Lanka or abroad;\n (k) I [affirm/state] that I have not been a director, Chief Executive Officer or held any other position \nof authority in any bank or financial institution \u2013\n (i) whose license has been suspended or cancelled; or\n (ii) which has been wound up or is being wound up, or which is being compulsorily liquidated; \nwhether in Sri Lanka or abroad.\n (l) I [affirm/state] that to the best of my knowledge I am a fit and proper person [to \nhold office as a director / to be appointed, nominated or elected as a director] of \na licensed commercial bank / licensed specialised bank in terms of the provisions \nof Section 42 of the Banking Act as amended by Banking (Amendment) Act,  \nNo. 2 of 2005.\nThe averments contained herein  ]\nwere read over to the [affirmant/deponent  ]\nwho having understood the contents  ]  \nhereof and having accepted same as  ] Before me\ntrue, swore to and placed his / her signature  ]\nat Colombo on this \u2026\u2026\u2026\u2026\u2026\u2026 day  ]\nof \u2026\u2026\u2026\u2026\u2026\u2026  ] \n                                                              JUSTICE OF THE PEACE", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 243, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  237\nRef. No. : 02  / 04 / 002 / 0012  / 002\nBank Supervision Department\n31 March 2005\nTo : The CEOs of all Licensed Commercial Banks (Domestic) and\n Licensed Specialised Banks\nDear Sirs,\nAPPOINTMENT OF DIRECTORS OF BANKS\n(SECTION 42 OF THE BANKING ACT, NO.30 OF 1988 AS AMENDED)\n In terms of Section 42(1) of the Banking Act a person who is to be appointed, elected or \nnominated as a director of a licensed commercial bank or who continues as a director of such bank \nmust be a fit and proper person to hold such office and should not be prevented from doing so by the \nprovisions of the Banking Act or by any other written law. The Act also sets out specific matters to be \ntaken into consideration in determining whether a person is fit and proper .  \n Further , in terms of Section 42(4) of the Act, all banks are required to notify the Director \nof Bank Supervision, details of proposed/appointed/elected/nominated directors for approval under \nSection 42(5).  Boards of licensed commercial banks should ensure that adequate information relating \nto any person who is to be appointed, elected or nominated to the Board of Directors is made available \nto the Board before such appointment, election or nomination takes place. Furthermore, it is necessary \nthat relevant information in respect of current directors should also be available to the Board of \nDirectors.  \n For this purpose we annex hereto a draft affidavit to be obtained from all directors and \npersons nominated for election or appointment as directors of the bank or to be nominated to \nthe Board. In addition to the affidavit, a declaration may also be obtained from such person to \nenable the bank to ascertain compliance by directors of the bank with other provisions of the \nAct. For this purpose a draft declaration as in Annex 2 may be used.  The Secretary of each", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 244, "year": 2013}, "type": "Document"}
{"page_content": "Act. For this purpose a draft declaration as in Annex 2 may be used.  The Secretary of each \nbank shall submit a copy of the affidavit and the declaration in respect of each such person to \nbe appointed, to the Director of Bank Supervision, together with the information specified in  \nsub-section (4) of Section 42, by the bank when approval for appointment, election or nomination of a \ndirector is sought. \n W ith respect to current directors, the declaration and affidavit should be obtained and copies \nfurnished to the Central Bank in respect of each director holding office, by 30 April 2005. Thereafter, \nthe declaration and affidavit should be obtained and copies furnished to the Central Bank annually, \nbefore the Annual General Meeting of the respective bank in respect of every continuing director.\nYours faithfully,\nSgd, Director of Bank Supervision\ncc \u2013 Mr . Upali De Silva\n Secretary-General \u2013 Sri Lanka Bankers Association\n Level 8, Ceylinco House, 69, Janadhipathi Mawatha\n Colombo 01.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 244, "year": 2013}, "type": "Document"}
{"page_content": "238 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAffidavit \tto\tbe\tsubmitted \tin\tterms\tof\tSection\t42(2)\tof\tthe\tBanking\tAct\nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.. of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. Being a [Buddhist \nsolemnly, sincerely and truly declare and affirm/Christian/Catholic make oath and state/Muslim make \noath and state] as follows :\n (a) I am the [affirmant / deponent] abovenamed and I [am a director / have been elected as a director \n/ have been nominated as a director] of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 which is a licensed \ncommercial bank / licensed specialized bank, licensed under the Banking Act, No. 30 of 1988.\n (b) I [affirm/state] that I possess the following academic and/or professional qualifications :\n (c) I [affirm/state] that the effective experience that I possess in banking, finance, business or \nadministration or of any other relevant discipline is as follows :\n (d) I [affirm/state] that there is no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or \nabroad, to the effect that I have committed or have been connected with the commission of, any \nact which involves fraud, deceit, dishonesty or any other improper conduct;\n (e) I [affirm/state] that as such I am not subject to any investigation or inquiry in Sri Lanka or \nelsewhere by any regulatory authority, or supervisory authority, professional association, any \nCommission of Inquiry, tribunal or other body established by law in Sri Lanka or abroad, that I \nhave committed or have been connected with the commission of, any act which involves fraud, \ndeceit, dishonesty or any other improper conduct;\n (f) I [affirm/state] that I have not been convicted by any Court in Sri Lanka or abroad in respect of \na crime committed in connection with financial management or of any offence involving moral \nturpitude;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 245, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  239\n (g) I [affirm/state] that I am not an undischarged insolvent nor have I been declared a bankrupt in Sri \nLanka or abroad;\n (h) I [affirm/state] that I have not failed, to satisfy any judgment or order of any court whether in Sri \nLanka or elsewhere, or to repay a debt;\n (i)  I [affirm/state] that I have not been declared by a competent court in Sri Lanka or abroad, to be \nof unsound mind;\n (j) I [affirm/state] that I have not been removed or suspended by an order of a regulatory or \nsupervisory authority from serving as a director, Chief Executive Officer or other officer in any \nbank or financial institution or corporate body, in Sri Lanka or abroad;\n (k) I [affirm/state] that I have not been a director, Chief Executive Officer or held any other position \nof authority in any bank or financial institution \u2013\n (i) whose license has been suspended; or\n (ii) which has been wound up or is being wound up, or which is being compulsorily liquidated; \nwhether in Sri Lanka or elsewhere.\n (l) I [affirm/state] that to the best of my knowledge I am a fit and proper person [to \nhold office as a director / to be appointed, nominated or elected as a director] of \na licensed commercial bank / licensed specialised bank in terms of the provisions \nof Section 42 of the Banking Act as amended by Banking (Amendment) Act,  \nNo. 2 of 2005.\nThe averments contained herein                        ]\nwere read over to the [affirmant/deponent         ]\nwho having understood the contents                  ]   \nhereof and having accepted same as                  ]                Before me\ntrue, swore to and placed his/her signature        ]\nat Colombo on this \u2026\u2026\u2026\u2026\u2026\u2026 day             ]\nof \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026                                   ]                  \n                                                                                    JUSTICE OF THE PEACE", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 246, "year": 2013}, "type": "Document"}
{"page_content": "240 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex 2\nName of Bank: \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration to be submitted in terms of Section 42 of the Banking Act \nby persons proposed to be/appointed/elected/nominated as a Director of a Licensed Bank\n(with enclosures as appropriate as of \u2026\u2026\u2026\u2026\u2026\u2026\u2026.)\n1. Personal Details \n1.1 Full name:   \n1.2 NIC No./Passport No.:                                                                                              \n1.3 Permanent Address:\n1.4 Present Address:\n1.5 Occupation:\n2. List of close r elations in terms of Section 86 of the Banking Act:\n2.1 Name in full of spouse:\n NIC No./Passport No. :\n2.2 Names of dependent children:\n  Full Name     NIC No. / Passport No.\n1.  \n2.  \n3.  \n4.  \n3. List of entities in which director/prospective director has a substantial interest in terms of Section \n86 of the Banking Act", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 247, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  241\n4. Name/s of Licensed Bank/s in which he/she is or has been a member of the Board of Directors \n(give details of period during which such office was held)\n5. Accomodation, if any, presently availed by him/her or by his close relations at 2 above, and by \nentities at 3 above from the bank, and collateral\nDeclaration:\nI confirm that  the  above information is to the  best of my knowledge and belief true and complete.  \nI undertake to keep the bank fully informed, as soon as possible, of all events  which take place \nsubsequently which are relevant to the  information provided above.\nSignature:\nDate:                                       \nAny other explanation/information in regard to the information furnished above and other information \nconsidered relevant for assessing the suitability of the proposed/appointed director .\nRemarks of Board of Directors of the Bank\nDate:                                                                                 Signature of Company Secretary", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 248, "year": 2013}, "type": "Document"}
{"page_content": "242 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 17 / 550 /002 / 003\nBank Supervision Department\n24 December 2010\nTo : CEOs of all Licensed Commer cial Banks;\n Licensed Specialised Banks, and\n Auditors conducting Bank Audits\nDear Sir  / Madam,\nREQUIREMENTS UNDER \nTHE CORPORATE GOVERNANCE DIRECTION\nWe write to inform you that the Institute of Chartered Accountants of Sri Lanka (ICASL) has issued \nguidelines on the internal control mechanism and annual corporate governance report to be followed \nby banks in relation to Directions 3(8)(ii) (b), (c) and (g) of the Corporate Governance Direction dated \n26.12.2007 issued by the Central  Bank of Sri Lanka.\nPlease find the guidelines in the website of the ICASL.  The link is as follows:\nhttp://www.icasrilanka.com/Technical/Central%20Bank%20Internal%20Control%20-%20\n         Final%20printed%20uploaded.pdf\nYours faithfully,\nSgd, N W G R D Nanayakkara\nAddl. Director of Bank Supervision\nc.c. -  President\n Institute of Chartered Accountants of Sri Lanka\n 30A  Malalasekera Mawatha\n Colombo 7.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 249, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  243\nRef. No. : 02  / 17 / 600 / 0017  / 001\nBank Supervision Department\n08 August 2011\nTo : CEOs of Licensed Specialised Banks\nDear Sirs,\nASSESSMENT OF FITNESS AND PROPRIETY OF\nCHIEF EXECUTIVE OFFICERS OF\nLICENSED SPECIALISED BANKS\nIn terms of Section 76 H read with Section 44 A of the Banking Act, Chief Executive Officers \n(CEOs) of Licensed Specialised Banks (LSBs) are required to be fit and proper persons to perform \nexecutive functions in a LSB. \nAccordingly, we enclose herewith formats for the affidavit and the declaration to be submitted by \nthe CEOs of LSBs and a guidance note to duly complete such affidavits and the declarations.\nAnnex I  :  Affidavit to be submitted by CEOs of LSBs\nAnnex II  :  Declaration to be submitted by CEOs of LSBs\nAnnex III  :  Guidance Note\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 250, "year": 2013}, "type": "Document"}
{"page_content": "244 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex I\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nAffidavit \tto\tbe\tsubmitted \tby\tChief\tExecutive \tOfficers\tof\t \nLicensed Specialised Banks in terms of Section 76 H read with Section 44 A of the Banking Act \nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( full name)\nholder of National Identity Card No.  / Passport No. \u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026..\u2026\u2026..\u2026\u2026..\u2026\u2026\u2026\u2026\u2026\u2026 of\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. (address) \nbeing a [Buddhist  / Hindu do hereby solemnly, sincerely and truly declare and affirm  / Christian  / Catholic  /\nMuslim make oath and state] as follows :\n(a) I am the [affirmant  / deponent] above named and I am the [ Chief Executive Officer  / proposed Chief \nExecutive Officer] of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026. (name of bank) which is a specialised bank, licensed under the Banking Act, No. 30 of \n1988. \n(b) I [affirm  / state] that I possess the following academic and  / or professional qualification/s: \n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(c) I [affirm  / state] that the effective experience that I possess in banking, finance, business or \nadministration or of any other relevant discipline is as follows:\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(d) I [affirm  / state] that there is no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or \nabroad, to the effect that I have committed or have been connected with the commission of, any act \nwhich involves fraud, deceit, dishonesty or any other improper conduct.\n(e) I [affirm  / state] that I am not subject to an investigation or inquiry consequent upon being served \nwith notice of a charge involving fraud, deceit, dishonesty or other similar criminal activity, by any", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 251, "year": 2013}, "type": "Document"}
{"page_content": "regulatory authority, supervisory authority, professional association, any Commission of Inquiry, \ntribunal or other body established by law, in Sri Lanka or abroad.\n(f) I [affirm  / state] that I have not been convicted by any Court in Sri Lanka or abroad in respect of \na crime committed in connection with financial management or of any offence involving moral \nturpitude.\n(g) I [affirm  / state] that I am not an undischarged insolvent nor have I been declared a bankrupt in Sri \nLanka or abroad.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 251, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  245\n(h) I [affirm  / state] that I have not failed, to satisfy any judgment or order of any Court whether in Sri \nLanka or abroad, or to repay a debt.\n(i) I [affirm  / state] that I have not been declared by a Court of competent jurisdiction in Sri Lanka or \nabroad, to be of unsound mind.\n(j) I [affirm  / state] that I have not been removed or suspended by an order of a regulatory or supervisory \nauthority from serving as a Director, Chief Executive Officer or other officer in any licensed bank or  \nfinancial institution or corporate body, in Sri Lanka or abroad.\n(k) I [affirm  / state] that I have not been a Director, Chief Executive Officer or held any other position of \nauthority in any bank or financial institution \u2013 \n (i) whose license has been suspended or cancelled; or\n (ii) which has been wound up or is being wound up, or which is being compulsorily liquidated;\nwhether in Sri Lanka or abroad.\n(l) I [affirm  / state] that to the best of my knowledge I am a fit and proper person [to hold office as a \nChief Executive Officer  / to be appointed as a Chief Executive Officer] of a licensed specialised bank \nin terms of the provisions of Section 76 H read with Section 44 A of the Banking Act. \nThe averments contained \nherein were read over to \nthe [affirmant  / deponent] \nwho having understood the \ncontents hereof and having \naccepted same as true, \naffirmed  / swore to and \nplaced his  / her signature at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\u2026 on this\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 day of\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\nJUSTICE OF THE PEACE  / \nCOMMISSIONER FOR OATHSAffix Stamps\nas applicable\nBefore me", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 252, "year": 2013}, "type": "Document"}
{"page_content": "246 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex II\nName of Bank:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclaration \tto\tbe\tsubmitted \tby\tChief\tExecutive \tOfficers\tof\t\t\nLicensed Specialised Banks in terms of Section 76 H read with Section 44 A of the Banking Act \n(with enclosures as appropriate as of \u2026\u2026\u2026\u2026\u2026\u2026\u2026.)\n1. Personal Details \n 1.1 Full name:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.2 NIC / Passport number:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.3 Date of birth :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.4 Permanent address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 1.5 Present address :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n2. Appointment to the Bank\n 2.1 Date of appointment : \n  (please attach a certified copy of the appointment letter)\n 2.2 Designation :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 2.3 Local or expatriate :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n3. Backgr ound and Experience\n Name/s of licensed bank/s, its subsidiaries in terms of the Banking Act and associates if any, in \nwhich he  / she is or has been employed as Chief Executive Officer, Director or an officer performing \nexecutive functions:\nName of the institution Period of office Designation\n4. Shar eholdings in Banks and their Related Companies\n Share ownerships in any licensed banks, their subsidiaries and associates, if any , presently held: \nName of the institution No. of shares Percentage holding", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 253, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  247\n5. Business Transactions1/ \n Any business transactions the Chief Executive Officer  / proposed Chief Executive Officer presently \nhas with the bank and its subsidiaries and associates, if any.\nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-performing)Type and \nvalue of \ncollateral \n(Rs. mn)% of Bank\u2019 s \ncapital\nLimit Out-standing\nAccommodations\nInvestments\nDeposits\n6. Personal Details of Close Relations in terms of Section 86 of the Banking Act \n 6.1 Full name of spouse :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 6.2 NIC / Passport number :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n 6.3 Names of dependant children :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nFull name NIC / Passport number\n6.3.1\n6.3.2\n6.3.3\n6.3.4\n7. Appointments, Shar eholdings and Business Transactions of Close Relations \n7.1 A ny close relations presently employed as Chief Executive Officers, Directors or officers \nperforming executive functions in any licensed banks, their subsidiaries and associates, if any.\nName of the bank Full name of the close relation Position held\n1/ \u201cBusiness transaction\u201d shall mean any accommodations, investments and deposits and in the case of \nforeign banks, only the business transactions with Sri Lankan operations.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 254, "year": 2013}, "type": "Document"}
{"page_content": "248 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n7.2 Direct or indirect share ownership in the bank, its subsidiaries and associates, if any, presently \nheld by any close relation.\nFull name of the close relationNo. of Shares Percentage holding\nDirect Indirect Direct Indirect\n7.3 Any business transaction, the close relation currently has with the bank, its subsidiaries and \nassociates, if any. \nName \nof the \ninstitutionDate of \ntran-\nsaction Amount as at \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(Rs. mn)Classification \n(performing/ \nnon-performing)Type and \nvalue of \ncollateral \n(Rs. mn)% of Bank\u2019 s \nregulatory \ncapital\nLimit Out-standing\nAccommodations\nInvestments\nDeposits\n8. Any other explanation  / information in regard to the information furnished above and other  \ninformation considered relevant for assessing the suitability of the Chief Executive Officer  / proposed \nChief Executive Officer  of the bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 255, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  249\nDECLARATION:\nI confirm that the above information is to the best of my knowledge and belief true and complete.  \nI undertake to keep the bank fully informed, as soon as possible, of all events, which take place \nsubsequently, which is relevant to the information provided above.\nI state that I am not prevented by any Statute from being appointed as the Chief Executive Officer of \nLicensed Specialised Bank. \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signature of Chief Executive Officer  / \n Proposed Cheif Executive Officer\nTO BE FILLED BY THE CHAIRMAN / REGIONAL HEAD (in the case of foreign banks)\n1. Any other explanation  / information in regard to the information furnished above and other  \ninformation considered relevant for assessing the suitability of the Chief Executive Officer  / proposed \nChief Executive Officer of the bank.\n2. I confirm that, in terms of Section 76 H read with Section 44 A of the Banking Act, No. 30 of 1988, \nthe officer referred to above is fit and proper to carry out functions of the Chief Executive Officer of \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 . \nDate : \u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Signature of the Chairman / Regional Head\n and the official stamp", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 256, "year": 2013}, "type": "Document"}
{"page_content": "250 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex III\nGUIDANCE TO DULY COMPLETE THE AFFIDA VITS AND \nDECLARATIONS TO BE SUBMITTED BY CHIEF EXECUTIVE OFFICERS OF\n LICENSED SPECIALISED BANKS\nA. PURPOSE OF  OBTAINING AFFIDA VITS AND DECLARATIONS\n\u2022 T he purpose of obtaining affidavits and declarations of Chief Executive Officers (CEOs) of \nLicensed Specialised Banks (LSBs) is to enable the Bank Supervision Department to assess the \nfitness and propriety of such officers in terms of the provisions of the Banking Act. Accordingly, \nthe Bank Supervision Department requires comprehensive information to evaluate the experience, \nqualifications, integrity and compliance with other requirements specified in the Banking Act, to \nassess the suitability of the CEOs of the LSBs.\n\u2022 Further , these should be legally binding documents in the event of any dispute. \n\u2022 This guidance is issued to ensure that sufficient information is provided by banks for assessing the \nfitness and propriety of the CEOs.\nB. AFFIDA VITS\n1. It is preferable that the affidavit is prepared as a fresh document, based on the format provided by the \nBank Supervision Department, so as to avoid inclusion of unnecessary words. However, if the given \nformat is filled, all alterations, erasures and interlineations should be initialed by the Commissioner \nfor Oaths.\n2. Academic/professional qualifications\n\u2022 Relevant qualification should be mentioned clearly with:\n \u2013 Qualification obtained \n \u2013 Name of the Institution/University\n \u2013 Y ear of obtaining the qualification \n \u2013 Name of the Professional body where he/she is a member\n3. Ef fective experience should include:\n\u2022 Institution\n\u2022 Designation\n\u2022 Period\n4. Complete all blank spaces and clauses appropriately. ( Eg., Name in full, NIC No. / Passport No., \nAddress, Chief executive officer/proposed chief executive officer, Name of the Bank, etc.)\n5. Appropriate words should be used based on the religion of the person", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 257, "year": 2013}, "type": "Document"}
{"page_content": "5. Appropriate words should be used based on the religion of the person\n5.1 Delete/strike out inappropriate words\nEg. \n\u2022 Buddhist/Hindu:  affirm/affirmant/solemnly , sincerely and truly declare and affirm.\n\u2022 Christian/Catholic/Muslim:  deponent/state/make oath and state/ swear .\n\u2022 If a person refrains/objects to disclose his/her religion:   affirm/affirmant/solemnly, sincerely \nand truly declare and affirm. In this event, a confirmation should be submitted by the officer \nstating that: \n\u2013 he/she is an atheist or belongs to a religion not mentioned in this affidavit;   or\n\u2013 he/she objects to disclosing his/her religion.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 257, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  251\n5.2 If the inappropriate words are stricken out, the Commissioner for Oaths/Justice of the Peace \nshould place his initials immediately after all such amendments.\n6. If the person is a foreigner and signs the affidavit while overseas:\n\u2013 signature of the person should be attested by a Commissioner for Oaths or an equivalent in the \ncountry in which he places his signature.\n\u2013 a ttestation should be made in front of the Sri Lankan High Commissioner in the respective \ncountry.\n7. Affix a stamp for a sum of Rs.25/- and the signature of the person. In the case of future affidavits, \nthe denomination of the stamp should be changed according to the value applicable as at the date of \nsigning the affidavit.\n8. Attest by a Commissioner for Oaths/Justice of the Peace immediately after the signature of the person \nat \u2018Before me\u2019.\nC. DECLARATIONS\n1. Declarations:\n\u2013 should be duly completed : All the sections (1-8) should be completed (full name, date etc.) and \nirrelevant sections stated as Not applicable/nil/none or cancelled out.\n\u2013 should be signed and dated.\n2. The last section should be completed, dated and signed with official stamp/seal by the Chairman/ \nRegional Head (in the case of foreign banks). If there is no comment it should be stated as Not \napplicable/nil/none.\n3. T erms of appointment (including designation, date of appointment, duties, responsibilities and \nremuneration package) should be attached.\nD. INTERPRET ATION  \n1. \u201cClose relation\u201d means spouse or dependent child.\n2. \u201cBusiness Transaction\u201d shall means any accommodations, investment and deposits and in the case \nof foreign banks, only the business transactions with Sri Lankan operations.\n3. \u201cAccommodation\u201d means any loan, overdraft or advance or such other facility as may be determined \nby the Monetary Board or any commitment to grant any loan, overdraft or advance or such other", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 258, "year": 2013}, "type": "Document"}
{"page_content": "by the Monetary Board or any commitment to grant any loan, overdraft or advance or such other \nfacility as may be determined by the Monetary Board, including a commitment to accept a contingent \nliability.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 258, "year": 2013}, "type": "Document"}
{"page_content": "252 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOur Ref. : 02  / 17 / 600 / 0036  / 001\nBank Supervision Department\n17 July 2012\nTo : Chief Executive Officers of \n       all locally incorporated licensed banks\nDear Sir / Madam,\nSPECIAL PAYMENTS  / BENEFITS TO DIRECTORS AT THEIR RETIREMENT\nHaving observed that exorbitant special payments  / benefits have been made in the form of gratuity \nto retiring directors of some banks and that such payments  / benefits are not prudent in terms of good \ngovernance, the Monetary Board has decided to require licensed banks to obtain prior approval of \nshareholders for any special payments  / benefits made to bank directors at their retirement in addition to \nnormal remuneration.\nAccordingly, all locally incorporated licensed banks are requested to:  \n(1) i ncorporate such special payments  / benefits to its directors at their retirement to the  \nremuneration policy;\n(2) obtain prior approval of the shareholders for any special payments  / benefits made to directors \nat their retirement in addition to normal remuneration;\n(3) ensure that all special payments  / benefits are extended on arm\u2019s length basis; and\n(4) disclose separately the aggregate value of total special payments  / benefits made to retiring \ndirectors during the respective financial year in the Annual Report.  \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nCc :  Chairmen of all locally incorporated licensed banks", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 259, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  253\nRef. No. : 02  / 17 / 550 /002 / 003\nBank Supervision Department\n29 March 2012\nTo : CEOs of all Licensed Banks and\n Panel of Qualified Auditors\nDear Sir  / Madam,\nDISCLOSURE IN ANNUAL REPORTS \nBANKING ACT DIRECTIONS ON CORPORATE GOVERNANCE\nWe write to inform you that, the Monetary Board has approved of accepting the following as \nsubstitutes for compliance with the Directions 3(8)( ii)(c) and 3(8)(ii)(g) of the Banking Act, Directions \nNo. 11 and 12 of 2007. \nDirection Disclosure Requirements Substitute Disclosure Requirements \n3(8)(ii)(c) The external auditor\u2019s \ncertification on the \neffectiveness of the internal \ncontrol mechanism reported \nby the board of directorsThe Assurance Report issued by the auditors under \n\u201cSri Lanka Standard on Assurance Engagements \nSLSAE 3050 \u2013 Assurance Reports for Banks on \nDirectors\u2019 Statements on Internal Control\u201d.\n3(8)(ii)(g) The external auditor\u2019s \ncertification of the compliance \nwith Corporate Governance \nDirections in the annual \ncorporate governance reports \npublished in the annual reportA confirmation by the Board of Directors in its Annual \nCorporate Governance Report that all the findings \nof the \u201cFactual Findings Reports\u201d of auditors issued \nunder \u201cSri Lanka Related Services Practice Statement \n4750\u201d have been incorporated in the Annual Corporate \nGovernance Report, provided that auditors confirm to \nthe Director of Bank Supervision to this effect.\nAccordingly, you are required to adhere to the above requirements.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 260, "year": 2013}, "type": "Document"}
{"page_content": "254 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nExplanatory Note: 1  / 2012\nBank Supervision Department\n06 July 2012\nAUTHORITY OF THE MONETARY BOARD\nTO ISSUE DIRECTIONS TO LICENSED BANKS REAFFIRMED BY THE\nCOURT OF APPEAL\nThe Monetary Board of the Central Bank of Sri Lanka (CBSL) issued Directions on corporate \ngovernance to licensed banks on 26 December 2007. The Directions were issued in terms of the Banking \nAct requiring, inter alia,  fitness and propriety of bank directors, limiting the age of a director of a bank \nto 70 years, the term of office of a director to be not more than 9 years, etc.\nConsequent to issuing these Directions, the authority of the Monetary Board of the CBSL to  \nissue such Directions was challenged in the Court of Appeal CA (Writ) Application No. 330 /2008 by  \nK.C. Vignarajah, the Petitioner. \nAs per the Court of Appeal judgment of the above action delivered on 28 March 2012, it was held \nthat, inter-alia , the Banking Act, No. 30 of 1988 falls within the category of legislation referred to as \nAdministrative Legislation, and that a necessary aspect of such legislation is one of delegating powers \nto an extraneous body of persons to act at Parliament\u2019s bidding. The Court further held that, accordingly,  \nthe Banking Act is a Primary Legislation for the purpose of providing for any aspect of banking business \nand of business of such banks and includes the right to control the existing systems and functions of banks, \nand therefore that the Monetary Board has been delegated with the power to make directions which had the \napproval, licence or stamp of a legislative power. On that basis, the Court of Appeal ruled that Direction \nNo.11 of 2007 on Corporate Governance of 26 December 2007 is within the powers prescribed in the \nBanking Act, No. 30 of 1988, as amended.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 261, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  255\nRef. No. : 02  / 17 / 402 / 0079  / 001\nBank Supervision Department\nMay 02, 2006\nTo :  CEOs of Licensed Commer cial Banks and\n   CEOs of Licensed Specialised Banks\nDear Sirs,\nIMPLEMENTATION OF THE PROVISIONS OF PART IX\n(SECTIONS 72 TO 76) OF THE BANKING ACT ON ABANDONED PROPERTY\nAs intimated to you at the meeting of the CEOs of Licensed Commercial Banks and Licensed \nSpecialised Banks held on 24.11.05, in terms of Section 73(1) of the Banking Act, all licensed \ncommercial banks (LCBs) are hereby required to report \u201cAbandoned Property\u201d referred to in \nSection 72 of the Banking Act in the format determined by the Monetary Board given in Annex 1.  \nIn implementing the provisions of the Banking Act on Abandoned Property LCBs are requested to \nfollow the guidelines at Annex 2.\nThe provisions of the Banking Act do not require the licensed specialized banks (LSBs) to \nreport Abandoned Property. However, the LSBs too are requested to identify the articles that could \nbe considered abandoned as described in Section 72 of the Banking Act and to report them using the \nformat at Annex 1 till such time these provisions are made applicable to LSBs as well.\nThe first Report should contain property that would have been presumed abandoned up to \n31.12.2005.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd, Director of Bank Supervision\nEncl:", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 262, "year": 2013}, "type": "Document"}
{"page_content": "256 Directions, Determinations, and Circulars issued to Licensed Specialised BanksAnnex 1\nReport of Abandoned Property \nName of Bank          :\nReporting Period      :\nA B C D E F G H I J K L M\nOwner\u2019s\nLast Name\nwith Other Names\nin Full Last\nknown \nComplete\nAddressOwner\u2019s \nIdentification \nNos., if available\n(NIC,\nPassport No.,\ndate of birth etc.)Descrip-\ntion\nof\nPropertyProperty \nIdenti-\nfication \nNumberInterest \nbearing \nYes/NoLast \nActivity \nDateNature\nof \nActivityAmount \nDueAmount \nDeductedDescrip-\ntion\nof\nDeductionAmount Terms of \nAgreement \nand owner\u2019s \ninstructions\n1.             \n2.             \n3.             \n4.             \n5.             \n6.             \n7.             \n8.             \n9.             \n10.              \n11.              \n12.              \nTotal\n                            \nI, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.., being first duly sworn, on oath depose and state that I have cause to be prepared and have examined \nthis report consisting of \u2026\u2026\u2026\u2026\u2026\u2026\u2026pages totaling Rs \u2026\u2026\u2026\u2026\u2026.. as to property presumed abandoned under the provisions of the Banking Act, No.30 \nof 1988, for the period stated above that I am duly authorised by the ...................................................................... (name of the bank) to execute this Report \nand that to the best of my knowledge and belief the Report is true, correct and complete as of said date, excepting for such property as has since ceased to be \nabandoned.  \nSignature:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026      Name: \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026    Designation:   \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 \n              \nSworn and placed his/her signature before me on this \u2026.. day of\u2026\u2026\u2026  in the year \u2026\u2026         \nSignature:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026      Name: \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 263, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  257\nAnnex 2\nGuidelines on the implementation of Part IX (Section 72 to 76) of the Banking Act \non Abandoned Property\nThe Central Bank of Sri Lanka has decided to implement the provisions of Part IX of the Banking Act \nwith effect from 31 December 2005. These guidelines establish the procedures for handling such property.\n1.\tIdentification \tof\tAbandoned \tProperty\na. All licensed commercial banks (LCBs) should identify articles presumed to be abandoned property \nas described in Section 72 of the Banking Act. In general abandoned property includes the following \narticles in respect of which no activity has been evidenced for a period of ten years.\n\u2022 Any general deposit (demand, savings or matured time deposit) with an LCB with any interest \nor dividend but excluding any lawful charges.\n\u2022 Any funds paid towards the purchase of shares or other interests in an LCB with any interest or \ndividend but excluding any lawful charges.\n\u2022 Any sum payable on cheques or other instruments for which the LCB is directly liable.\n\u2022 Any intangible personal property and any income or interest thereon held in a fiduciary capacity.\n\u2022 The contents of safe deposit boxes upon which the rental period has expired and of which notice \nhas been sent by registered post to the last known address of the lessee and the lessee has failed \nto respond within three years.\nb. Activity in this regard is evidenced by any action taken by an owner with respect to his property, \nwhich indicates that the owner does not intend his property to be considered abandoned. Such \naction would include a deposit or a withdrawal in the case of a customer account, notification of \nchange of address, payment of a safe deposit rental charge, any other written correspondence, \npresenting the pass book for updating etc.\n2. Filing of the Report on Abandoned Property with the Central Bank of Sri Lanka (CBSL)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 264, "year": 2013}, "type": "Document"}
{"page_content": "2. Filing of the Report on Abandoned Property with the Central Bank of Sri Lanka (CBSL)\na. All LCBs holding any abandoned property should submit a report to CBSL within six months of the \nend of each financial year. The first Report should cover property that would have been presumed \nabandoned up to 31.12.2005. In the case of LCBs whose financial year ends on 31 March, the first \nreport may cover the position as at 31.03.2006.\nb. A ll reporting of abandoned property should be in accordance with the format approved by the \nMonetary Board given at Annex 1. Information should be recorded in alphabetical order of the \nowners\u2019 last name, to the extent possible, and branchwise. Minors accounts should be reported \nseparately. The process of identifying and completing the Report is expected to be automated by \nLCBs.\nc. While the banks should report all property that falls within the definition of abandoned property, if \nthere are special considerations attached to such property, e.g.: the owner having migrated or left the \ncountry for an infinite period with notice to the bank, such special consideration should be reported \nto CBSL.\nd. Where an LCB does not hold any abandoned property to be reported as required by Section 73 \nof the Banking Act, the respective bank is expected to formally communicate it to CBSL. Such \ncommunication will be considered as a \u201cNegative Report\u201d.\ne. Prior to reporting abandoned property to CBSL, the banks should make notification of it to the \nowner of such abandoned property, by registered mail, to the last known address of the owner giving \na reasonable period to respond. Such notice should include a description of the property, a statement \nexplaining the statutory requirements of abandoned property and the intended date that the property", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 264, "year": 2013}, "type": "Document"}
{"page_content": "258 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nwill be reported to CBSL if there is no response. In the case of Minors\u2019 accounts where the banks are \nof the view that it is not reasonable to consider a particular account as abandoned due to its intrinsic \ncharacteristics, banks need not notify the owners/guardians of such accounts. However, the banks \nshould report all Minors\u2019 accounts that fall within the definition of abandoned property to CBSL \nwith specific mention why they should not be considered as abandoned property . \nf. Pursuant to the filing of a Report on Abandoned Property, a bank should maintain documents \nnecessary to prove information submitted in the Report for a period of at least six years from the \ndate of submitting the Report.\n3. Delivery of Abandoned Property to CBSL\nAny further action to be taken in terms of Subsections (2) and (3) of Section 73 of the Banking Act \nwill be notified to all LCBs in due course.\n4. Publication of Notice of Abandoned Property\na. In accordance with Section 74 of the Banking Act a bank should, within thirty days of submission \nof the Report, required under paragraph 2.a above,\n\u2022 publish a notice in the Sinhala, Tamil and English daily newspapers stating the name of the owner \nand particulars concerning the property; and\n\u2022 should dispatch by registered post, a notice containing particulars of the property to the last \nknown address of the owner.\nb. W ith regard to Minors\u2019 accounts, the procedure stated in paragraph 2 e. above should be followed.\n5. Drilling/Opening of safe deposits\na. T he bank should prepare a Safe Deposit Inventory Sheet to record details of safe deposit \nboxes opened. Opening of the safe custody lockers should be carried out in the presence of \ntwo responsible officers who are, inter-alia, specifically assigned with such task and one of \nwhom should be at least at Senior Executive Level. All items found in safe deposit boxes", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 265, "year": 2013}, "type": "Document"}
{"page_content": "whom should be at least at Senior Executive Level. All items found in safe deposit boxes \npresumed to be abandoned should be included in the Inventory Sheet without exceptions.  \nNo item should be sold, destroyed or disposed.\nb. The format at Annex 3 may be used for this purpose. The Inventory Sheet should be signed by the \nstaff conducting the inventory and returned to CBSL along with the Report on Abandoned Property.\nc. All items contained in the safe deposit boxes should be itemised and kept in safe custody after the \ndrilling/opening of safe deposit boxes.\n6. The costs\nThe banks should attempt to comply with these guidelines in the most cost efficient manner. These \ncosts should be charged to the owners of abandoned property only if it has been made known to the \ncustomers in a valid, enforceable and written contract between the bank and the customer, specifying \nthe amount of the fee and the customer is notified of the charging of such fee.\n7. Submission of information by licensed specialized banks (LSBs)\nThe provisions of the Banking Act do not require LSBs to identify and report Abandoned Property. \nHowever, LSBs are requested to identify the articles that could be considered abandoned as described \nin Section 72 of the Banking Act and to report them to CBSL using the format at Annex 1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 265, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  259\nInstructions for completing the Report of Abandoned Property at Annex 1\nInformation should be recorded in alphabetical order of the owners\u2019 last name, to the extent possible, and \nbranchwise. A separate sheet should be used for Minors accounts.\nName of Bank: Enter the name of the reporting bank.\nReporting Date: Enter the date as at when the reporting is done.\nColumn A:  Enter the owner\u2019s last name followed by full first name and full middle name/s.  \nEnter information that would aid in identification such as Miss, Mr., Mrs., after the  \nmiddle name.\n If a single item has two or more owners, the names of all such owners must be reported \nwith the relationship.\n If your records do not show an owner name for an item, enter the owner as \u201cunknown\u201d.\nColumn B:  Enter the complete address available in your records. If no address is available indicate \nso. In the case of several owners if the address is same, the address may be entered once \nand indicated that it is same for others.\nColumn C:  Enter the owner\u2019s National Identity Card No., Passport No., date of birth or any other \ninformation that will assist in identification of an owner. These will be essential in paying \nclaims and if known, they must be included in the Report.\nColumn D:  Enter the description of item with sufficient detail.\nColumn E:  Enter your identification number for each item such as Account No., Cheque No. etc.\nColumn F:  Indicate whether the item is interest bearing.\nColumn G:  Indicate the date when the last deposit, withdrawal or contact was made by the owner.  \nIt could also be the date a dividend became payable, cheque or draft was issued, certificate \nwas purchased.\nColumn H:  Indicate the nature of the last activity .\nColumn I:  Indicate the total amount due to the owner including all interest, dividend, earned up to \nthe reporting date without deducting any service charges.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 266, "year": 2013}, "type": "Document"}
{"page_content": "the reporting date without deducting any service charges.\n In the case of safe deposit boxes or other items held for safekeeping, identify the contents \nand include the description of any item that has a value. For all safe deposit boxes include \nan inventory sheet as in Annex3.\nColumn J:  Enter the amount of deductions made which should include only any lawful char ges.\nColumn K:  Indicate the nature of deduction made such as service char ges, tax etc.\nColumn L:  Indicate the net amount due after the deductions mentioned.\nColumn M:  Indicate the terms agreed with the owner such as interest rate, payment instructions etc., \nthat will be essential in case of payment of claims.\n Also indicate any special considerations attached to such property and the date of maturity \nin case of term deposits.\nTotal:  T otal the Column L and enter at the bottom of each page. On the last page enter the page \ntotal and the grand total for the entire Report.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 266, "year": 2013}, "type": "Document"}
{"page_content": "260 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex 3\nSafe Deposit Box Inventory Sheet\nName of Bank:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nReporting Year:  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nName of Box Owner(s):  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nBox Number: \u2026\u2026\u2026\u2026\u2026\u2026\u2026  Date Drilled: \u2026\u2026\u2026\u2026\u2026\u2026\u2026  Vault Location: \u2026\u2026\u2026\u2026\u2026..\nQuantity Detailed Description of Contents Any other Relevant Information\nWe certify that the above information is true and that no items have been removed or destroyed.\nDate of Inventory:\n --------------------------------  ---------------------------------  ------------------------------\n Signatur e of Bank Official  Name of Official  Designation\n --------------------------------  ---------------------------------  ------------------------------\n Signatur e of Bank Official  Name of Official  Designation\nInstructions for completing the Safe Deposit Box Inventory Sheet at Annex 3\nName of Bank: Enter the name of the reporting bank.\nReporting Date: Enter the date as at the date of reporting.\nName of the Box Owner(s):  Indicate the full name(s) of the owner(s) including information useful for \nowner identification.\nBox Number: Enter the safe deposit box number.\nDate Drilled: Enter the date the safe deposit box was opened.\nVault Location: Indicate where the vault containing the safe deposit is located.\nQuantity & Detailed Description:  Indicate the nature of each item contained in the safe deposit box \nwith the quantities.\nDate of Inventory: The date on which the inventory was taken.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 267, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  261\nRef. No. : BS/38/90\nBank Supervision Department\nCentral Bank of Sri Lanka\n8th Floor \u2013 Renuka Building\n41 Janadhipathi Mawatha\nColombo 1.\n30 April 1998.\nTo : All Licensed Specialised Banks\nDear Sir,\nLIST OF QUALIFIED AUDITORS\nS.38a OF THE BANKING ACT NO. 30 OF 1988 AS AMENDED BY ACT NO. 33 OF 1995\nWe refer to section 38 a of the Banking Act, No. 30 of 1988 as amended by Act, No. 33 of 1995 and \nenclose herewith a list of qualified  auditors compiled in accordance with S.38 a(1) of the Act.\nYour attention is drawn to S.38 a (2) and S.39(1) of the Act which requires that the appointment \nof an auditor to audit  the accounts of your Bank from the list transmitted to you under S.38 a (1) by the  \nDirector of Bank Supervision.\nYou are required to comply with this provision when you next appoint an auditor in terms of S.39 \nof the Banking Act, No.30 of 1988 as amended by Act, No.33 of 1995.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd. Y. A. Piyatissa\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 268, "year": 2013}, "type": "Document"}
{"page_content": "262 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nList\tof\tQualified \tAuditors\nS.38 a (1) of the Banking Act, No. 30 of 1988 as amended by Act, No.33 of 1995\n Name  Addr ess\n 1. Ernst & Young  201 De Saram Place\n  P.O. Box 101\n  Colombo 10.\n 2. K P  M G Ford Rhodes Thornton & Co.  32A Sir Mohamed Macan Marker Mawatha\n  P.O. Box 186\n  Colombo 3.\n 3. Pricewaterhouse Coopers  P.O. Box 918\n  100, Braybrooke Place\n  Colombo 2.\n 4. SJMS Associates  2 Castle Lane\n  Colombo 4.\n 5. H L  B Edirisinghe & Co.  45 Braybrooke Street\n  Colombo 2\n 6. B R de Silva & Co.  22/4 Vijaya Kumaratunga Mawatha\n  Colombo 5.\n 7. Kreston MNS & Co.  P.O. Box 210\n  50/2 Sir James Peiris Mawatha\n  Colombo 2.\n 8. BDO Hathy  \u2018Charter House\u2019\n  65/2 \n  Sir Chittampalam A Gardiner Mawatha\n   P.O. Box 962\n  Colombo 2.\n 9. B V Fernando & Co.  78-3 1/1 Rodney Street\n  Colombo 8.\n10. T issa Fernando  519/2B Elvitigala Mawatha\n  Colombo 5.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 269, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  263\nRef. No. : 02  / 05 /006 / 0100  / 002\nBank Supervision Department\n17 June 2011\nTo : CEOs of All Licensed Banks\nDear Sir / Madam,\nDISPLAY OF INTEREST RATES, EXCHANGE RATES, \nSERVICE CHARGES, FEES AND COMMISSIONS\nReference Circular No. 02/05/006/0100/001 dated 28 October 2003 on display of interest rates \nand exchange rates.\nTo further improve the market efficiency by promoting healthy competition among banks, all \nlicensed banks are required to expand the disclosures on interest rates of deposits and lending products, \nexchange rates and to display details of fees, commissions and other service charges in all branches and \nother banking outlets and publish them in banks\u2019 web sites, commencing from 01 August 2011.\nFormats for display of above information are enclosed herewith. Banks may further expand the \nformats given to suit the products and services of each bank.\nAnnex I  :  Format for display of interest rates\nAnnex II  :  Format for display of foreign exchange rates\nAnnex III  :  Format for display of service char ges, fees and commissions\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 270, "year": 2013}, "type": "Document"}
{"page_content": "264 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex  I\nSuggested format for the Display of Interest Rates\nDescriptionMin. rate\nas at \u2026..Max. rate\nas at \u2026..\nInterest Rates on Deposits\nSavings Deposits\nMinor Savings Deposits\nCall Deposits\nTime Deposits - 1 Year\n    * Interest Payable monthly\n    * Interest Payable at maturity\nNRFC Savings Deposits\n    * US Dollar\n    * Sterling Pound\n    * Euro\n    * Any other currencies\nNRFC Fixed Deposits - 1 Year\n    * US Dollar\n    * Sterling Pound\n    * Euro\n    * Any other currencies\nInterest Rates on Advances\nExport Bill Finance - Rupee Facilities\nImport Bill Finance - Rupee Facilities\nLease Finance\nLending to Small & Medium Scale Industries (SMEs)\nResidential Housing\nPawning\nUS Dollar Loans to Exporters\nOverdrafts\n    * Permanent\n    * Temporary\nPersonal Loans\nVehicle Loans\nCredit Cards \nAgricultural Lending\nRefinance \tSchemes\n  i.  Agriculture & Animal Husbandry\n      * Tea Development Project (Revolving fund)- (TDPRF)\n      * Agro \u2013 Livestock Development Project \n      * Any other\n ii.  Small & Medium Enterprises Sector\n      * Susahana Loan Scheme\n      * Self-Employment Initiative Loan Scheme \n      * Any other\niii. Micro Finance Sector\n    * Poverty Alleviation Microfinance Project (Revolving Fund)  PAMP Scheme\n    * Small Farmers & Landless Credit Project Revolving Fund\n    * Any other", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 271, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  265\nAnnex  II\nSuggested format for the Display of Foreign Exchange Rates\nExchange RatesRate: Rupees per unit of foreign currency as at \u2026\u2026\u2026\u2026.\nCurrency Travelers Cheques Telegraphic TransfersImport \nBill \nRatesBuying \nRateSelling \nRateBuying \nRateSelling \nRateBuying \nRateSelling \nRate\nAustralian Dollar\nCanadian Dollar\nDanish Kroner\nEuro\nHong Kong Dollar\nJapanese Yen \nNew Zealand Dollar\nNorwegian Kroner\nPound Sterling\nSingapore Dollar\nSwedish Kroner\nSwiss Franc\nUnited States Dollar", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 272, "year": 2013}, "type": "Document"}
{"page_content": "266 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex  III\nSuggested format for the Display of Service Charges, Fees & Commissions\nDescription Rs.   as at \u2026\u2026..\nSERVICE CHARGES\nSavings Accounts\nCharges for non-maintenance of account balance as stipulated minimum, etc\u2026\nCurrent Accounts\nCurrent account monthly service charge\nCharges for account statement\nCheque issuing cost\nStop payment order\nReturn cheques due to insufficient funds, etc\u2026\nRemittances\nInward credit to Sri Lanka rupee account\nInward remittance to foreign currency account\nIssue of foreign currency demand draft, pay orders, etc\u2026\nTraveller\u2019s Cheques\nEncashment of Traveller\u2019s Cheques\nSale of Traveller\u2019s Cheques, etc.\u2026\nATMs\nIssuing Fee \nATM cash withdrawal - Own Bank\nATM cash withdrawal - Other Bank, etc.\u2026\nCredit Cards - Main Cardholder\nAnnual fee \nLate Payment charges\nInterest charges, etc. \u2026\nFEES & COMMISSIONS\nSLIPS Payment Charges\nRTGS Payment Charges\nFacility Arrangement Fees - Overdrafts\n    * Security Backed\n    * Clean Basis\nEarly Settlement Fees\n    * Residential Housing\n    * Vehicle Loans\nCheque Purchase Commission\nLC Commission \n    * LC Opening Fee & Commission\n    * LC Negotiation Charges, etc. \u2026\nShipping Guarantees \nBank Guarantees \nAcceptance", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 273, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  267\nRef.  No. : 02  / 05 / 006 / 0100  / 001\nBank Supervision Department\n28th October 2003\nTo : All Licensed Commercial Banks and\n        Licensed Specialised Banks\nDear Sir  / Madam,\nDISPLAY OF INTEREST RATES AND EXCHANGE RATES\nThe Central Bank of Sri Lanka welcomes the efforts made by banks to publish their deposit and \nlending rates. You would no doubt appreciate that adequate market information is vital for improving \nmarket efficiency and in promoting healthy competition.\nAs another step forward in this direction, all licensed commercial banks and specialised banks \nare requested to compile a representative list of their interest rates on deposits and advances and their \nbuying and selling rates for foreign currencies and to display such information to the general public in \nall branches and other banking outlets. You would recall that we agreed at an earlier Bank Managers\u2019 \nMeeting to follow this practice, but it is observed that not all banks adequately do so.\nAll licensed commercial banks and specialised banks are informed that the display of interest rates \nand exchange rates of banks should commence from 1st January, 2004 the latest. A format suggested \nfor the display of information is enclosed herewith.\nPlease forward a copy of the list of interest rates and exchange rates displayed to this Department \nperiodically as and when it is revised.\nYours faithfully,\nDirector of Bank Supervision\nSuggested Format for the Display of Interest Rates and Exchange Rates\nBank \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nInterest Rates on Deposits [per cent per annum]  Rate as at \u2026\u2026\nSavings Deposits\n Fixed Deposits - 12 months\n  Interest payable monthly\n  Interest payable at maturity\n NRFC Savings Deposits - US Dollar\n              - Sterling Pound\n NRFC One Year Fixed Deposits - US Dollar \n                - Sterling Pound\n \nInterest Rates on Advances [per cent per annum]  Rate as at \u2026\u2026", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 274, "year": 2013}, "type": "Document"}
{"page_content": "- Sterling Pound\n \nInterest Rates on Advances [per cent per annum]  Rate as at \u2026\u2026\nExport Bill Finance - Rupee Facilities\nImport Bill Finance - Rupee Facilities\nLease Finance\nLending to Medium Scale Industries (up to 5 years)\nResidential Housing \nPawning\nUS Dollar Loans to Exporters\n Rate : Rupees per unit of Foreign Currency as at \u2026\u2026\u2026\n    Exchange Rates  Currency  Traveller\u2019s Cheques\n Buying Rate  Selling Rate  Buying Rate  Selling Rate\nUS Dollar\nSterling Pound\nYen\nEuro\nAustralian Dollar\nSingapore Dollar\nIndian Rupee", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 274, "year": 2013}, "type": "Document"}
{"page_content": "268 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 003 / 0401  / 001\nBank Supervision Department\n24 March 2006\nTo :  CEOs of Licensed Commer cial Banks and\n   CEOs of Licensed Specialised Banks\nDear Sirs,\nINADEQUATE  / INCORRECT DISCLOSURES  / PRESS STATEMENTS BY BANKS\nAs intimated to you at the Chief Executive Officers meeting held on 23 March 2006, there have \nbeen several instances where banks have attempted to mislead the public by publishing incorrect \nstatements/data or by not publishing certain aspects of information with regard to non-compliance with \nstatutory regulations. \nSuch attempts by banks to mislead the general public totally negate the efforts of the regulator to \neducate the public on the true state of the banks in the industry, and it would be futile to further enhance \nour efforts in this regard, if immediate action is not taken by the regulator to stop such deception. The \nCentral Bank of Sri Lanka (CBSL) will be faulted for permitting the banks to misrepresent their financial \ncondition to the public.\nIt is incumbent on bank management, in the discharge of their fiduciary responsibility, to project the \ntrue picture of their financial condition to the public.\nTherefore, in the interest of providing accurate information to the public for making informed \ndecisions, all banks are required, in making statements to the press, and in publishing the financial results \nof banks, to ensure that adequate publicity is given to non-compliance, if any, with the prudential ratios \nand the measures being taken by the bank to meet these ratios.\nWhere banks, which are not compliant with regulatory requirements, do not make such disclosures \nto the public in press interviews or statements, the CBSL, as the regulator will be compelled to correct \nsuch information in the public domain.\nYours faithfully,\nSgd, Director of Bank Supervision\nCopy to : Secretary-General, SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 275, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  269\nRef. No. : 02  / 04 / 003 / 0401  / 001\nBank Supervision Department\n21 February 2006\nTo :  The CEOs of all Licensed Commer cial Banks and\n   Licensed Specialised Banks\nDear Sirs,\nPUBLICATION OF AUDITED FINANCIAL STATEMENTS OF BANKS IN THE PRESS\nFurther to the circulars issued with regard to the publication of financial statements of banks in the \npress, dated 30 September 2005 and 26 January 2006.\nConsidering the representations made by the banks with regard to the practical difficulties faced by \nthem with regard to the time period for publication of audited financial statements of banks in the press, \nin order to qualify for exemption from publishing the last quarter unaudited results, all licensed banks \nare informed as follows:\no If the bank publishes its annual audited financial statements within three months from the end \nof the financial year, the requirement to publish the financial statements for the fourth quarter \nin terms of the circular dated 30 September 2005 would not be mandatory.\no The licensed commercial banks incorporated abroad may publish the latest available key  \nperformance indicators relating to the global operations of such bank on a quarterly basis, and \nthe ratios based on audited financial information along with the audited financial statements \nof the parent bank. \no W ith regard to the format for publication of audited financial statements, all banks should use \nthe format issued on 30 September 2005 for the publication of quarterly financial statements.\nYours faithfully,\nSgd, Director of Bank Supervision\n(Formats referred to in the Circular are replaced with Circular No. 02/17/900/0001/04 dated 11.02.2013)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 276, "year": 2013}, "type": "Document"}
{"page_content": "270 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 003 / 0401  / 001\nBank Supervision Department\n26 January 2006\nTo : CEOs of all Licensed Banks\nDear Sirs,\nPUBLICATION OF QUARTERLY FINANCIAL STATEMENTS OF BANKS\nIN THE PRESS\nBy circular No. 02/04/003/0401/001 dated 30 September 2005, all banks were informed of the \nrequirements with regard to the publication of quarterly financial statements of banks in the press, which \nwas applicable for the publication of financial statements from the 3rd Quarter of 2005 onwards.\nSeveral discrepancies were observed with regard to the publications in respect of the 3rd Quarter of \n2005. Therefore all banks are informed that they should comply with all the requirements in the above \ncircular. The following points should be noted:\n 1. The time frame for publication is within two months from the end of each quarter .\n 2. The publication should be made in a Sinhala, English and Tamil daily newspaper \u2013 This \nrequirement is to inform the public of the financial condition of the banks and is uniformly \napplicable to all banks. \n 3. The format specified by the circular should be conformed to. If a \u2018 nil\u2019 balance has to be \nreported in respect of an item in the format, such items should be reported as \u2018 nil\u2019, instead \nof deleting the entire row from the format.\n 4. The key performance indicators should be computed according to the definitions provided \nby the BSD.\nWith regard to the publication of accounts by licensed commercial banks incorporated abroad, the \npublication of global accounts is mandatory on an annual basis, while the banks may publish information \nrelating to the latest available period on a quarterly basis. However, all such banks should publish \nquarterly, the selected performance indicators such as capital adequacy ratio, return on assets, return on \nequity, and the non-performing advances ratio of the parent bank for the respective quarter.\nYours faithfully,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 277, "year": 2013}, "type": "Document"}
{"page_content": "Yours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 277, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  271\nRef. No. : 02  / 04 / 003 / 0401  / 001\nBank Supervision Department\n30 September 2005\nTo : The CEOs of all Licensed Commercial Banks and\n        Licensed Specialised Banks\nDear Sirs,\nPUBLIC DISCLOSURE BY PUBLICATION OF\nQUARTERLY FINANCIAL STATEMENTS OF BANKS IN THE PRESS\n As discussed at the meeting of the CEOs of LCBs held on 28 July 2005, the format for publication \nof quarterly financial statements in the press has been revised in consultation with the representative of \nbanks, and is attached herewith, along with the suggested Sinhala and Tamil translations.  \n2. T he revision is aimed at increasing the transparency of banking operations, and to align the \npublication requirements with those of other regulators. Accordingly, the formats have been drafted \nincorporating the disclosure requirements of the Securities and Exchange Commission (SEC)  \n(in respect of listed banks) and the Sri Lanka Accounting Standards, as far as possible. In addition, \nselected performance indicators, including key prudential ratios have been included, as agreed with the \nbanks. \n3. T he information published should be in respect of the entire bank, i.e. including the off-shore \nbanking unit and in the case of LCBs incorporated in Sri Lanka, any branches abroad. \n4. The new format contains two parts viz; \n\u2022 Part  I : The format for the summarized balance sheet, income statement, and the statement of \nchanges in equity and reserves and selected performance indicators.\n\u2022 Part II :  Instructions for Preparation of Bank Accounts for publication in the press .\n5. Balance Sheet information should be reported as at end of the relevant quarter. Comparative figures \nto be published should be based on the audited financial statements for the previous financial year . \n5.1 The reporting period in respect of the income statement should be the cumulative position as at the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 278, "year": 2013}, "type": "Document"}
{"page_content": "end of the relevant quarter in the financial year. Comparative figures should be in respect of the same \nreporting period in the previous financial year. \n5.2 In the case of selected performance indicators, the relevant ratios as at the reporting date should be \nreported while the comparative ratios should be based on the audited financial statements for the previous \nfinancial year. \n6. The publication should be made within two months from the end of each quarter, at least once in \nan English, Sinhala and Tamil newspaper.  If the bank publishes its annual audited financial statements \nwithin two months from the end of the financial year, the requirement to publish the financial statements \nfor the fourth quarter in terms of these instructions would not be mandatory.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 278, "year": 2013}, "type": "Document"}
{"page_content": "272 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n7. The licensed commercial banks incorporated abroad may report information pertaining to  \nthe global operations of the parent bank, in the column for reporting the information on the Group.  \nSuch information may be reported in the currency of the home country or in US Dollars. In view of \nthe heterogeneous character of group accounts of foreign banks, the banks are requested to make every \nendeavour to publish all items given in the agreed format.  \n8. The disclosure requirements contained herein specify the minimum requirements to be adopted \nby the banks and all banks are encouraged to make additional disclosures for the benefit of the general \npublic. In addition, the banks listed on the Colombo Stock Exchange should comply with any additional \nregulations imposed by the SEC with regard to publication of financial information. \n9. The revised publication format will be effective for publication of banks\u2019 financial statements from \nthe 3rd quarter of 2005 onwards. \n9.1 The codes indicated in the formats are for cross reference with the definitions in the instructions and \nnot for publication.  \n10. The circular dated 30 January 2003 on the publication of quarterly financial statements is hereby \nrescinded.   \n Please acknowledge receipt of this circular .  \nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 279, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  273\nOur Ref. : 02  / 17 / 900 / 0001  / 04\nBank Supervision Department\n11 February 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nPUBLIC DISCLOSURE BY PUBLICATION OF  \nQUARTERLY FINANCIAL STATEMENTS OF  \nBANKS IN THE PRESS\nWe refer to our previous correspondence and discussions on the above and enclose the  \nnew format for the publication of quarterly financial statements of licensed commercial banks and \nlicensed specialised banks in the press effective from the 1st quarter of 2013.\nAccordingly, format referred to in the paragraph No. 4 of the Circular dated 30 September 2005 \non the above is replaced with the format in Annex.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nCopy to :  The Secretary-General, Sri Lanka Banks\u2019  Association (Guarantee) Ltd.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 280, "year": 2013}, "type": "Document"}
{"page_content": "274 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex\nSPECIFIED FORMAT FOR THE PUBLICATION OF \nQUARTERLY FINANCIAL STATEMENTS OF \nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS \nIN THE PRESS\n\u2026\u2026\u2026\u2026.. BANK\nINCOME STATEMENT\nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.\nIn Rupees Thousands\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YY\nInterest income\nInterest expenses\nNet interest income\nFee and commission income\nFee and commission expenses\nNet fee and commission income\nNet gain / (loss) from trading\nNet gain / (loss) from financial instruments  \n  designated at fair value through  \n  profit or loss\nNet gain / (loss) from financial investments\nOther operating income (net)\nTotal operating income\nImpairment for loans and other losses\n Individual impairment\n Collective impairment\n Others\nNet operating income\nPersonnel expenses\nDepreciation and amortisation\nOther expenses\nOperating profit/(loss) \n befor e value added tax (V AT)\nValue added tax (V AT) on financial services", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 281, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  275\nBank Group\nFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YYFrom\nDD/MM/YY\nTo\nDD/MM/YY\nProfit / (loss) for the period\nOther comprehensive income, net of tax\nChanges in revaluation surplus\nActuarial gains and losses on  \ndefined benefit plans\nGains and losses  \n(arising from translating the financial \nstatements of a foreign operation) \nGains and losses on re-measuring  \navailable-for-sale financial assets\nGains and losses on cash flow hedges\nOthers\nShare of profits of associates  \nand joint ventures \nLess: T ax expense/(income) relating to \ncomponents of other comprehensive \nincome\nOther comprehensive income for the \nperiod, net of taxes\nTotal comprehensive income for the period\nAttributable to:\nOwners of the parent\nNon-controlling interests\u2026\u2026\u2026\u2026.. BANK\nSTATEMENT OF COMPREHENSIVE INCOME\nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.\nIn Rupees ThousandsOperating profit/(loss)  \n  after value added tax (V AT)\nShare of profits of associates and  \n  joint ventures\nProfit/(loss) before tax\nTax expenses\nProfit/(loss) for the period\nProfit attributable to:\nOwners of the parent\nNon-controlling interests\nEarnings per share on profit\nBasic earnings per ordinary share\nDiluted earnings per ordinary share(Contd.)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 282, "year": 2013}, "type": "Document"}
{"page_content": "276 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n\u2026\u2026\u2026\u2026.. BANK\nSTATEMENT OF FINANCIAL POSITION\nAS AT \u2026\u2026\u2026\u2026.\nIn Rupees Thousands\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nAssets\nCash and cash equivalents\nBalances with central banks \nPlacements with banks \nDerivative financial instruments\nOther financial assets held-for-trading\nFinancial assets designated at fair value  \n through profit or loss\nLoans and receivables to banks \nLoans and receivables to other customers\nFinancial investments \u2013 Available-for-sale \nFinancial investments \u2013 Held-to-maturity \nInvestments in subsidiaries\nInvestments in associates and joint ventures\nProperty, plant and equipment\nInvestment properties\nGoodwill and intangible assets \nDeferred tax assets\nOther assets\nTotal assets\nLiabilities\nDue to banks \nDerivative financial instruments\nOther financial liabilities held-for-trading\nFinancial liabilities designated at fair value  \n through profit or loss\nDue to other customers\nOther borrowings\nDebt securities issued\nCurrent tax liabilities\nDeferred tax liabilities\nOther provisions\nOther liabilities\nDue to subsidiaries\nSubordinated term debts\nTotal liabilities", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 283, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  277\n\u2026\u2026\u2026\u2026.. BANK\nSTATEMENT OF CHANGES IN EQUITY\nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.\nBANK / GROUP  In Rupees Thousands\nStated capital/\nAssigned \ncapitalReserves\nTotal\nNon-controlling interest\nTotal equityOrdinary \nvoting shares\nOrdinary \nnon-voting shares\nAssigned capital\nReserve fund\nRevaluation reserve\nRetained earnings\nOther reserves\nBalance as at DD/MM/YY (Opening balance)  \nTotal comprehensive income for the year  \nProfit/(loss) for the year  \nOther comprehensive income (net of tax)  \nTotal comprehensive income for the year           \nTransactions with equity holders, recognised \ndirectly in equity \nShare issue/increase of assigned capital  \nShare options exercised\nBonus issue  \nRights issue  \nTransfers to reserves during the period  \nDividends to equity holders  \nProfit transferred to head office  \nGain/(loss) on revaluation of Property, Plant \nand Equipment (if cost method is adopted) \nOthers (Please specify)  \nTotal transactions with equity holders           \nBalance as at DD/MM/YY (Closing balance)           (Contd.)\nEquity\nStated capital/Assigned capital\nStatutory reserve fund\nRetained earnings\nOther reserves\nTotal shareholders\u2019 equity\nNon-controlling interests\nTotal equity\nTotal equity and liabilities\nContingent liabilities and commitments \nMemorandum Information\n Number of Employees\n Number of Branches\nNote: Amounts stated are in net of impairment and depreciation", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 284, "year": 2013}, "type": "Document"}
{"page_content": "278 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n\u2026\u2026\u2026\u2026.. BANK\nSTATEMENT OF CASH FLOWS\nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.\nIn Rupees Thousands\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nDD/MM/YY DD/MM/YY DD/MM/YY DD/MM/YY\nCash\tflows\tfrom\toperating \tactivities\nProfit before tax\nAdjustment for :\nNon-cash items included in profits before tax\nChange in operating assets\nChange in operating liabilities\nNet gains from investing activities\nShare of profits in associates and joint ventures\nDividend income from subsidiaries and associates \nInterest expense on subordinated debt\nOthers (please specify)\nContribution paid to defined benefit plans\nTax paid\nNet cash generated from operating activities     \nCash\tflows\tfrom\tinvesting\tactivities\nPurchase of property, plant and equipment\nProceeds from the sale of property, plant and equipment\nPurchase of financial investments\nProceeds from the sale and maturity of financial \ninvestments\nNet purchase of intangible assets\nNet cash flow from acquisition of investment  \nin subsidiaries and associates\nNet cash flow from disposal of subsidiaries\nProceeds from disposal of associates and joint ventures\nDividends received from investment  \nin subsidiaries and associates\nOthers (please specify)\nNet cash (used in)/from investing activities     \nCash\tflows\tfrom\tfinancing\tactivities\nNet proceeds from the issue of ordinary share capital \nNet proceeds from the issue of other equity instruments\nNet proceeds from the issue of subordinated debt\nRepayment of subordinated debt\nInterest paid on subordinated debt\nDividend paid to non-controlling interest\nDividend paid to shareholders of the parent company\nDividend paid to holders of other equity instruments\nOthers (please specify)\nNet\tcash\tfrom\tfinancing\tactivates     \nNet increase/(decrease) in cash & cash equivalents\nCash and cash equivalents at the beginning of the period\nExchange difference in respect of cash & cash equivalent", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 285, "year": 2013}, "type": "Document"}
{"page_content": "Exchange difference in respect of cash & cash equivalent\nCash and cash equivalents at the end of the period     \nNote:   Banks have the option to use one of the two methods specified in LKAS 7  \nfor the preparation of the statement of cash flows", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 285, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  279\n\u2026\u2026\u2026\u2026.. BANK\nANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS\nAS AT \u2026\u2026\u2026\u2026.\nIn Rupees Thousands\na. Bank \u2013 Curr ent period  \nHFTDesignated\nat fair \nvalueHTMAmortised \ncostAFS Hedging Total\nASSETS\nCash and cash equivalents\nBalances with central banks\nPlacements with banks \nDerivative financial instruments\nOther financial assets at  \n fair value through profit or loss\nLoans and receivables to banks\nLoans and receivables to  \n other customers\nFinancial investments\nTotal financial assets \nHFTDesignated\nat fair valueAmortised \ncostHedging Total\nLIABILITIES\nDue to banks\nDerivative financial instruments\nOther financial liabilities at  \n fair value through profit or \nloss\nDue to other customers\nOther borrowings\nDebt securities issued\nTotal financial liabilities \nHFT  \u2013  Held for trading\nDesignated at fair value  \u2013  Designated at fair value through profit or loss\nAmortised cost  \u2013  Loans and receivables/deposits at amortised cost \nHTM  \u2013  Held-to-maturity \nAFS  \u2013  Available-for-sale \nHedging  \u2013  Instruments of fair value and cash flow hedging \nb. Bank \u2013 Pr evious period as above\nc. Gr oup \u2013 Current period as above\nd. Gr oup \u2013 Previous period as above", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 286, "year": 2013}, "type": "Document"}
{"page_content": "280 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n\u2026\u2026\u2026\u2026.. BANK\nSELECTED PERFORMANCE INDICATORS (AS PER REGULATORY REPORTING)\nAS AT \u2026\u2026\u2026\u2026.\nItemBank Group\nDD/MM/YY DD/MM/YY DD/MM/YY DD/MM/YY\nRegulatory Capital Adequacy     \nCore Capital (Tier 1 Capital), Rs. \u2019000     \nTotal Capital Base, Rs. \u2019000     \nCore Capital Adequacy Ratio, as % of Risk Weighted  \n Assets (Minimum Requirement, 5%)    \nTotal Capital Adequacy Ratio, as % of Risk Weighted  \n Assets (Minimum Requirement, 10%)    \nAssets Quality (Quality of Loan Portfolio)     \nGross Non-Performing Advances Ratio, %  \n (net of interest in suspense)    \nNet-Non Performing Advances, % \n (net of interest in suspense and provision)    \nProfitability     \nInterest Margin, %     \nReturn on Assets (before Tax), %     \nReturn on Equity, %     \nRegulatory Liquidity     \nStatutory Liquid Assets, Rs. \u2019000     \nStatutory Liquid Assets Ratio, %  \n (Minimum Requirement, 20%)    \nDomestic Banking Unit     \nOff-Shore Banking Unit     \nCERTIFICATION :\n \nWe, the undersigned, being the Chief Executive officer and the Financial Controller / Compliance Officer of \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 Bank certify jointly that:\n (a)  the above statements have been prepared in compliance with the format and definitions pre -\nscribed by the  Central Bank of Sri Lanka;\n (b)  t he information contained in these statements have been extracted from the unaudited financial \nstatements of the bank unless indicated as audited.\n (Name )  (Name)\n (Sgd.) Chief Executive Officer   (Sgd.) Financial Controller or Compliance Officer\n Date: DD/MM/YY   Date: DD/MM/YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 287, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  281\nRef. : 02  / 17 / 900 / 0001  / 004\nBank Supervision Department\n11 October 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nADDITIONAL QUARTERLY DISCLOSURE\nIN THE PRESS AND ON THE WEBSITES\nReference our Circulars dated 11 February 2013 and 17 September 2013 on Public Disclosure \nby Publication of Quarterly Financial Statements of Banks in the Press and Publication of Financial \nStatements and Other Disclosures on the Websites, respectively.\nEvery bank shall ensure additional disclosures on the following items in their quarterly publications \nin the press and on their respective websites, from 3rd quarter of 2013 as given in Annex.\n1. Loans and receivables to other customers\n2. Loans and receivables to other customers \u2013 By product\n3. Movements in individual and collective impairment during the period for loans and receivables \nto other customers\n4. Dues to other customers \u2013 By product\nAccordingly, you are requested to take necessary measures to comply with the above.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 288, "year": 2013}, "type": "Document"}
{"page_content": "282 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex \nADDITIONAL QUARTERLY DISCLOSURES IN THE PRESS AND \nON THE WEBSITES \n1) Loans and Receivables to Other Customers\nIn Rupees Thousand\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nGross loans and receivables\n(Less ):  Individual impairment \nCollective impairment \nNet loans and receivables including those \ndesignated at fair value through profit or loss\n(Less): Loans and receivables designated at fair \nvalue through profit or loss\nNet loans and receivables\n2) Loans and Receivables to Other Customers \u2013 By product\nIn Rupees Thousand\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nBy product-Domestic Currency\nOverdrafts\nTerm loans\nLease rentals receivable\nCredit cards\nPawning\nOther loans (Please specify)\nSub total\nBy product-Foreign Currency\nOverdrafts\nTerm loans\nOther loans (Please specify)\nSub total\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 289, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  283\n3) Movements in Individual and Collective Impairment during the period for  \nLoans and Receivables to Other Customers\nIn Rupees Thousand\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nIndividual impairment \nOpening balance at DD/MM/YY\nCharge/(Write back) to income statement\nWrite-off during the year\nOther movements\nClosing balance at DD/MM/YY\nCollective impairment \nOpening balance at DD/MM/YY\nCharge/(Write back) to income statement\nOther movements\nClosing balance at DD/MM/YY\nTotal impairment\n4) Due to Other Customers \u2013 By product\nIn Rupees Thousand\nBank Group\nCurrent \nPeriodPrevious \nPeriodCurrent \nPeriodPrevious \nPeriod\nAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YYAs at\nDD/MM/YY\nBy product-Domestic Currency\nDemand deposits (current accounts)\nSavings deposits\nFixed deposits\nOther deposits (Please specify)\nSub total\nBy product- Foreign Currency\nDemand deposits (current accounts)\nSavings deposits\nFixed deposits\nOther deposits (Please specify)\nSub total\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 290, "year": 2013}, "type": "Document"}
{"page_content": "284 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02/04/004/0002/001\nBank Supervision Department\n8th Floor, Renuka Building \n41, Janadhipathi Mawatha\nColombo 01.\n15th December 1999\nTo : All Licensed Specialised Banks\nDear Sir,\nPRESCRIBED ACCOUNTING FORMAT FOR THE PUBLICATIONS OF\nANNUAL AUDITED ACCOUNTS OF LICENSED SPECIALISED BANKS\nWe enclose herewith the Prescribed Accounting Format specified by the Monetary Board, in \nterms of Section 38(3) of the Banking Act, No.30 of 1988 as amended by Section 76(H) of the Banking \n(Amendment) Act, No.33 of 1995, for the publication of annual audited accounts of Licensed Specialised \nBanks (LSBs).\nAll LSBs are required to publish their annual audited accounts for the accounting periods ending \non or after 31.12.1999 in the enclosed Prescribed Accounting Format. \nYours faithfully,\nSgd. Ms. C. I. Fernando\nDirector of Bank Supervision\n(Formats referred to in the Circular are replaced with Circular No. 02/17/900/0001/04 dated 11.02.2013)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 291, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  285\nRef. No. : 02  / 17 / 900 / 0001  / 04\nBank Supervision Department\n11 February, 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nPREPARATION, PRESENTATION AND PUBLICATION OF\nANNUAL AUDITED ACCOUNTS OF BANKS\nWe refer to our previous correspondence and discussions on the above and enclose the new format \nfor the preparation, presentation and publication of annual audited accounts of licenced commercial \nbanks and licensed specialised banks effective from the financial reporting periods beginning on or after \n1 January 2012.\nAccordingly, formats referred to in the Circulars dated 02 June 1998 and 15 December 1999 on \npreparation of annual audited accounts of licensed commercial banks and licensed specialised banks, \nrespectively, are replaced with the format in Annex. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nCopy to :  The Secretary-General, Sri Lanka Banks\u2019  Association (Gurantee) Ltd.\n Panel of Auditors", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 292, "year": 2013}, "type": "Document"}
{"page_content": "286 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nSPECIFIED FORMAT FOR THE PREPARATION OF \nANNUAL FINANCIAL STATEMENTS OF \nLICENSED COMMERCIAL BANKS \nAND \nLICENSED SPECIALISED BANKS\n Annex", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 293, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  287\nFinancial Statements\nTable of Contents\nFinancial Statements\n Income Statement\n Statement of Comprehensive Income\n Statement of Financial Position\n Statement of Changes in Equity\n Statement of Cash Flows\nNotes to the Financial Statements\n 1. Corporate Information\n 2. Accounting Policies\n 3. Segment Information\nIncome Statement\n 4. Net Interest Income\n 5. Net Fee and Commission Income\n 6. Net Gain/(Loss) from Trading\n 7. Net Gain/(Loss) from Financial Instruments Designated at Fair Value through Profit or Loss\n 8. Net Gain/(Loss) from Financial Investments\n 9. Other Operating Income (net)\n10. Impairment for Loans and Other Losses \n11. Personnel Expenses\n12. Other Expenses\n13. T ax Expenses\n14. Earnings Per Share\nStatement of Financial Position: Assets\n15. Analysis of Financial Instruments by Measurement Basis\n16. Cash and Cash Equivalents\n17. Balances with Central Banks\n18. Placements with Banks\n19. Derivative Financial Instruments \n20. Other Financial Assets at Fair Value through Profit or Loss\n21. Loans and Receivables to Banks\n22. Loans and Receivables to Other Customers\n23. Financial Investments - Available-for-Sale\n24. Financial Investments - Held-to-Maturity\n25. Investments in Subsidiaries\n26. Investments in Associates and Joint Ventures\n27. Property , Plant and Equipment\n28. Investment Properties\n29. Goodwill and Intangible Assets\n30. Deferred Tax Assets/Liabilities\n31. Other Assets", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 294, "year": 2013}, "type": "Document"}
{"page_content": "288 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nStatement of Financial Position: Liabilities\n32. Due to Banks\n33. Derivative Financial Instruments\n34. Other Financial Liabilities at Fair Value through Profit or Loss\n35. Due to Other Customers\n36. Other Borrowings\n37. Debt Securities Issued\n38. Other Provisions\n39. Other Liabilities\n40. Due to Subsidiaries\n41. Subordinated T erm Debts\nStatement of Financial Position: Capital and Reserves\n42. Stated Capital/Assigned Capital\n43. Statutory Reserve Fund\n44. Retained Earnings\n45. Other Reserves\n46. Non-controlling Interests\n \nOff-Balance Sheet Information\n47. Contingent Liabilities and Commitments\nOther Disclosures\n48. Related Party Disclosures\n49. Net Assets Value per Ordinary Share\nStatement of Cash Flows\n50. Non-Cash items included in Profit Before Tax\n51. Changes in Operating Assets\n52. Changes in Operating Liabilities\nOther Disclosure Requirements\n1. Information about the significance of financial instruments for financial position and performance\n2. Information about the nature and extent of risks arising from financial instruments\n3. Other disclosures", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 295, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  289\nINCOME STATEMENT\nFOR THE YEAR ENDED  DD MM YYYY\nIn Rupees Million\nNoteBank Group\n20XX 20XX 20XX 20XX\nInterest income\nInterest expenses\nNet interest income 04\nFee and commission income\nFee and commission expenses\nNet fee and commission income 05\nNet gain / (loss) from trading 06\nNet gain / (loss) from financial instruments  \ndesignated at fair value through profit or loss07\nNet gain / (loss) from financial investments 08\nOther operating income (net) 09\nTotal operating income\nImpairment for loans and other losses 10\nNet operating income\nPersonnel expenses 11\nOther expenses 12\nOperating profit/(loss) before value added tax (V AT)\nValue added tax (V AT) on financial services\nOperating profit/(loss) after value added tax (V AT)\nShare of profits of associates and joint ventures\nProfit / (loss) before tax\nTax expenses 13\nProfit / (loss) for the year\nProfit attributable to:\nOwners of the parent\nNon-controlling interests\nEarnings per share on profit 14\nBasic earnings per ordinary share\nDiluted earnings per ordinary share", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 296, "year": 2013}, "type": "Document"}
{"page_content": "290 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nSTATEMENT OF COMPREHENSIVE INCOME\nFOR THE YEAR ENDED  DD MM YYYY\nIn Rupees Million\nNoteBank Group\n20XX 20XX 20XX 20XX\nProfit / (loss) for the year\nOther comprehensive income, net of tax\nChanges in revaluation surplus\nActuarial gains and losses on defined benefit plans\nGains and losses (arising from translating  \n the financial statements of a foreign operation) \nGains and losses on re-measuring  \n available-for -sale financial assets\nGains and losses on cash flow hedges\nOthers\nShare of profits of associates and joint ventures \nLess:  T ax expense/(income) relating to components \nof other comprehensive income\nOther comprehensive income for the year, net of \ntaxes\nTotal comprehensive income for the year\nAttributable to:\nOwners of the parent\nNon-controlling interests", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 297, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  291\nSTATEMENT OF FINANCIAL POSITION\nAS AT  DD MM YYYY\nIn Rupees Million\nNoteBank Group\n20XX 20XX 20XX 20XX\nAssets\nCash and cash equivalents 16\nBalances with central banks 17\nPlacements with banks 18\nDerivative financial instruments 19\nOther financial assets held-for-trading 20\nFinancial assets designated at fair value  \n through profit or loss20\nLoans and receivables to banks 21\nLoans and receivables to other customers 22\nFinancial investments \u2013 Available-for-sale 23\nFinancial investments \u2013 Held-to-maturity 24\nInvestments in subsidiaries 25\nInvestments in associates and joint ventures 26\nProperty, plant and equipment 27\nInvestment properties 28\nGoodwill and intangible assets 29\nDeferred tax assets 30\nOther assets 31\nTotal assets\nLiabilities\nDue to banks 32\nDerivative financial instruments 33\nOther financial liabilities held-for-trading 34\nFinancial liabilities designated at fair value  \n through profit or loss34\nDue to other customers 35\nOther borrowings 36\nDebt securities issued 37\nCurrent tax liabilities\nDeferred tax liabilities 30\nOther provisions 38\nOther liabilities 39\nDue to subsidiaries 40\nSubordinated term debts 41\nTotal liabilities\nEquity\nStated capital/Assigned capital 42\nStatutory reserve fund 43\nRetained earnings 44\nOther reserves 45\nTotal equity  of the owners of the parent  \n Non-controlling interests46\nTotal equity\nTotal equity and liabilities\nContingent liabilities and commitments 47", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 298, "year": 2013}, "type": "Document"}
{"page_content": "292 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nSTATEMENT OF CHANGES IN EQUITY\nFOR THE YEAR ENDED  DD MM YYYY\nBANK / GROUP \nIn Rupees Million\nStated capital/\nAssigned \ncapitalReserves\nTotal\nNon-controlling interest\nTotal equityOrdinary \nvoting shares\nOrdinary \nnon-voting shares\nAssigned capital\nReserve fund\nRevaluation reserve\nRetained earnings\nOther reserves\nBalance as at DD/MM/YY (Opening balance)  \nTotal comprehensive income for the year  \nProfit/(loss) for the year  \nOther comprehensive income (net of tax)  \nTotal comprehensive income for the year           \nTransactions with equity holders, recognised \ndirectly in equity \nShare issue/increase of assigned capital  \nShare options exercised\nBonus issue  \nRights issue  \nTransfers to reserves during the period  \nDividends to equity holders  \nProfit transferred to head office  \nGain/(loss) on revaluation of Property, Plant and \nEquipment (if cost method is adopted) \nOthers (Please specify)  \nTotal transactions with equity holders           \nBalance as at DD/MM/YY (Closing balance)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 299, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  293\nSTATEMENT OF CASH FLOWS\nFOR THE YEAR ENDED  DD MM YYYY\nIn Rupees Million\nNoteBank Group\n20XX 20XX 20XX 20XX\nCash\tflows\tfrom\toperating \tactivities\nProfit before tax\nAdjustment for :\nNon-cash items included in profits before tax 50\nChange in operating assets 51\nChange in operating liabilities 52\nNet gains from investing activities\nShare of profits in associates and joint ventures\nDividend income from subsidiaries and associates \nInterest expense on subordinated debt\nOthers (please specify)\nContribution paid to defined benefit plans\nTax paid\nNet cash generated from operating activities     \nCash\tflows\tfrom\tinvesting \tactivities\nPurchase of property, plant and equipment\nProceeds from the sale of property, plant and equipment\nPurchase of financial investments\nProceeds from the sale and maturity of  \n financial investments\nNet purchase of intangible assets\nNet cash flow from acquisition of investment  \n in subsidiaries and associates\nNet cash flow from disposal of subsidiaries\nProceeds from disposal of associates and joint ventures\nDividends received from investment  \n in subsidiaries and associates\nOthers (please specify)\nNet cash (used in)/from investing activities     \nCash\tflows\tfrom\tfinancing \tactivities\nNet proceeds from the issue of ordinary share capital \nNet proceeds from the issue of other equity instruments\nNet proceeds from the issue of subordinated debt\nRepayment of subordinated debt\nInterest paid on subordinated debt\nDividend paid to non-controlling interest\nDividend paid to the owners of the parent company\nDividend paid to holders of other equity instruments\nOthers (please specify)\nNet\tcash\tfrom\tfinancing \tactivates     \nNet increase/(decrease) in cash & cash equivalents\nCash and cash equivalents at the beginning of the year\nExchange difference in respect of cash & cash equivalent\nCash and cash equivalents at the end of the year", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 300, "year": 2013}, "type": "Document"}
{"page_content": "Cash and cash equivalents at the end of the year     \nNote:  Banks have the option to use one of the two methods specified in LKAS 7  \nfor the preparation of the statement of cash flows", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 300, "year": 2013}, "type": "Document"}
{"page_content": "294 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nNOTES TO THE FINANCIAL STATEMENTS\nFOR THE YEAR ENDED  DD MM YYYY\n \n1. Corporate information\n2. Accounting policies\n2.1 Basis of preparation\n2.1.1  Statement of compliance\n2.1.2  Presentation of financial statements\n2.2 Basis of consolidation\n2.3 Significant accounting judgments and estimates\n2.3.1  Fair value of financial instruments\n2.3.2  Impairment losses on loans and receivables\n2.3.3  Impairment of available-for -sale investments\n2.3.4  Deferred tax assets\n2.3.5  Pensions obligation\n2.3.6  Others\n2.4 Changes in accounting policy and disclosures\n2.5 Summary of significant accounting policies\n2.5.1  Foreign currency translation\n2.5.2  Financial instruments - initial recognition and subsequent measurement\n2.5.3  Impairment of financial assets and subsequent measurement of financial liabilities\n2.5.4  Impairment of non-financial assets \n2.5.5  Repurchase and reverse repurchase agreements\n2.5.6  Securities lending and borrowing\n2.5.7  Determination of fair value\n2.5.8  Hedge accounting\n2.5.9  Of f-setting financial instruments\n2.5.10  Leasing\n2.5.11  Recognition of income and expenses\n2.5.12  Cash and cash equivalents\n2.5.13  Property , plant and equipment \n2.5.14  Business combination and goodwill\n2.5.15  Intangible assets\n2.5.16  Financial guarantees\n2.5.17  Pension benefits\n2.5.18  Provisions\n2.5.19  Share based payment transactions\n2.5.20  Taxes\n2.5.21  Dividends\n2.5.22  Reserves\n2.5.23  Segment reporting\n2.5.24  Others", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 301, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  295\n3. Segment information (as per  SLFRS 8)\n4. Net Inter est Income\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nInterest income\nCash and cash equivalents\nPlacements with banks \nDerivative financial instruments \nOther financial assets held-for-trading\nFinancial assets designated at fair value through profit or loss\nLoans and receivables to banks \nLoans and receivables to other customers\nFinancial investments \u2013 Held-to-maturity\nFinancial investments \u2013 Available-for-sale\nOthers (Please specify)\nTotal interest income\nInterest expenses\nDue to banks \nDerivative financial instruments\nOther financial liabilities at fair value through profit or loss\nDue to other customers\nOther borrowings\nDebt securities issued\nOthers (Please specify)\nTotal interest expenses\nNet interest income\na.  Net Interest Income from Sri Lanka Government Securities\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nInterest income \nLess : Interest expenses\nNet interest income \n5. Net Fee and Commission Income\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nFee and commission income\nFee and commission expenses\nNet fee and commission income", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 302, "year": 2013}, "type": "Document"}
{"page_content": "296 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nComprising\nLoans\nCards \nTrade and remittances\nInvestment banking\nDeposits\nGuarantees\nOthers (Please specify)\nNet fee and commission income\n6. Net Gain / (Loss) fr om Trading\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nForeign exchange\n From banks\n From others customers\nInterest rates\nEquities\nOthers (Please specify)\nTotal\n7.\t Net\tGain\t/\t(Loss)\tfrom\tFinancial \tInstruments \tDesignated \tat\tFair\tValue\tthrough\tProfit\tor\tLoss\t\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGains on financial assets designated at fair value  \nthrough profit or loss\nLosses on financial assets designated at fair value  \nthrough profit or loss\nGains on financial liabilities designated at fair value \nthrough profit or loss\nLosses on financial liabilities designated at fair value \nthrough profit or loss\nTotal\n8. Net Gain / (Loss) fr om Financial Investments\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nAssets available-for-sale \n Debt securities\n Equities\n Others (Please specify)\nOthers (Please specify)\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 303, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  297\n9. Other  Operating Income (net)\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGain / (Loss) on investment properties \nGain / (Loss) on sale of property, plant and equipment\nGain / (Loss) on revaluation of foreign exchange\nRecovery of loans written-off\nOthers (Please specify)\nOther Operating Income (net)\n10. Impairment for  Loans and Other Losses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nLoans and receivables  \n T o banks [Note 21(b)]\n T o other customers [Note 22(c)]\nFinancial investments \n A vailable-for-sale [Note 23(a)]\n Held-to-maturity [Note 24(a)]\nInvestment in subsidiaries [Note 25(a)]\nInvestments in associates and joint ventures [Note 26(a)]\nProperty, plant and equipment [Note 27(c)]\nInvestment properties [Note 28(b)]\nOff-balance sheet exposures [Note 39]\nOthers (Please specify)\nTotal\n11. Personnel Expenses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSalary and bonus\nContributions to defined contribution / benefit plans\nShare based expenses\nOthers\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 304, "year": 2013}, "type": "Document"}
{"page_content": "298 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n12. Other  Expenses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nDirectors\u2019 emoluments \nAuditors\u2019 remunerations\nNon-audit fees to auditors\nProfessional and legal expenses\nDepreciation of property, plant and equipment\nAmortisation of leasedhold property\nAmortisation of intangible assets\nOperating lease expenses\nOffice administration and establishment expenses\nOthers (Please specify)\nTotal\n13. T ax Expenses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nCurrent tax expense\n Current year\n Prior years\u2019  provision\nDeferred tax expense\n Ef fect of change in tax rates\n T emporary differences\n Prior years\u2019  provision\nTotal\na.  Reconciliation of tax expenses\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nProfit\t/\t(loss)\tbefore\ttax\nIncome tax for the period  \n(Accounting profit @ applicable tax rate)\nAdjustment in respect of current income tax of  \nprior periods\nAdd :  T ax effect of expenses that are  \nnot deductible for tax purposes\nLess :  T ax effect of expenses that are  \ndeductible for tax purposes\nTax expense for the period", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 305, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  299\nb.  The deferred tax (credit) / charge in the income statement comprise of the following:\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nDeferred tax assets\nDeferred tax liabilities\nOther temporary differences \nDeferred tax (credit) / charge to income statement\n14. Earnings Per  Share\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nNet profit attributable to ordinary equity holders\nAdjust :\n Interest on preference shares\n Interest on convertible bonds\nNet profit attributable to ordinary equity holders adjusted for the ef fect of dilution\nWeighted average number of ordinary shares for basic earnings per share\nEffect of dilution \n Convertible bonds\n Convertible preference shares\n Others\nWeighted average number of ordinary shares adjusted for the effect of dilution\nBasic earnings per ordinary share\nDiluted earnings per ordinary share\n15. Analysis of Financial Instruments by Measur ement Basis\nIn Rupees Million\na. Bank \u2013 Curr ent year (20XX)  \nHFTDesignated\nat fair valueHTMAmortised \ncostAFS Hedging Total\nASSETS\nCash and cash equivalents\nBalances with central banks\nPlacements with banks \nDerivative financial instruments\nOther financial assets at  \n fair value through profit or loss\nLoans and receivables to banks\nLoans and receivables to other  \n customers\nFinancial investments\nTotal financial assets", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 306, "year": 2013}, "type": "Document"}
{"page_content": "300 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nHFTDesignated\nat fair valueAmortised \ncostHedging Total\nLIABILITIES\nDue to banks\nDerivative financial instruments\nOther financial liabilities at  \n fair value through profit or loss\nDue to other customers\nDebt securities issued\nOther borrowings\nTotal financial liabilities \nHFT  \u2013  Held for trading\nDesignated at fair value  \u2013  Designated at fair value through profit or loss\nAmortised cost  \u2013  Loans and receivables/deposits at amortised cost \nHTM  \u2013  Held-to-maturity \nAFS  \u2013  Available-for-sale \nHedging  \u2013  Instruments of fair value and cash flow hedging \nIn Rupees Million\nb. Bank \u2013 Pr evious year (20XX)  \nHFTDesignated\nat fair valueHTMAmortised \ncostAFS Hedging Total\nASSETS\nCash and cash equivalents\nBalances with central banks\nPlacements with banks \nDerivative financial instruments\nOther financial assets at  \n fair value through profit or loss\nLoans and receivables to banks\nLoans and receivables to other  \n customers\nFinancial investments\nTotal financial assets \nHFTDesignated\nat fair valueAmortised \ncostHedging Total\nLIABILITIES\nDue to banks\nDerivative financial instruments\nOther financial liabilities at  \n fair value through profit or loss\nDue to other customers\nDebt securities issued\nOther borrowings\nTotal financial liabilities", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 307, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  301\nc. Gr oup \u2013 Current year (20XX) [as per 15(a) above]   \n  \nd. Gr oup \u2013 Previous year (20XX) [as per 15(b) above]\n16. Cash and Cash Equivalents\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nCash in hand\nBalances with banks\nMoney at call and short notice\nTotal\n17. Balances with Central Banks\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nStatutory balances with central banks\n Central bank of Sri Lanka\n Other Central banks\nNon-statutory balances with central banks\n Central bank of Sri Lanka\n Other central banks\nTotal balances with central banks\n18. Placements with Banks \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 308, "year": 2013}, "type": "Document"}
{"page_content": "302 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n19. Derivative Financial Instruments\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nInterest rate derivatives\n Interest rate swaps\n Interest rate futures\n Interest rate options\n Others (Please specify)\nForeign currency derivatives\n Currency swaps\n Forward foreign exchange contracts\n Others(Please specify)\nOthers (Please specify)\nTotal\n20.\tOther \tFinancial \tAssets\tat\tFair\tValue\tthrough\tProfit\tor\tLoss\t\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nHeld for trading\n Sri Lanka Government Securities \n  (separately by instrument-wise)\n Equity securities\n Debt securities\n Others (Please specify)\nSub Total\nDesignated at fair value through profit or loss\n Sri Lanka Government Securities \n  (separately by instrument-wise)\n Debt securities\n Equity securities\n Loans and receivables to banks (Note 21)\n Loans and receivables to other customers (Note 22)\n Others (Please specify)\nSub Total\nTotal\na. Financial Assets Held for Trading\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nFinancial assets held for trading pledged as collateral\nOther financial assets held for trading\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 309, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  303\n21. Loans and Receivables to Banks \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGross loans and receivables\nLess : Individual impairment \nOf which : Loans and receivables designated at fair value \n     through profit or loss (Note 20)\nNet loans and receivables\na.  Analysis\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nBy product\nLoans and advances\n Overdrafts\n Short-term loans\n Long-term loans\n Securities purchased under resale agreements\n Others (Please specify)\nOthers \n Sri Lanka Government Securities \n  (separately by instrument-wise)\n Others (Please specify)\nGross total\nBy currency\n Sri Lankan Rupee \n United States Dollar\n Great Britain Pound \n Others (Please specify)\nGross total\nb. Movements in Individual Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nIndividual impairment \n Opening balance at DD MM YY\n Char ge / (Write back) to income statement\n W rite-off during the year\n Other movements\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 310, "year": 2013}, "type": "Document"}
{"page_content": "304 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n22. Loans and Receivables to Other  Customers \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGross loans and receivables\nLess : Individual impairment \n    Collective impairment\nOf which : Loans and receivables designated at fair value \n     through profit or loss (Note 20)\nNet loans and receivables\na.  Analysis\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nBy product\n Loans and advances\n  Overdrafts\n  T rade finance\n  Lease rentals receivable\n  Credit cards\n  Pawning\n  Staff loans\n  T erm loans\n   Short-term\n   Long-term\n  Securities purchased under resale agreements\n  Others (Please specify)\nOthers \n Sri Lanka Government Securities (separately by instrument-wise)\n Others (Please specify)\nGross total\nBy currency\n Sri Lankan Rupee \n United States Dollar\n Great Britain Pound \n Others (Please specify)\nGross total\nBy industry\n Agriculture and fishing\n Manufacturing\n Tourism\n Transport\n Construction\n Traders\n New economy\n Others \nGross total", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 311, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  305\nb. Lease r entals receivable (Disclose as per LKAS 17)\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\nc. Movements in Individual and Collective Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nIndividual impairment \n Opening balance at DD MM YY\n Char ge / (Write back) to income statement\n W rite-off during the year\n Other movements\nClosing balance at DD MM YY\nCollective impairment\n Opening balance at DD MM YY\n Char ge / (Write back) to income statement\n Other movements\nClosing balance at DD MM YY\nTotal\n23. Financial Investments \u2013 Available-for-Sale \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSri Lanka Government Securities (separately by instrument-wise)\nEquity securities\nDebt securities\nOthers\nLess : Impairment \nNet Available-for-sale Investments\na.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nWrite-off during the year\nOther movements\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 312, "year": 2013}, "type": "Document"}
{"page_content": "306 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nb.  Financial Investments \u2013 Available-for-Sale\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nFinancial investments \u2013 Available-for-sale pledged as collateral\nOther financial investments \u2013 Available-for-sale \nTotal\n24. Financial Investments \u2013 Held-to-Maturity \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSri Lanka Government Securities (separately by instrument-wise)\nDebt securities\nOthers\nLess : Impairment \nNet Total\nOf which : Held-to-Maturity investments designated at fair value\n     through profit or loss (Note 20)\nNet Held-to-Maturity Investments\na.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nWrite-off during the year\nOther movements\nClosing balance at DD MM YY\n25. Investments in Subsidiaries\nIn Rupees Million\nBank\n20XX 20XX\nQuoted equity share\nUnquoted equity share\nLess : Impairment \nNet Total\nNote : Please provide details of subsidiaries, separately.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 313, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  307\na.  Movements in Impairment during the year\nIn Rupees Million\nBank\n20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nOther movements\nClosing balance at DD MM YY\n26. Investments in Associates and Joint Ventures\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nAssociates\nUnquoted equity share\nQuoted equity share\nLess : Impairment \nSub Total\nJoint Ventures\nUnquoted equity share\nQuoted equity share\nLess : Impairment \nSub Total\nTotal\nNote : Please provide details of associates and joint ventures separately.\na.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nAssociates\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nOther movements\nClosing balance at DD MM YY\nJoint Ventures\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nOther movements\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 314, "year": 2013}, "type": "Document"}
{"page_content": "308 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n27. Pr operty, Plant and Equipment\na. Pr operty, Plant and Equipment \u2013 Bank\nIn Rupees Million\nBank 20XXLand \nand Buildings\nLeasehold \nproperties\nComputer \nHardware \nComputer \nSoftware\nOffice\t\nEquipment, \nfurniture and\n\tfittings\nOthers\nTotal\n20XX (Current year)\nCost / fair value\nOpening balance at DD MM YY\nAdditions\nDisposals\nExchange rate variance\nAdjustments \nClosing balance at DD MM YY\nLess : Accumulated depreciation\nOpening balance at DD MM YY\nCharge for the year\nAdditions\nDisposals\nExchange rate variance\nAdjustments\nClosing balance at DD MM YY\nLess : Impairment \nNet book value at DD MM YY\nMarket value at DD MM YY\n20XX (Previous year)\nCost / fair value\nOpening balance at DD MM YY\nAdditions\nDisposals\nExchange rate variance\nAdjustments \nClosing balance at DD MM YY\nLess : Accumulated depreciation\nOpening balance at DD MM YY\nCharge for the year\nAdditions\nDisposals\nExchange rate variance\nAdjustments\nClosing balance at DD MM YY\nLess : Impairment \nNet book value at DD MM YY\nMarket value at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 315, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  309\nb.  Property, Plant and Equipment \u2013 Group [as per 27(a) above]\nc.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nExchange rate variance and other adjustments\nClosing balance at DD MM YY\n28. Investment Pr operties\na.  Investment Properties as Cost / fair value\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nCost / fair value\nOpening balance at DD MM YY\nAdditions\nDisposals\nExchange rate variance\nAdjustments \nClosing balance at DD MM YY\nLess : Accumulated depreciation\nOpening balance at DD MM YY\nCharge for the year\nAdditions\nDisposals\nExchange rate variance\nAdjustments\nClosing balance at DD MM YY\nLess : Impairment \nNet book value at DD MM YY\nMarket value at DD MM YY\nb.  Movements in Impairment during the year\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at DD MM YY\nCharge / (Write back) to income statement\nNet Write-off during the year\nExchange rate variance and other adjustments\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 316, "year": 2013}, "type": "Document"}
{"page_content": "310 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n29. Goodwill and Intangible Assets\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGoodwill\nOpening balance at DD MM YY\nAdjustments\nLess : Impairment \nSub-total (closing balance at DD MM YY\nOther Intangible Assets\nOpening balance at DD MM YY\nAdjustments\nSub-total (closing balance at DD MM YY\nTotal\n30. Deferr ed Tax Assets / Liabilities\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nDeferred tax assets\nDeferred tax liabilities \nIncome statement\nNet Total\n31. Other  Assets\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nCost\nReceivables\nDeposits and prepayments\nSundry debtors\nOthers (Please specify)\nTotal\n32. Due to Banks\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nBorrowings\nSecurities sold under repurchase (repo) agreements\nOthers (Please specify)\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 317, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  311\n33. Derivative Financial Instruments\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nInterest rate derivatives\n Interest rate swaps\n Interest rate futures\n Interest rate options\n Others (Please specify)\nForeign exchange derivatives\n Currency swaps\n Forward foreign exchange contracts\n Others (Please specify)\nOthers (Please specify)\nTotal\n34.\tOther \tFinancial \tLiabilities \tat\tFair\tValue\tthrough\tProfit\tor\tLoss\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nHeld for trading\n Other debt securities\n Due to non-bank customers\n Other financial liabilities\nSub Total\nFair value designated\n Other debt securities\n Due to non-bank customers\n Other financial liabilities\nSub Total\nTotal\n35. Due to Other  Customers\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nTotal amount due to other customers\nLess : Designated at fair value through profit or loss (Note 34)\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 318, "year": 2013}, "type": "Document"}
{"page_content": "312 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\na.  Analysis \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nBy product\n Demand deposits (current accounts)\n Savings deposits\n Fixed deposits\n Other deposits (Please specify)\nTotal\nBy currency\n Sri Lanka rupee \n United State dollar\n Great Britain pound \n Others (Please specify)\nTotal\n36. Other  Borrowings \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSecurities sold under repurchase (repo) agreements\nOthers (Please specify)\nTotal\n37. Debt Securities Issued\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nIssued by the bank (Note 32)\nIssued by other subsidiaries (Note 40)\nTotal\nDue within 1 year\nDue after 1 year\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 319, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  313\na. Details of Debt Securities Issued\nTypeFace \nValue \n(Rupees \nMillions)Interest \nRate and \nRepayment \nTermsIssue \nDateMaturity \nDateBank Group\n20XX 20XX 20XX 20XX\nIssued by the bank\n (i)\n(ii)\nSub Total\nIssued by other subsidiaries \n (i)\n(ii)\nSub Total\nTotal\n38. Other  Provisions \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\n39. Other  Liabilities \nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nSundry creditors\nInterest payable\nImpairment in respect of off-balance sheet credit exposures (Note 10)\nOther payables\nTotal\n40. Due to Subsidiaries \nIn Rupees Million\nBank\n20XX 20XX\nPlease specify\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 320, "year": 2013}, "type": "Document"}
{"page_content": "314 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n41. Subordinated Term Debts\nTypeFace \nValue \n(Rupees \nMillions)Interest \nRate and \nRepayment \nTermsIssue \nDateMaturity \nDateBank Group\n20XX 20XX 20XX 20XX\nIssued by the bank\n (i)\n(ii)\nSub Total\nIssued by other subsidiaries \n (i)\n(ii)\nSub Total\nTotal\nDue within 1 year\nDue after 1 year\nTotal\n42. Stated Capital / Assigned Capital\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\n43. Statutory Reserve Fund\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at  DD MM YY\nTransfer during the period\nClosing balance at DD MM YY\n44. Retained Earnings\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nOpening balance at  DD MM YY\nProfit for the year\nTransfers to other reserves\nDividend\nClosing balance at DD MM YY", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 321, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  315\n45. Other  Reserves  \na.  Bank \u2013 Current year (20XX)  \nIn Rupees Million\nOpening balance \nat DD MM YYMovement / \ntransfersClosing balance \nat DD MM YY\nGeneral reserve\nRevaluation reserve\nAvailable-for-sale reserve\nCash flow hedge reserve\nForeign currency translation reserve\nOthers (please specify)\nTotal\nb.  Bank \u2013 Previous year (20XX)  \nIn Rupees Million\nOpening balance \nat DD MM YYMovement / \ntransfersClosing balance \nat DD MM YY\nGeneral reserve\nRevaluation reserve\nAvailable-for-sale reserve\nCash flow hedge reserve\nForeign currency translation reserve\nOthers (please specify)\nTotal\nc.  Group \u2013 Current year (20XX)  [as per 43(a) above]\nd.  Group \u2013 Previous year (20XX)  [as per 43(b) above]\n46. Non-contr olling Interests\nIn Rupees Million\nGroup\n20XX 20XX\nPlease specify\nTotal\n47. Contingent Liabilities and Commitments\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nGuarantees\nPerformance bonds\nLetters of credit\nOther contingent items\nUndrawn loan commitments\nOther commitments\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 322, "year": 2013}, "type": "Document"}
{"page_content": "316 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n48. Related Party Disclosur es\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\n49. Net Assets Value per Ordinary Share\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nPlease specify\nTotal\n50.\tNon-Cash \titems\tincluded\tin\tProfit\tBefore\tTax\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nDepreciation of property, plant and equipment\nAmortisation of leasehold property\nAmortisation of intangible assets\nImpairment losses on loans and advances \nOther impairment\nAccretion of discounts and amortisation of premiums of investment securities\nCharge for defined benefit plans\nShare based payment expense\nOthers (please specify)\nTotal\n51. Change in Operating Assets\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nChange in derivative financial instruments\nNet increase in debt securities, treasury bills & bonds and \n equity shares held at fair value through profit or loss\nNet increase in loans and advances to banks\nNet increase in loans and advances to customers\nChange in balances with Central Banks\nChange in pre-payments and accrued income\nChange in other assets (please specify)\nTotal", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 323, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  317\n52. Change in Operating Liabilities\nIn Rupees Million\nBank Group\n20XX 20XX 20XX 20XX\nChange in derivative financial instruments\nChange in deposits from banks, customers and  \ndebt securities issued\nChange in debt securities\nChange in financial liabilities designated at  \nfair value through profit or loss\nChange in accruals and deferred income\nChange in other liabilities (Please specify)\nTotal\nOther Disclosure Requirements\nWhile complying with the disclosure requirements of all applicable Sri Lanka Accounting \nStandards, the following minimum disclosure requirements are applicable for all licensed banks \non\tstandalone \tbasis\tand\ton\tconsolidated \tbasis\tfor\tthe\tfinancial\treporting\tperiods\tbeginning \ton\tor\t\nafter\t01.01.2012 \tand\tshall\tbe\tdisclosed \teither\ton\tthe\tface\tof\tfinancial\tstatements \tor\ton\tthe\tnotes.\n1.\t Information \tabout\tthe\tsignificance \tof\tfinancial\tinstruments \tfor\tfinancial\tposition\tand\t\nperformance\n1.1 Statement of Financial Position \n1.1.1  Disclosures on categories of financial assets and financial liabilities (refer notes to the financial \nstatements).\n1.1.2  Other disclosures\n (i) Special disclosures about financial assets and financial liabilities designated to be measured \nat fair value through profit or loss, including disclosures about credit risk and market risk, \nchanges in fair values attributable to these risks and the methods of measurement. \n (ii) Reclassifications of financial instruments from one category to another .  \n (iii) Information about financial assets pledged as collateral and about financial or non-financial \nassets held as collateral.  \n (iv) Reconciliation of the allowance account for credit losses by class of financial assets. \n (v) Information about compound financial instruments with multiple embedded derivatives. \n (vi) Breaches of terms of loan agreements. \n1.2 Statement of Compr ehensive Income", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 324, "year": 2013}, "type": "Document"}
{"page_content": "(vi) Breaches of terms of loan agreements. \n1.2 Statement of Compr ehensive Income \n1.2.1  Disclosures on items of income, expense, gains and losses (refer notes to the financial statements).\n1.2.2  Other disclosures: \n (i) T otal interest income and total interest expense for those financial instruments that are not \nmeasured at fair value through profit and loss. \n (ii) Fee income and expense.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 324, "year": 2013}, "type": "Document"}
{"page_content": "318 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (iii) Amount of impairment losses by class of financial assets.  \n (iv) Interest income on impaired financial assets. \n1.3 Other  disclosures\n1.3.1  Accounting policies for financial instruments \n1.3.2  Information on hedge accounting \n1.3.3  Information about the fair values of each class of financial asset and financial liability, along with: \n (i) Comparable carrying amounts. \n (ii) Description of how fair value was determined. \n (iii) The level of inputs used in determining fair value. \n (iv) Reconciliations of movements between levels of fair value measurement hierarchy, \nadditional disclosures for financial instruments that fair value is determined using level 3 \ninputs. \n (v) Information if fair value cannot be reliably measured. \n2.\t Information \tabout\tthe\tnature\tand\textent\tof\trisks\tarising\tfrom\tfinancial\tinstruments \t\n2.1 Qualitative disclosur es \n2.1.1  Risk exposures for each type of financial instrument \n2.1.2  Management\u2019 s objectives, policies, and processes for managing those risks \n2.1.3  Changes from the prior period\n2.2 Quantitative disclosur es\n2.2.1  Summary of quantitative data about exposure to each risk at the reporting date. \n2.2.2  Disclosures about credit risk, liquidity risk, market risk, operational risk, interest rate risk and \nhow these risks are managed.\n (i) Credit Risk\n(a) Maximum amount of exposure (before deducting the value of collateral), description \nof collateral, information about credit quality of financial assets that are neither past \ndue nor impaired and information about credit quality of financial assets. \n(b) For financial assets that are past due or impaired, disclosures on age, factors considered \nin determining as impaired and the description of collateral on each class of financial \nasset. \n(c) Information about collateral or other credit enhancements obtained or called.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 325, "year": 2013}, "type": "Document"}
{"page_content": "asset. \n(c) Information about collateral or other credit enhancements obtained or called. \n(d) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk \nManagement Framework for Licensed Banks (Section H).\n (ii) Liquidity Risk \n(a) A  maturity analysis of financial liabilities. \n(b) Description of approach to risk management. \n(c) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk \nManagement Framework for Licensed Banks (Section H).\n (iii) Market Risk \n(a) A  sensitivity analysis of each type of market risk to which the entity is exposed.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 325, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  319\n(b) Additional information, if the sensitivity analysis is not representative of the entity's \nrisk exposure. \n(c) For other disclosures, refer Banking Act, Direction No. 7 of 2011 on Integrated Risk \nManagement Framework for Licensed Banks (Section H).\n (iv) Operational Risk\n  Refer Banking Act, Direction No. 7 of 2011 on Integrated Risk Management Framework \nfor Licensed Banks (Section H).\n (v) Equity risk in the banking book\n(a) Qualitative disclosures\n\u2022 Dif ferentiation between holdings on which capital gains are expected and those \ntaken under other objectives including for relationship and strategic reasons.\n\u2022 Discussion of important policies covering the valuation and accounting of equity \nholdings in the banking book. \n(b) Quantitative disclosures\n\u2022 V alue disclosed in the statement of financial position of investments, as well as \nthe fair value of those investments; for quoted securities, a comparison to publicly \nquoted share values where the share price is materially different from fair value.\n\u2022 The types and nature of investments\n\u2022 The cumulative realised gains/(losses) arising from sales and liquidations in the \nreporting period.\n (vi) Interest rate risk in the banking book\n(a) Qualitative disclosures\n Nature of interest rate risk in the banking book (IRRBB) and key assumptions\n(b) Quantitative disclosures \n The increase / (decline) in earnings or economic value (or relevant measure used \nby management) for upward and downward rate shocks according to management\u2019s \nmethod for measuring IRRBB, broken down by currency (as relevant).\n2.2.3  Information on concentrations of risk \n3. Other  disclosures\n3.1 Capital\n3.1.1  Capital structure\n (i) Qualitative disclosures\n  Summary information on the terms and conditions of the main features of all capital \ninstruments, especially in the case of innovative, complex or hybrid capital instruments.\n (ii) Quantitative disclosures", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 326, "year": 2013}, "type": "Document"}
{"page_content": "(ii) Quantitative disclosures\n(a) The amount of Tier 1 capital, with separate disclosure of:\n\u2022 Paid-up share capital / common stock\n\u2022 Reserves\n\u2022 Non-controlling interests in the equity of subsidiaries\n\u2022 Innovative instruments\n\u2022 Other capital instruments\n\u2022 Deductions from Tier 1 capital", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 326, "year": 2013}, "type": "Document"}
{"page_content": "320 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n(b) The total amount of Tier 2 and Tier 3 capital\n(c) Other deductions from capital\n(d) T otal eligible capital\n3.1.2  Capital adequacy\n (i) Qualitative disclosures\nA summary discussion of the bank\u2019s approach to assessing the adequacy of its capital to \nsupport current and future activities.\n (ii) Quantitative disclosures\n(a) Capital requirements for credit risk, market risk and operational risk\n(b) T otal and Tier 1 capital ratio", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 327, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  321\nRef. Nos. :  02 / 04 / 002 / 0105  / 001\n    &\n 02 / 04 / 002 / 0151  / 001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha \nColombo 1.\n20th March, 2001\nTo :  All Licensed Commer cial Banks and\n Licensed Sepcialised Banks\nDear Sir,\nPUBLICATION OF CAPITAL ADEQUACY STATEMENT\nIN THE ANNUAL REPORT\n You may be aware that the CBSL guidelines permit consolidation of subsidiaries for the \npurpose of computing capital adequacy ratios of banks but have not specified the nature of subsidiaries \nto be consolidated. The CBSL is presently reviewing the policy on consolidation of subsidiaries by \nbanks for capital adequacy purposes.\n It  is observed that there had been no uniformity among banks in presenting the capital \nadequacy statement in their Annual Reports. While few banks publish the statement on a \u2018solo\u2019 basis \nothers present it on a \u2018consolidated\u2019 basis.\n W ith a view to giving a true picture to the readers, it is recommended that the basis of \ncomputation of the capital adequacy and the inclusion of non banking and non-financial subsidiaries \nin the computation of the capital adequacy ratio, be disclosed as a footnote to the capital adequacy \nstatement, if published in the Annual Report of the bank.\nYours faithfully,\nSgd, P.T. Sirisena\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 328, "year": 2013}, "type": "Document"}
{"page_content": "322 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. Nos. :  02 / 17 / 800 / 0002  / 002\nBank Supervision Department\n17 September, 2013\nTo :  CEOs of All Licensed Commercial Banks and\n Licensed Sepcialised Banks\nDear Sir/Madam,\nPUBLICATION OF FINANCIAL STATEMENTS AND  \n OTHER DISCLOSURES ON THE WEBSITES\n As intimated at the Chief Executive Officers meeting held on 28 August 2013, uniform and \nadequate disclosure practices are important for improving market efficiency and promoting healthy \ncompetition. In view of same and to further enhance transparency of banking operations and market \ndiscipline, every bank shall ensure the following publication requirements on their respective websites.\nFrequency Disclosure requirement\nAnnually   (i) Annual Audited Report/Financial Statements and/or reports based on the \nrequirements specified in, \n(a) Circulars dated 02 June 1998 and 11 February 2013 issued on preparation \nof annual audited accounts. \n(b) Direction No. 3(8): \u201cDisclosures\u201d of the Banking Act, Directions No. 11 \nand 12 of 2007 on Corporate Governance. \n(ii) In respect of branches of foreign banks, item (i)(b) above shall be in accordance \nwith the requirements specified in the Circular dated 03 January 201 1.\nBi-annually (i) Qualitative disclosures of the bank\u2019s risk management as required under Direction \n1.5 of Item H on Disclosure Requirements of the Guidelines issued under the \nBanking Act, Directions No. 7 of 2011 on the Integrated Risk Management \nFramework. Such publication in the website will be considered as compliance \nwith the respective requirements under the Banking Act, Directions No. 7 of \n2011.\n(ii) Banks may effect appropriate changes to the above requirements in accordance \nwith the Sri Lanka Financial Reporting Standards (SLFRS) and Sri Lanka \nAccounting Standards (LKAS). \nQuarterly Quarterly Financial Statements based on the requirements specified in Circulars", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 329, "year": 2013}, "type": "Document"}
{"page_content": "Quarterly Quarterly Financial Statements based on the requirements specified in Circulars \ndated 30 September 2005, 26 January 2006, 21 February 2006 and 1 1 February 2013 \nissued on publication on quarterly financial statements in the press.  \nAccordingly, you are required to take necessary measures to comply with the above.\nYours faithfully\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 329, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  323\nRef. No. : BS/38/90\nDept. of Bank Supervision\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha\nColombo 1.\n20 May 1998 \nTo : All appr oved External Auditors of\n Licensed Specialised Bank s\nDear Sir,\n As you are aware, the Central Bank of Sri Lanka, as the supervisory authority for licensed  \ncommercial banks and specialised banks in Sri Lanka, is charged with the responsibility of ensuring that \nthere is a great degree of consistency of bank audits and standard procedures which can be followed by \napproved auditors. Accordingly, we enclose herewith a set of \u201cGuidelines for External Auditors relating \nto their statutory duties under Section 39 of the Banking Act, No.30 of 1988, as amended by Banking \nAct, No.33 of 1995\u201d.\n Since your Firm is on the panel of approved auditors of the Central Bank, you are required to \nensure that the audit of licensed commercial banks/licensed specialised banks, are in conformity with \nthese guidelines, with effect from the financial year 1998.\n Please note that wherever the expression \u201clicensed commercial banks\u201d appears in the guidelines, \nit would also include \u201clicensed specialised banks\u201d.\n Please acknowledge receipt of this letter and the enclosures.\nYours faithfully,\nSgd. Y. A. Piyatissa\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 330, "year": 2013}, "type": "Document"}
{"page_content": "324 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nGUIDELINES FOR EXTERNAL AUDITORS RELATING TO THEIR STATUTORY DUTIES \nUNDER SECTION 39 OF THE BANKING ACT NO. 30 OF 1988 \nAS AMENDED BY BANKING ACT NO. 33 OF 1995\n1. In terms of Section 39 of the Banking Act, the Central Bank of Sri Lanka, as the supervisory authority \nfor licensed commercial banks in Sri Lanka, is charged with the responsibility of ensuring that the \naudits of banks are conducted satisfactorily. Accordingly, External Auditors of licensed commercial \nbanks in Sri Lanka are informed of the following guidelines which have been formulated in \nrecognition of the fact that Auditors are specially qualified to undertake :\u2013\n(a) The verification of prudential returns;\n(b) The evaluation of control systems;\n(c) The expression of opinions on provisioning policies; and\n(d) The monitoring of the fiduciary activities of Banks.\n2. The auditing guidelines envisaged by the Central Bank for the audit of licensed commercial banks \nin Sri Lanka do not seek to provide an exhaustive listing of the procedures and practices to be used \nin an audit. Rather, they seek to stress special audit considerations for instance concerning related \nparty transactions, or the risks they assume resulting from the use of electronic data processing and \nelectronic fund transfer systems connected to the specific characteristics of Banks. These guidelines \nacknowledge the audit objectives which are of particular importance in relation to the typical items \nin a Bank\u2019s financial statement and encourage substantive audit procedures for the evaluation of loan \nloss provisions, income recognition, etc . It is hoped that these guidelines will encourage a greater \ndegree of consistency in Bank audits and set standard procedures which can be followed by Auditors \nin Sri Lanka. \n3. W ith a view to ensuring that the interests of depositors are not at risk because of adverse changes in", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 331, "year": 2013}, "type": "Document"}
{"page_content": "the financial position or in the management or other resources of an institution, External Auditors, \nin performing their statutory duties under the Banking Act and in recognizing the dependence of the \nCentral Bank on prudential returns and other information submitted by licensed commercial banks, \nshall ensure :\u2013\n (a) that the institution has not breached, or is in the process of currently breaching, or is likely to \nbreach, the capital ratio set by the Central Bank;\n (b) that the institution has not breached by a material amount for a significant period, or has been \nfrequently breaching by any amount, the liquidity ratio laid down by the Central Bank;\n (c) that the institution holds adequate provisions for bad and doubtful debts, expected losses on \ncontingents and tax liabilities, in accordance with accepted accounting standards;\n (d) that the accounting and other records and systems of control of the institution are commensurate \nwith the size and nature of business, or the way in which the business is structured, organized \nand managed;\n (e) that the business, or a significant component of the business, is not effectively being directed or \nhas been directed for any period of time, by only one individual;\n (f) that there is evidence which calls into question the appropriateness of actions or decisions taken \nby the management which are significant for prudential purposes.\n4. In formulating these guidelines the Central Bank has recognized that in an industry environment \nof high dependence on information technology, auditors should devote sufficient resources to \nassess the soundness of the EDP processes which are vital to the institution\u2019s operations and to the \neffectiveness of internal EDP controls. External Auditors should accordingly, refer in their annual", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 331, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  325\nmanagement letters to any shortcomings and imperfections which have come to their attention in the \ncourse of their examination of this specified field. The Central Bank recognizes that the risks which \ncharacterize an EDP environment and the security and control procedures it requires are :\u2013\n(a) Improper disclosure of information;\n(b) Error;\n(c) Fraud;\n(d) Interruption of business due to hardware or software failure;\n(e) Inef fective planning and risks associated with end-user computing operations.\n5. The Central Bank of Sri Lanka would also require auditors, under certain conditions, to discuss \nwith the supervisory authorities the activities of their banking clients. In doing so, the Central Bank \nrecognises that it is important that Auditors act in a manner that will preserve their professional \nrelationship with their client at all times. They would be therefore expected to draw the attention of \nthe Bank\u2019s management immediately in certain situations, reference to which shall be contained in \ntheir annual Management Letter. The situations envisaged in this regard are :\u2013\n (a) Where it has come to the Auditor\u2019s attention that there is an extreme situation, such as evidence \nof imminent financial collapse;\n (b) Where the Auditor has evidence of an occurrence which has led or is likely to lead to a material \ndiminution of the institution\u2019s assets;\n (c) W hen there appears to the Auditor to be a material contravention of one or more of the \nprovisions of the Banking Act or of the regulations, directives, or guidelines issued to licensed \ncommercial banks by the Central Bank;\n (d) When the Auditor forms the opinion that the management has reported financial information \nto the Supervisor which is misleading or when he becomes aware that management has failed, \ndoes not intend to, report something and such failure to report is, or would be, materially \nmisleading; or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 332, "year": 2013}, "type": "Document"}
{"page_content": "misleading; or\n (e) When the Auditor forms the opinion that there has been a significant failure of, or that there \nis significant weakness in, the accounting and other records or internal control systems of the \ninstitution.\n6. The Central Bank believes that these guidelines would require Auditors to enlarge the scope of their \naudit work. The Central Bank expects that only when Auditors become aware in the ordinary course \nof their audit work of such an occurrence that they would expect them to make detailed enquiries \nwith the statutory provisions/directives/regulations/guidelines specifically in mind. These guidelines \ndo not cast an obligation on Auditors to seek out ground for making a report nor do they place an \nobligation on them to conduct their work in such a way that there is reasonable certainty that they \nwill discover a breach of the criteria set out in these guidelines.\n Detailed operational guidelines to auditors are annexed.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 332, "year": 2013}, "type": "Document"}
{"page_content": "326 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOPERATIONAL GUIDELINES TO EXTERNAL AUDITORS RELATING \nTO THEIR STATUTORY DUTIES UNDER SECTION 39 OF THE BANKING ACT NO. 30 OF 1988 \nAS AMENDED BY BANKING ACT NO. 33 OF 1995\n1. These auditing guidelines on Bank audits are intended to assist the Auditors of Licensed commercial \nbanks in Sri Lanka to comply with generally accepted auditing standards when carrying out their \naudit work and in preparing their report on the financial statements of Banks. These guidelines \nare supplementary to and should be read in conjunction with the Sri Lanka Accounting Standards  \nNos. 23 and 30 and any other relevant Standards referred to therein on the audit of licensed \ncommercial banks in Sri Lanka.\n2. It is particularly important that Auditors of a Bank undertake an audit engagement only after \nconsidering their own competence and the adequacy of their resources (including relevant experience) \nto carry out their duties. In assessing their competence and, resources the Auditors should bear in \nmind the type and range of the Banks activities and the nature of its systems. For example highly \nspecialized computer systems will require different skills from those necessary to evaluate manual \nsystems.\n3. These guidelines have been drawn up in recognition of the fact that the maintenance of adequate \nrecords and systems in a licensed commercial bank is of paramount importance and that an institution \ncannot be regarded as conducting its business in a prudent manner unless it maintains adequate \naccounting and other records as well as adequate systems of control of its business and records to \nenable the business of the institution to be prudently managed and to comply with the duties imposed \non it by or under the statutes relevant to its operations.\n4. These guidelines do not attempt to describe in detail the manner, in which a particular institution", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 333, "year": 2013}, "type": "Document"}
{"page_content": "should maintain its accounting and other records and internal control systems. Rather it emphasizes \nthe need to ensure that the scope and nature of the financial information which the accounting and \nother records must be designed to capture, contain the required information.\nPlanning and Audit\n5. When planning the audit of a Bank, Auditors are required to consider the following :\u2013\n (a) The overall financial environment in which the Bank operates and its type of business;\n (b) The extent of computer systems and the reliance placed on these systems by the Bank;\n (c) The legal framework in which the Bank operates;\n (d) The audit risk involved, the assessment of which is crucial and should be undertaken very \ncarefully, particularly where the circumstances and management of the Bank indicate that the \nengagement is likely to be high risk;\n (e) Key audit areas, in particular, individual areas where there is a high risk of material misstatement. \nThese should be identified at an early stage of audit to ensure that work is concentrated on this \narea;\n (f) The adequacy and scope of the internal audit or inspection function;\n (g) The timing and nature of the audit work to be carried out;\n (h) The use of staf f with adequate training and experience.\n6. Auditors should also consider the following additional matters when planning the audit :\u2013\n (a) Compliance with the requirements of any guidelines issued by the CBSL;\n (b) Any formal communications between the CBSL and the Bank, including all correspondence, \nminutes or notes of meetings relevant to the examination of the accounting and other records, \ninternal control systems and CBSL returns used for prudential purposes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 333, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  327\nScope of Audit \u2013 Accounts and Other Records\n7. The scope and nature of the accounting and other records which are required for the business of a \nBank to be conducted in a prudent manner should be commensurate with the manner in which the \nbusiness is structured, organized and managed, as well as the volume, nature and complexity of its \ntransactions and commitments. Auditors are thus required to ensure that the accounting and other \nrecords of a Bank meet the following general requirements :\u2013\n (a) capture and record on a timely basis and in an orderly fashion every transaction and commitment \nwhich the institution enters into with sufficient information to explain :\u2013\n (i)  its nature and purpose;\n (ii) any asset and/or liability, actual and contingent, which respectively arises or may arise \nfrom it; and \n (iii) any income and/or expenditure, current and/or deferred which arises from it;\n (b) provide details, as appropriate, for each transaction and commitment, showing :\u2013\n (i) the parties, including, in the case of a loan, advance or other credit exposure, whether \nit is sub-participated and if so to whom it is sub-participated;\n (ii) the amount and currency;\n (iii) the contract, rollover , value and settlement or repayment dates;\n (iv) the contracted interest rates of an interest rate transaction or commitment;\n (v) the contracted exchange rate of a foreign exchange transaction or commitment;\n (vi) the contract ed commission or fees payable or receivable together with any other related \npayment or receipt;\n (vii) the nature and current estimated value of any security for a loan or other exposure; the \nphysical location and documentary evidence of such security; and\n (viii) in the case of any borrowing, whether it is subordinated; if secured, the nature and book \nvalue of any asset upon which it is secured;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 334, "year": 2013}, "type": "Document"}
{"page_content": "value of any asset upon which it is secured;\n (c) m aintain the accounting and other records in such a manner that financial and business \ninformation can be extracted promptly to enable management to :\u2013\n (i) monitor the quality of the institution\u2019s assets and safeguard them, including those held \nas custodian;\n (ii) identify , quantify, control and manage its exposures by related counter-parties across \nall products;\n (iii) i dentify, quantify, control and manage its exposures to liquidity risk and foreign \nexchange and other market risks across all products;\n (iv) monitor the performance of all aspects of its business on an up-to-date basis; and\n (v) make timely and informed decisions;\n (d) c ontain details of exposure limits authorized by management which are appropriate to the \ntype, nature and volume of business undertaken. These limits should, where relevant, include \ncounterparty, industry sector, country, settlement liquidity, interest rate mismatch and securities \nposition limits as well as limits on the level of intra-day and overnight trading positions in \nforeign exchange, futures, options, future (or forward) rate agreements (FRAs) and swaps; \nprovide information which can be summarized in such a way as to enable actual exposures to \nbe readily, accurately and regularly measured against these limits;\n (e) contain details of the factors considered, the analysis undertaken and the authorization or  \nrejection by management of a loan, advance or other credit exposure; and", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 334, "year": 2013}, "type": "Document"}
{"page_content": "328 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (f) provide on a memo randum basis details of every transaction entered into in the name of or \non behalf of another party on an agency or fiduciary (trustee) basis where it is agreed that the \ninstitution itself is not legally or contractually bound by the transaction.\nInternal Control Systems\n8. A  system of internal controls in a Bank is deemed to be;\n\u2018the whole system of controls, financial and otherwise, established by management in order to \ncarry on the business of the enterprise in an orderly and efficient manner, ensure adherence \nto management policies, safeguard the assets and secure as far as possible the completeness \nand accuracy of the records.\u2019\n9. In evaluati ng the adequacy of internal control systems in a bank, auditors are required to assess \nthe internal control systems only to the extent that they wish to place reliance on those systems in \narriving at their opinion as to whether the financial statements give a true and fair view. A careful \nevaluation of these systems would include computer based accounting and information systems and \ntheir relationship with the risk of material misstatement in the financial statements will be essential. \nIf the Auditors conclude that they can rely on the system of controls they may be able to limit the \nlevel of substantive tests required to form their opinion on the financial statements.\n10. For the purpose of identifying relevant controls, the principal activities of banks may be classified as \nfollows :\u2013\n (a) loans, advances, trade finance and related income and expense;\n (b) customer accounts, cash, transfer of funds, nostro accounts and related income and expense;\n (c) inter bank deposits and related income and expense;\n (d) d ealing in foreign exchange, futures, options, commodities, bullion and related income, \nexpense, gains and losses;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 335, "year": 2013}, "type": "Document"}
{"page_content": "expense, gains and losses;\n (e) investments, dealing securities and related income, expense, gains and losses; and\n (f) trustee and advisory activities (including portfolio management) and related income and  \nexpense.\n11. The overall audit objective should always be to ensure that the financial statements give a true and \nfair view of the state of the Bank\u2019s affairs at a given date and of the results for the year ended, and \ncomply with statutory and other relevant requirements.\n12. Audit steps likely to be required to satisfy this overall objective, can be identified as follows :\u2013\n (a) to determine the reliability of the bank\u2019 s systems of internal control;\n (b) to ensure that all material balances exist, are complete, and are fairly stated at the balance sheet \ndate;\n (c) to ensure that all income and expenditure, gains and losses are properly accounted for;\n (d) to ascertain the recoverability and hence the realizability at the balance sheet date, of any loans, \ninvestments and other related credit exposures;\n (e) in relation to trustee activities, to ascertain whether controls exist to give reasonable assurance \nthat the bank has fulfilled its fiduciary duties; and\n (f) to ensure that all material commitments and liabilities, contingent or otherwise, are identified, \nprovided for, or adequately disclosed in the financial statements.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 335, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  329\nAutomation\n13. As a result of the large number of transactions undertaken and records held by banks and the need \nfor swift and accurate information processing and retrieval, many banking functions are often highly \nautomated, including : funds transfer systems, the accounting function, the processing and recording \nof retail customer transactions, the dealing room and the supply of dealing and management \ninformation.\n14. The Auditors should assess the extent, nature and impact of automation within the bank and plan and \nperform their work accordingly.\n (a) the required level of technical computer knowledge and skills is likely to be extensive and may \nrequire the auditor to obtain advice and assistance from staff with specialist skills;\n (b) bank audits are particularly suitable for the use of audit software and other types of Computer \nAssisted Audit Techniques; and\n (c) reliance on internal controls for audit purposes is likely to require the evaluation and testing \nof general controls relating to the environment within which computer based systems are \ndeveloped, maintained and operated.\nBranches\n15. Many branches operate a network of branches. The Auditors\u2019 approach to such branches will \nprincipally be determined by the degree of Head Office control over the business and accounting \nfunctions at each branch and by the scope and effectiveness of the bank\u2019s inspection and/or internal \naudit visits. The extent and impact of visits from regulators should also be considered. Where \nbranches maintain separate accounting records, the extent of audit visits and work on each branch \nwill also be dependent on the materiality of, and risks associated with, the operations of each branch \nand the extent to which controls over branches are exercised centrally. Where the branch accounting \nrecords are centralized, the auditors should obtain reasonable assurance that the systems of control", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 336, "year": 2013}, "type": "Document"}
{"page_content": "over branches are operating satisfactorily either by visiting branches, or by ensuring that an adequate \nsystem of branch inspection by internal auditors exists. Particular attention should be paid both to the \ndifficulties of exercising Head Office control and to the differences in nature and degree of risk that \nmay arise in overseas branches. In the case of smaller branches, attention should focussed upon the \nexceptions to a bank\u2019s normal control procedures caused by staffing levels (e.g., the greater difficulty \nof ensuring adequate segregation of duties) and to the consequent need for an increased level of \ncontrol from outside the branch.\nReview of Financial Statements\n16. When reviewing the financial statements of the Bank the Auditor should carry out such a review of \nthe financial statements as is sufficient, in conjunction with the conclusions drawn from the other \naudit evidence obtained, to give him a reasonable basis for his opinion on the financial statements. \nSuch a review should include :\u2013\n (a) Lar ge deposits or loan repayments received shortly before the year end which are repaid or \nre-advanced shortly afterwards. This will require a good deal of judgement to identify any \nwindow-dressing transactions;\n (b) T ransfers between the trading security and investment security portfolios which take advantage \nof different valuation policies;\n (c) The reclassification of hedging and trading transaction/positions to take advantage of different \ntiming of profit and loss recognition;\n (d) The reclassification of assets within liquidity profiles or under balance sheets headings.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 336, "year": 2013}, "type": "Document"}
{"page_content": "330 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n17. Auditors should consider whether the accounts comply with all relevant statutory requirements, and \nwhether the accounting policies adopted will enable them to express an unqualified opinion on the \nfinancial statement, in respect of the following:\u2013\n (a) loans, advances and trade finance;\n (b) customer accounts, cash, transfer of funds and NOSTRO accounts;\n (c) market deposits;\n (d) foreign exchange, futures, options and commodities dealings;\n (e) investments and dealing securities.\n18. Auditors should ensure that the following controls are compliance tested :\u2013\n (a) Segregation of duties wherever these controls are deemed necessary;\n (b) Physical controls wherever they are deemed necessary;\n (c) Authorization and approval wherever they are deemed necessary;\n (d) Arithmetical and accounting accuracy and controls where they are deemed necessary;\n (e) Supervision controls where they are deemed necessary;\n (f) Substantive tests to prove the adequacy of these controls.\n19. Application and general control over the computer environment would entail :\u2013\n (a) The or ganization of the relevant Bank departments.\n (b) Management review of activities.\n (c) Recompute processing of the transactions.\n (d) Input and processing of transactions by computer .\n (e) Maintenance of computer files of transactions and balances.\n (f) Post processing actions on output and computer systems.\n (g) Reconciliation of computerized records with related assets.\n20. The general controls relating to the development, maintenance and operation of computer systems \nthat are designed to control the following risks :\u2013\n (a) Risks arising in the development and enhancement of new computer systems;\n (b) Risks or errors during data processing, development and amendment to programmes;\n (c) Risks of loss including being unable to continue operation or recover from a breakdown or \ndisaster - business interruption;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 337, "year": 2013}, "type": "Document"}
{"page_content": "disaster - business interruption;\n (d) Risks relating to unauthorized access to the computer system, its application and data files.\n21. Other controls which af fect a number of areas :\u2013\n (a) controls over the authorization and correct recording of :\n (i) nostro transactions; and\n (ii) transactions using funds transfer systems.\n (b) Control over financial planning and budgeting.\n (c) Controls governing the provision of adequate management accounting information.\n (d) Controls over the documentation and communication of :\n (i) accounting policies ; and\n (ii) operational procedures and controls.\n (e) controls over ef fective personnel selection routines.\n (f) Controls over establishing, monitoring and reporting risk.\n (g) Controls over management review of systems, e.g. internal audit.\n (h) Controls over communication with the CBSL  and other regulatory authorities.\n (i) Computer controls.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 337, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  331\nBank Supervision Department\n27 April 2004 \nTo :  All Approved External Auditors \n \nDear Sir,\nGUIDELINES FOR EXTERNAL AUDITORS RELATING TO\nTHEIR STATUTORY DUTIES IN TERMS OF SECTION 39 OF THE BANKING ACT,\nNO. 30 OF 1988 AS AMENDED BY THE BANKING ACT, NO. 33 OF 1995\n The Central Bank of Sri Lanka as the Supervisory and regulatory authority of banking institutions  \nstrives continually to mitigate and manage the attendant risks in the banking sector in Sri Lanka.  \nThe CBSL recognizes the important role played by the External Audit firms in this regard and is working \ntowards improving the quality and the integrity of bank audits. \n Significant developments and changes have taken place in the global financial architecture \nsince the introduction of the first guidelines to External Auditors by the CBSL. As you are aware, the  \nSarbanes-Oxley Act of the US has attempted to address some of these issues. Accordingly, the Monetary \nBoard of the Central Bank of Sri Lanka has approved the attached Addendum to the Guidelines issued \non 20 May 1998. The CBSL believes that these additional guidelines will address some of these concerns \nand contribute towards the improvement of bank audits in Sri Lanka.\n Si nce your Firm is on the panel of approved auditors of the Central Bank, you are required to ensure \nthat your firm is in compliance with these guidelines, which are operative with immediate ef fect.\n Please acknowledge receipt of this letter .\nYours faithfully,\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 338, "year": 2013}, "type": "Document"}
{"page_content": "332 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex I\nGUIDELINES FOR EXTERNAL AUDITORS RELATING TO THEIR STATUTORY DUTIES \nIN TERMS OF SECTION 39 OF THE BANKING ACT NO. 30 OF 1988\nAS AMENDED BY THE BANKING ACT NO. 33 OF 1995\nADDENDUM\nNon-Audit Services\n1. Qualified External Auditors shall not undertake any consultancy or other non-audit services with a \nbank contemporaneously with the external audit. The restricted non-audit services are:\n\u2022 Book keeping or other services related to the accounting records or financial statements of the audit \nclient;\n\u2022 Financial information systems design and implementation;\n\u2022 Appraisal or valuation services, fairness options, or contribution-in-kind reports;\n\u2022 Actuarial services;\n\u2022 Internal audit outsourcing services;\n\u2022 Management functions, human resources and payroll services;\n\u2022 Broker or dealer , investment adviser, or investment banking services; and \n\u2022 Legal services and expert services related to the audit.\nThis restriction also applies to services provided by entities where a partner of an Audit Firm is a \nDirector or has a significant share holding.\nManagement Letter\n2. External Audit firms are requested to submit the Management Letter, which is a non-statutory report by \nthe Auditor to the management of the Bank, together with the published audited accounts to the Banks \nthey audit, within five months of the end of the financial year. If the auditors are unable to finalize the \nManagement Letter, they should submit an interim report with their major findings within the said \nperiod. This will enable the Banks and the Regulator to identify significant and systemically important \nrisks in a timely manner.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 339, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  333\nBank Supervision Department\n28 July 2006\nTo : CEOs of all Licensed Specialised Banks (except RDBs)\nDear Sirs,\nIMPLEMENTATION OF THE NEW WEB BASED \nOFF-SITE SURVEILLANCE SYSTEM\nFurther to our circular dated 17 March 2006 and the discussions at the meeting of the CEOs of \nlicensed banks held on 04.07.2006 and 22.06.2006, on the above subject, all licensed banks are hereby \ninformed that the submission of periodical returns in manual form will be discontinued from the reporting \nperiod ending June 2006. The new \u2018web-based returns\u2019 will be implemented from the reporting period \ncommencing July 01, 2006. The lists of web-based returns are given in the Annex 1. Existing returns that \nare not replaced with the web-based returns should continue to be submitted in manual form.\nBanks are further informed that statement of certification relating to returns submitted on a weekly/\nmonthly, quarterly and annual basis should be submitted as specified in Annex 2, Annex 3, Annex 4 and \nAnnex 5, respectively, within 3 days from the end of the reporting period.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 340, "year": 2013}, "type": "Document"}
{"page_content": "334 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex 1\nThe List of Returns implemented under New Web-based Off-site Surveillance System\nLicensed Specialised Banks\nExisting Manual Return New web-based Return to replace the Manual Return\nWeekly Returns\nInterest Rates BSD-WF-13-IR \u2013 Interest Rates (\u201cBank Only\u201d Totals)\nMonthly Returns\nAssets and Liabilities BSD-MF-01-BD \u2013 Balance Sheet (DBU and Bank Only Operations)\nIncome/Expenditure & Distribution of \nProfits (Note)BSD-MF-02-PD \u2013 Profit & Loss (DBU and Bank Only Operations)\nLiquid Assets BSD-MF-04-LD \u2013 Statutory Liquid Asset Ratio \nCommercial Paper/Promissory Notes BSD-MF-16-CP \u2013 Commercial Papers/Promissory Notes\n\u2013 BSD-MF-03-CD \u2013 Classification of Loans & Advances ( New)\n\u2013 BSD-MF-15-GE \u2013 Government Exposure (\u201cBank Only\u201d Totals) ( New)\nQuarterly Returns\nLarge Accommodation ( Note) BSD-QF-05-LN \u2013 Large Exposures (Performing & Non Performing \u2013 \n\u201cBank Only\u201d Totals)\nAccommodation granted to a Director or \na close RelationBSD-QF-06- RC  \u2013 Related Party Exposures (Accommodation Granted \nby the Bank to Directors or/and Close Relatives \u2013 \u201cBank Only\u201d Totals)\nAccommodation granted to concerns \nwhere the Director has a substantial \ninterestBSD-QF-06-RS \u2013 Related Party Exposures (Accommodations Granted \nby the Bank to Concerns where a Director of the Bank has a Substantial \nInterest \u2013 \u201cBank Only\u201d Totals)\nInvestment in Equity \n(Public Companies)BSD-QF-07-IE \u2013 Investment in Equity (\u201cBank Only\u201d Totals)Investment in Equity \n(Private Companies)\nCapital Adequacy \u2013 Solo BSD-QF-11-C1-C4  \u2013 Capital Adequacy (\u201cBank Only\u201d Solo Basis \nTotals)\nCapital Adequacy \u2013 Consolidated BSD-QF-11-C5-C8 \u2013 Capital Adequacy (Consolidated Totals)\nInterest Spread BSD-QF-14-SP \u2013 Interest Spread\n\u2013 BSD-QF-08-FE \u2013 Foreign Currency Exposures \u2013 If applicable  (New)\n\u2013 BSD-QF-09-GA \u2013 Maturity Gap Analysis (\u201cBank Only\u201d Totals) ( New)\n\u2013 BSD-QF-10-IS \u2013 Interest Rate Sensitivity (\u201cBank Only\u201d Totals) ( New)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 341, "year": 2013}, "type": "Document"}
{"page_content": "\u2013 BSD-QF-10-IS \u2013 Interest Rate Sensitivity (\u201cBank Only\u201d Totals) ( New)\n\u2013 BSD-QF-12-SC \u2013 Sector Wise Credit Exposures (\u201cBank Only\u201d Totals) \n(New)\nAnnual Returns\nAssets and Liabilities BSD-AF-01-BD \u2013 Balance Sheet (DBU and Bank Only Operations)\nIncome and Expenditure BSD-AF-02-PD \u2013 Profit & Loss (DBU and Bank Only Operations)\nCapital Adequacy - Solo BSD-AF-11-C1-C4  \u2013 Capital Adequacy (\u201cBank Only\u201d Solo Basis \nTotals)\nCapital Adequacy - Consolidated BSD-AF-11-C5 \u2013 C8  \u2013 Capital Adequacy (Consolidated Totals)\nNote: Frequency has been changed form quarterly to monthly.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 341, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  335\nAnnex 2\nStatement \tof\tCertification \tof\tWeekly/Monthly \tReturns\tApproved/Submitted\n \nMonthly Returns\nBSD-MF-01-BD  \u2013 Balance Sheet - Domestic Banking \nUnit Operations (DBU) and Bank15/MM/YY\nBSD-MF-02-PD \u2013 Profit & Loss - Domestic Banking Unit \nOperations (DBU) and Bank15/MM/YY\nBSD-MF-03-CD \u2013 Classification of Loans & Advances 15/MM/YY\nBSD-MF-04-LD \u2013 Statutory Liquid Asset Ratio - Domestic \nBanking Unit Operations (DBU)15/MM/YY\nBSD-MF-16-CP \u2013 Commercial Papers/Promissory Notes 15/MM/YY\nBSD-MF-15-GE \u2013 Government Exposure ( New) 15/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 1st Week DD/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 2nd Week DD/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 3rd Week DD/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 4th Week DD/MM/YY\nBSD-WF-13-IR \u2013 Interest Rates \u2013 5th Week DD/MM/YY\nWe certify that the information contained in the above returns has been extracted from and is in \naccordance with the books of accounts of the bank.\n (Name ) (Name ) \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator\n Date: DD/MM/YY  Date: DD/MM/YYReturn Due DateSubmitted Approved \nDate Yes No", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 342, "year": 2013}, "type": "Document"}
{"page_content": "336 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex 3\nStatement \tof\tCertification \tof\tQuarterly \tReturns\tApproved/Submitted\nQuarterly Returns\nBSD-QF-05-LN \u2013 Large Exposures (New) 21/MM/YY\nBSD-QF-06-RC \u2013 Related Party Exposures - \nAccommodation granted by the Bank to Directors and/\nor Close Relatives 21/MM/YY\nBSD-QF-06-RS \u2013 Related Party Exposures - \nAccommodation Granted by the Bank to Concerns \nwhere a Director of the Bank has a Substantial Interest21/MM/YY\nBSD-QF-07-IE \u2013 Investment in Equity 21/MM/YY\nBSD-QF-08-FE \u2013 Foreign Currency Exposures (New) 21/MM/YY\nBSD-QF-09-GA \u2013 Maturity Gap Analysis (New) 21/MM/YY\nBSD-QF-10-IS \u2013 Interest Rate Sensitivity ( New) 21/MM/YY\nBSD-QF-12-SC \u2013 Sector Wise Credit Exposures ( New) 21/MM/YY\nBSD-QF-14-SP \u2013 Interest Spread 21/MM/YY\n   \nWe certify that the information contained in the above returns has been extracted from and is in \naccordance with the books of accounts of the bank.\n (Name ) (Name ) \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator\n Date: DD/MM/YY  Date: DD/MM/YYReturn Due DateSubmitted Approved \nDate Yes No", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 343, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  337\nReturn Due DateSubmitted Approved \nDate Yes NoAnnex 4\nStatement \tof\tCertification \tof\tAnnual\tReturns\tApproved/Submitted\n \nAnnual Returns\nBSD-AF-01-BD \u2013 Balance Sheet \n(DBU and Bank Only Operations)30/MM/YY\nBSD-AF-02-PD \u2013 Profit & Loss \n(DBU and Bank Only Operations)30/MM/YY\nWe certify that the information contained in the above returns has been extracted from and is in \naccordance with the books of accounts of the bank.\n (Name ) (Name ) \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\n (Sgd) Finance Controller  (Sgd) Compliance Officer/Administrator\n Date: DD/MM/YY  Date: DD/MM/YY\nAnnex 5\nStatement \tof\tCertification \tof\tQuarterly/Annual \tReturns\tApproved/Submitted\n(Only for Capital Adequacy)\n \nQuarterly Returns\nBSD-QF-11-C \u2013 Capital Adequacy \u2013 Bank Only \n(SOLO basis)30/MM/YY\nBSD-QF-11-C \u2013 Capital Adequacy \u2013 Consolidated 30/MM/YY\nWe certify that \u2013\n(1) The information submitted in the above return is, to the best of our knowledge and belief, correct;\n(2) The capital adequacy ratio was, at any time during the quarter/year under review, not less than the \nratio determined by the Monetary Board, in terms of section 76J(1) of the Banking Act, No.30 of \n1988 as amended by Banking Act, No.33 of 1995 and Act, No.2 of 2005. \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\n Chief Accountant/Authorised Officer  Chief Executive\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\n Name   Name\n Date:\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.  Date:\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.Return Due DateSubmitted Approved \nDate Yes No", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 344, "year": 2013}, "type": "Document"}
{"page_content": "338 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBank Supervision Department\n17 March 2006\nTo : CEOs of all Licensed Commercial Banks and\n        Licensed Specialised Banks\nDear Sirs,\nNEW WEB-BASED OFF-SITE SURVEILLANCE SYSTEM\nWe refer to the discussion at the Bank Managers\u2019 Meeting held on 26 January 2006 and the previous \ncorrespondence on the above subject and write to inform you that the testing of, and familiarization with, \nthe above system with the use of information submitted by the banks for the month of September 2005, \nthrough the web-based application, has been completed. The next step is to go \u201clive\u201d with the above \nsystem and this exercise will start in parallel with the existing manual system till June 2006. Once the \nsystem is fully tested, the existing manual returns submission system will be discontinued.\nTherefore, we shall be thankful if you will make arrangements to forward the information in the \nnew returns, from January 2006 onwords, through the above web-based system, in addition to the present \nsystem of \u201cmanual returns submission\u201d to this Department. Your co-operation in this regard will be much \nappreciated.\nYours faithfully,\nSgd, Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 345, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  339\nRef. No. : 02  / 04 / 004 / 0010  / 001\nBank Supervision Department\n18 February 2005\nTo : The CEOs of all Licensed Commercial Banks and\n Licensed Specialised Banks\nDear Sirs,\nSUBMISSION OF THE MONTHLY & QUARTERLY COMPLIANCE REPORTS\nI refer to the BSD Circular dated 26 October 2001 and the discussion on the above subject at the \nmeeting of the CEOs of Licensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) \nheld on 17.02.2005.\nAs agreed, all banks are hereby informed that the CEO of the respective bank should sign the \nCompliance Reports submitted to this Department on a monthly and quarterly basis.\nThis will be effective for the Compliance Reports to be submitted for the month of February 2005 \nonwards. \nYours faithfully,\nSgd, Director of Bank Supervision\ncc \u2013 Secretary-General/SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 346, "year": 2013}, "type": "Document"}
{"page_content": "340 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 03 /004 / 0006  / 001\nBank Supervision Department\n15 October, 2012\nTo :  The CEOs of all Licensed Banks\nSUBMISSION OF STATUTORY RETURNS\nA review of the submission of Statutory Returns to the Bank Supervision Department has revealed \nthat several banks continue submission of some Statutory Returns in manual form which have already \nbeen discontinued due to the following. \n(a) Implementation of the web based off-site surveillance system from the reporting period \nending June 2009.\n(b) Withdrawal of certain Circulars.\n2. As intimated to you by our letter dated 28.03.2006, banks were requested only to  \ncontinue submission of Returns that are not replaced with web based Returns, in manual form. \nHowever, it is noted that few banks do not follow these instructions and continue submitting  \nthe same Returns both manually and as web based Returns. \n3. Accordingly, we request you to ensure that only the Returns enumerated in Annex are sent in \nmanual form with effect from 01.11.2012 and to advise the respective officers accordingly. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 347, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  341\nAnnex\nReturns to be submitted manually \nReturn Reference Reporting \nPeriod\n1.Report of abandoned property - \nsettlements during the period \n(Only  for LCBs)Banking Act Direction No. 05 of \n2009 dated 02.09.2009Weekly\n2.Cheque returns statement \n(Only  for LCBs) Monthly\n3.Donations received by Government,  \nNon-Government Organisations \n(NGOs) and Others (Non-NGOs) \u2013 \nTable 102/19/40110072/001 dated \n07.03.2006Monthly\n4.Donations received by NGOs \u2013 \nTable 202/19/40110072/001 dated \n07.03.2006Monthly\n5.Utilization of investment fund account02/17/800/0014/02 dated \n31.10.2011Monthly \n(by e-mail)\n6.Statements of certification of weekly, \nmonthly, quarterly and annual reports \napproved/submitted Guidelines on Implementation \nof the new web based off-\nsite surveillance system dated \n28.07.2006Monthly, \nquarterly and \nannually\n7.Information on shareholdings \n(Only for domestically incorporated \nprivate banks)  BD/CB/P dated 21.06.1996 Monthly \n8.Statement of exposure to the stock \nmarketBanking Act Direction No. 05 & \n06 of 2011 dated 26.08.2011Quarterly\n(by e-mail)\n9.Information on operation of banking \noutlet 02/03/004/0200/002 dated \n18.01.2012Quarterly \n(by e-mail)\n10. Report of internal loss events in banksExposure Draft on implementation \nof the Standardised Approach \nfor calculating capital charge for \nOperational Risk dated 22.06.2011Quarterly\n11.Business operations that are/to be \noutsourced \nas at/during the yearBanking Act Direction No. 7 & 8 \nof 2010 dated 02.11.2010Annually\n12.Report of abandoned property \u2013 \nadditions during the periodBanking Act Direction No. 05 of \n2009 dated 02.09.2009 Annually *\n13.Report of abandoned property \u2013 \nsettlements during the periodBanking Act Direction No. 05 of \n2009 dated 02.09.2009Annually *\n14.Return on depositor wise details of \neligible deposits Circular No. 02/2010 dated \n09.12.2010Quarterly\n15.Sri Lanka deposit insurance scheme \u2013", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 348, "year": 2013}, "type": "Document"}
{"page_content": "09.12.2010Quarterly\n15.Sri Lanka deposit insurance scheme \u2013 \npayment of premium Circular No. 01/2010 dated \n15.10.2010Quarterly\n* Only for Lic ensed Commercial Banks which are unable to upload data to the web based returns  \nBSD-AF-18-AP \u2013 Report of Abandoned Property-Additions during the period and BSD-AF-18-AS \u2013 \nReport of Abandoned Property-Settlements during the period are required to submit manually.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 348, "year": 2013}, "type": "Document"}
{"page_content": "342 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT, NO. 88 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT, NO.33 OF 1995\nAmendment to Direction dated 7th May 1998 issued by the Monetary Board of the Central Bank \nof Sri Lanka, under Section 76 j(1) of the Banking Act, No.30 of 1988 as amended by the Banking \n(Amendment) Act, No.33 of 1995 in respect of deposits.\nSgd. Sunil Mendis\nGovernor\nColombo\n03 January 2005.\nAMENDMENT TO LICENSED SPECIALISED BANKS (DEPOSITS)\nDIRECTIONS\nSub section (b) of Section 4 of the above Direction is repealed with immediate effect.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 349, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  343\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka, under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as last amended by the Banking (Amendment) Act, No.33 of 1995 in \nrespect of deposits.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n7th May 1998\nLICENSED SPECIALISED BANKS (DEPOSITS)\nDIRECTIONS\n1. Every Lice nsed Specialised Bank shall, in opening an account for a depositor, \nrequire the depositor to sign a mandate form and a signature card in such form as \nmay be approved by the Board of Directors of the Bank.\n2. The terms and conditions under which any deposit may be accepted by a Licensed \nSpecialised Bank from a depositor shall, among other matters, state \u2013\n (a) whether interest on such deposit is paid or credited on a daily balance or \notherwise;\n (b) the minimum balance, if any , that is required to be maintained in such \naccount;\n (c) the terms and conditions relating to deposit and withdrawal of money at any \nof its branches or automated teller machines in and from an account.\n3. Every Licensed Specialised Bank shall issue to a depositor if such depositor  \nrequests\n (a) i n respect of a savings account, a pass book or such other document, \nrecording the operations of the account;\n (b) in respect of other deposit accounts, a receipt or a certificate specifying the \namount deposited and the manner of its withdrawal.\n4. Interest shall not be paid to a depositor or be credited to a depositor \u2019s account\u2013\n (a) on any deposit of money in such account, other than a savings account, if \nthe deposit is withdrawn before 7 days from the date of deposit; \n (b) on the sum in deposit in a savings account in respect of any month in any \nyear, where there have been more than 4 withdrawals from that account in \nthat month.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 350, "year": 2013}, "type": "Document"}
{"page_content": "year, where there have been more than 4 withdrawals from that account in \nthat month.\n5. Every Licensed Specialised Bank s hall, before opening a deposit account for \na depositor, communicate in writing to the depositor the terms and conditions \nspecified in paragraph 2 and receive an acknowledgement in writing from such \ndepositor that the depositor has received and has agreed to accept such terms and \nconditions.\n6. These Directions shall not apply to any deposits made by a Licensed Commercial \nBank or a Licensed Specialised Bank.Opening of \nDeposit Accounts.\nTerms and \nConditions.\nPass Books & \nreceipts and \ncertificates.\nInterest when not \npayable.\nCommunication \nof terms and \nconditions to \ndepositors.\nNon-application of \nDirections.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 350, "year": 2013}, "type": "Document"}
{"page_content": "344 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : BS/31/90 V ol. III \nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha\nColombo 1.\n15th September, 1998 \nDear Sir,\nBUSINESS OF PAWN BROKING\n W e enclose herewith the Direction issued by the  Monetary Board, in terms of Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by Act, No.33 of 1995, relating to the business of pawn \nbroking conducted by a Regional Development Bank, which is a Licensed Specialised Bank within the \nmeaning of the Banking Act referred to above, for your information and compliance.\n The ef fective date of this Direction would be 1st October 1998.\n Please acknowledge receipt of this letter .\nYours faithfully,\nSgd. Y. A. Piyatissa\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 351, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  345\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka, under Section 76 j(1) of \nthe Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995 relating \nto business of pawn broking carried on by a Regional Development Bank, being a licensed specialised \nbank within the meaning of the Banking Act.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n7th September 1998\nREGIONAL DEVELOPMENT BANKS (PAWNING) DIRECTIONS 1998\n1. ( 1)  These Directions may be cited as the Regional Development Banks  \n(Pawning) Directions, 1998.\n (2) These Directions shall apply to the business of pawn broking, (hereafter \nreferred to as \u201cpawning\u201d) carried on by a Regional Development Bank or \nany branch or agency of such bank (hereafter referred to as the \u201cpawnee\u201d).\n2. In these Directions \u201cpawning\u201d means the  lending of money on the security of \npersonal articles made of gold (hereafter referred to as the \u201carticle\u201d) accepted as \na pledge for a period not exceeding an initial period of 12 months.\n3. (1) A  pawnee shall not accept an article as  a pledge where the pawnee has \nreasonable grounds to believe that the person who gives the article as a \npledge is not the owner or the authorised agent of the owner of the article.\n ( 2)  A  person who gives an article as a pledge or redeems an article shall \nestablish the identity of the person to he satisfaction of the pawnee.\n4. Pawning shall be carried on by a pawnee\n (a) between the opening and closing hours of business for the public by the \nRegional Development Bank\n (b) on such other dates and times as may be specified in a notice displayed in a \nconspicuous place at the place of business of the Pawnee.\n5. A  pawnee shall, for the purpose of testing and valuing articles for pawning, have", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 352, "year": 2013}, "type": "Document"}
{"page_content": "5. A  pawnee shall, for the purpose of testing and valuing articles for pawning, have \nstaff with sufficient training and competency in and the equipment for assaying \nthe gold content of an article.\n6. (1) The standard measurement for the determination of the quality of an article \nshall be a carat.\n (2) The standard measurement of weight used in the valuation of an article shall \nbe a gram.\n (3) An article measuring less than 9 carats shall not be accepted as a pledge.Citation & \nApplication. \nInterpretation.\nOwnership of \npledge.\nDates & Times of \nPawning.\nCompetence \nof Staff and \nequipment.\nStandard \nMeasurement.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 352, "year": 2013}, "type": "Document"}
{"page_content": "346 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (4) In valuing an article, the pawnee shall have regard only to the value of gold \nin the article.\n ( 5)  A  pawnee shall, in accepting an article as a pledge, inform the person \ndelivering the article, the value of the article determined in accordance with \nthis paragraph.\n7. (1) The rate of interest chargeable on the money lent on the security of an article \naccepted as a pledge for pawning shall be fixed by the pawnee.\n (2) A  pawnee shall display in a conspicuous place in its place of business a \nnotice specifying \u2013\n (a) the daily market value of sovereign gold;\n (b) the rate or rates of interest fixed under subparagraph (1) or subparagraph \n(3).\n (c) The maximum  percentage of the value of an article lent on each carat \nof the article.\n (3) Where an article given as a pledge for pawning is not redeemed within the \nredeemable period calculated under paragraph 11, a pawnee may, subject \nto paragraph 10(2), levy interest on the money lent at a rate higher than the \nrate levied during the redeemable period, (such higher rate referred to as \n\u201cenhanced interest\u201d) from the date immediately following the redeemable \nperiod.\n8. (1) A  pawnee shall keep for its business \u2013\n (a) a pledge book in the Form set out in the First Schedule;\n (b) a sale book of pledges in the Form set out in the Second Schedule.\n ( 2)  A  pawnee shall, after due inquiry, enter in each Book kept under the \nsubparagraph (1), the particulars specified therein in respect of each Article \ntaken as  a pledge.\n9. (1) Subject to subparagraph (6), a pawnee shall execute, in respect of every \narticle accepted as a pledge for pawning, a pawn ticket.\n (2) A  pawn ticket shall be in foil and counterfoil and  shall be in the Form set \nout in the Third Schedule.\n (3) The counterfoil of the pawn ticket shall, after it is filled up by the pawnee, be \nsigned by the person giving the article as a pledge (hereafter  referred to as", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 353, "year": 2013}, "type": "Document"}
{"page_content": "signed by the person giving the article as a pledge (hereafter  referred to as \nthe \u201cpawner\u201d) or, if the pawner is unable to sign the name, be marked with \nthe left thumb impression of the pawner.\n (4) The foil of the pawn ticket shall be filled up and signed by the pawnee.\n (5) The pawnee shall, after compliance with sub paragraph (4), hand over the \nfoil of the pawn ticket to the pawner.\n ( 6)  When a paw ner gives more than one article as a pledge on the same \noccasion, the pawnee may execute one pawn ticket for all such articles, \nunless the pawner requests otherwise.\n10. (1) Where an article is redeemed within the first fourteen days of a month, the \ninterest chargeable for that month shall be one half of interest chargeable for \nthat month.Interest Rates.\nBooks to be \nmaintained.\nPawn Ticket.\nComputation of \nInterest.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 353, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  347\n ( 2)  Where the business of a pawnee remains closed on the last day of the  \nredeemable period without reasonable and adequate notice, enhanced \ninterest may be levied only from the day immediately succeeding the first \nday on which the business thereafter remains open.\n11. ( 1) Every article given as a pledge shall be redeemable within a period of   \n12 months commencing from the date of pawning (in these Directions \nreferred to as the \u201credeemable period\u201d).\n (2) In calculating the period of 12 months under subparagraph (1) the date of \npawning shall be disregarded.\n12. (1) Subject to the other provisions of this paragraph, a pawner may redeem an \narticle given as a pledge, by delivering to the pawnee the foil of the pawn \nticket in relation to that article and by placing the signature or the left thumb \nimprint, as the case may be, of the pawner on the foil in the presence of the \npawnee or an authorised agent or employee of the pawnee\n (2) A  person authorised in writing by the pawner may redeem an article given \nas a pledge by delivering to the pawnee the foil of the pawn ticket in relation \nto the article, duly endorsed by the signature or the left thumb imprint of \nthe pawner and by placing on the foil the person\u2019s signature or left thumb \nimpression in the presence of the pawnee or an authorised agent or employee \nof the pawnee.\n (3) Where by reason of the death or disability of the pawner, an article given as \na pledge cannot be redeemable under subparagraph (1) or subparagraph (2), \na holder of the foil of the pawn ticket in relation to the article may redeem \nthe article by delivering to the pawnee the foil together  with a  declaration  \nin the form set out in the Fourth Schedule signed by the holder and by a \nperson identifying the holder and made before a Justice of Peace.\n (4) Where a foil in relat ion to an article given as a pledge is lost, stolen, mislaid,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 354, "year": 2013}, "type": "Document"}
{"page_content": "(4) Where a foil in relat ion to an article given as a pledge is lost, stolen, mislaid, \ndestroyed or has been obtained by a person not entitled to it, the pawner, \nthe person or the holder referred to in subparagraphs (1), (2) or (3) may \nredeem the article by making a declaration in the Form set out in the Fifth \nSchedule signed by the pawner, person or holder, as the case may be, and a  \nperson identifying the pawner, person or holder and made before a Justice \nof Peace and in that event the pawner, person or holder, as the case may \nbe, shall place the signature or the left thumb impression on the counterfoil \nof the pawn ticket in the presence of the pawnee, or an authorised agent or \nemployee of the pawnee.\n (5) Subject to subparagraphs (1), (2), (3) and (4) the pawnee of an article given \nas a pledge shall, on payment of the money lent on the security of the article \ntogether with the interest due thereon by the person entitled to redeem the \narticle under those subparagraphs, deliver, subject to subparagraph (6), the \narticle to such person.\n (6) Where a pawnee has reasonable grounds to believe that a person delivering \na foil of a pawn ticket under subparagraphs (1), (2) or (3) has stolen or \notherwise illegally obtained possession of it, the pawnee may refuse to \ndeliver the article in relation to that foil.\n (7) The pawnee shall in delivering under subparagraph (4) an article given as \na pledge, issue to the person redeeming the article a receipt for the money \npaid in the Form set out in the Sixth Schedule.Redeemable \nperiod.\nProcedure for \nredemption of a \npledge.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 354, "year": 2013}, "type": "Document"}
{"page_content": "348 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n13. (1) Where an article given as a pledge is lost, destroyed or damaged while in the \ncustody of the pawnee, the pawnee shall be liable, on demand by a person \nentitled to redeem it within the redeemable  period, to  pay the  person the \nvalue of the article determined under paragraph (6), less any sum due as \nmoney lent and interest thereon.\n (2) Every pawnee shall insure the business of pawn broking to the value of the \narticles taken as pledges.\n14. Every pawnee shall retain in the possession of the pawnee  \u2013\n (a) the counterfoil of each pawn ticket for a period of 12 months from the date \nof redemption of article relating to that pawn ticket or, when the article is \nsold under paragraph 15 from the date of sale.\n (b) foil of every such pawn ticket referred to in paragraph ( a) for a period of \n12 months from the date of redemption where the foil is delivered to the \npawnee;\n (c) each declaration made under paragraph 12 for a period of 12 months from \ndate of redemption of the article in respect of which the declaration is \nmade.\n (d) the duplicate copy of the receipt issued under paragraph 12(7) for a period \nof 12 months from the date of issue of the receipt.\n15. (1) Where an article delivered as a pledge is not redeemed within the redeemable \nperiod calculated under paragraph 11, a pawnee may sell the article by public \nauction and the provisions of this paragraph and the Seventh Schedule shall \napply to such sale. \n (2) The auctioneer at a public auction conducted Under subparagraph (1) shall \nbe a senior officer of the pawnee of a rank not below the rank of a Branch \nManager.\n (3) A  pawnee shall give to each pawner of an   article liable for sale under  \nsubparagraph (1) not less than 14 days notice of the auction.\n (4) The notice under subparagraph (3) shall  state the date, time and place of \nthe auction and shall be sent to the pawner  by registered post to the address", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 355, "year": 2013}, "type": "Document"}
{"page_content": "the auction and shall be sent to the pawner  by registered post to the address \nstated in the pledge book and the cost of such postage shall be borne by the \npawner.\n (5) Where a notice sent by registered post to a pawner of the auction published \npursuant to the Seventh Schedule shall be a sufficient notice to the pawner .\n ( 6)  A  pawnee may bid for and purchase at an auction conducted under \nsubparagraph (1) an article delivered to the pawnee  as a pledge and liable \nto be sold under that subparagraph and on such purchase shall be deemed to \nbe the absolute owner of the article.\n (7) Where at an auction conducted under subparagraph (1) an article is sold for \nan amount exceeding the money lent on the security of that article together \nwith interest thereon, the pawnee shall \u2013\n (a) forthwith give notice to the pawner of that article by registered post \nto the address stated in the pledge book of the amount for which the \narticle was sold and of the amount lying to the credit of the pawner \nafter deducting the cost of postage and the charges of the auction;Loss or destruction \nof pledge.\nPeriod of retention \nof documents.\nSale of Pledges.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 355, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  349\n (b) on demand made by the pawner within 12 months from the date  \nof despatch of the notice, pay to the pawner the sum lying to the \npawner\u2019s credit;\n (c) If no demand is made within the period specified in clause ( b) above \ndeposit forthwith after the expiration of that period such amount \nin a savings account opened in the name of the pawner or transfer \nthe said amount to an unclaimed balance amount maintained by the \npawnee.\n ( 8)  A  pawnee shall keep proper records of the unclaimed balance account \nmaintained under subparagraph (7)(c) and pay to the pawner the amount due \nto the pawner if a claim is made thereto the pawner.\n16a. A  pawnee shall at the end of every quarter carry a physical check to be made of \nthe articles delivered as pledges and held in stock by the pawnee.\n17. A  pawnee shall not \u2013\n (a) accept an article as a pledge from any person appearing to be under the age \nof 16 years or to be under the influence of alcohol;\n (b) accept an article as a pledge without giving the pawner of the article the foil \nof the pawn ticket;\n (c) purchase or take as security or exchange the foil of a pawn ticket issued by \nanother pawnee;\n (d) purchase any article given to the pawnee as a pledge except at a public  \nauction conducted under paragraph 15;\n (e) allow any article delivered as a pledge to be redeemed with the view to \npurchasing it by the pawnee;\n (f) agree with the pawner to purchase, sell, or dispose within the redeemable \nperiod an article delivered  the pawner as a pledge;\n (g) sell or otherwise dispose of an article delivered as a pledge except at such \ntime and in such manner as is authorised under these conditions.\n (h) make any false entry in a pledge book or any other document required to be \nkept under these conditions.\n18. (1) A  pawnee shall be responsible for the safe custody of articles delivered as \npledges.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 356, "year": 2013}, "type": "Document"}
{"page_content": "18. (1) A  pawnee shall be responsible for the safe custody of articles delivered as \npledges.\n (2) Articles delivered to a pawnee as pledges shall be placed \u2013\n (a) In safes which are under dual control;\n  or\n (b) In steel cabinets under dual control kept inside a vault.\n ( 3)  A  pawnee shall establish a dual control team of which the Head of the \npawning division shall be a member.\n19. ( 1) A  pawnee may formulate rules which are not inconsistent with these \nDirections for the conduct of its pawn broking business.Physical check of \npledges.\nActs prohibited.\nSafe custody of \narticles.\nRules.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 356, "year": 2013}, "type": "Document"}
{"page_content": "350 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (2) A  pawnee shall forward to the Director of the Bank Supervision Department \nof the Central Bank a copy of the rules formulated under paragraph (1) \nand display a copy of those rules in a conspicuous place at its place of \nbusiness.\n [ PARAGRAPH 8 ]  First Schedule\nPLEDGE BOOK\nPledge Book of  ......................................................  Pawnee of ...................................................................\nSerial\nNo. of  \npledge  in  \nthe monthDate No. of  \nthe Issued \nPawn \nTicketName\nof\nPawnerAddress*\nof\nPawnerName\nof Owner if \nother than\nPawnerDescription\nof each Article\nPawned\n [ PARAGRAPH 8 ]  Second Schedule\n SALE BOOK OF PLEDGES\nDate and Place of Sale : ................................................................................................................................\nName and Address of Auctioneer : ...............................................................................................................Weight of \nArticle if \nJewelleryValue of each \nArticle in term \nof\n para (6)\n(Rs. cts.)Amount of \nLoan upon \neach Article\n(Rs. cts.)Profit or \ninterest \ncharged upon \neach Article\n(Rs. cts.)Name & \nAddress\nof\nPerson \nredeemingDate \nof \nredemption\n* New address if original is changed\nDate\nof\nPawningNo. of  \npledge as in  \npledge  \nBookName\nof\nPawnerAmount  \nof \nLoanAmount  \nof  \nInterest  \ndueAmount for \nwhich each \nPledge was Sold \nby AuctioneerName & \nAddress of \nPurchaser", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 357, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  351\n[ PARAGRAPH 9 ]  Third Schedule\nPAWN TICKET\nCounterfoil  No. \u2026\u2026\u2026\u2026\u2026\n(To be retained by Pawnee)\nDate : \u2026\u2026\u2026\nName and address of pawnee \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nI, the undersigned, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 of \n(*address of pawner) \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 \nhave this day pawned with the aforesaid \npawnee\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 worth  \nRs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 for \nRs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(Value as determined in terms of para (6) of the \ncondition)\nSignature of pawner, or \nLeft thumb impression of \nPawner if unable to write \nName.\nSignature of pawnee\nFoil.  No. \u2026\u2026\u2026\u2026\u2026\u2026Date : \u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \n(name and *address of pawner) has \nthis day pawned with the undersigned \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \n(name and address of pawnee) worth \nRs\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 for \nRs. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(Value as determined in terms of para (6) of the \ncondition) \nSignature of Pawnee\nSignature of Pawner or \nleft thumb impression\nPawner agrees\n1) w here an article delivered as a pledge is \nnot redeemable within the redeemable \nperiod calculated under paragraph 11 of \nthe condition under paragraph 11 of the \nconditions of pawning, a pawnee may sell \nthe article by public auction.\n2) wh ere a notice sent by registered post to \na pawner is returned undelivered to the \npawnee, the notice of auction published in \nthe newspapers shall be sufficient notice to \nthe pawner.* Change of address to be notified", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 358, "year": 2013}, "type": "Document"}
{"page_content": "352 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n[ PARAGRAPH 12 ]  4th Schedule\nDECLARATION WHERE THE FOIL OF THE PAWN TICKET IS SURRENDERED \nWITHOUT THE SIGNATURE\nOF THE PAWNER ENDORSED THEREON\nI,  A.  B.,  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 , of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 , do solemnly  and  \nsincerely  declare  that  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 pledged  at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, \nPawnee,  the  article/s  described  below  and received  the  foil  of a pawn ticket for the same and that  for  \nthe  purpose  of redeeming  the pledge I am unable to surrender the foil of the pawn ticket to the pawnee \nwith the signature of the said .\u2026\u2026\u2026.........\n(pawner) duly endorsed thereon, because the said  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(pawner) is dead/under a disability, to wit  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(nature of  disability).\nThe article/s above referred to is/are \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nI,  C. D., \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 do solemnly and sincerely declare that I know the  person  now making \nthe  foregoing declaration to be A. B., of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclared before me this \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 day of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, 19\u2026\u2026\u2026\nSignature of A. B.,  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nSignature of C. D.,  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nJustice of Peace\n[ PARAGRAPH 12 ]  5th Schedule\nDECLARATION WHERE THE FOIL OF THE PAWN TICKET IS LOST &C.\nTake notice, if this declaration is false the person making it is punishable.\nI,  A.  B.,  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 , of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 , do solemnly  and  \nsincerely  declare  that  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 pledged  at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, Pawnee,  \nthe  article (or articles)  described  below, \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, property, \nand   received   the   foil  of  the  pawn  ticket  for  the   same,   which   has   since been  \u2026\u2026\u2026\u2026\u2026, \nby \u2026\u2026\u2026\u2026\u2026,  and that the foil of the pawn ticket has not  been  sold  or transferred to any person by \n\u2026\u2026\u2026\u2026\u2026 to  \u2026\u2026\u2026\u2026\u2026knowledge or belief.\nThe article (or articles) above referred to is (or are) the following : .....\u2026\u2026\u2026\u2026\u2026.....\nAnd, I,  C. D., \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 do solemnly and sincerely declare that I know the  person  now", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 359, "year": 2013}, "type": "Document"}
{"page_content": "And, I,  C. D., \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 do solemnly and sincerely declare that I know the  person  now \nmaking the  foregoing declaration to be A. B.,  of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nDeclared before me this \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 day of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026, 19\u2026\u2026\u2026\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nJustice of Peace", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 359, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  353\n[ PARAGRAPH 12 ]  6th Schedule\nRECEIPT NO.\nDate : \u2026\u2026\u2026\u2026\nReceived on redemption of Pledge No. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nRs.   Cts.\n       Amount of loan\n       Profit or interest  \nTotal            \n                                                      ==============\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nSignature of Pawnee\n[ PARAGRAPH 15 ]  7th Schedule\nREGULATIONS RELATING TO AUCTIONS OF PLEDGES\n1. The pawnee shall cause all pledges to be exposed to public view .\n2. The pawnee shall display catalogues of the pledges, stating \u2013\n (a) the pawnee\u2019 s name and place of business;\n (b) the month in which each pledge was pawned;\n (c) the number of each pledge as entered at the time of pawning in the pledge book.\n3. The pledges of each pawnee in the catalogue shall be separate from any pledges of  any other pawnee.\n4. The auctioneer shall insert in a daily newspaper in all three  languages an  advertisement giving \nnotice of the sale, and stating \u2013\n   (a) the pawnee\u2019 s name and place of business;\n   (b) the months in which the pledges were pawned;\n   (c) the place of auction;\n   (d) the date and time of auction.\n5. The  advertisement shall be inserted on two separate days  in  the same  newspaper,  and  the second \nadvertisement shall be  inserted at least ten clear days before the first day of sale.\n6. Where  a pawnee bids at a sale, the auctioneer shall not take  the bidding  in  any   other  form than that \nin  which  he  takes  the biddings of other persons at the same sale; and the auctioneer  on knocking  \ndown  any article to a pawnee  shall  forthwith  declare audibly the name of the pawnee as purchaser.\n7. The auctioneer shall, within fourteen days after the sale, deliver to the pawnee a copy of the catalogue, \nor of so much thereof  as relates  to the pledges of that pawnee, filled up with the  amount for  which  \nthe  several pledges of that  pawnee  were  sold,  and authenticated by the signature of the auctioneer.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 360, "year": 2013}, "type": "Document"}
{"page_content": "8. The  pawnee shall preserve every such catalogue for two  years  at least after the date of the auction.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 360, "year": 2013}, "type": "Document"}
{"page_content": "354 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02/04/002/005/001\nBank Supervision Department\n8th Floor, Renuka Building\n41, Janadhipathi Mawatha\nColombo 01.\n01 December 1999\nTo : All Licensed Commer cial Banks &\n  All Licensed Specialised Banks\nDear Sir  / Madam,\nSECRECY OF BANKING TRANSACTIONS\nIN TERMS OF SECTION 77 OF THE BANKING ACT\nIn terms of Section 77 of the Banking Act, No.30 of 1988 as amended by Banking (Amendment) \nAct, No.33 of 1995, Banks are required to observe strict secrecy in respect of all banking transactions.\nInnovations in the field of Information Technology have changed the environment of the Banking \nIndustry and it has been observed  that staff of outside computer firms also have access to confidential \ncustomer information of Banks. \nIn the above circumstances all Licensed Commercial Banks and all Licensed Specialised Banks are \nhereby required to adhere to the following:\n (i) Inclusion of a special clause/condition in software maintenance agreements or service \nagreements with outside software companies, requiring them to observe strict secrecy in \nrespect of all transactions of the bank, its customers and the state of accounts of any person \nand all matters relating thereto.\n (ii) Obtain declarations of secrecy from all persons and organisations who perform services in \nterms of such maintenance or service agreements. \nYours faithfully,\nSgd. Dr. Anila Dias Bandaranaike\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 361, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  355\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka in terms of Sections 46(1) and \n76(J)(1) of the Banking Act, No. 30 of 1988, as amended.\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\n05 October 2011\nBANKING ACT DIRECTION NO. 8 OF 2011\nCUSTOMER CHARTER OF LICENSED BANKS\nIn order to ensure the soundness of the banking system, Sections 46(1) and 76( J)(1) of the Banking Act, \nNo. 30 of 1988, last amended by the Banking Act, No.46 of 2006, empowers the Monetary Board to issue \nDirections to licensed banks regarding the manner in which any aspect of the business of such banks is \nto be conducted. Safeguarding the interests of the customers, building up a healthy relationship between \ncustomers and banks; and improving the customer confidence in the banking sector would promote and \nensure stability in the banking sector. In view of the above, the Monetary Board issues this Direction \nto all licensed banks to adopt a \u2018Code of Conduct\u2019 in line with the Customer Charter annexed to this \nDirection.\n1. All licensed banks shall ensure that the customers\u2019 rights are protected in line with \u2018Customer \nCharter\u2019 annexed to this Direction and adopt a \u2018Code of Conduct\u2019 based on the charter. \n2. All licensed banks shall obtain written confirmation on adherence to the \u2018Code of Conduct\u2019 from the \ncurrent employees and all new employees (prior to taking up their employment in the bank).\n3. All licensed banks shall publish the \u2018Customer Charter\u2019 in their websites, make copies available for \ncustomers on request in their preferred language and educate them when necessary.\n4. All licensed banks shall ensure the implementation of this Direction within 6 months from the date \nof the Direction.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 362, "year": 2013}, "type": "Document"}
{"page_content": "356 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnexure\nCUSTOMER CHARTER OF LICENSED BANKS\n1. Introduction\n This Charter sets key standards of fair banking practices envisaged by customers when they undertake \ntransactions with licensed banks and provides guidance to the licensed banks to adopt a \u2018Code of \nConduct\u2019 on customer protection. The Charter also includes a set of customer obligations towards \nlicensed banks in the interest of stable relationship.\n2. Receiving information and understanding the banking Pr oducts/Services\n The customers have the right to receive factual information and understand the financial products/\nservices offered by banks. In this regard, certain good practices of banks would be as follows:\n (a) T he licensed banks should help the customers to understand the financial products/services \noffered by providing adequate information about them, explaining their financial implications and \nassisting the customers to choose the appropriate banking products/services. \n (b) Each licensed bank should have Key Facts Document in the form of a brochure/leaflet written in \nsimple language for its products or services, separately or in combination and which should be \ndistributed to the customers seeking such products/services. These brochures/leaflets should, at \nminimum, contain the following basic information and be available in languages preferred by the \ncustomers (i.e., Sinhala/Tamil/English):\n i.  Description of the products/services.\n ii.  Financial and other benefits to customers including any incentives and promotions.\n iii.  Fees/char ges, commission, interest etc., charged from customers.\n iv .  Procedures to be followed to obtain the product/service.\n v .  Major terms and conditions.\n vi.  A common complaint procedure for customers.\n (c) All advertisements by licensed banks should contain factual information on products/services", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 363, "year": 2013}, "type": "Document"}
{"page_content": "(c) All advertisements by licensed banks should contain factual information on products/services \noffered by them in any media and promotional material, which can be understood by the targeted \ncustomers and not contain information that may be likely to mislead the public. In addition,  \nall such advertisements should give the contact details and state that the respective bank is a \nlicensed bank supervised by the Central Bank of Sri Lanka.\n (d) Further information or clarification on any advertisements on bank\u2019s products/services ( i.e., fees/\ncharges and interest rates etc.) should be provided by banks on request.\n (e) The following information should be conspicuously displayed in the Head Offices and all branches \nand other banking outlets of the licensed banks.\n i.  Current interest rates on all deposit and loan products \n ii.  Buying and selling rates of foreign currencies\n iii. Credit rating of the bank with underlying specifications\n iv . The contact details of the Financial Ombudsman and Credit Counselling Centre\n v .  Banking hours and Holiday notices\n vi. Any other relevant information\n (f) A  periodic statement should be sent to customers either in printed form or electronic form opted by \nthem regarding transactions and balances in their deposit or loan accounts or other services other \nthan passbook savings accounts of non-dormant category.\n  Statements for credit cards should set out the minimum payment required and the total interest \namount charged if only the required minimum payment is made and late payment fee if the \nminimum payment is not made.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 363, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  357\n (g) The licensed banks should improve the customer awareness on financial products/services and \nrisks by arranging specific financial literacy programmes. \n (h) The licensed banks should act fairly and reasonably by ensuring that the banks\u2019 staff follows \nprocedures and practices stipulated in the \u2018Code of Conduct\u2019, the products/services offered are \nin line with relevant laws and regulations and the maintenance of the principles of integrity and \ntransparency.\n3. A wareness and understanding the \u2018Terms & Conditions\u2019 on Products/Services\n3.1 The customers have the right to access to and fully understand the terms and conditions relevant \nto each and every product or service they obtain from banks. In this regard, the licensed banks \nshould ensure that:\n (a) the \u2018Terms and Conditions\u2019 associated with each product or service are made available to \ncustomers in languages preferred by them;\n (b) a copy of the \u2018Terms and Conditions\u2019 is given to the prospective customer prior to offering \nor recommending a product or service and any clarification sought by customers is clearly \nexplained;\n (c) an of ficer carrying out the duties of a relationship officer should clearly explain to the customer \nof the terms and conditions and features of the products/services, provide a comparison of \nalternative products/services available and give reasonable time for the customer to make a \ndecision; \n (d) a written confirmation is obtained from the customer that the details of the products or services \nand their terms and conditions were received, explained and understood;\n (e) all the documents pertaining to the product or service are duly completed and signed by the \ncustomer. (Incomplete documents and obtaining signatures on blank papers/documents are \navoided.);\n (f) a ny changes made by licensed banks to the agreed terms and conditions on products or", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 364, "year": 2013}, "type": "Document"}
{"page_content": "(f) a ny changes made by licensed banks to the agreed terms and conditions on products or \nservices should be informed to the customers in writing or through paper notice or any other \nappropriate way before such changes are made.\n3.2 The customers have the right to know specifically the following under \u2018T erms and Conditions\u2019.\n (a) The details of the bank\u2019s general charges such as interest rates, fees and commissions, if any, \nrequired to be paid by the customer including the method of computing interest charges.\n (b) The bank\u2019 s procedure for receiving complaints and the resolution mechanism.\n (c) The course of recovery actions a bank may follow in the event of any default by the customer \non his/her obligations and bank\u2019s expenses that will be reimbursed from the customer.\n (d)  Any compensation proposed to be paid by the relevant customers in case of pre-mature \nwithdrawal/termination of participation in a product/service by the customers.\n (e) Any re strictions on opening of accounts, closing of accounts, maintenance of accounts  \n(e.g., minimum balance), transfer of funds by customers and policies and procedures on \ndormant accounts and abandoned property. \n (f) The disclosure of customer information to a party legally authorised to obtain such information.\n (g) The rules regarding (i) reporting of suspicious transactions and above-the-threshold  \ntransactions to the Financial Intelligence Unit (ii) the reporting procedures that the customer \nshould follow in the case of stolen cards /financial instruments and (iii) liability of the bank \nand the customer. \n (h) The procedures to be employed by the bank to foreclose on the property held as collateral for \na loan and the consequences thereof to the customer and options available to him/her .", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 364, "year": 2013}, "type": "Document"}
{"page_content": "358 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n4. Compensation fr om withdrawal / cancellation of products / services by banks\n In the event a licensed bank seeks to withdraw/terminate a product or service already on contract, \nespecially deposit products, customers have the right to receive a reasonable time with an exit \ncompensation scheme disclosed in advance.\n5. Pr otection from Agents of banks\n The customers have the right to know the details of the agents appointed for customer services by \nlicensed banks and the \u2018Code of Conduct\u2019 issued to them by banks to refrain from doing any of the \nfollowing.\n (a) Harassing customers. \n (b) Using abusive debt collection practices.\n (c) Disclosing customer information to others.\n (d) Giving false or misleading information about products/services.\n (e) Unduly influence customers or the general public to buy or get involved in the bank\u2019s products/\nservices.\n (f) Engage in getting any security documents signed outside the bank.\n6. Complaint measur es and relief\n The customers have the right to resolve their complaints with transparency and effectively. In this \nregard, licensed banks should:\n (a) implement a quick and effective resolution mechanism on disputes between customers and banks \nby rectifying disputes quickly, handling complaints within a short period, directing to take the \ncomplaints forward if the customer is still not satisfied and reversing any charges that applied due \nto a mistake;\n (b) have in place a written procedure for receiving complaints and steps to be taken to resolve such \ncomplaints;\n (c) acknowledge the receipt of any complaint in writing within a reasonably short period of time and \ninform the complainants of the procedure that will be followed by the bank for the resolution of \nthe complaint and the contact details of the officer/officers handling the complaint;", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 365, "year": 2013}, "type": "Document"}
{"page_content": "the complaint and the contact details of the officer/officers handling the complaint;\n (d) facilitate receiving complaints verbally or in writing and the banks shall not insist that complaints \nbe necessarily made only in writing;\n (e) establish a management information system regarding complaints and process of resolution as part \nof the duties of risk management committee relating to operational risks;\n (f) assign an of ficer with the duty of handling the complaints and management information in each \nbranch or office; and\n (g) advise the customers to seek af fordable and efficient recourse through the Financial Ombudsman \nor in Courts in the event the complaint is not resolved to their satisfaction.\n7. Special attention and Car e\n The customers such as elderly , disabled or customers with low financial literacy have the right to \nreceive special attention to facilitate them to have a fair access to banking services.\n8. Customer  obligations toward banks\n Customers should foster the relationship with banks fulfilling their obligations. In this regard:\n (a) Customers should not borrow beyond their af fordable repayment capacity limit.\n (b) Customers should not allow the repayments or instalments to go into arrears and the prompt  \nrepayments will create healthy relationships with the banks.\n (c) If a customer wants to settle his/her loan before the end of the loan period, he/she has to pay certain \namount of money over the loan amount as agreed at the time of accepting the offer.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 365, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  359\n (d) If the customer is unable to repay his/her loan outstanding as agreed, the bank will have the right \nto recover the amount owing to the bank including the bank\u2019s expenses specified in the \u2018Terms & \nConditions\u2019.\n (e) If a customer finds himself/herself in financial difficulties, he/she should let the bank know as \nearly as possible. The sooner the bank discusses the customer\u2019s problems, the easier it will be for \nboth of the customer and the bank to find a solution. \n (f) When a customer account goes into default, the first step the bank takes is to contact the customer . \nIn this regard, it is imperative that the customer should inform the bank at all times of any changes \nto his/her address and contact details.\n (g) C ustomers should have the full knowledge and understanding of the product/service offered \nbefore entering into the contract.\n (h) Customers should duly fill and submit the required application forms and supporting documents \nin time.\n (i) Customers should exercise due care in all transactions with banks. \n (j) Customers should notify the bank promptly of any fraudulent transaction/s or such attempts in \ntheir accounts with the banks whenever they become aware of such instances.\n (k) Cust omers should exercise utmost care in using and storing/handling Personal Identification \nNumbers (PIN) and security measures of other electronic cards issued by the bank.\n (l) Customers should not treat any operational lapse of a bank on its obligations mentioned in Clause \n2 to 7 above other than any dispute on the amount payable to the bank as a reason for his/her non \nsettlement or delay in settlement of a debt unless otherwise allowed by a court of law. All such \nincidents need to be resolved separately or individually.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 366, "year": 2013}, "type": "Document"}
{"page_content": "360 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOur Ref. : 02  / 17 / 600 / 002 / 001\nBank Supervision Department\n26 July 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\n \nCAP ON PENAL INTEREST RATES CHARGED BY LICENSED BANKS  \nON LOANS AND ADV ANCES\n  The Central Bank of Sri Lanka (CBSL) has reviewed the penal interest rates charged by licensed \nbanks on overdue loans and advances, and is of the view that such rates are excessively high, and result \nin an undue burden to overdue borrowers when repaying loans. The inability to sustainability service the \nloans as a result of such excessive rates being charged also has an adverse impact on financial position of \nbanks, as well as on the financial system stability. In addition high interest rates hinder entrepreneurship \ndevelopment in the economy. \n2. The recent surveys conducted by CBSL has revealed that the penal rates charged by the banks \nare in the range of 2 per cent to 20 per cent per annum on the amount in arrears and sometimes on the \ntotal amount outstanding, over and above the original interest rates charged on the loan. In the case of \nleasing facilities, penal rates are in the range of 36 per cent to 48 per cent per annum, on overdue rentals \nover and above the original rate.\n3. In view of the foregoing, the Monetary Board has instructed the undersigned to request all licensed \nbanks to reduce the penal interest rates charged on all loans and advances granted including on credit \nfacilities already granted to a level not exceeding 2 per cent per annum on amounts in arrears with effect \nfrom 1 August 2013. \n4. Accordingly , you are requested to take necessary measures to comply with the above.\nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 367, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  361\nOur Ref. : 02  / 17 / 600 / 002 / 001\nBank Supervision Department\n17 April 2012\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nINTEREST RATES ON CREDIT CARDS AND HOUSING LOANS\nWe refer to our letter dated 21 September 2010 on the Reduction of Interest Rates on Loans and \nAdvances and write to inform you that, considering the recent trends in market interest rates, the \nMonetary Board is of the view that licensed banks may increase interest rates on housing loans to 16 per \ncent per annum and credit card advances to 28 per cent per annum. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 368, "year": 2013}, "type": "Document"}
{"page_content": "362 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOur Ref. : 02  / 17 / 600 / 002 / 001\nBank Supervision Department\n07 June 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\n \nINTEREST RATES ON CREDIT CARDS AND OTHER LOANS AND ADV ANCES\nThe Central Bank of Sri Lanka in the recent past has eased its monetary policy stance resulting \nin a reduction of policy rates leading to a reduction in short term interest rates. In view of these \ndevelopments, the Central Bank on many occasions requested banks to reduce interest rates on lending. \nAlthough a marginal reduction in interest rates of a few products has been observed in certain banks,  \na wider reduction is required across the banking sector.\n2. In view of the foregoing, the Monetary Board has instructed the undersigned to request you to \nreduce interest rates on: \n(a) credit card advances from its present level of 28 per annum to 24 per annum, and\n(b) all other loans and advances in an appropriate manner from their current level, so as to not \nexceed 24 per cent per annum.\n3. Accordingly , you are requested to take necessary measures to comply with the above.\nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 369, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  363\nRef. No. : 02  / 04 / 001 / 0105  / 002\nBank Supervision Department\n06 April 2005\nTo : All Licensed Commercial Banks\n       Licensed Specialised Banks;\nDear Sirs,\nEXTENDING  / RESTRICTING OF BANKING HOURS BY THE BANKS\nIt has been observed that the Licensed Commercial Banks and Licensed Specialised Banks have \nmade requests from time to time to extend and restrict their banking hours. There is no legal provision \nthat governs banking  hours of the licensed banks.  However, as there can be certain repercussions arising \nunder certain laws if banking hours are extended to bank holidays and/or normal business hours are \nrestricted, it is important that banks satisfy themselves with the legal implications and liabilities, if any, \narising out of these arrangements. \nAll licensed banks are hereby informed that the Central Bank of Sri Lanka has no objection to \nthe extension or restriction of banking hours subject to the above concerns being met. All banks should \nensure that customers are informed of such changes well in advance to avoid inconvenience to them.\nYours faithfully,\nSgd, Director of Bank Supervision\ncc: Mr . Upali de Silva\n Secretary-General\n Sri Lanka Banks\u2019  Association (Gte) Ltd.\n Level 8, Ceylinco House\n Colombo 1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 370, "year": 2013}, "type": "Document"}
{"page_content": "364 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nIntroduction of Products based on Islamic Principles 1/\nThe recent amendments to the Banking Act permit banks to introduce banking products based on \nIslamic principles. Several banks have requested permission from CBSL in this regard.\nIn order to ensure that all banking operations, be it conventional banking or Islamic Banking, are \nconducted in a prudential manner, the following regulatory framework will apply:\n1. The Islamic Banking operations should be conducted strictly within the existing regulatory \nframework applicable to the licensed banks.\n2. The respective banks should maintain separate books of accounts for their Islamic Banking \nOperations.\n3. Data on Islamic Banking should be included under a separate column in the statutory returns \nsubmitted to CBSL in order to enable a clear demarcation between the accounts relating to \nconventional banking and Islamic Banking. \n4. The prudential regulations that apply to conventional banking operations will apply equally \nto Islamic Banking business and banks are advised to strictly follow the existing regulations.  \nIf any deviations are observed, such banks will be required to immediately cease the continuation \nof the relevant operations.\nThe CBSL will write individually to the banks that have inquired in this regard.\n1/  Distributed at the meeting of the CEOs of LCBs and LSBs held on 19 May 2005", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 371, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  365\nOur Ref. : 02  / 17 / 800 / 007 / 001\nBank Supervision Department\n19 March 2012\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nTHRESHOLD AGE OF THE SENIOR CITIZENS FOR \nTRANSACTIONS WITH LICENSED BANKS\nThe Monetary Board having observed that licensed banks and licensed finance companies use \ndifferent thresholds of age to identify senior citizens when conducting banking operations has decided \nto request the licensed banks to use a common threshold of 55 years of age in identifying senior citizens.\nAccordingly, you are requested to take appropriate measures to implement the above. \nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 372, "year": 2013}, "type": "Document"}
{"page_content": "366 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka in terms of Section 76 J(1) of \nthe Banking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board /\nGovernor of the Central Bank of Sri Lanka\nColombo\n27 September 2010\nBANKING ACT, DIRECTION NO. 6 OF 2010\nINSURANCE OF DEPOSIT LIABILITIES\nIn the exercise of the powers conferred by Section 76 J(1) of the Banking Act, No. 30 of 1988,  \nlast amended by the Banking (Amendment) Act, No. 46 of 2006, the Monetary Board hereby issues \nDirections to licensed specialised banks to be effective from 01 October, 2010.\n1.1 These Directions shall be cited as the Banking Act, Directions No. 6 of 2010 \non Insurance of Deposit Liabilities. \n2.1 In terms of Section 76 J(1) of the Banking Act, in order to ensure the soundness \nof the banking system, the Monetary Board may issue directions to licensed \nspecialised banks regarding the manner in which any aspect of the business of \nsuch bank or banks is to be conducted.\n3.1 In terms of statutory provisions and best practices in banking, accepting  \ndeposits is a core business that requires effective risk management measures \nas it critically depends on the public confidence in banks. As such, insurance \nof deposits is a well-accepted safety net measure that will protect and promote \nthe public confidence and stability of the banking system.\n4.1 As such, all licensed specialised banks shall insure their deposit liabilities in \nthe Deposit Insurance Scheme operated by the Monetary Board in terms of \nSri Lanka Deposit Insurance Scheme, Regulations No. 1 of 2010 issued under \nSections 32 A to 32 E of the Monetary Law Act, with effect from 01 October, \n2010.\n4.2 All licensed specialised banks shall also disclose to the public, in their  \nadvertisements soliciting deposits, the fact that eligible deposit liabilities have", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 373, "year": 2013}, "type": "Document"}
{"page_content": "advertisements soliciting deposits, the fact that eligible deposit liabilities have \nbeen insured with the Sri Lanka Deposit Insurance Scheme implemented by \nthe Monetary Board on payment of the applicable premium for compensation \nup to a maximum of Rs. 200,000 per depositor.1. Citation.\n2. Enabling  \nstatutory \nprovisions.\n3. The objective  \nof Directions.\n4. Insurance of  \ndeposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 373, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  367\nPART I : SECTION (I) \u2013 GENERAL\nCentral Bank of Sri Lanka Notices\nTHE MONETARY LAW ACT\nREGULATIONS made by the Monetary Board under Section 32 E of the Monetary Law Act, \n(Chapter 422).\nniv aRd  ajith LesLie  CabRaaL ,\nChairman,\nMonetary Board.\nCentral Bank of Sri Lanka,\nColombo,\n20th June 2011.\nSri Lanka Deposit Insurance Scheme Regulations\nAmendment to the Sri Lanka Deposit Insurance Scheme \nRegulations, No. 1 of 2010\n1.1 These Regulations shall be cited as \u201cSri Lanka Deposit Insurance Scheme  \nRegulations, No. 2 of 2011\u201d. \n2.1 Sri Lanka  Deposit Insurance Scheme Regulations, No. 1 of 2010 published in \nGazette Extraordinary No. 1673/11 of 28th September, 2010 are hereby amended \nas follows:\u2013\n2.2 In regulat ion 7 thereof by the repeal of paragraph 7.3 of that regulation and the \nsubstitution therefor of the following paragraph:\n\u201c 7.3 Debits to the Fund shall be for compensation payments to depositors, \ninvestments and operating expenses of the Scheme as may be determined \nby the Monetary Board.\u201d1. Citationwxl 1711$14 \u2013 2011 cqks 22 jeks nodod \u2013 2011'06'22\nno. 1711/14 \u2013 W ednesday , june 22, 2011\n(Published by Authority)\n2. Amendments  \nto the principal \nregulation\n Substitution for  \nregulation 7.3", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 374, "year": 2013}, "type": "Document"}
{"page_content": "368 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nPART I : SECTION (I) \u2013 GENERAL\nCentral Bank of Sri Lanka Notices\nTHE MONETARY LAW ACT\nREGULATIONS made by the Monetary Board under Section 32 E of the Monetary Law Act, \n(Chapter 422).\nniv aRd  ajith LesLie  CabRaaL ,\nChairman,\nMonetary Board.\nCentral Bank of Sri Lanka,\nColombo,\n26th January 2011.\nSri Lanka Deposit Insurance Scheme Regulations\nAmendment to the Sri Lanka Deposit Insurance Scheme Regulations, No. 1 of 2010\n1.1 These Regulations shall be cited as \u201cSri Lanka Deposit Insurance Scheme  \nRegulations, No. 1 of 2011\u201d. \n2.1 Sri Lanka  Deposit Insurance Regulations, No. 1 of 2010 published in Gazette \nExtraordinary  No. 1673/11 of 28th September, 2010 is hereby amended as \nfollows:\u2013\n2.2 By the substitution for word \u201cregulation\u201d of the word \u201cregulation\u201d wherever it \nis applicable.\n2.3 In regulation 5 thereof by the repeal of paragraph 5.2(iii) of that regulation and \nthe substitution therefor of the following paragraph:\n\u201c 5 .2(iii)  Deposit liabilities to directors, key management personnel and other  \nrelated parties excluding shareholders as defined in Banking Act \nDirection, No. 11 of 2007 on Corporate Governance for Licensed \nCommercial Banks, Banking Act Direction, No. 12 of 2007 on \nCorporate Governance for Licensed Specialised Banks and the \nFinance Companies Act (Corporate Governance) Direction, No. 3 \nof 2008 for Registered Finance Companies.\u201d1. Citation.wxl 1690$11 \u2013 2011 ckjd\u02d9 27 jeks n%yiam;skaod \u2013 2011'01'27\nno. 1690/11 \u2013 thuRsday , januaR y 27, 2011\n(Published by Authority)\n2. Amendments  \nto the principal \nregulation.\n Substitution \nfor the word \n\u201cregulation\u201d.\n Substitution \nfor regulation \n5.2(iii).", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 375, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  369\nPART I : SECTION (I) \u2013 GENERAL\nCentral Bank of Sri Lanka Notices\nTHE MONETARY LAW ACT\nREGULATIONS made by the Monetary Board under Section 32 E of the Monetary Law Act, \n(Chapter 422).\nniv aRd  ajith LesLie  CabRaaL\nChairman\nMonetary Board\nColombo,\n27th September, 2010.\nSRI LANKA DEPOSIT INSURANCE SCHEME REGULATIONS\n1.1 These Regulations shall be cited as \u201cSri Lanka Deposit Insurance Scheme  \nRegulations, No. 1 of 2010\u201d. \n2.1 In terms of Section 5 of the Monetary Law Act, the Central Bank of Sri Lanka \nis charged with the duty of securing, as far as possible by action authorized \nby such Act, the two objectives, namely, ( a) economic and price stability and  \n(b) financial system stability.\n2.2 In terms of the Sections 32 A to 32 E of the Monetary Law Act, the Central Bank \nmay establish, maintain, manage and control, as determined by the Monetary \nBoard from time to time, a scheme for insurance of deposits held by banking \ninstitutions.\n2.3 In terms of Sections 46(1) and 76J of the Banking Act, in order to ensure the \nsoundness of the banking system, the Monetary Board is empowered to issue 1. Citation.\n2. Objective of  \nthe Scheme \n& Enabling \nProvisions.\n  wxl 1673$11 \u2013 2010 iema;e\u00efnr\u00ae 28 jeks w\u00dbyrejdod \u2013 2010'09'28\nno. 1673/11 \u2013 tuesday , septeMbeR  28, 2010\n(Published by Authority)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 376, "year": 2013}, "type": "Document"}
{"page_content": "370 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nDirections to licensed commercial banks and licensed specialized banks, \nregarding the manner in which any aspect of the business of such banks is to \nbe conducted. \n2.4 In terms of the Sections 27 to 29 of the Finance Companies Act, the Central \nBank may operate a scheme for insurance of deposits held by registered finance \ncompanies and require such finance companies to insure their deposit liabilities \nunder the scheme or under any other scheme as is specified by the Monetary \nBoard. \n2.5 Accordingly , this Deposit Insurance Scheme will be implemented in the interest \nof the overall financial system stability of the country, and it will initially outline \na mechanism to protect small depositors from failure of financial institutions, \nthereby promoting the stability of financial institutions by maintaining small-\ndepositor-confidence. \n3.1 This Scheme shall be titled Sri Lanka Deposit Insurance Scheme.\n3.2 The Scheme shall come into ef fect from 1st October, 2010. \n4.1 All Licensed Commercial Banks, Licensed Specialised Banks and Registered \nFinance Companies shall be the members of the Scheme.\n5.1 Deposits to be insured shall include demand, time and savings deposit liabilities  \nof member institutions and exclude all borrowing instruments.\n5.2 The following deposit liabilities shall be excluded from the Scheme: \n (i) Deposit liabilities to member institutions.\n (ii) Deposit liabilitie s to the Government of Sri Lanka inclusive of  \nMinistries, Departments and Local Governments. \n (iii) Deposit liabilities to shareholders, directors, key management personnel   \nand other related parties as defined in Banking Act, Direction No. 11 \nof 2007 on Corporate Governance for Licensed Commercial Banks, \nBanking Act, Direction, No. 12 of 2007 on Corporate Governance \nfor Licensed Specialised Banks and the Finance Companies Act", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 377, "year": 2013}, "type": "Document"}
{"page_content": "for Licensed Specialised Banks and the Finance Companies Act \n(Corporate Governance), Direction No. 3 of 2008 for Registered Finance \nCompanies.\n (iv) Deposit liabilities held as collateral against any accommodation  \ngranted.\n (v) Deposits falling within the meaning of abandoned property in terms of \nthe Banking Act and dormant deposits in terms of the Finance Companies \nAct, funds of which have been transferred to the Central Bank of Sri \nLanka in terms of the relevant Directions issued by the Monetary \nBoard.\n5.3 All eligible deposits shall be insured by member institutions.\n6.1 Member institutions shall pay a premium calculated on the total amount of \ndeposits, excluding the deposits liability stated in 5.2 above as at end of the \nquarter  / month as may be determined by the Monetary Board from time to 3. T itle of the \nScheme and \nEffective Date.\n4. Member  \nInstitutions to \nbe governed by \nthe Scheme.\n5. Eligible  \nDeposits to \nbe insured.\n6. Premium to  \nbe levied \non insured \ndeposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 377, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  371\ntime, to the Deposit Insurance Fund stated in Regulation 7.\n6.2 The calculation of premia ef fective until further notice shall be as follows:\u2013\n (i) Licensed banks which maintained a capital adequacy ratio of 14 per \ncentum or above at the end of the immediately preceding financial year as \nper its audited accounts as accepted by the Director of Bank Supervision \n\u2013 a premium of 0.10 per centum per annum payable quarterly calculated \non total amount of all eligible deposits as at end of the quarter.\n (ii) All other licensed banks \u2013 a premium of 0.125 per centum per annum \npayable quarterly calculated on total amount of all eligible deposits as \nat end of the quarter.\n (iii) Re gistered Finance Companies \u2013 a premium of 0.15 per centum per \nannum payable monthly calculated on total amount of all eligible deposits \nas at end of the month. \n6.3 Member institutions shall remit the applicable amount of the premium to the \naccount of the Deposit Insurance Fund within a period of 15 days from the end of \nthe respective quarter  / month and submit the details of deposits and calculation \nof premium in a format specified by the Director of Bank Supervision.\n6.4 In the event of a delay in the payment of the premium inclusive of instances \nof under-payment, a penalty will be levied at the prevailing weighted average  \n91 days primary Treasury bill yield rate plus 200 basis points.\n7.1 The Scheme shall have a fund titled \u201cDeposit Insurance Fund\u201d (hereafter referred \nto as \u201cthe Fund\u201d), and it shall be operated and managed by the Monetary Board, \nwhich responsibility it may delegate to an officer or a Department of the Central \nBank of Sri Lanka of its choice. \n7.2 Credits to the Fund shall include: premia and penalties paid by member-institutions, \nall proceeds of profits, income and gains arriving out of the investments of the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 378, "year": 2013}, "type": "Document"}
{"page_content": "all proceeds of profits, income and gains arriving out of the investments of the \nmoneys in the Fund, recovery of deposits paid as compensation, such sums as \nmay be appropriated out of the abandoned property in the case of licensed banks \nand dormant deposits in the case of registered finance companies transferred to \nthe Central Bank of Sri Lanka in terms Directions issued by the Monetary Board \nunder Part IX \u2013 Sections 72 and 76 of the Banking Act and Sections 31(1) to \n31(3) of the Finance Companies Act as applicable, borrowings and contributions \nfrom the Government and  / or any other sources as may be approved by the \nMonetary Board. \n7.3 Debits to t he Fund shall be for Compensation payments to depositors, \ninvestments, repayment of abandoned property or dormant deposits as the \ncase may be, in the event such property/dormant deposits lying in the fund \nand operating expenses of the Scheme as may be determined by the Monetary \nBoard. \n8.1 The moneys in the fund shall be invested as hereinafter provided:\n (i) Government Securities \u2013 Government securities will include Treasury \nbills, Treasury bonds and other marketable securities issued by the \nGovernment of Sri Lanka. 7. Deposit  \nInsurance \nFund.\n8. Investments  \nof moneys in \nthe Funds.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 378, "year": 2013}, "type": "Document"}
{"page_content": "372 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (ii) Secured advances or loans to any member institution in the instance of \na severe liquidity crisis in such member institution, if, in the opinion \nof the Monetary Board (after considering an assessment report on the \nliquidity position submitted by the Director of Bank Supervision in the \ncase of a licensed bank or the Director of Department of Supervision \nof Non-Bank Financial Institutions in the case of a registered finance \ncompany), such an advance  / loan will help avoid an imminent financial \npanic in the particular institution or in the financial system as a whole.\n8.2 Su ch advances or loans to member institutions shall be provided on the security \nof re-saleable collaterals and  / or Government  / Central Bank of Sri Lanka \nGuarantees and at rates of interest as may be determined by the Monetary \nBoard. \n8.3 The repayment period of such loans or advances shall be as determined by the \nMonetary Board.\n9.1 Compensation to depositors on insured deposits will be paid as per regulations \nissued by the Monetary Board from time to time, or as hereinafter provided.\n9.2 Compensation on insured deposit liabilities of a member institution will  \nbe paid only when the licence  / registration of the member institution is \nsuspended  / cancelled by the Monetary Board in terms of the relevant statutory \nprovisions.\n9.3 W ithin a week from the announcement of Monetary Board decision to suspend  /\ncancel the licence  / registration of the member institution, the Director of \nBank Supervision in the case of a licensed bank or the Director of Department \nof Supervision of Non-Bank Financial Institutions in the case of a registered \nfinance company, shall prepare a list of depositors with the details of deposit \naccounts setting out the amounts due from the institution to such depositors as \nat the date of the Monetary Board Order of suspension  / cancellation.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 379, "year": 2013}, "type": "Document"}
{"page_content": "at the date of the Monetary Board Order of suspension  / cancellation. \n9.4 The compensation within the limits as specified will be paid within six months \nfrom the date of the suspension/cancellation. No interest will be paid in the \nensuing period. \n9.5 The compensation payable in respect of insured deposits of a member institution \nwill be computed on a \u201cper-depositor\u201d basis, consolidating all insured deposit \nliabilities to each depositor inclusive of any interest accrued and net of any dues \nfrom the depositor to the member institution as at the date of the suspension  /\ncancellation of licence  / registration. \n9.6 The amount of compensation payable to a depositor shall be limited to the total \ninsured deposits computed as above, subject to a maximum of Rs. 200,000 or \nits equivalent in the case of foreign currency deposits, if such amount exceeds \nRs. 200,000.\n9.7 Any compensation paid to depositors of a member institution by the Deposit \nInsurance Fund shall be accounted in the books of the member institution as its \ndeposit liability to the Deposit Insurance Scheme, while redeeming the deposit \nliabilities due to the respective depositors by an equivalent amount. 9. Compensation  \non Insured \nDeposits.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 379, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  373\n9.8 In the event that any depositor is unable to receive the entitled compensation at \nthe time of payment of compensation, the legal beneficiaries of the depositor \nshall be paid the compensation in terms of the applicable legal provisions and \nprocedures. \n9.9 The payment of compensation shall not be a liability of the Monetary Board \nor the Central Bank of Sri Lanka, and shall be limited to funds available or \nraised in the deposit insurance fund including any borrowings permitted and \ncontributions received. The Monetary Board and the Central Bank of Sri Lanka \nshall not be responsible for any liability that exceeds the total amount lying to \nthe credit of the Fund. \n9.10 T he payment of compensation shall come into effect in the case of a suspension  /\ncancellation as ordered by the Monetary Board on or after 1st January , 2012.\n10.1 There shall be an established Deposit Insurance Unit in the Bank Supervision \nDepartment (The Unit) which shall be responsible for the operational and \nmanagement arrangements, under the instructions and supervision of the \nDirector of Bank Supervision in terms of Directions  / Regulations and policies \nas approved by the Monetary Board from time to time. \n10.2 The Unit shall maintain books, accounts and statements relating to financial \ntransactions of the Scheme in terms of the applicable Sri Lanka Accounting \nStandards.\n10.3 The financial year of the Scheme shall be the calend ar year and the Auditor \nGeneral shall be the Auditor.\n10.4 The Unit shall prepare financial statements on income and expenses, assets and \nliabilities, cash flows and investments for each financial year and submit the \naudited financial statements to the Monetary Board on or before 31st March \nof the following year and disclose such statements for the information of the \nmember institutions and the public.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 380, "year": 2013}, "type": "Document"}
{"page_content": "member institutions and the public. \n10.5 The financial statements of the Sri Lanka Deposit Insurance Scheme shall be \ndistinctly separate from the financial statements of the Central Bank of Sri Lanka \nand accordingly, no consolidation of the Unit\u2019s financial statements shall be \nmade with that of the Central Bank of Sri Lanka.\n11.1 Deposit Insurance Scheme Regulations  / No. 1 of 1987 dated 27th February, \n1987 and Gazette, No. 443/17 dated 6th March, 1987 issued under Section 32 E \nof the Monetary Law Act, (Chapter 422) and subsequent amendments shall be \nrepealed and cease to operate with effect from 1st October, 2010 and the Deposit \nInsurance Fund operated under these Regulations as at 30th September, 2010 \nshall be vested with the Sri Lanka Deposit Insurance Scheme with effect from \n1st October, 2010.\n11.2 As such, all commitments or contingencies arising from the Scheme  \noperated under Deposit Insurance Scheme, Regulations No. 1 of 1987 as at  \n30th September, 2010 shall be extinguished as on 1st October, 2010.10. Books and \nAccounts of \nthe Scheme.\n \n11. Repeal of \nRegulations \ndated 27 \nFebruary, \n1987 and \nGazette , No. \n443/17dated 6 \nMarch, 1987.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 380, "year": 2013}, "type": "Document"}
{"page_content": "374 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nCircular No. : 01  / 2011\nBank Supervision Department\n20 April 2011\nTo : CEOs of all Member Institutions of\n       Sri Lanka Deposit Insurance Schemes\nDear Sir  / Madam,\nSRI LANKA DEPOSIT INSURANCE SCHEME \u2013 OPERATING INSTRUCTIONS\nAll member institutions are informed that Paragraph 4( c) of Circular No.02/2010 on the above subject \ndated 09 December 2010 is hereby amended as follows.\n\u201c Deposits at overseas branches shall not be considered as eligible deposits.  \u201d.\nAccordingly, deposits at Off-shore Banking Unit shall be considered as eligible deposits from next \npremium date.\nYours faithfully,\n(Mrs). T M J Y P Fernando\nDirector of Bank Supervision\nCopy: Director of Supervision of Non-Bank Financial Institutions\n           Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 381, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  375\nCircular No. : 02  / 2010\nBank Supervision Department\n09 December 2010\nTo : CEOs of all Member Institutions of\n       Sri Lanka Deposit Insurance Schemes\nDear Sir  / Madam,\nSRI LANKA DEPOSIT INSURANCE SCHEME \u2013 OPERATING INSTRUCTIONS\nAll member institutions are requested to adhere to the following instructions. \n1. Conversi on rates for foreign currency deposit liabilities:  The daily indicative exchange rates \nissued by International Operations Department of the Central Bank in the Central Bank web site \n(http://www.cbsl.gov.lk) should be used to convert the foreign currency liabilities in the local \naccounting requirements.  \n2. Deposits held as collaterals against any accommodation granted:  The deposits held as collateral \nto the extent of actual usage of the credit facilities as of the reporting date should be excluded for \ncalculation of insurance premium. In the case of a deposit taken as an additional collateral, the \ndeposit balance or the outstanding balance of the accommodation, which ever is lower, should be \nexcluded.\n3. Deposit liability calculation:  The outstanding balance of depositors\u2019 accounts eligible for insurance \nas at the end of each month/quarter should be treated as the deposit liability .\n4. Eligibility of deposits:  \n (a) Certificates of deposits shall be considered as eligible deposits.\n(b) V ostro accounts of entities in the member institution\u2019s group entity shall not be considered as \neligible deposits.\n(c) Deposits at Off-shore Banking Unit and overseas branches shall not be considered as eligible \ndeposits.\n5. Reporting on depositor wise details:  Member institutions shall submit depositor wise details of \neligible deposits to the Deposit Insurance Unit of the Central Bank of Sri Lanka in the annexed \nformat in an electronic form, along with a covering letter duly signed by the Chief Executive Officer", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 382, "year": 2013}, "type": "Document"}
{"page_content": "and the Chief Financial Officer, commencing from 31 December 2011.\nYours faithfully,\nActing Director of Bank Supervision\nCopy: Director of Supervision of Non-Bank Financial Institutions\n           Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 382, "year": 2013}, "type": "Document"}
{"page_content": "376 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex\nForm No: SLDIS/02/2010/01\nCONFIDENTIAL\n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..\u2026\u2026\u2026..  \n(Name of the Member Institution)\nReturn on Depositor wise details of eligible deposits \nAs at \u2026\u2026\u2026\u2026\u2026\u2026 (dd/mm/yyyy)\nAccount No. Name of Depositor/(s)NIC No. \nor \nany other Identity No.Eligible \nDeposit \nBalance \nNote: In case of joint accounts, Names and NIC numbers of joint account holders and the total deposit \nbalances shall be reported.\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n CFO / Chief Financial Officer  CEO / Chief Executive Officer\n \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n Name  Name", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 383, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  377\nCircular No. : 01  / 2010\nBank Supervision Department\n15 October 2010\nTo :  CEOs of all Member Institutions of\n Sri Lanka Deposit Insurance Scheme\nDear Sir  / Madam,\nSRI LANKA DEPOSIT INSURANCE SCHEME \n\u2013 PREMIUM TO BE LEVIED ON INSURED DEPOSIT\nIn terms of Regulation 10.1 of the Sri Lanka Deposit Insurance Scheme, Regulations No. 01 of \n2010 dated 27 September, we write to inform you of the following. \n1. The premium on deposits in terms of Regulation, No. 6 of the Regulations should be paid to \n\u201cSri Lanka Deposit Insurance Fund\u201d through RTGS, specially mentioning the account name \nas \u201cSri Lanka Deposit Insurance Fund \u2013 Account Number 4681\u201d or drawing a cheque in \nfavour the said account. \n2. In terms of Regulation No. 6.3 of the Regulations, all members of the scheme are required \nto e-mail the details of the \u2018calculation of premium\u2019 as per Annex I to the Director of Bank \nSupervision (e-mail addresses: dbsd@cbsl.lk, anuradha@cbsl.lk and sumithi@cbsl.lk) along \nwith the payment of premia.\n3. All Member Institutions should maintain a proper system of information to support the \naccuracy of calculation of premium.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 384, "year": 2013}, "type": "Document"}
{"page_content": "378 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nAnnex 1\nSri Lanka Deposit Insurance Scheme\nPayment of Premium\n1. Name of the Member  Institution :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n2. Capital Adequacy Ratio  \n(At\tthe\tend\tof\tthe\timmediately \tpreceding \tfinancial\tyear\tas\tper\tits\taudited\taccounts) \t:\t \u2026\u2026\u2026\n3. Quarter  / Month :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n4. Pr emium to be Paid                                                                                (Rs. \u2019000) \nTotal deposit liability as per the general ledger (a) XXX\nLess: Total excluded deposits (XX)\nTotal eligible deposits XXX\nApplicable annual insurance premium rate (%) (b) XX\nTotal insurance premium to be paid for the quarter/month (c) XXX\n (a) Deposit liability as at end of the quarter in the case of licensed banks and as at end of the month \nin the case of registered finance companies.\n (b) Rate of Premium\n (i) Licensed banks which maintained a capital adequacy ratio of 14% or above at the end \nof the immediately previous financial year as per its audited accounts as accepted by \nthe Director of Bank Supervision \u2013 a premium of 0.10 per cent per annum, payable \nquarterly.\n (ii) All other licensed banks \u2013 a premium of 0.125 per cent per annum, payable quarterly .\n (iii) Regist ered Finance Companies \u2013 a premium of 0.15 per cent per annum, payable \nmonthly calculated on total amount of all eligible deposits as at end of the month.\n (c) Premium should be paid within 15 days from the end of the quarter  / month.\n Prepared by  Checked by  Authorised by\nName of the officer :   \u2026\u2026\u2026\u2026\u2026..  \u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\nDesignation of the officer :   \u2026\u2026\u2026\u2026\u2026..  Head of Finance  Chief Executive \nOfficer\nDate :  \u2026\u2026\u2026\u2026\u2026..  \u2026\u2026\u2026\u2026\u2026.  \u2026\u2026\u2026\u2026\u2026\u2026\nThis return should be sent to the Director of Bank Supervision.\nTelephone: 01124772100, 0112398602 and 0112477169. Fax: 0112477711.\nE-mail: dbsd@cbsl.lk, anuradha@cbsl.lk and sumithi@cbsl.lk", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 385, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  379\nDirections issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76J(1) of the \nBanking Act, No.30 of 1988, as amended.\nSgd. Nivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n04 April 2013\nBANKING ACT DIRECTION NO. 2 OF 2013\nRESTRICTION ON SALE, TRANSFER, ASSIGN OR DISPOSAL OF  \nIMMOV ABLE ASSETS OF\nLICENSED SPECIALISED BANKS\nIn the exercise of the powers conferred by Section 76J(1) of the Banking Act, No. 30 of 1988,  \nlast amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues the following \nDirections on Restriction on Sale, Transfer, Assign or Disposal of  Immovable Assets of Licensed \nSpecialised Banks: \n1. W ithout the prior written approval of the Director of Bank Supervision, no Licensed Specialised \nBank shall sell, transfer, assign or dispose of any of its immovable assets below the market \nvalue of the assets or increase the valuation of the assets as recorded in the books of the bank \nabove the market value of the assets, excluding immovable property acquired in default of a \ndebt.\n2. The Directions on Restriction in the Sale, Transfer of Immovable Assets, dated 21 November \n1997 are hereby revoked.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 386, "year": 2013}, "type": "Document"}
{"page_content": "380 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No. 30 of 1988 as amended by the Banking (Amendment) Act, No. 33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nACQUISITION OF IMMOV ABLE PROPERTY\n1. Except with the approval of the Central Bank a licensed specialised bank having an equity capital as \ndefined in the Banking Act shall not purchase or in any way acquire any immovable property or any \nright therein exceeding in the aggregate ten percent of its capital funds.\n2. Where a licens ed specialised bank has purchased or in any other way acquired any immovable \nproperty or any right therein in excess of limits imposed at paragraph 1, on or before the date of this \ndirection, such licensed specialised bank shall conform with paragraph 1 before the expiry of two \nyears from the aforementioned date.\n3. The restriction at paragraph 1 shall not prevent a licensed specialised bank from \u2013\n 3.1 acquiring immovable property as security for a debt and in the event of a default in payment \nof the debt, from holding such immovable property provided that the licensed specialised \nbank shall sell such property or any right therein, if such holding exceed the limit prescribed \nin paragraph 1 above, within a period of two years from the date it acquires or this direction \nwhichever is later or such longer period as may be determined by the Central Bank;\n 3.2 acquiring immovable property reasonably required for purpose of conducting its business, or \nhousing or providing amenities to its staff.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 387, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  381\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nRESTRICTION IN THE SALE, TRANSFER OF IMMOV ABLE ASSETS\n1. W ithout the prior written approval of the Central Bank, no licensed specialised bank shall sell, \ntransfer, assign or dispose of any of its immovable assets below the market value of the assets or \nincrease the valuation of the assets as recorded in the books of the bank above the market value of \nthe assets, excluding immovables property acquired in default of a debt.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 388, "year": 2013}, "type": "Document"}
{"page_content": "382 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nMEMORANDUM & ARTICLES TO BE ALTERED WITH APPROV AL\n1. A  Licensed Specialised Bank which is a company as defined in Section 449 of the Companies Act, \nNo.17 of 1982, shall not alter its Memorandum of Association and the Articles of Association, \nwithout the prior written approval of the Central Bank.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 389, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  383\n Bank Supervision Department\n 31 December 2007\nMr. S H Piyasiri  \nGeneral Manager\nNational Savings Bank\n255, Galle Road\nColombo 3.\nDear Sir,\nDIRECTIONS ISSUED TO NATIONAL SA VINGS BANK\nConsidering the structural change in the equity capital of the National Savings Bank (NSB) and with \na view to strengthening the safety and soundness of NSB, the Monetary Board of the Central Bank of Sri \nLanka has decided to revoke all separate Directions issued to NSB on 21 November 1997 under Sections  \n76j(1) and 76 j(3) of the Banking Act and replace these Directions with the Directions issued to other \nlicensed specialized banks (LSBs) under Section 76 j(1) of the Banking Act, with effect from 01 January \n2008.\n2.  The Directions that are to replace the existing Directions are given in the following table.\nSeparate Directions issued to NSB \n(Existing Directions)Directions that are to replace the existing \nseparate Directions\n(i)Directions under Section 76 j(3) \n\u2013 Capital Adequacy  (i)Directions under Section 76 j(1) \u2013 \nMaintenance of Capital Adequacy Ratio \n(Banking Act Direction No. 10) issued on \n26.12.2007 \n(ii) Directions under Section 76 j(1) \n\u2013 Reserve Fund(ii) Directions under Section 76 j(1) \u2013  Reserve \nFund \n(iii) Directions under Section 76 j(3) \n\u2013 Liquid Assets(iii) Directions under Section 76 j(1) \u2013 Liquid \nAssets \n(iv) Directions under Section 76 j(1) \n\u2013 Investments in Equity(iv) Directions under Section 76 j(1) \u2013 \nInvestments in Equity  \n(v) Directions under Section 76 j(1) \n\u2013 Single Borrower Limit(v) Directions under Section 76 j(1) \u2013 Maximum \nAmount of Accommodation (Banking Act, \nDirection No. 8) issued on 1.11.2007 \n(vi) Directions under Section 76 j(1) \n\u2013 Acquisition of Immovable \nProperty(vi) Directions under Section 76 j(1) \u2013 Acquisition \nof Immovable Property \n3.  The Monetary Board has also decided to grant time till 31 December 2008 to comply with the", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 390, "year": 2013}, "type": "Document"}
{"page_content": "3.  The Monetary Board has also decided to grant time till 31 December 2008 to comply with the \nrequirements contained in the new Directions. In the event that NSB is unable to comply with any of the \nnewly applicable Directions, it shall comply with the requirements contained in the relevant previous \nDirections, until the expiration of the time granted to comply with the new Directions.\nYours faithfully,\nSgd. B D W A Silva\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 390, "year": 2013}, "type": "Document"}
{"page_content": "384 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nPAYMENT OF DIVIDENDS\n1. No licensed specialised bank incorporated or established within Sri Lanka by or under any written \nlaw shall pay any dividend on its shares until all its capitalised expenses including preliminary \nexpenses and other items of expenditure not represented by tangible assets, have been completely \nwritten off.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 391, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  385\nBANKING ACT NO. 30 OF 1988\nAS AMENDED BY BANKING (AMENDMENT) ACT NO. 33 OF 1995\nThe directions issued by the Monetary Board of the Central Bank of Sri Lanka under Section 76 j(1) \nof the Banking Act, No.30 of 1988 as amended by the Banking (Amendment) Act, No.33 of 1995.\nSgd. A. S. Jayawardena\nGovernor\nColombo\n21-11-1997.\nDIRECTIONS UNDER 76 j(1)\nPRIOR APPROV AL OF THE CENTRAL BANK\nTO CARRY ON CERTAIN TRANSACTIONS\n1. A  licensed specialised bank shall require the written approval of the Monetary Board for the  \nfollowing \u2013\n 1.1 to open or close an agency or office of such bank or close a branch; \n 1.2 to acquire the business of another licensed specialised bank or bank or of any branch of another \nlicensed specialised bank;\n 1 .3  to mer ge with another licensed specialised bank or branch of another licensed specialised \nbank.\n2. The approval under these directions may be granted subject to such terms and conditions as may be \nspecified by the Monetary Board.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 392, "year": 2013}, "type": "Document"}
{"page_content": "386 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 17 / 800 / 007 / 001\nBank Supervision Department\n07 April 2009\nTo :  CEOs of Licensed Commer cial Banks and\n Licensed Specialised Banks\nDear Sir  / Madam,\nSTIMULUS PACKAGE APPROVED BY THE GOVERNMENT FOR\nTHE FINANCE AND LEASING INDUSTRY\nThe Cabinet of Ministers at its meeting held on 25.02.2009, having considered the present \nfinancial stress experienced by some registered finance companies (RFCs) and specialised leasing \ncompanies (SLCs), has approved of a Stimulus Package consisting of several measures to address \nthe liquidity and funding constraints faced by RFCs and SLCs. This Stimulus Package is designed to \nrestore public confidence in the finance and leasing companies and thereby to ensure the stability of the \nfinancial system. \nThe current liquidity problems encountered by the finance companies and leasing companies  \nhave been aggravated by the sudden withdrawal of credit lines by some banking institutions. As the stability \nof the financial system is of utmost importance, all licensed banks are requested to carry on their normal \nbusinesses with registered finance companies and specialised leasing companies.\nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 393, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  387\nRef. No. : PS  / 21 / 98\nBank Supervision Department\n14 September 1998\nTo : All Licensed Specialised Banks\nDear Sirs,\nAPPOINTMENT OF COMPLIANCE OFFICERS\nYour attention is drawn to the discussion held at the Bank Managers\u2019 Meeting of 13 August 1998 \nwhere it was agreed that the banks should establish an independent compliance function to ensure \ncompliance in respect of banking and other statutory requirements.\nAs compliance failures affect integrity and reputation of banking institutions, it is imperative, that \nbanks have in place adequate policies and procedures to ensure compliance with laws and regulations.\nSuch a compliance function would be most appropriately addressed, by appointing a Compliance \nOfficer whose terms of reference, would broadly, encompass the following:\u2013\n1. Develop policies and procedures designed to eliminate or minimize the risk of breach of  \nregulatory requirements and of damages to the bank\u2019s reputation and to ensure these policies \nand arrangements are adhered to in letter and spirit.\n2. Promote throughout the business the belief that compliance is not a negative process but a \npositive contribution to the success of the Bank, so that the principles and importance of \ncompliance are clearly understood by all.\n3. Secure early involvement in the design and structuring of new products and systems, to  \nensure that they conform to local regulatory requirements and internal compliance and ethical \nstandards.\n4. Maintain regular contact and good working relationship with regulators based upon clear and \ntimely communication and a mutual understanding of the regulators\u2019  objectives.\n5. Ensure that reviews are undertaken at appropriate frequencies to assess compliance with  \nregulatory rules and internal compliance standards. \n6. Promote, across the compliance network, best practices developed in the area of compliance.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 394, "year": 2013}, "type": "Document"}
{"page_content": "6. Promote, across the compliance network, best practices developed in the area of compliance.\n7. Understand and apply all new legal and regulatory developments relevant to the business of \nthe Bank.\n8. Represent the compliance function on relevant internal  and external committees.\n9. Ensure that compliance policies and procedures are clearly communicated to management and \nmembers of staff.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 394, "year": 2013}, "type": "Document"}
{"page_content": "388 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n10. Provide timely reports to management, including senior management, which will highlight \nregulatory developments, changes in the law, and other developments insofar as they give rise \nto compliance issues relevant to the Bank\u2019s business.\n11. Highlight serious or persistent compliance problems and where appropriate, work with  \nmanagement to ensure that they are rectified within an acceptable time.\n12. Liaise with the Bank\u2019 s Audit function to ensure that:\n (a) Auditors are familiar with local regulatory and ethical requirements, so that they are able \nto ensure that compliance issues are properly addressed.\n (b) Compliance weaknesses identified as a result of audits are followed up.\nYour are requested to make early arrangements to appoint a Compliance Officer with sufficient \nseniority and also communicate the name of the officers and his contact telephone number for our \nrecords.\nPlease acknowledge receipt of this letter.\nYours faithfully,\nSgd, Y. A. Piyatissa\nDirector of Bank Supervision\ncc: Mr . C.A.P. Leonard,\n Chairman\n Sri Lanka Banks\u2019  Association (Gte) Ltd.\n 17 1/B, Standard Chartered Bank Building\n Janadhipathi Mawatha\n Colombo 1.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 395, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  389\nRef. No. : 02  / 04 / 008 / 0002  / 001\nBank Supervision Department\n06 May, 2008\nTo :  All CEOs of Licensed Commer cial Banks\n        and Licensed Specialised Banks\nDear Sir/Madam,\nENHANCING LENDING TO AGRICULTURE SECTOR\n As you are aware, international food prices have risen in an unprecedented manner in the recent \npast and these price escalations could have far reaching effects on Sri Lanka and indeed on almost every \ncountry in the world. As you also know, a significant portion of the current inflation in Sri Lanka is driven \nby these large increases in food prices. This clearly demonstrates the importance of enhancing food \nproduction and food security in the country.\nHence, as conveyed by the Governor at the Bank Managers\u2019 Meeting held on 24 April 2008, there \nis a need to sustain and expand lending to the Agriculture sector.  While we note that some banks have \nalready achieved the target set out in the Budget 2006, there are others who are yet below such level of \nlending to the sector. Hence, banks which are yet to expand their Agriculture lending to reach 10% of \ntheir lending portfolio, are requested to take steps to do so, and also to inform us of their plans to expand \nagricultural loans, in particular for cultivation of food crops.  \nIn view of the present national requirement in expanding food production and increasing agricultural \nproductivity, your urgent attention and cooperation to channel lending to this sector is solicited.\nYours faithfully,\nSgd. Actg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 396, "year": 2013}, "type": "Document"}
{"page_content": "390 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOur Ref. : 02  / 04 / 008 / 0002  / 003\nBank Supervision Department\n30 April 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\n \nMANDATORY LENDING TO THE AGRICULTURE SECTOR\nWe refer to the requests and discussions on compliance with the mandatory lending to the \nagriculture sector and write to inform you that the Monetary Board has decided to:\n(a) permit licensed banks to include loans and advances granted for growing, processing and \ntrading of domestic agriculture products in the definition of agriculture for the purpose of \ncompliance with the above. \n(b) exclude the following from the total loans and advances in computing the ratio of mandatory \nlending to agriculture sector:\n (i) Total loans and advances granted outside Sri Lanka by Off-shore Banking Units and \nby overseas branches on a staggered basis, as 50 per cent of such advances in 2013 and \n100 per cent in 2014 onwards; and\n (ii) Direct financing to large Government and other infrastructure projects promoted by the \nGovernment.\n(c) permit LCBs and LSBs to include their loans granted to other banks and finance companies for \non-lending to agriculture sector in the mandatory lending, provided that a suitable monitoring \nmechanism to identify such lending is maintained by the respective banks.\n2. Loans and advances granted for processing and trading of domestic agriculture products include \nadvances to:\n(a) manufacturing companies for value addition using domestic agricultural produce; and \n(b) companies that act as intermediaries to provide advances to meet working capital and other \ncapital requirements of agricultural producers and to facilitate the sale of agricultural produces.\n3. The monitoring mechanism under loans granted to other licensed banks for on-lending to agriculture", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 397, "year": 2013}, "type": "Document"}
{"page_content": "sector should ensure that the borrowing banks will not consider such loan facilities as lending to agriculture \nsector in complying with the above. \nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 397, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  391\nRef. No. : 02  / 04 / 008 / 0002  / 002\nBank Supervision Department\n25 February, 2010\nTo :  CEOs of all Licensed Banks\nDear Sir/Madam,\nMANDATORY LENDING TO THE AGRICULTURE SECTOR\n Further to our letter No: 02/04/008/0002/002 dated 13 July 2009 on the above subject, we write to \ninform you of the following:\n(1) The Monetary Board has decided to:\n (a) create a refinance fund to be operated by the Regional Development Department (RDD) \nof the Central Bank of Sri Lanka (CBSL) for lending to the Agriculture Sector through \nbanks; \n (b) require banks that are non-compliant with the 10% lending requirement to the Agriculture \nSector since end 2009 to contribute any shortfall to this refinance fund; and\n (c) pay a rate of return of 2% per annum to the contributing banks after commencing lending \nthrough other banks.\n(2) A  refinance fund \u201cSpecial Loan Scheme for Agriculture Sector Development \u2013 Account  \nNo: 32 0000 900\u201d has been created in the CBSL. \n(3) Accordingly , all licensed banks are required to:\n (a) cre dit funds to the above account to cover any shortfall of the agriculture lending \nrequirement of 10% by end 2009 within 7 days from the date of this letter; and\n (b) assess the position on lending to agriculture sector quarterly and credit funds equivalent \nto the shortfall of the requirement of 10% to the above account within 15 days from the \nend of each quarter.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nActg.  Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 398, "year": 2013}, "type": "Document"}
{"page_content": "392 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 04 / 008 / 0002  / 002\nBank Supervision Department\n13 July, 2009\nTo :  CEOs of all Licensed Banks\nDear Sir/Madam,\nMANDATORY LENDING TO THE AGRICULTURE SECTOR\n As per the 2006 Budget proposal, all licensed banks have to fulfil the mandatory requirement \nof lending 10% of the total advances granted by each bank, to the Agriculture Sector by end 2009.  \nThe following time targets were proposed and agreed with the banks at the meeting of Chief Executive \nOfficers of Licensed Banks held on 04 July 2006, in order to reach the tar get by end of 2009.  \n(a) 3% of total advances by 31.12.2007\n(b) 6% of total advances by 31.12.2008; and\n(c) 10% of total advances by 31.12.2009\nThe position as at 31 March 2009 shows that of the 36 banks, 10 banks have already achieved the  \n10% target, while 14 banks have achieved the 6% target.  However, the Monetary Board, having observed \nthat there are 12 banks that have not yet met even the 6% requirement, has decided to consider the following \ntwo options to facilitate banks to grant credit to the Agriculture Sector. \n1. Permitting banks to provide funds to banks of their choice to re-lend such funds to the \nAgriculture Sector; and \n2. The banks to subscribe to a fund managed and monitored by the Rural Development  \nDepartment of the Central Bank, which will lend to the Agriculture Sector.\nIn this regard, the Central Bank wishes to know the preferred option from each bank, which would facilitate \nthe bank to achieve the stipulated percentage before end 2009. Therefore, you are kindly requested to \nforward your position to us on or before 17th July, 2009.\nYours faithfully,\nB D W A Silva\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 399, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  393\nBank Supervision Department\n21 August 2006\nTo : CEOs of all Licensed Commercial Banks and\n        Licensed Specialised Banks\nDear Sirs,\nMANDATORY LENDING TO AGRICULTURE SECTOR\n \nWe refer to the discussion on the above subject at the meeting of the CEOs of Licensed Commercial \nBanks (LCBs) and Licensed Specialised Banks (LSBs) held on 11 August 2006.\nAs announced, all banks are requested to inform us of the advances granted to the different  \nsub-sectors in the agriculture sector on the basis of definition provided at the meeting held on 04 July \n2006 (copy enclosed for reference). You are also requested to include any other advances that are not \ncaptured in the above definition but are connected with agricultural purposes, separately, indicating the \npurpose.\nWe shall be thankful if you will make arrangements to provide the information on or before  \n31 August 2006.\nYours faithfully,\nSgd, Actg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 400, "year": 2013}, "type": "Document"}
{"page_content": "394 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nMandatory lending to the agriculture sector\nThe attention of the CEOs is drawn to the discussion on the proposed implementation of the budget \nproposal on mandatory lending to the agriculture sector. The CEOs were requested to send in their \nsuggestions in this regard.\nThe BSD has presented a paper in this regard to the Monetary Board, and the following has been \napproved:\n1.\t The\tdefinition \tof\tagriculture\n Cultivation, processing and purchasing of tea, rubber, coconut, paddy, minor export crops, livestock \nand dairy farming, fisheries, minor food crops, horticulture, forestry and bee keeping etc. as well as \nprocessing of products for value addition for export purposes.\n W ithin the above definition, the following could be construed as mandatory lending to the agriculture \nsector.\n(a) Direct finance to farmers to undertake the agricultural activities specified above and\n(b) Indirect finance for:\n\u2022 Purchase of agricultural implements\n\u2022 Purchase of farm machinery (tractors, trailers, power tillers, tractor accessories and providing \nfunds to Co-operative societies to provide agricultural equipments and tractors on concessional \nrental basis to farmers)\n\u2022 Purchase of vehicles for the transport of agricultural inputs and farm products including lease \nfacilities\n\u2022 Developing the national irrigation potential ( e.g.: implementing multipurpose irrigation \nschemes, construction of tanks, tube wells etc. and purchase of drilling units)\n\u2022 Reclamation and developing land for cultivation\n\u2022 Construction of farm buildings and structures (Bullock sheds, farm sheds, implement sheds, \ntractor and truck sheds)\n\u2022 Construction and running of storage facilities (warehouses, silos and loans granted for \nestablishing cold storages for storing produce)\n\u2022 Production and processing of hybrid seeds for crops ( e.g.: developing state owned seed \nresearch farms and seed production farms)", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 401, "year": 2013}, "type": "Document"}
{"page_content": "research farms and seed production farms)\n\u2022 Obtaining fertilizer (Establishing a fertilizer factory to supply fertilizer at cheaper prices and \nproviding essential insecticides and weedicides through Co-operatives at competitive prices)\n\u2022 Agricultural advisory services and research activities (reviving schools of Agriculture and \nUniversity faculties, training farmers and equipping them with required technological and \nother skills)\n\u2022 Purchase of Agricultural produce (granting loans at concessionary rates to rehabilitate the \nsmall and medium scale paddy mills and establishing Rice Processing Villages)\n\u2022 Developing plantations, horticulture, forestry, dairy, fisheries, piggery, poultry, bee keeping \netc. and providing loans for allied activities (Providing incentives for introducing new \nvarieties and value addition, conducting research, boosting exports, modernizing factories, \nproviding assistance for obtaining equipment and new technology, launching projects to \npreserve crops, add value to market crops as processed/packed foods and store the produce,", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 401, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  395\nestablishing Regional distribution Centres and arranging to store produce in fully equipped \ncool rooms etc .)\n In addition, it is proposed that funding provided under the credit schemes operated by the  \nRegional Development Department of CBSL, also be considered as agricultural credit.  \nThe schemes presently in operation are as follows:\n\u2022 T ea Development Project \u2013 Established for the purpose of increasing tea small holders\u2019 income \non a sustainable basis, improving the natural environment in the project area and developing \nthe necessary infrastructure in the sector. (2,678 loans amounting to Rs.2,963 mn had been \ngranted as at end 2005)\n\u2022 Second Perennial Crops Development Project \u2013 Set up to commercialise the perennial crop \nsector, increase production, develop nurseries, handle post harvest processing and marketing. \n(6,250 loans amounting to Rs.1,453 mn had been granted as at end 2005)\n\u2022 New Comprehensive Rural Credit Scheme \u2013 Provision of working capital requirement \nof small farmers; short term production loans, production of seeds and plant material and \npurchase of agricultural commodities under forward sales contracts. (70,196 loans amounting \nto Rs.1,620 mn had been granted during 2005)\n\u2022 Small Farmers and Landless Credit Project \u2013 To establish a cost effective and sustainable \nmicro credit delivery system to generate employment and improve savings habits among the \nlow income receiving people (106,632 loans amounting to Rs.1,513 mn had been granted as \nat end 2005).\n2. Pr oposed time frame \nIn implementing the proposals, it is suggested that the banks be required to increase their lending to \nthe agricultural sector to 10% of total advances as follows:\n\u2022\t3%\tby\tend\t2007,\t6%\tby\tend\t2008\tand\t10%\tby\t31\tDecember \t2009.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 402, "year": 2013}, "type": "Document"}
{"page_content": "396 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nBank Supervision Department\n27 June 2006\nTo : CEOs of Licensed Banks\n       Panel of Approved Auditors\nDear Sirs,\nPAYMENT OF TAXES BY THE BANKING AND FINANCIAL SECTOR\n \nThe Inland Revenue Department has drawn the attention of the CBSL to the deviations observed \nin the payment of taxes (income tax, V AT \u2013 including V AT on financial activities, PAYE, Debit Tax and \nEconomic Service Charge) by the banking sector.\nLicensed Banks are therefore informed that payment of all taxes such as income tax, V AT (including \nV AT on financial activities), PAYE, Debit Tax and Economic Service Charge payable to the Department \nof Inland Revenue should carry a certification by the External Auditors of the bank, when such payment is \nmade, that the relevant tax is in conformity with the provisions of the relevant Inland Revenue regulations \nin that regard.\nYours faithfully,\nSgd, Director of Bank Supervision\ncc: Secretary-General/SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 403, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  397\nRef. No. : 02  / 17 / 800 / 0007  / 001\nBank Supervision Department\n06 November 2008\nTo: All the CEOs of Licensed Commercial Banks and\n                                Licensed Specialised Banks \nDear Sirs,\nMISLEADING AND UNETHICAL ADVERTISEMENTS\n It has been observed on several occasions that banks are publishing misleading and unethical \nadvertisements, e.g., 15% on US Dollar deposits, interest rate of 30% on Fixed deposits, mega bonus \nreturn of 300% or bonus interest of 200% etc., in the media and in bill boards displayed in public places.  \nThese advertisements are very misleading and cause much negative misinterpretation of the economic \nsituation of the country. There have been complaints from the public about being misled by these \nadvertisements too. Whilst we understand that good marketing strategies are necessary in a competitive \nmarket, we wish to emphasise that they should be ethical, with clear policies.\n Therefore, we hereby request all the l icensed banks to refrain from publishing misleading and \nunethical advertisements with immediate effect and to ensure that all important information is highlighted \nin a visible manner to enable the general public to understand clearly the nature of the products and the \neffective interest rates applicable.\nYours faithfully,\nActg. Director of Bank Supervision\ncc: Secretary-General / SLBA", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 404, "year": 2013}, "type": "Document"}
{"page_content": "398 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 17 / 800 / 0007  / 001\nBank Supervision Department\n08 November 2013\nTo: CEOs of Licensed Commercial Banks and\n      Licensed Specialised Banks \nDear Sirs,\nMISLEADING AND UNETHICAL ADVERTISEMENTS\n We refer to our Circular 02/17/800/0007/001 dated 6 November 2008 requiring all banks to refrain \nfrom publishing misleading and unethical advertisements, and to ensure that all important information is \nhighlighted in a visible manner to enable the general public to understand clearly the nature of the products \nand the effective interest rates applicable.\n As informed at the meeting of the Chief Executive Officers of licensed commercial banks and licensed \nspecialised banks held on 24 October 2013, banks publish advertisements in a misleading and unethical \nmanner, e.g., publication of annual effective rate of interest (AER) of deposits in small font size which \nis much smaller or less than that of other important information, promoting deposits without divulging a \nrate of return, i.e., an interest rate or an annual percentage yield.\n W e, therefore, request you to comply with the Circular 02/17/800/0007/001 dated 6 November 2008 \nat all times, ensuring that all key information including nominal interest rate, AER and credit rating of \nthe bank is published with the same prominence in all advertisements, articles, etc., to enable the general \npublic to make informed decisions.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 405, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  399\nRef. : 02  / 17 / 600 / 0031  / 001\nBank Supervision Department\n28 July 2011\nTo : CEOs of all Licensed Commercial Banks, and\n       Licensed Specialised Banks\nDear Sir  / Madam,\nREGISTRATION OF SECURED INTERESTS OVER MOV ABLE PROPERTIES\nWITH THE SECURED TRANSACTIONS REGISTRY\nIt is observed that the Secured Transactions Registry maintained by Credit Information Bureau \n(CRIB) of Sri Lanka under section 23 of the Secured Transactions Act, No. 49 of 2009, will be beneficial \nto credit risk management of banks as it provides valuable information to assess the availability and \nquality of movable assets taken as securities for loans and other banking facilities.\nTherefore, licensed banks are requested to register any pledge, mortgage or obligation on movable \nassets as collaterals for loans and other banking facilities, as provided for in sections 2 and 3 of \nthe Secured Transactions Act, with the Secured Transactions Registry at the CRIB and utilize such \ninformation obtainable from the CRIB for credit risk management decisions.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 406, "year": 2013}, "type": "Document"}
{"page_content": "400 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nRef. No. : 02  / 01 / 00 / 0002  / 001\nBank Supervision Department\n31 December 2007\nTo :  CEOs of All Licensed Banks\nDear Sir  / Madam,\nGUIDELINES FOR EMPLOYMENT OF EXPATRIATE STAFF IN BANKS\n As announced at the meeting of the Chief Executive Officers of licensed banks on 22 November \n2007, the Guidelines for employment of expatriate staff in banks, which have been developed to facilitate \nthe introduction of new banking products and risk management of banks, are sent herewith. \n Please acknowledge receipt of this Circular .\nYours faithfully,\nSgd, B.D.W.A. Silva\nActg.  Director of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 407, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  401\nGuidelines for Employment of Expatriate Staff in Banks\n1. Curr ent Policy\n1.1 At present, the Central Bank of Sri Lanka (CBSL) recommends to Immigration and Emigration \nDepartment resident visas for expatriate staff of foreign banks to enable the banks to employ them \nas follows.\n (i) Maximum of three officers without any restriction.\n (ii) Permission for any officers exceeding 3 is granted on a case-by-case-basis for a specific \nperiod not exceeding one year subject to condition that local staff should be trained to handle \nthe work initiated/undertaken by such expatriate officers.\n1.2 The objective of developing this policy is to provide local staff with the training and opportunities \nto take on positions held by the expatriate officers.\n1.3 In the case of local banks, there has not been such a policy since local banks generally do not \nemploy foreign personnel. However, four local banks have employed foreign consultants to \nundertake specific assignments.\n2. Need for  a Revision of the Policy\n The following factors are considered favourably to relax the current policy to permit more expatriate \nofficers and to encourage domestic banks to employ foreign experts.\n (i) Expansion of business operations of some foreign banks. \n ( ii)  Foreign banks now t end to expand business in Sri Lanka, especially infrastructure projects, \nthrough funds borrowed from their respective head offices and branches. \n (iii) The active presence of foreign banks with internationally experienced professionals will help \nimprove Sri Lanka\u2019s image and investment promotion internationally.\n (iv) T endency to introduce international banking products such as securitization, loan syndication, \nforeign loan raising, infrastructure funding and derivative products. \n (v) Banks in Sri Lanka mainly depend on conventional deposit and loan products. Introduction of", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 408, "year": 2013}, "type": "Document"}
{"page_content": "(v) Banks in Sri Lanka mainly depend on conventional deposit and loan products. Introduction of \ninnovative banking products indicate the development of the financial sector and the economy. \nInternational banking know-how is necessary to introduce new banking products, especially to \nattract foreign capital to Sri Lanka. \n (vi) Banks will need to employ risk management specialists to implement advanced approaches of \nBasel II in the medium term and there may be a need to look for such specialists from countries \nwhich implement Basel II.\n (vii) The proposed adoption of IAS/IFRS also will require bankers who have practical experience in \nadopting IAS/IFRS.\n (viii)  In general, banking industry needs experts who have global banking experience if Sri Lankan \nbanks are to introduce modern banking products, technology and risk management techniques.\n3. Policy Guidelines\n 3.1 For  Foreign Banks\n (i) The maximum number of expatriate officers permitted will be as follows:\n (a) 3 for banks whose staf f strength is less than 75.\n (b) 5 for banks with staf f strength of 75 to 400. \n (c) 10 for banks with staf f strength of more than 400.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 408, "year": 2013}, "type": "Document"}
{"page_content": "402 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (ii) In the case of Indian banks, agreement as per on-going negotiations of the Comprehensive \nEconomic Partnership Agreement (CEPA) will be adopted as the minimum criteria.\n (iii) Approval for expatriate officers in excess of the above limits will be considered on a case-\nby-case-basis taking into consideration the specific skills of the nominated expatriates \nand specific assignments given to them. The banks should submit projections for specific \nbusiness or deliverables expected from expatriate officers.\n (iv) V alidity period of the approval will be two years for expatriates under the normal quota and \none year for others (case-by-case-basis criteria).\n (v) In the case of expatriate officers under the normal quota except for CEO, approval may \nbe renewed for another term of two years after assessing the performance of respective \nexpatriate officer. For CEOs, approval may be extended for two terms (4 more years) on the \nbasis of performance records. The renewal for the term of expatriates permitted in excess of \nthe normal quota (case-by-case basis) will be considered only for extension of the projects/\nassignments or new projects/assignments. \n (vi) Approving authority for expatriate officers under normal quota will be the Director of Bank \nSupervision. The Deputy Governor will approve expatriate officers in excess of the normal \nquota.\n 3.2  For  Locally Incorporated Banks\nPermission will be granted on a-case-by-case basis taking into consideration the specific needs of \nthe banks. Special attention will be given to employment of foreign experts in the following fields:\n (a) Basel II-based risk management\n (b) International Accounting Standards\n (c) Risk modelling and data warehouse\n (d) Structuring of derivative products\n (e) Corporate governance", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 409, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  403\nRef. No. : 02  / 04 / 003 / 0400  / 001\nBank Supervision Department\n19 January, 2004\nTo :  All Chief Executive Officers \n of LCBs and LSBs\nGUIDELINES ON CREDIT RATING OF BANKING INSTITUTIONS\n I refer to the discussions on the above subject at the meetings of the Chief Executive Officers of \nLicensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) held on 20.11.2003 and \n18.12.2003 and the agreement of the Chief Executive Officers to obtain ratings for banks. \n All LCBs and LSBs are hereby required to observe the following guidelines in this regard.\n1. All LCBs and LSBs (both local and foreign) are hereby required to obtain a Credit Rating on \nor before 30 June 2004.\n2. All ratings should be from an independent rating agency acceptable to the Central Bank of Sri \nLanka.\n3. Local branches of foreign banks may disclose their parent bank\u2019 s rating.\n4. W ith effect from July 2004, all banks are required to disclose their rating in all their advertise -\nments soliciting deposits and other debt instruments. The fact that a bank has not obtained a \nrating should also be disclosed, if that is the case.\n5. Credit Ratings should be updated annually and the rating report should be submitted to the \nCentral Bank of Sri Lanka within one month from the date of the report.\nPlease acknowledge the receipt of this letter.\nYours faithfully,\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 410, "year": 2013}, "type": "Document"}
{"page_content": "404 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOur Ref. : 02  / 17 / 800 / 0014  / 01\nBank Supervision Department\n24 April 2013\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nAMENDMENTS TO GUIDELINES ON THE \nOPERATIONS OF THE INVESTMENT FUND ACCOUNT\nAn amendment to paragraph 3.1( iii) of the above Guidelines and the amended format to submit \ninformation on the utilisation of the investment fund account on a monthly basis are enclosed for \ncompliance.\nThe letter dated 1st October 2011 sent on the above subject is hereby withdrawn.\nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nAnnex \nAmendment to Guidelines to Licensed Commercial Banks and Licensed Specialised Banks \non the Operations of the Investment Fund Account\nThe following Guidelines will replace 3.1( iii) of the above. \n3.1(iii)  Lend only for the following purposes commencing 01 May 2013:\n (a) Long-term loans for cultivation of plantation crops/agriculture crops including, fruits, \nvegetables, cocoa and spices and for livestock and fisheries\n (b) Factory/mills modernization/establishment/expansion \n (c) Small and medium enterprises: loans up to Rs. 200 mn to enterprises with annual  \nturnover less than Rs. 600 mn  \n (d) Information Technology related activities and Business Process Outsourcing \n (e) Infrastructure development\n (f) Education: vocational training and tertiary education\n (g) Housing: up to Rs. 2 mn per customer for construction of a house for residential purposes\n (h) Housing development: construction of low cost houses for residential purposes\n (i) Construction of hotels and for related purposes \n (j) Investment in/purchases of sustainable energy sources including solar power up to  \nRs. 10 mn\n (k) W omen enterpreneurship venture capital projects up to Rs. 10 mn\n (l) Restructuring of loans extended for the above purposes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 411, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  405\nUtilization of Investment Fund Account (IFA)\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nMonth ended :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(Rs. \u2019000)\nItem Amount\nA. Total Transferred to IFA XXXX\nB. Total Loans Granted\nXXXX\nSector Description Amount \n(a) Long-term loans for cultivation of plantation \ncrops/agriculture crops including, fruits, \nvegetables, cocoa and spices and for livestock \nand fisheriesXX\n(b) Factory/mills modernization/establishment/\nexpansionXX\n(c) Small and medium enterprises: loans up to Rs. \n200 mn to enterprises with annual turnover \nless than Rs. 600 mnXX\n(d) Information Technology related activities and \nBusiness Process OutsourcingXX\n(e) Infrastructure development XX\n(f) Education: vocational training and tertiary \neducationXX\n(g) Housing: up to Rs. 2 mn per customer \nfor construction of a house for residential \npurposesXX\n(h) Housing development: construction of low \ncost houses for residential purposesXX\n(i) Construction of hotels and for related \npurposesXX\n(j) Investments in/purchases of sustainable \nenergy sources including solar power up to \nRs. 10 mnXX\n(k) W omen entrepreneurship venture capital \nprojects up to Rs. 10 mnXX\n(l) Restructuring of loans extended for above \npurposesXX\nSub Total \nC. Total investments in Government Securities  \u2013  long-term\n                                                                                  \u2013  short-termXXXX\nXXXX\n  Sub Total XXXX\nD. Balance available for utilization (A-B-C) XXXX\nNOTE:  E-mail the above details to dbsd@cbsl.lk with copies to mihiri@cbsl.lk  and \n  manjulap@dfd.treasury.gov.lk by 10th of each month following the month of reporting.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 412, "year": 2013}, "type": "Document"}
{"page_content": "406 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOur Ref. : 02  / 17 / 800 / 0014  / 02\nBank Supervision Department\n31 October 2011\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sir / Madam,\nAMENDMENTS TO GUIDELINES ON THE \nOPERATIONS OF THE INVESTMENT FUND ACCOUNT\nAn amendment to paragraph 3.1( iii) of the above Guidelines and the amended format to submit \ninformation on the utilisation of the investment fund account on a monthly basis are enclosed for \ncompliance.\nYours faithfully,\n(Ms.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.\nAnnex  I\nAmendment to Guidelines to Licensed Commercial Banks and Licensed Specialised Banks \non the Operations of the Investment Fund Account proposed in the 2011 Budget\nThe following Guidelines will replace 3.1( iii) of the above. \n3.1(iii)  Lend only for the following purposes commencing 1 November 201 1:\n (a) Long-term loans for cultivation of plantation crops/agriculture crops including, fruits, \nvegetables, cocoa and spices and for livestock and fisheries\n (b) Factory/mills modernization/establishment/expansion \n (c) Small and medium enterprises:  loans up to Rs. 200 mn to enterprises with annual \nturnover less than Rs. 600 mn  \n (d) Information Technology related activities and Business Process Outsourcing \n (e) Infrastructure development\n (f) Education: vocational training and tertiary education\n (g) Ho using: up to Rs. 2 mn per customer for construction of a house for residential \npurposes\n (h) Construction of hotels and for related purposes \n (i) Restructuring of loans extended for the above purposes.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 413, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  407\nUtilization of Investment Fund Account (IFA)\nName of Bank :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\nMonth ended :  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\n(Rs. \u2019000)\nItem Amount \nA. T otal Transferred to IFA XXXX\nB. T otal Loans Granted\nXXXXSector Description Amount \n(a) Agriculture XX\n(b) Factory/mills modernization XX\n(c) Small and Medium Enterprises XX\n(d) Information Technology and BPO XX\n(e) Infrastructure development XX\n(f) Education XX\n(g) Housing XX\n(h) Construction of hotels and for \nrelated purposesXX\n(i) Restructuring of loans extended \nfor above purposesXX\nC. Total investments in Government Securities  -  long-term\n                                                                             -  short-termXXXX\nXXXX\nD. Balance available for utilization XXXX\nNOTE:  E-mail the above details to dbsd@cbsl.lk with copies to mayadunne@cbsl.lk  and \n  jayaminiw@fpd.treasury.gov.lk by 10th of each month following the month of reporting.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 414, "year": 2013}, "type": "Document"}
{"page_content": "408 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\nOur Ref. : 02  / 17 / 800 / 0041  / 01\nBank Supervision Department\n29 April 2011\nTo : CEOs of all Licensed Commercial Banks and\n       Licensed Specialised Banks\nDear Sirs,\nGUIDELINES ON THE OPERATION OF THE\nINVESTMENT FUND ACCOUNT\nWe enclose the Guidelines on the establishment and operations of the Investment Fund Account \nproposed in the Budget 2011, for compliance.\nYours faithfully,\n(Mrs.) T M J Y P Fernando\nDirector of Bank Supervision\nEncl.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 415, "year": 2013}, "type": "Document"}
{"page_content": "Directions, Determinations, and Circulars issued to Licensed Specialised Banks  409\nGuidelines to Licensed Commercial Banks and Licensed Specialised Banks \non the Operations of the \nInvestment Fund Account proposed in the 2011 Budget\n1. Establishment of an Investment Fund Account (IFA)\n As proposed in Budget 2011, every person or partnership who is in the business of banking or financial \nservices, is required to establish and operate an IFA.\n2. Initial Cr edits to IFA \n As and when taxes are paid after 1 January 2011, licensed banks shall transfer the following funds to \nthe IFA and build a permanent fund in the bank: \n (i) 8 per cent of the profits calculated for the payment of Value Added Tax (V AT) on financial services \non dates as specified in the V AT Act for payment of V AT. \n (ii) 5 per cent of the profits before tax calculated for payment of income tax purpos es on dates \nspecified in Section 113 of the Inland Revenue Act for the self assessment payments of tax. \n3. Utilisation of Funds\n3.1 Banks shall commence utilization of funds in the IFA in the following manner within three months \nfrom the date of transfer to the IFA: \n (i) Invest in long-term Government securities and/or bonds with maturities not less than seven \nyears. \n (ii) Lend on maturities not less than five years at interest rates not exceeding 5-year Treasury bond \nrates plus 2 per cent. \n (iii) Lend only for the following purposes:\n (a) Long-term loans for cultivation of plantation crops/agriculture crops including, fruits, \nvegetables, cocoa and spices and for livestock and fisheries\n (b) Factory/mills modernization/establishment/expansion \n (c) Small and medium enterprises: \n a. loans up to Rs. 30 mn or \n b. loans over Rs. 10 mn to enterprises with annual turnover less than Rs. 300 mn and  \nemployees less than 400 \n (d) Information Technology related activities and Business Process Outsourcing \n (e) Infrastructure development\n (f) Education - vocational training and tertiary education", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 416, "year": 2013}, "type": "Document"}
{"page_content": "(e) Infrastructure development\n (f) Education - vocational training and tertiary education\n (g) Restructuring of loans extended for the above purposes.\n3.2 Lending may be in Sri Lanka Rupees and/or foreign currency loans granted within the country .\n3.3 Ba nks shall invest funds in short-term Government securities until the commencement of \nutilization of funds as stated in 3.1 above.\n4. Conditions\n4.1 Applicability of Prudential Requirements\n (i) Subject to paragraph ( ii) below, transactions of the IFA shall be subject to all Regulations, \nDirections, Determinations and Circulars issued by the Central Bank of Sri Lanka as \napplicable.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 416, "year": 2013}, "type": "Document"}
{"page_content": "410 Directions, Determinations, and Circulars issued to Licensed Specialised Banks\n (ii) Lending to the Agriculture sector in the case of licensed banks shall be in addition to the \nrequirement on lending to agriculture by banks of 10 per cent of total loans and advances of \nthe bank in terms of the budget proposal 2006.\n4.2 Accounting for Transactions\n (i) T ransfers to the IFA shall be treated as appropriations of profit after tax.\n (ii) The IF A shall be maintained as a separate item under general and other reserves and constitutes \na part of shareholder funds.\n (iii) Cost of operations of IF A and income from investments and lending operations shall be \naccounted for in the financial statements of the bank.\n (iv) Banks shall maintain separate accounts with necessary details on all operations of the IF A.\n (v) IF A shall not be impaired or reduced without the approval of the Central Bank of Sri Lanka.\n4.3 Disclosur es and Reporting to Central Bank of Sri Lanka\n (i) The following disclosures shall be made in the \u201cNotes to the financial statements\u201d:\n (a) Number of loans granted and total amount outstanding for each purpose stated in  \nparagraph 3.1(iii ), interest rates and tenure of loans.\n (b) T otal investments in Government securities, interest rates and maturity.\n (ii) Information on the operations of the IFA shall be made available as and when required by the \nCentral Bank of Sri Lanka and Ministry of Finance.\n4.4 T reatment of Taxation \nThe tax liability in relation to the operations of IFA shall be computed in accordance with \napplicable tax laws. However, the following shall be noted:\n (i) Interest income on investments, stated in paragraphs 3.1( i) and 3.3 is liable to income tax. \n (ii) Interest income on loans granted utilizing the IF A will be exempt from income tax. \n (iii) Specific provisions on loan losses will be subject to normal adjustments applicable to bad \ndebts.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 417, "year": 2013}, "type": "Document"}
{"page_content": "debts. \n (iv) Any over-funding or under-funding shall be in accordance with the relevant tax laws/\nregulations/guidelines.", "metadata": {"source": "data\\CBSL\\2013\\bsd_LSB_Up_to_30_Nov_2013_compressed_0.pdf", "page": 417, "year": 2013}, "type": "Document"}
{"page_content": "Determination made by the Monetary Board of the Central Bank of Sri Lanka under Sections\n8 and 76D(6) of the Banking Act, No. 30 of 1988, as amended.\nA|, \\h-J q\nrl\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nColombo\n| ( December 2014\nBANKING ACT DETERMINATION NO. I OF 2OI4\nANNUAL LICENCE FEE OF'\nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nAnnual licence l. In terms of Sections 8(1) and 76D(6) of the Banking Act, the\nfee for the years Monetary Board has determined that the licence fee that shall be\n2015 and 2016 paid by licensed commercial banks (LCBs) and licensed\nspecialised banks (LSBs) for the years 2015 and 2016 shall be\nbased on the total assets as follows:\nTotal Assets\nas at the end ofthe previous yearLicence Fee\nAbove Rs 750 bn Rs.30.0 Mn\nAbove Rs 500 bn to Rs.750 bn Rs. 25.0 Mn\nAbove Rs 200 bn to Rs 500 bn Rs. 22.0 Mn\nAbove Rs 125 bn to Rs 200 bn Rs. 16.5 Mn\nAbove Rs 75 bn to Rs 125 bn Rs. I1.0 Mn\nRs 25 bn to Rs 75 bn Rs. 5.5 Mn\nLess than Rs 25 bn Rs. 2.2 Mn\nPayment of 2. Every LCB and LSB shall pay the licence fee to the Central Bank\nlicence fee of Sri Lanka on or before 31't day of January of the respective\nyear.\n3. The licence fee shall be paid on calendar year basis.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_BankingActDetermination_1_2014_Annual LicenceFee_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "Orco q6ooo oqerboo@dqO@ goor @o OcoqO\n@ordrane ropdru onird\nCENTRAL BANK OF SRI LANKA\neurdldl Grodunrimeuq; q6lanooroseino Bank Supervision Department\n<r1 lanuary 2014\nCircular No.: 01/2014\nTo : CEOs of all Member Institutions of\nSri Lanka Deposit Insurance and Liquidity Support Scheme\nDear Sir/Madam\nSri Lanka Deposit Insurance and Liquidity Support Scheme\nOperating Instructions\nWe write to inform you of the following:\n1. In terms of the Sri Lanka Deposit Insurance and Liquidity Support Scheme Regulations No. 1\nof 2013 dated 30.12.2013, the title of the \"Sri Lanka Deposit Insurance Scheme\" has been\nrenamed as the \"Sri Lanka Deposit Insurance and Liquidity Support Scheme\" and the title of\nthe \"Deposit Insurance Fund\" has been renamed as the \"Sri Lanka Deposit Insurance and\nLiquidity Support Fund\", with effect from22.ll.20l3. A copy of the Regulation is attached.\n2. Further, with the implementation of the new \"General Ledger Accounting System\" by the\nCentral Bank of Sri Lanka, the account number \"4681\" of the Sri Lanka Deposit Insurance\nand Liquidity Support Fund has been changed as \"54523\", with effect from 01 .01.2014.\n3. Accordingly, all member institutions are requested to adhere to the following instructions\nwith immediate effect:\n(i) The premium on eligible deposits in terms of the Regulation No. 6 of the Sri Lanka\nDeposit Insurance and Liquidity Support Scheme Regulations No. 1 of 2010 dated\n28.09.2010, as amended should be paid to \"Sri Lanka Deposit Insurance and Liquidity\nSupport Fund\" through RTGS, specially mentioning the account name as ooSri Lanka\nDeposit Insurance and Liquidity Support Fund - Account Number 54523\" or\ndrawing a cheque in favor of the said account.\n(ii) Make necessary amendments in order to rename the \"Sri Lanka Deposit Insurance\nScheme\" as the \"Sri Lanka Deposit Insurance and Liquidity Support Scheme\" and the\n\"Deposit Insurance Fund\" as the \"Sri Lanka Deposit Insurance and Liquidity Support", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_01_SL_deposit_Insurance_Liquidity_SS_e_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "\"Deposit Insurance Fund\" as the \"Sri Lanka Deposit Insurance and Liquidity Support\nFund\" in the correspondence with the Sri Lanka Deposit Insurance and Liquidity Supporl\nScheme (SLDILSS).\n(iii)Previous e-mail address, \"sldis@cbsl.lk\" of SLDILSS has been changed as\n'o{di!S5_@clrs!!!\" and therefore, forward e-mail correspondence to sldilss(a)cbsl.lk with a\ncopy to dbsd@cbsl.lk.\nYours faithfully\n@(Mrs.)TMJYPFernando\nDirector of Bank Supervision\n6 Oeo Oco\u20ac, qco 3O, do:6ed O:Oo, 6 e6rb onrg, @o. :o emrplu$ onropbop GtenqgLbq 1 Level 6, N0.30, Janadhipathi Mawatlra, Colombo I\ntD! . se . 59O, @rDte@ Of, 6 \u20acploro p. Ou. @o. 590, Genqgrbq 01, Oa)trio6 P.0, B0x.590, Colombo 01, Sd lanka.\nI %fizttztoolssg (,J g+ f 2477711-A- banksup@cbst.tk @ www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_01_SL_deposit_Insurance_Liquidity_SS_e_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "6 f,ohc adrnrC$n argrd0rf dnddod 01n0 0003\ngB Eocaee\nThe Gazette of theDemocratic SocialistRepublic of SriLanka\nEXTRAORDINARY\ng\"zo 1843/8 - 2Ol3 oQeel@Ob @ee 30 O18 eegqc - 2013J230\nNo. 1843/8 - MONDAY DECEMBER 30, 2013\n(Published by Authority)\nPART I : SECTION (I) - GENERAL\nCentral Bank of Sri Lanka Notices\nTHE MONETARYLAWACT\nREGULATIONS made by the Monetary Board under Sectton32E of the Monetary LawAct, (Chapter 422).\nNlvano A:rru Lssr-re Casnaal,\nChairman,\nMonetary Board.\nCentral Bank ofSri Lanka,\nColombo,\n23'd December,20l3.\nSri Lanka Deposit Insurance and Liquidity Support Scheme Regulations\nAmendment to the Sri Lanka Deposit Insurance Scheme Regulations, No. I of 2010\nI .1 These Regulations shall be cited as Sri Lanka Deposit Insurance and Liquidity Support Scheme L citation\nRegulations, No. I of 2013.\n2.1 Sri Lanka Deposit Insurance Scheme Regulations, No. 1 of 2010 publishedin Gazette 2. Amendments\nExtraordinary No. 1673/11 of 28th September,2010 is hereby amended as follows :- toj.li,lJl''r''\n2.2 ln regulation 3.1 thereof, by the substitution for the words \"This Scheme shall be titled Sri\nLanka Deposit Insurance Scheme\" of the words \"This Scheme shall be titled Sri Lanka Deposit Insurance\nand Liquidity Support Scheme (hereinafter referred to as \"the Scheme\")\".\n2.3 In regulation 7.1 thereof, by the substitution for the words \"The Scheme shall have a fund titled\n\"Deposit lnsurance Fund\" \" of the words \"The Scheme shall have a fund titled \"Sri Lanka Deposit Insurance\nand Liquidity Support Fund\" \".\nThis Gazette Extraordinary can be downloaded from www.documcnts.gov.lk 1A", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_01_SL_deposit_Insurance_Liquidity_SS_e_0.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "2A I orslcOes , (I) odqcs - @ goroc AdcorcrrJ$zo o@cdOcQ dr.:,dc'o.ol qB Eooe olcsO epco - 2013.12.30\nPanr I : Src. (I) - GAZETTE EXTRAORDINARY OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA - 30.12.2013\n2.4 ln regulation 9.1 thereof, by the substitution for the words \"Deposit Insurance Fund\", and\nwherever those words occur in these regulations, of the words \"Sri Lanka Deposit Insurance and Liquidity\nSupport Fund\".\n2.5 In regulation 10.5 thereof, by the substitution for the words \"Sri Lanka Deposit Insurance\nScheme\", and wherever those words occur in these regulations, of the words \"Sri Lanka Deposit Insurance\nand Liquidity Support Scheme\".\n3. Effective date 3 . 1 These amendments shall come into effect from 22nd Novembeq 20 I 3.\n01 -417\nPRINTED AT THE DEPARTMENT OF GOVERNMENT PRINTING. SRI LANKA.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_01_SL_deposit_Insurance_Liquidity_SS_e_0.pdf", "page": 2, "year": 2014}, "type": "Document"}
{"page_content": "@ goor @co OcoapO\neuridl GLo$unrioror$ $eoom&aenLb Bank Supervision Department AUoGD qA!r\u20ac6 oqefioo@dqO\n3\\ March2014\nRef No. : 02/ 17 I 600 10029 I 001\nTo: CEOs of all Licensed Commercial Banks and Licensed Specialised Banks\nDear Sir/Madam\nIMPLEMENTATION OF THE STANDARDISED APPROACH ON\nCOMPUTATION OF RISK-WEIGHTED AMOUNT FOR OPERATIONAL\nRISK UNDER BASEL II CAPITAL ADEQUACY FRAMEWORK\nWe refer to our previous correspondence and discussions on the above and enclose\nthe revised Guidelines and reporting format on computation of operational risk capital\ncharges for licensed commercial banks (LCBs) and licensed specialised banks (LSBs).\nAccordingly, with effect from 0l .07.2014:\na. Guideline No. 6.8 of Part V on the computation of Risk-Weighted Amount for\nOperational Risk referred to in Schedule I of the Banking Act Directions Nos. 9\nand 10 of 2007 issued to LCBs and LSBs, respectively, are replaced with the\nrevised Guidelines in Schedule I; and\nb. Existing reporting format of the computation of Risk-Weighted Amount for\nOperational Risk as referred to in Schedule II of the Banking Act Directions Nos.\n9 and l0 of 2007 issued to LCBs and LSBs, respectively, are replaced with the\nnew formats in Schedule II.\nYours faithfully\n8-(Mrs.)f\".-VflYPFernando\nDirector of Bank Supervision\nEncl.\no OeD g.rg, qco 3o, daraed OrOcl,\nt'!. @G,,59O, elo\u20acO oI, 6 elclolo6egri: onrg, @o. :o emrpflupfl onogog GtsrqgLbq 1 lerel 6,No,30,JanadhlpathlMawatha,Colombo\npi. Ou. OED. 590, Oengrbq 01, Oa)rEd)6 P,0. 80x.590, Colombo 01, Sd Lanka.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Risk_Weighted_Amount_for_Operational_Risk_e_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "Schedule II  \nPart V(a): Computation of Risk -weighted Amount for Operational Risk  \nFirst year Second year Third year First year Second year Third year\n11.5.1.1.0.0 The Basic Indicator Approach (BIA) 15% 0 0 0\n11.5.1.2.0.0 The Standardised Approach (TSA) 0 0 0 0 0 0\n11.5.1.2.1.0 Corporate Finance (\u03b2 1) 18% 0 0 0\n11.5.1.2.2.0 Trading and Sales (\u03b2 2) 18% 0 0 0\n11.5.1.2.3.0 Payment and Settlement (\u03b2 3) 18% 0 0 0\n11.5.1.2.4.0 Agency Services (\u03b2 4) 15% 0 0 0\n11.5.1.2.5.0 Asset Management (\u03b2 5) 12% 0 0 0\n11.5.1.2.6.0 Retail Brokerage (\u03b2 6) 12% 0 0 0\n11.5.1.2.7.0 Retail Banking(\u03b2 7) 12% 0 0 0\n11.5.1.2.8.0 Commercial Banking(\u03b2 8) 15% 0 0 0\n11.5.1.3.0.0 The Alternative Standardised Approach (ASA) 0 0 0\n11.5.1.3.1.0 Sub total 0 0 0 0 0 0\n11.5.1.3.1.1 Corporate Finance (\u03b2 1) 18% 0 0 0\n11.5.1.3.1.2 Trading and Sales (\u03b2 2) 18% 0 0 0\n11.5.1.3.1.3 Payment and Settlement (\u03b2 3) 18% 0 0 0\n11.5.1.3.1.4 Agency Services (\u03b2 4) 15% 0 0 0\n11.5.1.3.1.5 Asset Management (\u03b2 5) 12% 0 0 0\n11.5.1.3.1.6 Retail Brokerage (\u03b2 6) 12% 0 0 0\n11.5.1.3.2.0 0 0 0 0 0 0\n11.5.1.3.2.1 Retail Banking(\u03b27) 12% 0.035 0 0 0\n11.5.1.3.2.2 Commercial Banking(\u03b28) 15% 0.035 0 0 0\n11.5.1.9.0.0\n11.5.1.9.1.0 0\n11.5.1.9.2.0 0\n11.5.1.9.3.0 0\n11.5.1.10.0.0\n11.5.1.10.1.0 0\n11.5.1.10.2.0 0\n11.5.1.10.3.0 0 The Alternative Standardised Approach (11.5.1.9.3.0*10)Sub total\nCapital Charges for Operational Risk\nThe Basic Indicator Approach (11.5.1.9.1.0*10)\nThe Standardised Approach 11.5.1.9.2.0*10)The Basic Indicator Approach\nThe Standardised Approach\nRisk-weighted Amount for Operational RiskCapital Charge \nFactor (\u0251 & \u03b2) \n11.5.1.5.0.0Fixed factor \n'm' \n11.5.1.6.0.0Capital Charges                          \n11.5.1.8.0.0Gross Income/ Loans & Advances         \n11.5.1.7.0.0\nCodeBusiness Lines                                         \n(11.5.1.4.0.0)\nThe Alternative Standardised Approach\n \nCapital Charge for Operational Risk under BIA  \nKBIA = [\u03a3(GI 1\u2026.n x\u0251 )]/n  \n \nCapital Charge for Operational Risk under TSA", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_II_1.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "KBIA = [\u03a3(GI 1\u2026.n x\u0251 )]/n  \n \nCapital Charge for Operational Risk under TSA  \nKTSA = {\u03a3 years 1 -3 max[\u03a3(GI 1-8 x \u03b21-8),0]}/3  \n \nCapital Charge for Operational Risk under ASA  \nKASA = {\u03a3years 1 -3 max[\u03a3(GI 1-6 x \u03b21-6),0]} /3 + (\u03b2 7 x m x LA r) + (\u03b2 8 x m x LA c)", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_II_1.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "Part V(b): Computation of Gross Income under Operational Risk  \n \nFirst \nyearSecond \nyearThird \nyearFirst \nyearSecond \nyearThird \nyearFirst \nyearSecond \nyearThird \nyearFirst \nyearSecond \nyearThird \nyearFirst \nyearSecond \nyearThird \nyear\n11.5.2.1.0.0 The Basic Indicator Approach\n11.5.2.2.0.0The Standardised Approach/The \nAlternative Standardised \nApproach 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0\n11.5.2.2.1.0 Corporate Finance\n11.5.2.2.2.0 Trading and Sales\n11.5.2.2.3.0 Payment and Settlement\n11.5.2.2.4.0 Agency Services\n11.5.2.2.5.0 Asset Management\n11.5.2.2.6.0 Retail Brokerage\n11.5.2.2.7.0 Retail Banking\n11.5.2.2.8.0 Commercial BankingExtraordinary / Irregular \nItem of Income                               \n(11.5.2.8.0.0)Realised Profits from the \nSale of Securities in the \nBanking Book   \n(11.5.2.7.0.0)CodeBusiness Lines                                         \n(11.5.2.3.0.0)Interest Income           \n(11.5.2.4.0.0)Interest Expenses        \n(11.5.2.5.0.0)Non Interest Income              \n(11.5.2.6.0.0)", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_II_1.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "1 \n Schedule I  \n \nRevised  Guidelines on Computation of Risk -weighted Amount  \nfor Operational Risk  \n   \n6.8. Part V \u2013 Computation of Risk -weighted Amount (RWA) for Operational Risk.  \n6.8.1.  Overview  \n6.8.1.1.  Definition of Operational Risk  \nOperational risk is defined as the risk of loss resulting from inadequate or failed \ninternal processes, people and systems or from external events. This definition \nincludes legal risk, but excludes strategic and reputational risk. Legal risk includes, \nbut is not limited to, exposure to fines, penalties, or punitive damages resulting from \nsupervisory actions, as well as private settlements.  \n6.8.1.2.  The Measurement Methodologies  \nThe Basel II Framework presents three methods for calculating operational risk \ncapital charges in a continuum of incr easing sophistication and risk sensitivity: (i) \nthe Basic Indicator Approach (BIA) ; (ii) the Standardised Approach (TSA); and (iii) \nAdvanced Measurement Approaches (AMA) . In comparison with BIA, other \napproaches are more advanced methods to determine the required capital for \ncovering operational losses. Hence, the Banks shall with supervisory approval \nmigrate from BIA to other advance approaches  subject to comply ing with qualifying \ncriteria . \n \n6.8.2.  Approaches for Calculating Operational Risk \n6.8.2.1.  A Bank shall use one of the following approaches to calculate its operational RWA:  \na) The BIA in accordance with item 6.8.3; or  \nb) The TSA in accordance with item 6.8.4; or  \nc) The ASA in accordance with item 6.8.5 . \n6.8.2.2.  A Ba nk which has been allowed to use  TSA or ASA shall not use a simpler \napproach without the prior  written  approval of the Director of Bank Supervision \n(DBS) of CBSL . \n6.8.2.3.  Once a Bank moves  to a simpler approach, such Bank cannot use an advanced \napproach without the approval of DBS. DBS shall grant such approval subject to", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "2 \n requiring the Bank to comply with other conditions prior to migrating to the \nrespective advanced approach.  \n6.8.2.4.  When DBS is not satisfied that a Bank which has adopted TSA or ASA complies \nwith the specified requirements, DBS may require the Bank to use a simpl er \napproach.  \n   \n6.8.3.  The Basic Indicator Approach (BIA)  \n6.8.3.1.  Bank shall calculate its operational risk capital requirement as follows:  \nKBIA = [ \u03a3 ( GI1...n  x \u03b1.) ] / n   \n   Where;  \na) KBIA = capital charge for operational risk  under BIA  \nb) GI    = annu al gross income, where positive, over the preceding three  \nyears as set out in items 6.8.3.2 to 6.8.3.4  \nc) n      = number of years in the preceding three years when annual gross  \nincome is positive  \nd) \u03b1     = 15%, which is set by BCBS.  \n6.8.3.2.  Bank shall calc ulate its gross income as the sum of its net interest income and non -\ninterest income, taking into account the following adjustments:  \na) gross of any provisions /impairments  (including unpaid interest);  \nb) gross of operating expenses, including fees paid to outsou rcing service \nproviders, in contrast to fees paid for services that are outsourced, fees \nreceived by Banks that provide outsourcing services shall be included in \nthe definition of gross income . \nbut excluding - \na) any realized profits/losses arising from the s ale of securities in the banking \nbook. Securities in the  banking book shall be the securities that are \nclassified as \u201cheld to maturity\u201d or \u201cavailable for sale\u201d, in accordance with \nSri Lanka Accounting Standard - LKAS 39;  \nb) any income or expenses  not deri ved from the ordinary activities of the \nBank and not expected to recur frequently or regularly, i.e., sale of fixed \nassets , income derived from insurance recoveries , etc.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "3 \n 6.8.3.3.  If the annual gross income /capital charge  for any given year i s negative or zero, it \nshould be excluded from both the numerator and denominator when calculating the \naverage capital charge.  \n6.8.3.4.  A Bank shall calculate its annual gross income for the most recent year by \naggregating the gross income of the last four financia l quarters and follow same to \ncalculate annual gross income for each of the two years preceding the most recent \nyear. Table 20 provides an illustration of the calculation of the annual gross income \nfor the previous three years, for a Bank calculating its o perational RWA as at end \nJune 2014. \n \nTable 20  \n Illustration of Calculation of Annual Gross Income  \n Third Year  Second Year  First Year  \nGross  \nIncome  \nfor \nfinancial  \nquarter  \nending  Jun\u201914 (GI3a) Jun\u201913 (GI 2a) Jun\u201912 (GI1a) \nMar\u201914 (GI3b) Mar\u201913 (GI 2b) Mar\u201912 (GI1b) \nDec\u201913 ( GI3c) Dec\u201912 (GI 2c) Dec\u201911 (GI1c) \nSep\u201913 (GI3d) Sep\u201912 (GI 2d) Sep\u201911 (GI 1d) \nTotal  GI3 = GI3a + GI3b \n+ GI3c + GI3d GI2 = GI 2a + GI 2b \n+ GI 2c + GI2d GI1 = GI1a + GI1b \n+ GI1c + GI1d \n \nwhere GI = Gross Income  \n \n \n6.8.4.  The Standardised Approach ( TSA) \n6.8.4.1.  Any Bank can use the Standardised Approach for computation of capital charge of \noperational risk with the prior approval of DBS subject to complying with \nqualifying criteria set out in item 6.8.4. 4. \n6.8.4.2.  A Bank adopting TSA shall classify their business activities into eight business \nlines, namely, corporate finance, trading and sales, payment and settlement, agency \nservices,  asset manag ement, retail brokerage, retail banking  and commercial \nbanking . The definition of these business lines are provided in detail in Table 2 1.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 2, "year": 2014}, "type": "Document"}
{"page_content": "4 \n Table 21  \nMapping of Busi ness Lines  \n \n Level 1  Level 2  Activity Groups  \n1 Corporate \nFinance  Corporate \nFinance  Mergers  and acquisitions, underwriting, \nprivatisations, securitisation, research, debt \n(government, high yield), equity, \nsyndications, Initial Public Offering, \nsecondary private placements.  Government \nFinance  \nMerchant \nBanking  \nAdvisory \nServices  \n2 Trading & \nSales  Sales  Fixed income, equity, foreign exchanges, \ncredit products, funding, own position \nsecurities, lending and repos, brokerage, \ndebt, prime brokerage  and sale of \nGovernment bonds to retail investors.  Market Making  \nProprietary \nPositions  \nTreasury  \n3 Payment and \nSettlement  External Clients  Payments and collections, inter -bank Funds \ntransfer (RTGS, EFT etc.), clearing and \nsettlement.  \n4 Agency \nServices  Custody  Escrow, securities lending (customers) \ncorporate actions, depository services.  \nCorporate \nAgency  Issuer and paying agents.  \nCorporate Trust  Debenture trustee.  \n5 Asset \nManagement  Discretionary \nFund \nManagement  Pooled, segregated,  retail, institutional, \nclosed, open, private equity .  \nNon-\nDiscretionary \nFund \nManagement  Pooled, segregated, retail, institutional, \nclosed, open.  \n6 Retail \nBrokerage  Retail Brokerage  Execution and full service .  \n7 Retail \nBanking  Retail Banking  Retail lending and deposits, banking \nservices, trust and estates.  \nPrivate Banking  Private lending (personal loans) and private  \n(institutional) deposits, banking services, \ntrust and estates, investment advice.  \nCard Services  Merchant/commercial/corporate car ds, \nprivate labels and retail.  \n8 Commercial \nBanking  Commercial \nBanking  Lending including project finance, corporate \nloans, real estate,  trade finance including \nexport and import loans, letter of credit , bills.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 3, "year": 2014}, "type": "Document"}
{"page_content": "5 \n  Level 1  Level 2  Activity Groups  \nof exchange, leasing, factoring  and \nguarantees.  \nDeposits and other repayable funds  \n \n6.8.4.3.  The Bank shall calculate its operational risk capital requirement by taking the three -\nyear average of the simple summation of the operational risk capital requirements \nacross each of the business lines in each year as follows:  \nKTSA = {\u03a3years 1 -3 max[\u03a3(GI1-8 x \u03b21-8),0]}/3  \nWhere:  \na) KTSA     = capital charge for operational risk under TSA  \nb) GI1-8       = annual gross income in a given year, calculated in accordance  \n                      with item 6.8.3.2 and 6.8 .3.4 under BIA, for each of the eight  \n                      business  lines set out in Table 2 1 above  \nc)  \u03b2 1-8        =  fixed beta factor (Table 22 below) as set out by BCBS, relating   \nthe level of required capital to the level of the gross income for  \neach of the eight business lines.  \n \nTable 22 \nBeta (\u03b2)  factors for each business line  \nNo. Business Line  \u03b2 Factors  \n1  Corporate finance (\u03b21)  18%  \n2  Trading and sales (\u03b22)  18%  \n3  Payment and settlement (\u03b23)  18%  \n4  Agency services (\u03b24)  15%  \n5  Asset management (\u03b25)  12%  \n6  Retail brokerage (\u03b26)  12%  \n7  Retail banking(\u03b27)  12%  \n8  Commercial banking(\u03b28)  15%  \n \nd) In any given year, negative capital charges (resulting from negative gross \nincome) in any business line may be set off against positive capital \ncharges in other business lines. However, where the aggregate operational \nrisk cap ital charges across all business lines within a given year is \nnegative, then the operational risk capital charges for the Bank for that", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 4, "year": 2014}, "type": "Document"}
{"page_content": "6 \n year is deemed to be zero (input to the numerator for that year will be \nzero).  \ne) Within each business line, gross income i s a broad indicator that serves as \na proxy for the scale of business operations and thus the likely scale of \noperational risk exposure within each of these business lines.  \nf) Each beta factor serves as a proxy for the industry -wide relationship \nbetween the op erational risk loss experience for a given business line and \nthe aggregate level of gross income for that business line.  \ng) Gross income should be measured for each business line and not for the \nwhole institution, i.e., in commercial banking, the indicator is  the gross \nincome generated in the commercial banking business line. However, the \nsum of the gross income of the eight business lines should be equal to the \ngross income of the Bank.  \n6.8.4.4.  Qualifying criteria  \n6.8.4.4.1.  The Board of Directors and senior management shall a ctively involve in the \noversight of the operational risk management of the Bank. \n6.8.4.4.2.  The Bank shall have an operational risk management system that is \nconceptually sound and is implemented with integrity, and with clear \nresponsibilities assigned to an operat ional risk management function. A Bank \nshall ensure that operational risk management function:  \ni. develops strategies to identify, assess, monitor, control and mitigate \noperational risk;  \nii. codifies bank -level policies and procedures concerning operational risk  \nmanagement and control; and  \niii. designs and implements the operational risk assessment methodology \nand operational risk -reporting system of the Bank . \n6.8.4.4.3.  The Bank shall have sufficient resources in the use of TSA in the major \nbusiness lines as well as the cont rol and audit area .    \n6.8.4.4.4.  The Bank shall have a system for regular reporting of operational exposures, \nincluding material operational losses to management  of the business unit s,", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 5, "year": 2014}, "type": "Document"}
{"page_content": "including material operational losses to management  of the business unit s, \nsenior management and the Board of Directors .   \n6.8.4.4.5.  Operational risk management system of the Bank should be well documented.  \nIt must have a routine in place for ensuring compliance with a documented set", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 5, "year": 2014}, "type": "Document"}
{"page_content": "7 \n of internal policies, controls and procedures concerning the operational risk \nmanagement system, which must include polic ies for the treatment of non -\ncompliance issues . \n6.8.4.4.6.  Operational risk management process and assessment system should be subject \nto the validation and regular independent review  at least annually. These \nreviews must include both the activities of the business units and of the \noperational risk management function . \n6.8.4.4.7.  A Bank shall develop specific policies and have a prudent documented \nprocedure for mapping its current business activities to the appropriate business \nlines in accordance with items a), b), c) and Table 2 1 above . \na) The senior management shall be responsible in developing the mapping \npolicy, which shall be subject to the approval of the Board of Directors. \nThese mapping policies should be reviewed and adjusted in line with new \nbusiness ac tivities as appropriate.  \nb) A Bank shall comply with the following principles when mapping its \nbusiness activities to the appropriate business lines:  \ni. Subject to item ii below, each activity or business of a Bank shall be \nmapped into eight Level 1 business lines (refer Table 21) in a mutually \nexclusive and jointly exhaustive manner.  \nii. Any banking or non -banking activity or product that cannot be readily \nmapped into any business line and which is ancillary to and supports a \nbusiness lin e shall be allocated to the business line it supports. If the \nactivity supports more than one business line, an objective criterion \nshall be used to allocate the annual gross income.  \niii. Any activity which cannot be readily mapped into any business line \nshall be allocated to the business line with the highest beta factor , i.e., \n18%. \niv. Banks may use internal pricing methods to allocate gross income \nbetween business lines provided that total gross income for the Bank \n(as would be recorded under BIA) still equals the sum of gross income", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 6, "year": 2014}, "type": "Document"}
{"page_content": "(as would be recorded under BIA) still equals the sum of gross income \nfor the eight business lines.  \nv. Once an activity has been mapped to a particular business line, the \nactivity shall be mapped to the same business line consistently over \ntime.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 6, "year": 2014}, "type": "Document"}
{"page_content": "8 \n vi. The mapping of activities  into business lines for operational risk \ncapital purposes must be consistent with the definitions of business \nlines used for regulatory capital calculations in other risk categories, \ni.e. credit and market risk.  \nvii. Processes must be in place to define the ma pping of any new activities \nor products.  \nviii. The mapping process shall be subject to regular independent reviews \nby the internal or external auditors of a Bank.  \nc) Supplementary business line mapping guidelines: There are a variety of \nvalid approaches that Bank s can use to map their activities to the eight \nbusiness lines, provided the approach used meets the business line \nmapping principles. The following is a possible approach that could be \nused by a Bank to map its gross income:  \ni. Gross income for retail banking  consists of net interest income on \nloans and advances to retail customers and SMEs treated as retail, plus \nfees related to traditional retail activities, net income from swaps and \nderivatives held to hedge the retail banking book, and income on \npurchased retail receivables. To calculate net interest income for retail \nbanking, a Bank takes the interest earned on its loans and advances to \nretail customers less the weighted average cost of funding of the loans \n(from whatever source \u2013 retail or other deposits) . \nii. Similarly, gross income from commercial banking consists of the net \ninterest income on loans and advances to corporate (plus SMEs treated \nas corporate), interbank and sovereign customers and income on \npurchased corporate receivables, plus fees related to  traditional \ncommercial banking activities including commitments, guarantees, \nbills of exchange, net income (e.g. from coupons and dividends) on \nsecurities held in the banking book, and profits/losses on swaps and \nderivatives held to hedge the commercial b anking book. Again, the \ncalculation on net interest income is based on interest earned on loans", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 7, "year": 2014}, "type": "Document"}
{"page_content": "calculation on net interest income is based on interest earned on loans \nand advances to corporate, interbank and sovereign customers less the \nweighted average of funding for these loans (from whatever source).", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 7, "year": 2014}, "type": "Document"}
{"page_content": "9 \n iii. For trading and sales,  gross income consists of profits/losses on \ninstruments held in the trading book , net of funding cost, plus fees \nfrom wholesale broking.  \niv. For the other five business lines, gross income consists primarily of the \nnet fees/commissions earned in each of these businesses. Payment and \nsettlement consists of fees to cover provision of payment/settlement \nfacilities  for wholesale counterparties.  Asset management  is \nmanagement of assets on behalf of others.  \n \n6.8.5.  The Alternati ve Standardised Approach (ASA)  \n6.8.5.1.  A Bank may, with the prior approval of DBS, use ASA to calculate its operational \nrisk capital requirement.  A Bank shall not use ASA to calculate its operational risk \ncapital requirement unless it complies with all qualifying  criteria set out in item \n6.8.4.2 under TSA. \n6.8.5.2.  Under ASA, the operational risk capital requirement/methodology is the same as \nunder TSA, except for two business lines , retail banking and commercial banking \nbusiness lines. For these business lines , use outstanding amount of loans and \nadvances after multiplying by a fixed factor \u2018m\u2019 (0.035) as the exposure indicator \nwhich replaces gross income.   \n6.8.5.3.   A Bank which has adopted ASA shall not use TSA or BIA without the prior \napproval of DBS.    \n6.8.5.4.  The Ba nk shall calculate operational risk capital requirement under ASA as follows:  \n KASA = {\u03a3years 1 -3 max[\u03a3(GI1-6 x \u03b21-6),0]} /3 + (\u03b27 x m x LAr) + (\u03b28 x m x LAc)          \n Where:  \na) KASA   =   capital charge for operational risk  under  ASA  \nb) GI1-6   = annual gross income in a given year calculated in accordance  \nwith item 6.8.3.2 under BIA, for each of the eight business  \nlines set out in Table 21, except for retail banking and \ncommercial  banking business lines  \nc) \u03b21-8     =   fixed beta factor as set out in Table 22 \nd) m      = 0.035  \ne) LAr   = total outstanding loans and advances of the retail banking           \nbusiness line", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 8, "year": 2014}, "type": "Document"}
{"page_content": "10 \n f) LAc   = total outstanding loans and advances of the commercial  \nbanking busines s line . \n \n6.8.5.5.   For the purposes of the ASA, total outstanding  loans and advances  shall be  as \nfollows:  \na) Retail banking business line  consists of the total on-balance sheet \noutstanding amount of the retail, SMEs treated as retail, residential \nmortgages and purchased retail receivables , credit portfolios . \nb) Commercial business line  consists of the total on-balance sheet \noutst anding amount of the  corporate, sovereign, bank, specialised lending, \nSMEs treated as corporate and purchased corporate receivables , credit \nportfolios  and the book value of securities held in the held-to-maturity  and \navailable -for-sale categories.  \n6.8.5.6.  For the purpose of determining LAr and LAc, a Bank shall take a simple average of \nthe total outstanding loans and adva nces of the relevant business line over the 12 \nmost recent financial quarters without gross of any provisions/ impairment charges.  \n \n6.8.6.  Specific Instruction for completion of Part V  \n6.8.6.1.  Part V(a): Computation of Risk -weighted Amount for Operational Risk  \n6.8.6.1.1.  Gross Income / Loans and Advances  \n (WBRC 11.5. 1.7.0.0) \nGross income:  The value of gross income for each year in respect of BIA \n(WBRC 11.5.1. 1.0.0), business lines of TSA  (WBRC 11.5. 1.2.1.0 to 11.5. 1.2.8.0) \nand business lines of ASA  (WBRC 11.5. 1.3.1.1 to 11.5.1.3.1.6 ) is automatically \nshown  based on the data provided in the Part V (b)  as follows ; \nGross income =  Interest Income  (WBRC 11.5. 2.3.0.0) - Interest Expenses  \n(WBRC 11.5.2.4.0.0) + Non Interest Income (WBRC 11.5.2.5.0.0) (+/-) \nRealised Profits /losses  from the Sale of Securities in the Banking Book \n(WBRC 11.5.2.6.0.0) (+/-) Extraord inary /Irregular Item of Income  (WBRC \n11.5.2.7.0.0) .", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 9, "year": 2014}, "type": "Document"}
{"page_content": "11 \n This is illustrated further by the example below  (Table 2 3). \n \nTable 2 3 \nIllustration of Calculation of Annual Gross Income  \nItem  Amount -\nRs\u2019 000  Amount -\nRs\u2019000 \nInterest Income  200,000  200,000 \nLess: Interest Expense  (100,000)  (100,000)  \nNet Interest Income  100,000  100,000  \nNon-interest Income    \nFee and Commission Income  50,000  50,000  \nDividend Income  30,000  30,000  \nGain on sale of fixed assets  40,000   \nProfit/loss from Trading  20,000  20,000 \nRealised gains/losses from sale of banking book \nsecurities  50,000   \nOther s 10,000  10,000  \nNon-interest Income  200,000  110,000  \nOperating Income  300,000  210,000  \nLess: Operating expenses  (100,000)   \nLess: Allowances  (50,000)   \nLess: Taxes  (30,000)   \nProfit/loss for the period  120,000   \nGross Income  for the purpose of operational \nrisk capital requirement   210,000  \nLoans and Advances:  The values of loans and advances in respect of retail banking \n(WBRC 11.5.1.3.2.1 ) and commercial banking  (WBRC 11.5.1.3. 2.2) should be \nfilled in accordance with the item 6.8.5.6 . \n6.8.6.1.2.  Capital charges  \n (WBRC 11.5.1. 8.0.0) \nThe value of capital charges  for each year in respect of  BIA, TSA and ASA is \ncalculated  as follows;  \n(i) BIA: by multiplying the gross income  for each year by \u03b1 (15%).  \n(ii) TSA: by multiplying the gross income of individual business line for \neach year by \u03b2 assigned  to each business line.  \n(iii) ASA: by multiplying the gross income of individual business line for \neach year by \u03b2 assigned to each business line.  In the case of  retail \nbanking business line and commercial banking business  line, capital", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 10, "year": 2014}, "type": "Document"}
{"page_content": "12 \n charge is calculated by multiplying the yearly average outstanding \namount of loans and advances  by a fixed factor \u2018m\u2019 , i.e., 0.035 with the \nrespective \u03b2 , i.e., 12% and 15 %, respect ively.   \n \n6.8.6.1.3.  Capital Charges for Operational Risk \n (WBRC 11.5. 1.9.0.0) \nThe value of capital charges for operational risk in respect  of BIA , TSA  and ASA  \nis automatically shown as follows ; \n(i) Capital charges for operational risk in respect of each approach is \ncalcu lated by aggregating the capital charges for the 3 years as reported \nunder WBRC 11.5.1. 8.0.0 and 11.5.1. 1.0.0 of BIA, WBRC 11.5.1.8.0.0 \nand 11.5.1.2.0.0 of TSA and WBRC 11.5.1.8.0.0 and 11.5.1.3.0.0 of \nASA by dividing that aggregate by 3 (number of year s). \n(ii) Negative capital charge recorded in a given year /s of the these  3 years , \nshall be considered  as a zero value and not used to offset the positive \ncapital  charge recorded in other year/s.  \n(iii) In the case of BIA, n umber of years referred  to in (i) above, may change \nin accordance with the item 6.8.3.3.  \n6.8.6.1.4.  Risk -weighted Amount for operational risk  \n (WBRC 11.5. 1.10.0.0) \nThe value of risk -weighted amount for operational risk in respect of BIA (WBRC \n11.5. 1.10.1.0), TSA (WBRC 11.5.1. 10.2.0), and ASA (WBRC 11.5.1. 10.3.0) is \nautomatically shown by multiplying the capital charge for operational risk under \nBIA (WBRC 11.5.1. 9.1.0), TSA (WBRC 11.5.1. 9.2.0), and ASA (WBRC \n11.5.1. 9.3.0) by 10, separately.  \n \n6.8.6.2.  Part V(b): Computation of Gross Income Under Oper ational Risk  \n6.8.6.2.1.  The reporting of income and expenses  items referred to in this Part should be in \naccordance with the item 6.8.3.4 .  \n6.8.6.2.2.  WBRC 11.5. 2.1.0.0 is applicable only for BIA , six business lines un der WBRC \n11.5. 2.2.1.0 to 11.5.2.2.6.0 are applicable for both TSA and  ASA and two  \nbusiness lines under WBRC 11.5.2.2.7.0 and 11.5.2.2.8.0 are applicable only for \nTSA.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_02_Schedule_I_0.pdf", "page": 11, "year": 2014}, "type": "Document"}
{"page_content": "Ocoq @rre6 oqctrt5oo@dAO eurrird@ goor @co Ooo4O\n@ordrola ropdur onjrd\nCENTRAT BANK OFSRI TANKA\nGro$unrianeu$ pflanaro*eorLb BankSupervision Department\nR:ef . : 02 I 17 I 600 I 0003 I 002\nTo: Chief Executive Officers of Licensed Commercial Banks\nand Licensed Specialised Banks\nDear Sir/MadamOt June 2014\nCompliance with the requirements imposed under the Banking Act\non valuation of immovable property\nWe write to inform you that the requirements on assessing the present market value of\nimmovable property and the eligibility criteria for valuers as specified in paragraphs (i) and (ii)\nbelow shall be complied in accordance with the requirements of the Banking Act Directions No.I of 2014 on Regulatory Framework on Valuation of Immovable Property of Licensed\nCommercial Banks and Licensed Specialised Banks dated 05 June 2014.\n(D ltem 6.2.2.4.1 - \"Revaluation Reserves\" and Item 6.4.3.1.9 - \"Claims Secured by\nResidential Property\" of the Schedule I of the Banking Act Directions Nos. 9 and 10 of\n2007 onMaintenance of Capital Adequacy Ratio, as applicable.\n(ii) Directions 7(1) (I) (iii) - \"Current external professional valuation report\" of the Banking\nAct Directions Nos. 3 and 4 of 2008 on Classification of Loans and Advances, Income\nRecognition and Provisioning, as applicable.\n2. The Circular dated 19 April 1999 under reference B3169193 on \"Criteria for selection of\nvaluers undertaking the revaluation of fixed assets for the computation of the Capital Adequacy\nRatio\" is hereby revoked.\nYours faithfully\n(Mrs.)TMJYPFernando\nDirector of Bank Supervision\n6 OeD Ot'e, ecto 30, deDrA\u20ac(, oJO!D, 6 ggLb oflg, Odu. 30 etrtrpflugil onapog G6tr@rbq I\n!D.. eE . 5eO, olDr\u20acO Ol, \u20acl \u20acp@ro tri. Ou. Oa). 590, Gangfrl 01, ea)nio6level 6, t{0.30, Janadhlpatfil mawatfia, Colombo 1\nP. 0. 8u.590, Colombo 01, Sri lrnka.\nI sqfi zafircorcss lJ g+tt2477711 fi banksup@cbsl.lk www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_2_Compliance_Requirements_Immovable_Property_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "@ @o\u00a3))^6ursj6\u00bba ID^LU suiEiaSCENTRAL BANK OF SRI LANKA\u00a9cot\u00ae \u00a3f(Ds\u00ae^3 \u00ae^ojba>@\u00aes5EB\u00a9 6uraj\u00a30 (Bu>j)urrrra\u00bb6ii^ ^iaDHroTaaE>\u00abTtb . , Bank Supervision Department IRef: 02/17/550/0016/00117 February 2014To: The Chief Executive Officers of Licensed Commercial BanksDear Sir/MadamDefinition of Liquid Assets under Section 86 of the Banking Act No. 30 of 1988, as AmendedIn terms of section 21 (1) and the definition of \"liquid assets\" in paragraph (g) of section 86 of the Banking Act, No. 30 of 1988, as amended, the Monetary Board has determined that Standing Deposit Facility balances held by Licensed Commercial Banks with the Central Bank of Sri Lanka are liquid assets.2. Licensed commercial banks shall report the eligible value of Standing Deposit Facility under code number 4.1.2.3.0.0 of the monthly web based return oh Statutory Liquid Assets Ratio for Domestic Banking Unit (BSD-MF-04-LD).Yours faithfully(Mrs.) T M J Y P FernandoDirector of Bank Supervision\n6 Den Qota 30, tfawSeS \u00a9icka, 6 ^ib lorr^, gjso. 30 ir>rT6ii\u00a3\u00ab>g> \u00a9snctpifiq 1oc.se. 590,' soig\u00ae 01, \u00a9GOJD Qu. geo. 590, Qffirrqpibq 01,( 9411 2477100/659 9411 2477711 \u2014----------------  banksup@cbsl.lk--------------------------------Level 6, No. 30, Janadhipathi Mawatha, Colombo 1 P. 0. Box. 590, Colombo 01, Sri Lanka.www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Circular_Definition_of_Liquid_Assets_LCBs_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "ffiF,#fli;r*ffi\nOaoag qdlp6 sgcmt rDs@dc2o orrirdl GroSunnorop pflanorod;e6rri Bank Supervlsion Depailment\nRef , 02 I 17 I 550/00 1 4/00 Il). August 2014\nTo: Chief Executive Officers of ticensed Commercial Banks\nand Licensed Specialised Banks\nDear SirAvladam\nIntroduction of New'Returns under the Web Based Off-site Surveillance System\nWe refer to our letter dated 22 November 2013 on the above and write to inform you that\nintroduction of new annual web returns, viz. Statement of Financial Position (BSD-AF-01-FP)\nand Statement of Comprehensive Income (BSD-AF-02-CI) have been completed successfully.\nWe therefore, request you to submit annual audited data through the above web retums in future.\nAs the secondary step, it has been decided to introduce the following web returns on a\ntest basis.\na) BSD-MF-01-FP: Statement of Financial Position\nb) BSD-MF-02-CI: Statement of Comprehensive Income\nTo facilitate smooth migration all Licensed Commercial Banks and Licensed Specialised\nBanks are kindly requested to submit data through above returns on quarterly basis from the end\nof 2\"d quarter of 2014 until further notice.\nAny clarifications on this matter may be sought from Ms. Sureka Ketawala, Senior\nAssistant Director on TeI:2398602 or email: sureka@cbsl.lk and Mr. Jayod Danthanaxayana,\nAssistant Director on Tel:2398551 or email: iayod@,cbs1.lk\nYours faithfully\n#flrz?(Mrs.) TMJYPFernando\nDirector of Bank Supervision\n6 OrD OrD\u20acr qeo 3o, dr'racr(i gro(',\nos. @E ,5gO, slorgo Ol, \u20ac Creoto6 egrb DiTrg, eeu. 30 strtrg6lupil ono$og Gen196q !\np. Ou. Qar.590, Gengrttt 01, en)tdlosL6vel 6, ilo.30, Jaoadhlp.ttl ilauaula, Colombo I\nP , 0. BoL 590, Colombo 01, Sd lrnka.\nlyy-7ct7-1e-019e:H.'\"y:!1r1..!:.#*,.-11$yp-9.:b.r+ @ www.cbsl.Eov.lk", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_circular_Introduction_New_Returns_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "@ @o\u00a33J \u00a9\u00a9 \u00a950^\u00a9||i @60FBJ\u00abD\u00ae LD^UJ edfEJflQCENTRAL BANK OF SRI LANKAsunM CiorbuirfrsiDsu^ ^eoGouTSx^erTLd Bank Supervision DepartmentRef. No.: 02/17/800/0014/02September 2014to: Chief Executive Officers of all Licensed Commercial Banksand Licensed Specialised BanksInvestment Fund AccountWe refer to the Circular dated 31 July 2014 on the above subject and write to inform you that paragraph 2 (iii) (b) of the above Circular is hereby repealed.Yours faithfully,(Mrs.) T M J Y P FernandoDirector of Bank Supervision\n6 Sa Qoza 30, aantfesS \u00a93353, 6 inrrt^, @so. 30 ^ssnr^lu^l Qarr^tbLi 1 Level 6, No. 30Janadhipathi Mawatha, Colombo 1as. . 590, \u00ae55>3es) 01, \u00a7 \u00a905333 Qu. @60.590, Qairoptby 61, @6urH6\u00aea P.O.Box.590,Colombo 01, Sri Lanka.( 94 11 2477100/659 (^ 94 11 2477711 banksup@cbsl.lk www.cbsl.gov.lk[rnraniimn", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_circular_Investment_Fund Account_revised_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "\u00a7 \u00a9ozsn \u00a920|I LD^^LU 6UI5J50' CENTRAL BANK OF SRI LANKAS)CQ^ euniiaS <SLDfburriT6iD&u^ \u00a396ft&roT%<%6nLb Bank Supervision DepartmentRef: 02/17/402/0073/00223 December 2014To: Chief Executive Officers of Licensed Commercial BanksDear Sir/MadamEnhancement of Minimum Capital Requirement of BanksWe refer to our Circular No. 02/17/402/0073/002 dated 29 July 2010 on the above subject and write to inform you that as announced in the Master Plan on Consolidation of the Financial Sector dated 17 January 2014, and in terms of Section 19(3) of the Banking Act, the Monetary Board of the Central Bank of Sri Lanka has decided to require all licensed commercial banks incorporated or established within Sri Lanka to increase their capital to Rs. 10 Billion commencing 01 January 2016, in view of a strong and dynamic banking sector.2. Capital for this purpose shall mean the Core Capital as defined in terms of item No. 6.2.2.2 in the Guidelines that were annexed as Schedule I to the Banking Act Direction No. 9 of 2007 dated 26 December 2007 on Maintenance of Capital Adequacy Ratio.3. All banks are required to take appropriate action to comply with the above on a timely basis.(Mrs.) T M J Y P FernandoDirector of Bank Supervision\n6 a\u00ae CM\u00ae 30, eSewScHStSK . <3\u00a9 . 590, \u00a9OJg\u00ae 01, \u00a7 \u00a9oSD\u00a96 ^60. 30 1 Level 6, No. 30, Janadhipathi Mawatha, Colombo 1Qu. geo. 590, Gtorrtipibq 01, P. 0. Box. 590, Colombo 01, Sri Lanka.Yours faithfully", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_circular_Minimum_Capital_Requirement_LCBs_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "\u00a96t)r&J65)\u00ae LD^^LU GUIhiaSCENTRAL BANK OF SRI LANKAsufBiafl GLprburrrreiDQj^ cQsDSMkBasnLb Bank Supervision DepartmentRef: 02/17/402/0073/0023 December 2014To: Chief Executive Officers of Licensed Specialised BanksDear Sir/Madam.Enhancement of Minimum Capital Requirement of BanksWe refer to our Circular No. 02/17/402/0073/002 dated 29 July 2010 on the above subject and write to inform you that as announced in the Master Plan on Consolidation of the Financial Sector dated 17 January 2014, and in terms of Section 76G of the Banking Act, the Monetary Board of the Central Bank of Sri Lanka has decided to require all licensed specialised banks to increase their capital to Rs. 5 Billion commencing 01 January 2016, in view of a strong and dynamic banking sector.2. Capital for this purpose shall mean the Core Capital as defined in terms of item No. 6.2.2.2 in the Guidelines that were annexed as Schedule I to the Banking Act Direction No. 10 of 2007 dated 26 December 2007 on Maintenance of Capital Adequacy Ratio.3. All banks are required to take appropriate action to comply with the above on a timely basis.Yours faithfully,(Mrs.) T M J Y P FernandoDirector of Bank Supervision\n6 ffoca 30, efeojSts\u00aeos . ee. 500, \u00a9sajg\u00a9 01, g* IPl , .6^b tctn^, \u00a9so. 30 Qatrcipihq 1Qu. \u00a960. 590, Q&rrQptbLi 01, \u00a9GOraaMs ----------------  -_______________________________ \u0000___Level 6, No. 30, Janadhipathi Mawatha, Colombo 1P. 0. Box. 590, Colombo 01, Sri Lanka. fa Cfmi Ek", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_circular_Minimum_Capital_Requirement_LSBs_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "Directions issued by the Monetary Board of the Central Bank of Sri Lanka under sections\n46(1) and 76(JX1) of the Banking Act, No. 30 of 1988, as amended.\n4i^ fuJu\nNivard Ajith Leslie Cabraal\nChairman\nMonetary Board\nCentral Bank of Sri Lanka\nColombo\n-( June 2014\nBANKING ACT DIRECTIONS NO. 1 OF 2014\nREGULATORY FRAMEWORK ON VALUATION OF IMMOVABLE PROPERTY OF\nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nIn the exercise of the powers conferred by Sections 46(1) and 76(JX1) of the Banking Act,\nNo. 30 of 1988, last amended by the Banking Act, No. 46 of 2006, the Monetary Board\nhereby issues Directions No. 1 of 2014 on the Regulatory Framework on Valuation of\nImmovable Property of Licensed Commercial Banks (LCBs) and Licensed Specialised Banks\n(LSBs).\nIn terms of sections 46( I ) and 76(JX I ) of the Banking Act, in order\nto ensure the soundness of the banking system, the Monetary\nBoard is empowered to issue Directions to all or any LCB and\nLSB, respectively, regarding the manner in which any aspect of the\nbusiness ofsuch banks is to be conducted.\nEvery LCB and LSB shall ensure that appropriate board approved\nprudent policies and procedures on valuation of immovable\nproperty are in place. In the case of banks incorporated outside Sri\nLanka, the 'Board of Directors' shall mean the Head Office or the\nRegional Office that supervises the respective bank.\nIn establishing policies and procedures on valuation of immovable\nproperty as referred to in Direction2.l above, every LCB and LSB\nshall consider the following minimum requirements and shall1. Empowerment\nunder the\nBanking Act\n2. Establishment 2.1\nand\nimplementation\nof a policy on\nvaluation of\nimmovable\npropertyt.l\n2.2", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_direction_1_Regulatory_Framework_ImmovableProperty_LCBs_LSBs-compressed_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "b)\nc)comply with all requirements set out by any other regulator or\ninstitution including the Securities & Exchange Commission of\nSri Lanka and the Institute of Chartered Accountants of Sri Lanka.\na) Responsibility of the Board of Directors, senior\nmanagement and other relevant committees, o.9., Credit\nCommittee, on the formulation and periodical review of\nthe policy.\nAppointment of panels of valuers, both internal and\nexternal.\nProcedures to identify and select qualified valuers for the\nappointment of panel(s) of valuers, subject to Direction 5\nbelow.\nProcedures to assess the reasonableness of the market\nvalue of an immovable property derived from the\nvaluation model and, the reliability and the accuracy of\ndata used for such valuation.\nThreshold for internal and extemal valuation reports\nobtained/to be obtained in respect of immovable property\nagainst all loans and advances, as the case may be, subject\nto Direction 6 below.\nFrequency of valuation, subject to Direction 7 below.\nValuation criteria for internal valuations.\nIndependence and Disclosure, subject to Direction 8\nbelow.\nNotification to borrowers: The loan agreement shall\ninclude detailed specifications of the manner and\nfrequency of revaluation together with a detailed\ndescription of the immovable property obtained as\ncollateral.\nProcedure of payment and fee structure for external\nvaluers.d)\ne)\n0\ns)\nh)\ni)\ni)", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_direction_1_Regulatory_Framework_ImmovableProperty_LCBs_LSBs-compressed_0.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "3. Immovable\nProperty\n4. Purposes\n5. Eligibilify\ncriteria for\nvaluers3.1For the purposes of these Directions, immovable property shall\nmean any land, land and building or any rights therein which are\nacquired or held for the purposes including the following:\na) land, and land and building which are obtained as\ncollateral against any accommodation extended by any\nbank including foreclosed properties.\nb) land, and land and building which are purchased or\nacquired for the purpose of conducting banking business\nby any bank which are measured and disclosed in\naccordance with Sri Lanka Accounting Standards (SLAS),\ne.g., LKAS l6: Property, Plant and Equipment.\nc) land, and land and building which are purchased or\nacquired as bank's investments, which are measured and\ndisclosed in accordance with SLAS, e.g., LKAS 40:\nInvestment Property.\nImmovable property valuation shall be made for the following\npurposes.\na) To meet the regulatory requirements imposed in terms of\nthe Banking Act, No. 30 of 1988.\nb) To value immovable property for financial reporting as\nrequired under SLAS.\nc) Other on-going business requirements of banks which\nnecessitate valuation of immovable property.\nEvery bank shall ensure that:\na) eligibility criteria for valuers are set out as follows.\nA. A corporate member of the Institute of Valuers of Sri\nLanka (IVSL) who shallbe:\nI. A Fellow member; or\nII. A Graduate member with 5 years experience in\nsuch grade of membership; or\nIII. A Graduate member who has been an\nAssociate member at the time of his admission\nto the Graduate Membership, with number of\n34.1\n5.1", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_direction_1_Regulatory_Framework_ImmovableProperty_LCBs_LSBs-compressed_0.pdf", "page": 2, "year": 2014}, "type": "Document"}
{"page_content": "6. Threshold for\ninternal and\nexternal\nvaluation\nreports\n7. Frequency of\nvaluation6.1\n6.2\n7.1years of experience equivalent to the period\nthat the member would have taken to complete\nl0 years in the Associate Membership; or\nIV. An Associate Member with 10 years\nexperience in such grade of membership.\nB. A Fellow member of the Royal Institution of\nChartered Surveyors of the United Kingdom (RICS).\nC. Any other member of RICS with 3 years experience\nin such grade of membership.\nb) valuers eligible as per the qualifications set out in Direction\n5.1 a) above acquire Continuous Professional Development\nas approved/recommended by the respective professional\nbody; and\nc) I January 2015 onwards, internal valuation of immovable\nproperty is undertaken by valuers who satisfy the eligibility\ncriteria in Directions 5.1 a) and b) above.\nIn respect of immovable property obtained/to be obtained as\ncollaterals against all loans and advances, as the case may be\nexcluding non-performing loans and advances, banks shall\nestablish an appropriate threshold for internal and extemal\nvaluation as per the bank's policy.\nThe threshold for internal valuation reports in respect of non-\nperforming loans, shall be in accordance with the requirements of\nthe Banking Act Directions Nos. 3 and 4 of 2008 on Classification\nof Loans and Advances, Income Recognition and Provisioning,\ni.e., facility/ies where the capital outstanding amount is less than\nRs. 5,000,000 or 0.1% of the bank's capital base, whichever is\nless.\nThe frequency of valuation as referred to in Direction 2.2 (f) above\nshall be as follows.\na) Valuation of immovable property obtained as collateral\nagainst loans and advances which are non-performing shall\nbe made at the frequency as required under the Banking", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_direction_1_Regulatory_Framework_ImmovableProperty_LCBs_LSBs-compressed_0.pdf", "page": 3, "year": 2014}, "type": "Document"}
{"page_content": "8.Independence\nand DisclosureAct Directions Nos. 3 and 4 of 2008 on Classification of\nLoans and Advances, Income Recognition and\nProvisioning, i.e., in respect of credit facilities granted\nagainst residential property which is occupied by the\nborrower for residential purposes: a report that is not more\nthan four years old and all other credit facilities: a report\nthat is not more than three years old.\nb) Revaluation of immovable property as referred to in\nDirections 3.1 b) and c) above shall be made:\nA. annually depending on any significant and volatile\nchanges in fair value of such immovable property\nare experienced; or\nB. at least once in every three years.\n8.1 Every bank shall ensure the independence ofexternal valuers and\nthat disclosures are made in the bank's Annual Report or in the\nAudited Financial Statements as set out below.\na) An extemal valuer shall not be a related party in terms of\nthe Direction 3(7) (i) of the Banking Act Direction Nos. I I\nand 12 of 2007 on Corporate Governance for LCBs and\nLSBs in Sri Lanka, to avoid any conflict of interest that\nmay arise from such engagement.\nb) The Board of Directors/senior management shall ensure\nthat disclosures are made in the bank's Annual Report or in\nthe Audited Financial Statements on the valuation policy,\nmeasurement and recognition of immovable property,\nunder disclosures to be made in terms of paragraph 1.3 of\nthe Specified Format for the Preparation of Annual\nFinancial Statements of Licensed Commercial Banks and\nLicensed Specialised Banks issued along with Circular\n' dated 1 1.02.2013 under reference 021171900100011004.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_direction_1_Regulatory_Framework_ImmovableProperty_LCBs_LSBs-compressed_0.pdf", "page": 4, "year": 2014}, "type": "Document"}
{"page_content": "Directions issued by the Monetary Board in terms of Section 46(1) of the Banking Act, No.30 of 1988, as amended. KBDWASilvaSenior Deputy Governor Central Bank of Sri LankaColombo26 June 2014BANKING ACT DIRECTIONS NO. 2 OF 2014AMENDMENT TO BANKING ACT DIRECTIONS NO. 7 OF 2007 ONMAXIMUM AMOUNT OF ACCOMMODATIONIn the exercise of the powers conferred by Section 46(1) of the Banking Act, No. 30 of i 988, last amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues following Directions amending Banking Act Directions No. 7 of 2007 dated 01 November 2007 issued by the Monetary Board of the Central Bank of Sri Lanka. These Directions may be cited as the Banking Act Directions No. 2 of 2014.1. The following new Direction shall replace Direction 5 of the Banking Act Directions No. 7 of 2007 dated 01 November 2007.5 (1) In the case of accommodation granted as at any given date to anycategory of customers referred to in paragraphs 2(i) and 2(ii) above in excess of 15 per centum of the capital base of the licensed commercial bank, the sum total of the outstanding amount of accommodation granted to such customers shall not exceed 55 per centum of the total outstanding amount of accommodation granted by the licensed commercial bank to all customers as at the end of the immediately preceding month.(2) The following accommodations shall be excluded from the computation of Direction 5(1) above.(i) Accommodation granted to the Government of Sri Lanka (GOSL).(ii) Accommodation granted in excess of the maximum limits specified under Directions 3 and 4 above with the approval of the Monetary", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Direction_2_LCBs_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "Board in terms of Direction 6 below.(iii) Accommodation granted under Direction 7(iii) below.2. The following new Directions shall be included immediately after Direction 7(ii) of the Banking Act Directions No. 7 of 2007 dated 01 November 2007.(iii) Accommodation granted by a licensed commercial bank incorporated outside Sri Lanka if such accommodation is funded directly through funds raised from its Head Office and/or any branch of such bank operating outside Sri Lanka.\n2", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Direction_2_LCBs_0.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "Directions issued by the Monetary Board in terms of Section 76J(1) of the Banking Act, No.30 of 1988, as amended. BDWASilvaSenior Deputy Governor Central Bank of Sri LankaColombo26 June 2014BANKING ACT DIRECTIONS NO. 3 OF 2014AMENDMENT TO BANKING ACT DIRECTIONS NO. 8 OF 2007 ONMAXIMUM AMOUNT OF ACCOMMODATIONIn the exercise of the powers conferred by Section 76J(1) of the Banking Act, No. 30 of 1988, last amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues following Directions amending Banking Act Directions No. 8 of 2007 dated 01 November 2007 issued by the Monetary Board of the Central Bank of Sri Lanka. These Directions may be cited as the Banking Act Directions No. 3 of 2014.1. The following new Direction shall replace Direction 5 of the Banking Act Directions No. 8 of 2007 dated 01 November 2007.5 (1) In the case of accommodation granted as at any given date to anycategory of customers referred to in paragraphs 2(i) and 2(ii) above in excess of 15 per centum of the capital base of the licensed specialised bank, the sum total of the outstanding amount of accommodation granted to such customers shall not exceed 55 per centum of the total outstanding amount of accommodation granted by the licensed specialised bank to all customers as at the end of the immediately preceding month.(2) The following accommodations shall be excluded from the computation of Direction 5(1) above.(i) Accommodation granted to the Government of Sri Lanka (GOSL).(ii) Accommodation granted in excess of the maximum limits specified under Directions 3 and 4 above with the approval of the Monetary Board in terms of Direction 6 below.", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Direction_3_LSBs_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "Directions issued by the Monetary Board of the Central Bank of Sri Lanka under Sections 46(1) and 76(J)( 1) of the Banking Act, No. 30 of 1988, as amended.BDWA SilvaSenior Deputy Governor Central Bank of Sri LankaColomboJune 2014BANKING ACT DIRECTIONS NO. 4 OF 2014 AMENDMENT TO DIRECTIONS ON INTEGRATED RISK MANAGEMENT FRAMEWORK FOR LICENSED BANKSIn the exercise of the powers conferred by Sections 46(1) and 76(f)(1) of the Banking Act, No. 30 of 1988, last amended by the Banking Act, No. 46 of 2006, the Monetary Board hereby issues the following amendment to the Guidelines annexed to the Banking Act Direction No. 7 of 2011 dated 05 October 2011 on Integrated Risk Management Framework for Licensed Banks to implement the Baseline Security Standard for Information Security Management.1. The following paragraph shall be inserted immediately after paragraph 2.8 of Part D of the Guidelines annexed to the Banking Act Directions No. 7 of 2011 dated 05 October 2011 on Integrated Risk Management Framework for Licensed Banks.\u201c2.9 Information Security Management -(a) With effect from 01 July 2015, all banks should implement the Baseline Security Standard for Information Security Management as per Attachment 4 hereto.1", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Direction_4_Amendment_IRM_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "(b) The Baseline Security Standard establishes minimum acceptable security standards for banks and standardizes the information security policies of such banks. However, each bank should ensure adoption of such standards relative to the size, nature of business activities and complexity of respective bank.(c) The BOD should ensure compliance with the Baseline Security Standard for Information Security Management.\u201d\n2", "metadata": {"source": "data\\CBSL\\2014\\bsd_2014_Direction_4_Amendment_IRM_0.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "^601516\u00a9* LD^llU 6UI5J^ICENTRAL BANK OF SRI LANKAScosa e^tajtoe^afajc) GiDpunfran\u00ae15 ^6iDw%\u00ab6nib Bank Supervision DepartmentRef. No.: 02/17/800/0014/0231 July 2014To: Chief Executive Officers of all Licensed Commercial Banksand Licensed Specialised BanksInvestment Fund AccountWe refer to the Guidelines dated 29 April 2011 and 24 April 2013 issued on the above subject and write to inform you that operations of the Investment Fund Account (IF A) will cease with effect from 1 October 2014.2. Accordingly, following clarifications are made with respect to the Guidelines on the Operations of IF A.(i) Guideline 2 - Credits to IFA(a) The requirement to transfer an amount equal to 8 per cent of the profits calculated for the payment of value added tax (VAT) on financial services to IFA expired on 31 December 2013. Accordingly, the last payment of VAT was due on 20 January 2014.(b) The requirement to transfer an amount equal to 5 per cent of the profit before tax calculated for income tax purposes on dates specified in Section 113 of the Inland Revenue Act to IFA in the year of assessment 2013/2014 expired on 31 March 2014. The final tax payment on income tax for the year of assessment 2013/2014 will be due on 30 September 2014.(ii) Guideline 4.3 - Disclosures and Reporting to Central Bank of Sri Lanka(a) Disclosure requirements in financial statements and the requirement to furnish a return on the utilisation of IFA shall be applicable until 30 September 2014.(iii) Guideline 4.4 - Treatment of Taxation(a) Any adjustments arising after 1 July 2014 due to finalising of tax payments of prior periods can be adjusted to IFA until 30 September 2014.(b) Interest income earned from any loans and advances granted from IFA will not be exempted from income tax after 1 July 2014 onwards.(Contd.)6 30, dsDjSes\u00a9 6 ^ib win?, geo. 30 1 Level 6, No. 30, Janadhrpatii Mawatiia, Colombo 1OK . \u00a9u. 590, eoDgs) Ol, \u00a7 \u00a9ocs>x) Qu. 590, GtoiQpwq 01, @6OIEWDS P. 0. Box 590, Colombo 01, Sri Lanka.( 9411", "metadata": {"source": "data\\CBSL\\2014\\bsd_Circular_Investment_Fund_Account_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "eoDgs) Ol, \u00a7 \u00a9ocs>x) Qu. 590, GtoiQpwq 01, @6OIEWDS P. 0. Box 590, Colombo 01, Sri Lanka.( 9411 2477100/659 6^ 94 11 2477711 banksup@cbsl.lk www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2014\\bsd_Circular_Investment_Fund_Account_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "3. Other(i) Capital Funds Recovered through Loan Repayments and Maturity Proceeds of Long-term Government Securitiesa) With effect from 1 July 2014, Guidelines on the operations of IF A shall not be applicable for the utilisation of capital funds recovered through loan repayments and maturity proceeds of long-term Government securities.b) Accordingly, banks may reduce an amount equivalent to the capital funds recovered from sources mentioned in paragraph 3(i)(a) above from IFA.(ii) Cessation of the operations of IFAa) The operations of IFA will cease with effect from 1 October 2014. Accordingly, banks shall transfer the remaining balance in IFA to retained earnings through the Statement of Changes in Equity.Yours faithfully,(Mrs.) T M J Y P FernandoDirector of Bank Supervision\n2", "metadata": {"source": "data\\CBSL\\2014\\bsd_Circular_Investment_Fund_Account_0.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "@ \u00a985)CENTRAL BANK OF SRI LANKA>\neurbi^! (3iDfDuniT6ff)6u^ ^16\u00a9655r<s\u00ae6nibBank Supervision DepartmentRef: 02/17/600/002/00116 October 2014To: Chief Executive Officers of Licensed Commercial BanksDear Sir/Madam,Recovery of Accommodation to ExportersThe Central Bank of Sri Lanka having considered the improvement in the country\u2019s external sector stability with increased earnings from exports and strengthened external reserves with the improvement in the Balance of Payment has decided to withdraw the Circulars dated 22 January 2001, 29 January 2001, 16 February 2001 and 30 March 2001 on Recovery of Accommodation to Exporters, with effect from 03 October 2014.Accordingly, you are requested to take necessary measures to comply with the above.Yours faithfully.(Mrs) T M J Y P FernandoDirector of Bank Supervision\nG tfom 30, daaSoS \u00a9JSO, 01a*, \u00a9ea. 590, \u00a9cn^S) O1T \u00a7 \u00a9OSDJD.6 imj, Hies. 30, gg\u00aeTTT^LJ^ G\u00aer(iptbL| 01 Level 6, No, 30, Janadliipathi Mawatha, Colombo 01Gu. \u00ae|6D. 590, G&irftgtbq 01,P 0. Box. 590, Colombo 01, Sri Lanka.^9411 2477100/659 ------------ 9411 2477711 ------------------  banksup@cbsl.lk --------------------- 0^ www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2014\\bsd_circular_LCBs_Recovery_of_Accom_to_Exporters_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "6 Qohc adcncr}$, al@cdOcQ eiade$oC 0in0 er0c0\ngE Eooee\neoro 1891/11 - 2Ol4 oqesl@Ob @ar 02 O1E qoeodlOclc - 2Ot4.t2.OZ\n(d<5ooj Oeca8a 98{o adar gQ)\nI Or8 ozslcOes: (I) OrB oeSqco - esc@ozr)s\n@ g\"nc @aD OloeoO SoOqar\n$q6! EE er:ror\n@22 alE q6zocdco 9) 9SC EE or:ooJ 329 oozrlEc.: csoooJ gQC @dogcs EBaJ er:op earl eq odrqgcS.\nEOoO q6?rJ oeti\u20ac otDdcC\nesoca:E\n9EC @doec:\n2014 oarcOl@Ab @as 28 O1E Qol\notocg@ Qcs.\n@ goeoc olaJoq dde<6 eoao gO6gorc qcOcdro qorCdanc 6@ca 8@aq odc29c8\n2010 goto I q6a @ gozoc orlaloog ddee6 oq:CeSzrrc p9o: 8@Aq odc2gcS teoosaCo?rcs\n1.1 o@@ odqgcE, 2014 qoa 1 qdzs: @ eo?oo oll?r}e5e dded oao gO66oc qcOcdzo oc.:Ce5r::c p@c,s r. o1(at6o\n8@Aq odr2gc8 cepoOrrS eolQzrlEo: gqo.\n2.1 2OlO ee1eJo>1@ab @$ 28 qE\\E qoa 1673/11 qdot gE Soaea aTaA e:gcs @Ert g8{O zsda eE 2010 2. g\u20ac- ooq6r8\nqoo I qda @ gozsrc rryr3oq dzslec6 ocsCdr:c p@<.: 8@aq odqgc8 eoa o6Q tsoo,c2Ca2rcs oO:- tsoo6idztq3\n2.2 9 a7E odrpgcS<,e, OE 9.6 o&qce gOoI E8o@:d eeg eeol eg oOpOO ee?rot ql?sJoozr oSqcs qco{ct\nE6o@elJ eeoo(,)Co2r6 omob:\n\"9.6 geoo qdO::: gq qczscdce:r} qpO coO:lce rodr: gq gloq ddEo olrrJeq 9@06<: @or SzsJ\no1:rJoqodloo4O oco8cs gq eocEgS<r 9EC ggcctcs o18cs6f 300,000d Q oeoC gggzo@ esEo\n5o{oa OE@ce otla}or2 ce@O:rjOoconJ O?r OO d18cs5f 300,000 nO re@ca g@c6ced Q 6,o8@ceoO\ncsOzrJ o8.\"\n3.1 o@@ eoo6.62Co?rco 2015 e5olocg @ts 01 O1E Qr:8O Ogco}@o Ecs gqce.\nt2 - 56'73. dgcoi@n Oar\nQaro:\no@@ qE Sooae oTaO epce www.documents.gov.lk oa? qaEoaal acaa ag, a:7a.", "metadata": {"source": "data\\CBSL\\2014\\bsd_gazette_SriLanka_Deposit_Insurance_LiquiditySupportScheme_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "0 f,ohc Adrnd$n t.r0rdOrfl durddoC cfi00 CI000\nepE Eoclae\n$ornrm ai ,lerlpn,r,rGsne6rtle,i g+, ttn ctlii1nnunu ugfrllna\ngdffi*rlan6{tgl\nE.?D l89l/II - zor+ oqarl@Ob @at 02 O1E qoodlOcqc _ 2014.12.02\nlasl/tt 4m @eulistb - 2014 qLh,q666rG, 66otbui nngb 024p gts$) Gi,eoitaLnLit+,fltpeoLn\n(e! a s n N 5!i5)6fi :t1 gt s n q ggt tan A ry a fi) & su u tr g1 )\nuggt I : Og n@61 (I) - Gtungl\n@ats uaa . p 8, at ru fitulleir gt 6trfi ggab e,otr\npncarw efl$,i e t-L-b\npnotuw aIt$t& e r.trr,(.g4$$twnwLn 422) Afloq szzgl6(ir E1p pneowwn er,auwnauGl,fiG;,a,n6irr;lr]uLLg1qg;ugal)$ts6;h.\nfiew L- et fi i Gl oo em afl a u gr n eb\nSeaaatg\nGsnlgi:tq, zo14,D}t6'tthuq 28. pnevorutieau\n@arriooaaocuuq&anuqgl$laPglk$tqd$paircrl,nzgafl$$tL-.r-ggrwrgeft$ta,;tt zoloqbq*n+^n igrir@cr-r&a,\n@atfuarr,s clner u q,* an u L1 91 $$ $tt_t_ ggru6e{l$taq&anr,u $t1g$gtb\n1. 1 @bs gAgagnssoh 20144tb q\"ar+*n lgm @our;;s @ourdrooe eaetLuqe, e,nu]E1gt .pUfi 1. o@gg1turiLa.\n$]U611$g@ir<ri:)a o 5a1]$ $ttt @gtrigaft$tsoir or oor a@$g1&sn ru)L u t Geuoah@b.\n2.1 2o1o $tb +6bji,@) de$Gtgnui nngtb 2s4p $rs$tfiLuutr lar s/ I l4x @ard;o sygt aIG+r z. u)d g!(caittg\naLg$Snnooru u!$tflal+r'ufla;GtanerflufLuutt 20loqlb q:6a6ngeur l4ib@arts,@er,r.,ieasrls>erutqS fl\u20ac#*\"*an ut1 Elgtg gtLL g(gta@6ftds,eh AeriraLg5nt gt gtg5gguu@dan pg1 :-\n2.2 @cgn;tre6rn6t s @at upgs s.a $se'uur@, =glbs @agdrg6fi6t a6fi6)rt!j,n ,b6, g:ak arfi$@\nGteLtuwuu@6laipg1:\n\"9.6 aaa>Luunffitl g!ttj6)r@a@Gteg1$guu@th prtr.rt@$Gi,qjn6d,i, Joo,oao QjunaqagGafiu@tjtureS$r,v,4 sa\"L4wGtLarfusnuqE1$AetiLwuui , GtSneas 3AO,AOO<7un cle;-s,tg gpStw\n'J:f;;X*:y;E:myJ!:*##5\":#:trg,;eaaer''rip'slvuu*,=uf ,a.:\n3.1 @bg$gASSas;ir zo1s,s66le,rft t4pgtegt&e$trybg) D6aL(g6apsrgetL6gevnget;Geuer&@m. *\u20acfbyffr*\"\n1 2- 567\n@@tueas 44 tl + n ns -94 & a;g $tourc,co ssar $$) fi u $tuAastLGtu fipg .\n@a, -qd arG\u20acL ililb$aq@n@u www.documents.gov.lk ataigltb @mmwggqgd^n@pg u6)atpi6tn 6\u20acou (4tq uliIA", "metadata": {"source": "data\\CBSL\\2014\\bsd_gazette_SriLanka_Deposit_Insurance_LiquiditySupportScheme_0.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "0 gohc Adrnrul$n t^r@rd0( dnddod finO 0000\ngE Eooee\nThe Gazette of the Democratic SocialistRepuhlic of SriLanka\nBXTRAORDINARY\nq\"zo 1891/11 - 2Ol4 oqeel@Ob @a: 02 O1E qroeodlOcqc - 2Ot4.12.O2\nNo.l89l/11 - TUESDAY DECEMBER 02,2014\n(Published by Authority)\nPART I : SECTION (I) - GENERAL\nCentral Bank of Sri Lanka Notices\nTTIE MONETARY LAWACT\nREGULATIONS made by the Monetary Board under Section 32E ofthe Monetary Law Act, (Chapter 422).\nNrvnno A.lrru Lnslrn CasRAar-\nChairman\nMonetary Board\nColombo, 28 November 2014.\nSri Lanka Deposit fnsurance and Liquidity Support Scheme Regulations\nAmendment to the Sri Lanka Deposit Insurance Scheme Regulations, No. I of 2010\nLI These Regulations shall be cited as Sri Lanka Deposit Insurance and Liquidity Support Scheme l. citation\nRegulations, No. 1 of 2014.\n2.1 Sir Lanka Deposit Insurance Scheme Regulations, No. 1 of 2010 published in Gazette 2. Amendment\nExtraordinaryNo. 167311 I of 28 September,20l0 is hereby amended as follows :- to the principal\nreg u la tion\n2.2 ln regulation 9 thereof by the repeal ofparagraph 9.6 ofthat regulation and the substitution\nofthe following paragraph :\n*9.6 The amount of compensation payable to a depositor shall be limited to the total insured\ndeposits computed as above, subject to a maximum of Rs. 300,000 or its equivalent in\nthe case offoreign currency deposits, ifsuch amount exceeds Rs. 300,000.\"\n3.1 This amendment shall come into effect ftom 0l January 2015.3. Effective\ndate\n12-s67\nPRINTED AT THE DEPARTMENT OF GOVERNMENT PRINTING, SRI LANKA, I AThis Gazette Extraordinary can be downloaded from www.documents.gov.lk", "metadata": {"source": "data\\CBSL\\2014\\bsd_gazette_SriLanka_Deposit_Insurance_LiquiditySupportScheme_0.pdf", "page": 2, "year": 2014}, "type": "Document"}
{"page_content": "Guidelines  on Stress Testing  \nof Licensed Commercial Banks and  \nLicensed Specialised  Banks  \n \n \n \n   \n \n \n \n \n \n \n \nBank Supervision Department  \nSeptember  2014", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 0, "year": 2014}, "type": "Document"}
{"page_content": "Contents  \n                      Page  \n \n1. Introduction           1 \n \n2. Objectives of Stress Testing         1 \n \n3. Principles Governing Stress Testing       2 \n \n4. Scope and Applicability         2 \n \n5. Stress Testing Framework (STF)        2 - 8 \n5.1 Developing and Implementing STF        2 \n5.2 The Board of Directors and Senior Management Oversight     3 \n5.3 Principal Risk Factors          4 \n5.4 Stress Testing Methodologies and Scenario Selection     5 \n5.5 Data and Appropriate M anagement Information System (MIS)    6 \n5.6 Reporting and Interpretation of Stress Test Results      7 \n5.7 Frequency of Stress Testing         7 \n5.8 Internal Controls and Independent Assessment       7 \n5.9 Remedial Actions          8 \n5.10 Disclosures           8 \n \nAnnex            9 - 11 \nFrequently Asked Questions (FAQs)        12 - 13", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 1, "year": 2014}, "type": "Document"}
{"page_content": "1 \n 1. Introduction  \n1.1. Stress testing has become an integral part of a bank\u2019s risk management system  and is \nused to evaluate its potential vulnerability to certain unlikely but plausible events or  \nmovements in financial variables. The vulnerability is usually measured with reference to \nthe bank\u2019s  profita bility , liquidity  and/or capital adequacy.  \n1.2. Stress testing provides guidance to manage  risks on the  basis of normal business \nconditions and emphasises the importance of robust risk management  systems which \nfactor -in a forward looking element and recognise the need to manage risks over the  \neconomic cycle . \n1.3. Improvement in risk management practices in the banking system in Sri Lanka has been \nin focus since the adoption of the Basle II capital adequacy framework beginning in \n2008 . This  process gained momentum with the issue of the Banking Act Direction No. 07 \nof 2011 on Integrated Risk Management  (IRM)  Framework in 2011  and the Banking Act \nDirection No. 5 of 2013 on Supervisory Review Process (SRP) for licensed commercial \nbanks and lice nsed specialised banks  (hereinafter referred to as \u201cbanks\u201d)  in 2013.  \n1.4. Building upon on previously issued supervisory guidance on stress testing under IRM \nframework and SRP, these guidelines  provide  broad principles a bank sh all follow in \ndeveloping and imp lementing  its stress testing activities  and integrating its stress testing \nresults into the overall risk management and decision making process.  \n \n2. Objectives of Stress Testing  \nStress testing is intended to:  \n\uf0b7 provid e rigorous and forward -looking assessments of risk;  \n\uf0b7 facilitat e the development of risk mitigation or contingency plans across a range \nof stressed conditions;  \n\uf0b7 facilitate  capital and liquidity planning proce ss; \n\uf0b7 guide in the process of undertaking new business activities, entering new markets \nor undertaking strategic initiatives;", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 2, "year": 2014}, "type": "Document"}
{"page_content": "or undertaking strategic initiatives;  \n\uf0b7 provide information to set  banks\u2019 risk tolerance  limits ; and \n\uf0b7 link external environmental factors with internal risk management framework .", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 2, "year": 2014}, "type": "Document"}
{"page_content": "2 \n 3. Principles Governing Stress Testing  \nBanks shall follow the following key principles, that are designed based on the \n\u201cPrinciples for sound stress testing practices and supervision\u201d  issued by the Basel \nCommittee on Banking Supervision in May 2009 when developing and i mplement ing \ntheir stress testing activities.   \n3.1. Stress testing sh all form an integral part of the overall governance and risk management \nculture of the bank.  \n3.2. Stress testing of a bank shall promote risk identification , control and shall provide a \ncomplementary risk perspective to other risk management tools.  \n3.3. Stress testing shall take account of views , from across the bank in order to cover a range \nof perspectives, scenarios and techniques including forward -looking aspects.  \n3.4. Stress testing sh all be actionable at the appropriate manag ement level, including strategic \nbusiness decisions of the board of directors and senior management.  \n3.5. Stress testing  activities  and the robustness of major individual components sh all be \nassessed regularly and independently.  \n \n4. Scope and Applicability  \nThis Stress Testing Framework shall be applicable to banks on both standalone (\"So 1o\") \nlevel as well as on the consolidated (\"Group\") level.  \n \n5. Stress Testing Framework (STF)  \n5.1. Developing and Implementing  STF \n(a) Every bank sh all develop an d implement a rigorous and well documented STF \nproportional to its operations, risk profile and consistent with prudential \nrequirements.  \n(b) Stress testing of a bank shall include activities and exercises that are tailored to \nand sufficiently capture the exposures, strategies, activitie s, risks, their \ninteractions and combined effects.  \n(c) STF shall be adjusted  according to the complexity of each bank\u2019s business \nactivities. Banks shall be able to justify their choice of stress tests and the choice \nof risk factors that are stressed.", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 3, "year": 2014}, "type": "Document"}
{"page_content": "3 \n (d) Banks which have global  operations, and/or are active in derivatives markets, \nand/or are operating an active trading portfolio shall use stress tests that suit to \nstress such activities.  \n(e) The STF of a bank shall satisfy the following essential requirements.  \n(i) The board of directors and senior management oversight ; \n(ii) principal risk factors;  \n(iii) stress testing methodolog ies and scenario selection ; \n(iv) data and appropriate Management Information Systems (M IS); \n(v) reporting and interpretation of stress test results ; \n(vi) frequency of stress test ing; \n(vii) internal controls and independent assessment;  \n(viii) remedial actions;  and \n(ix) disclosures . \n \n5.2. The Board of Directors and Senior Management Oversight  \n(a) The Board shall ensure that the bank has put in place a Board approved STF \nwhich suits to its individual requirements and integrate into its risk management \nsystems.  \n(b) The Board shall exercise effective oversight over the bank\u2019s stress testing \nactivities.  \n(c) The Board shall establish appropriate stress tolerance limits and shall ensure that \nthe appropriate remedial actions that banks may consider necessary to address the \nalarms of stress testing are put in place at required point of time.   \n(d) The Board shall establish formal lines of authority and the appropriate se gregation  \nof duties to maintain an effective check and balance within the stress testing \nprocess.  \n(e) The Board shall ensure that the senior management performs their duties \neffectively and adequately i n order to develop and implement its STF \nsuccessfully.  \n(f) The Board shall review the effectiveness and robustness of STF periodically, at \nleast annually. Areas for review include:  \n(i) effectiveness of STF in meeting its intended purposes;  \n(ii) effectiveness of stress testing policies, procedures and process;", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 4, "year": 2014}, "type": "Document"}
{"page_content": "4 \n (iii) scope of coverage of the framework , risk factors, stress scenarios and the \nlevels of stress applied;  \n(iv) integrity of MIS , data, assumptions and judgments  feeding into stress \ntests;  \n(v) adequacy of the documentation for various elements;  \n(vi) integration of STF in the day -to-day risk management processes; and  \n(vii) adequacy of the remedial actions and the efficiency of the systems for \ntheir activation.  \n(g) The Senior Management shall  ensure effective implementation of STF, including :  \n(i) identif ication of  principal risk factors;  \n(ii) design ing and implement ation of  appropriate single /multi factor stress \ntests;  \n(iii) designing  of an appropriate MIS to support the stress tests to be \nconducted;  \n(iv) ensuring  an appropriate and effective internal control mecha nism is in \nplace to implement and validate stress tests and their findings;  \n(v) review ing of stress test results and monitor for loss limits;  \n(vi) activat ion of appropriate remedial actions;   \n(vii) reporting periodically the stress test results and the actions taken, if any, to \nthe Board; and \n(viii) ensur ing the staff involved will have adequate training and qualifications.  \n \n5.3. Principal Risk Factors  \n(a) A bank shall identify its material risks that shall be subject to stress tests, their \nexposures and the correlation between these risks . \n(b) Suggested  list of risks that banks in general are exposed to are ; credit risk, credit \nconcentration risk,  interest rate risk, market risk, foreign currency risk, liquidity \nrisk, operational risk, reputational  risk, model risk, strategic  risk, macro -economic \nand country risk. These are only a probable  list and banks shall identify the risks \nto which they are exposed to with regard to their bank specific circumstances and \nportfolios.", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 5, "year": 2014}, "type": "Document"}
{"page_content": "5 \n (c) Suggested  list of items  that a bank shall consider when designing its STF:  \n(i) on and off -balance sheet activities;  \n(ii) business strategy;  \n(iii) portfolio composition;  \n(iv) asset quality;  \n(v) bank -specific events;  \n(vi) reputational events ; \n(vii) operating environment;  \n(viii) macro -economic factors (interest rate, fore ign exchange rate, inflation, \nGDP growth, unemployment rate, asset prices , property price index ); \n(ix) geographical and political factors (health of other economies, \nvulnerabilities to external events, contagion effects);   \n(x) historical events; and \n(xi) latest developm ent in the economic, political, geographical and global \nconditions and perspectives .  \n \n5.4. Stress Testing Methodolog ies and Scenario Selection  \n(a) The stress events and scenarios identified and developed by a bank shall be \nplausible and relevant to its portfolio.  It shall cover a range of scenarios, including \nforward -looking , quantitative and qualitative  that take into account system -wide \ninteractions and feedback effects . \n(b) Stress tests that can be applied to a bank are broadly in two categories: sensitivity \ntests and scenario tests. These may be used either separately or in conjunction \nwith each other.  \n(c) Sensitivity tests are normally used to assess the impact of change in one variable \nor the change in closely linked variables  on the bank\u2019s financial position  \n(examples for sensitivity tests \u2013 Annex) . \n(d) Scenario tests include simultaneous moves in a number of variables based on a \nsingle event experienced in the past or a plausible market event that has not yet \nhappened and the assessment of their impact on the ba nk\u2019s financial position. A \nbank shall determine the various risks that shall be included in a scenario, take \ninto account the linkages among the various risks without looking at each of them", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 6, "year": 2014}, "type": "Document"}
{"page_content": "6 \n in isolation and assess the extent to which the stress would impa ct their financial \nposition (examples for stress test scenarios \u2013 Annex).  \n(e) Stress testing shall  be conduct ed over various relevant time horizons to \nadequately capture risk characteristics of exposures, conditions that may \nmaterialize in the near term and ad verse situations that take longer to develop .  \n(f) Banks shall stress the relevant parameters at least at three levels of increasing \nadversity,  i.e. minor, medium and major , with reference to the normal situation \nand estimate the resources needed under each of  the circumstances to:  \n(i) meet the risk as it arises and for mitigating the impact of manifestation of \nthat risk;  \n(ii) meet the liabilities as they fall due; and  \n(iii) meet the minimum capital and liquidity requirements.  \n(g) Assumptions for stress testing : \n(i) banks are free to choose the various assumptions underlying the stress \ntests and the basis for their assumptions .  \n(ii) these assumptions shall be well documented and available for verification \nby the supervisor/auditors . \n(iii) assumptions underlying the stress tests shal l be reviewed periodically for \nassessing their validity  and changes, if any, shall be supported with \nrelevant reasons . Banks shall undertake fresh stress tests when there are \nsignificant modifications in the underlying assumptions.  \n(h) When designing stress te sting methodologies and scenarios, t he second round or \nspillover effects that might arise from the original shock must be taken into \naccount .  \n \n5.5. Data and Appropriate MIS  \n(a) A bank shall use appropriate, accurate and complete data when performing stress \ntests.  \n(b) A bank shall have a suitably robust infrastructure in place, which is sufficiently \nflexible to accommodate different and possibly changing stress tests at an \nappropriate level of granularity.  \n(c) IT resources shall be commensurate with the suitability of the techniques and the", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 7, "year": 2014}, "type": "Document"}
{"page_content": "(c) IT resources shall be commensurate with the suitability of the techniques and the \ncoverage of the stress tests.", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 7, "year": 2014}, "type": "Document"}
{"page_content": "7 \n  \n5.6. Reporting and Interpretation of Stress Test Results  \n(a) The results of stress test ing shall be reviewed by the senior management and \nreported to the Board. \n(b) The r esults shall be an essential ingredient of bank\u2019s risk management systems.  \n(c) Banks shall be conscious of the fact that the stress tests only indicate the likely \nimpact and do not indicate the likelihood of the occurrence of the stress events.  \n(d) Since stress testing is influenced by the judgment s and e xperience s, the \neffectiveness of the stress tests will depend upon whether banks have identified \ntheir major risks, whether they have chosen the right level of stress/stress \nscenarios, whether they have understood and interpreted the stress test results \nappropriately  and whether they have initiated the necessary steps to address the \nsituation presented by the stress test results.  \n \n5.7. Frequency of Stress Testing  \n(a) A bank may apply stress tests at varying frequencies necessitated  by their \nrespective business requ irements, relevance and cost.  \n(b) Some stress tests may be conducted daily or weekly and some others may be \nconducted at monthly or quarterly intervals.  \n(c) Under specific circumstances, ad -hoc stress tests may be required to assess the \nimpact of observed deteri oration , which banks had not taken into account . \n \n5.8. Internal Controls and Independent  Assessment  \n(a) An appropriate and effective internal control mechanism is essential to implement \nand validate stress tests and their findings.  \n(b) As part of the bank\u2019s internal control process, regular and independent assessment \nof stress testing policies, procedures and processes sh all be carried out to ensure \nthe quality and effectiveness of STF.  \n(c) The independent assessment  may be carried -out by internal audit or those who are \nnot involved in model development nor makes decision based on the model \noutput.", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 8, "year": 2014}, "type": "Document"}
{"page_content": "8 \n 5.9. Remedial Actions  \nThe remedial actions , that banks may consider necessary to activate when the various \nstress tolerance levels are breached may include  and not limited to : \n(a) reduction of risk limits;  \n(b) reduction of risks by enhancing collateral requirements, seeking higher level of \nrisk mitigants;  \n(c) reduction of exposures to specific sectors, portfolios, countries  or regions;  \n(d) revision of pricing and other policies to reflect enhanc ed risks or previously \nunidentified risks;  \n(e) augmentation of  capital levels to enhance the buffer to absorb shocks;  \n(f) implementation of contingency plans;  \n(g) enhanc e sources of funds through credit lines, managing the liability structure, \naltering the liquid asse t profile, etc.  \n \n5.10. Disclosures   \nThe Board of Directors/senior management shall ensure that disclosures are made in the \nbank's Annual Report or in the Audited Financial Statements on stress testing as \nappropriately .", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 9, "year": 2014}, "type": "Document"}
{"page_content": "9 \n Annex  \nExamples for Sensitivity Tests  \nCategory  Description  \nInterest Rates  (i) Parallel yield curve shift  \n(ii) Change of yield curve slope  \n(iii) Shift of curve and changing slope  \nEquities  (i) Shocks to levels and volatilities  \n(ii) Shocks to levels/volatilities only  \nExchange Rates  (i) Shocks to levels only \n(ii) Shocks to levels and volatilities  \nCredit  Shocks to credit spreads  \nOthers  Shocks to various volatilities  \n \nExamples for Stress Test Scenarios  \nCategory  Stress Test Scenarios  \nCredit Risk  \n (i) Movement in Non -Performing Assets(NPAs)  \n(a) Increase in NPAs  \n(b) Migration among  NPA categories  \n(c) Default of large borrower/s  \n(d) Default in a specific sector/industry/region  \n(ii) Change in impairment  \n(a) Probability of defaults (PD) for individual counterparty, \nportfolio or sector  \n(b) Loss given defaults(LGD) for specific facility types  \n(c) Change in expected cash flows  \n(iii) Credit concentration to a:  \n(a) Single borrower/ group of borrowers  \n(b) Sector  \n(c) Industry  \n(d) Region  \n(iv) Collaterals  \n(a) Factors affecting  on unencumbered position of", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 10, "year": 2014}, "type": "Document"}
{"page_content": "10 \n collaterals/guarantees   \n(b) Limits on the degree of reliance , e.g.; illiquid nature  of \ncollaterals  \n(c) concentration  \n(v) Ratings  \nImpact  on internal/external rating migrations  \n(vi) Economic movements  \nChanges in macro -economic variables , e.g., rise in oil prices, \nglobal/country specific slowdowns, international/market risk \nevents, extreme liquidity conditions, war situation etc.  \nInterest Rate Risk  \n(Rate of Return Risk in \nthe banking book and \nBenchmark Rate Risk in \nthe trading book for \nIslamic operations)  (i) Banking Book (Investment Portfolio)  \n(a) Parallel shifts in the yield curve /yield curve twists  \n(b) Basis changes  \n(c) Option and prepayment  \n(ii) Trading Book (Trading Portfolio)  \n(a) Market moves  \n\uf0b7 Decline in market value of financial instruments due to \nadverse changes in market prices  \n\uf0b7 Volatility changes and twists in the term structure of \nvolatility  \n\uf0b7 Changing credit spreads of bonds and securities  \n\uf0b7 Contagion effect due to adverse market direction ; eg.; \nglobal tightening (focusing on increasing of short -term \nand long-term interest rate)   \n(b) Model assumptions  \n\uf0b7 Historical volatilities  \n\uf0b7 Correlations, i.e. positive, negative, perfect or un -\ncorrelated  \n(c) Product complexity  \n\uf0b7 Derivative  instruments when market is illiquid  \n\uf0b7 Structured products with embedded multiple risks", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 11, "year": 2014}, "type": "Document"}
{"page_content": "11 \n Foreign Exchange Risk  Adverse movement in exchange rates; e.g.;  impact o f net open \nposition on major currencies , impact of major customers with \nsubstantial foreign exchange position .  \nEquity  Risk  (i) General risk : Relating to major change in the overall stock  \nmarket index  \n(ii) Specific risk : Relating  to the  individual issuer  \nLiquidity Risk  (i) Liquidity crisis  \n(ii) Credit tightening  (bank specific, market specific or \ncombination of both)  \n(iii) Speed and time period  to act  \n \n(Refer Explanatory Note 1/2014 on Guidelines on Stress Testing of Licensed Commercial Banks \nand Licensed Specialised Banks / FAQ s)", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 12, "year": 2014}, "type": "Document"}
{"page_content": "12 \n Explanatory Note 1/2014  \n \nGuidelines on Stress Testing  \nof Licensed Commercial Banks and Licensed Specialised Banks  \n \nFrequently Asked Questions (FAQs)  \nThese Frequently Asked Questions (FAQs) have been developed to assist banks in carrying -out \nstress testing activities in accordance with the Guidelines on Stress Testing of LCBs and LSBs \nand to clarify the possible queries relating to these Guidelines.  \n \nQ1 \u2013 Wha t is the overall purpose of issuing stress testing guidelines  to banks ? \n(a) The key objective of issuing these guidelines  is to provide guidance  to banks on the \ncritical areas pertaining to stress testing and to provide broad principles  that banks could \nfollow in carr ying-out stress testing activities . \n(b) In addition, to reinforce the importance of stress testing as a risk management tool  to \nevaluate the potential effects on bank\u2019s financial position arising from cer tain unlikely \nbut plausib le events or movements in financial variables . \n \nQ2 \u2013 Does a bank have the flexibility to determine suitable models, appropriate \nmethodologies and frequency of stress testing, depending on the approaches that they have \nadopted?  \nYes. \n(a) The principle advocated  in these guidelines is that banks have the flexibility with regard \nto the design and methodology adopted, so long as the management is satisfied with the \nrobustness of the process and assumptions.  \n(b) The models used for stress testing shall be appropriate in  the context of risk exposures  \nand size and complexity of operations.  \n(c) The frequency of stress testing shall be commensurate with the nature of risks to which \nbanks are exposed  to. In case where the approach adopted limits the frequency of the \nstress test c onducted, the management should re -consider the appropriateness of the \napproach used vis -\u00e0-vis the risk profile of the portfolio.", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 13, "year": 2014}, "type": "Document"}
{"page_content": "13 \n Q3 \u2013 Why these guidelines does not provide common risk factors and magnitude s of shock s \nto assist banks in developing appropriate scenarios?  \n(a) It is not the intention of these guidelines to specify standard scenarios for comparability \nacross banking industry.  \n(b) Given the objective and the scope of these guidelines, the prescribed scenarios may n ot \nbe broad enough to cover all the detailed information and experiences of specific bank or \nmay be irrelevant to others.  \n(c) Hence, banks should identify their own vulnerabilities as they have the best \nunderstanding of their own business exposure and inherent  vulnerabilities.  \n \nQ4 - Why these guidelines  does not specify any examples for operational risk events or \nscenarios?  \n(a) By nature, operational risk events or scenarios are specific to a particular bank. \nTherefore, these guidelines are not specified any common scenarios for operational risk.  \n(b) Based on business models, risk management systems, risk exposure, internal control \npolicies and procedures banks are free to generate operational risk scenarios, which suits \nto their size and complexity of business operations.  \n \nQ5 - What is the acceptance level of second round or spillover effects? Is there a specific \napproach/common method ology to link the second layer risk elements to the first layer risk \nfactors?  \n(a) While acknowledging the challenge in incorporating second round effects and \nunderstanding the complexity of the links between the scenarios, these guidelines do not \nspecify any c ommon methodology to conduct such an exercise.  \n(b) Banks are expected to capture the second round effect based on the reasonable \nexpectation of the impact at least for the portfolio of material risk.  \n \nQ6 \u2013 What are the possible measures available to handle non -availability of adequate data \nin carrying -out stress testing?  \n(a) Lack of complete data does not preclude stress testing . However, the quality of data will", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 14, "year": 2014}, "type": "Document"}
{"page_content": "(a) Lack of complete data does not preclude stress testing . However, the quality of data will \nimprove stress testing results and usefulness.  \n(b) Banks may make additional assumptions or use proxy data as appropriately.  \n(c) However, this shall not be considered as a long -term solution to the non -availability of \nadequate data  and banks are required to build and maintain necessary and appropriate \ndate for this purpose.", "metadata": {"source": "data\\CBSL\\2014\\bsd_Guidelines_Stress_testing_LCBs_LSBs_0.pdf", "page": 14, "year": 2014}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKASeptember 2015 BANKING ACT DIRECTIONS No. 02 of 2015LOAN TO VALUE RATIO FOR LOANS AND ADVANCESIN RESPECT OF MOTOR VEHICLESIssued under Sections 46(1) and 76(J)(1) of the Banking Act, No. 30 of 1988, as amended.The Monetary Board issues 'Directions as follows for the implementation of a loan to value (LTV) ratio in respect of loans and advances granted by licensed commercial banks (LCBs) and licensed specialised banks (LSBs) for the purpose of purchase or utilisation of motor vehicles.1. Empowerment1.1In terms of Sections 46(1) and 76(J)(1) of the Banking Act, in orderunder theto ensure the soundness of the banking system, the Monetary BoardBanking Actis empowered to issue Directions to all or any LCB and LSB, respectively, regarding the manner in which any aspect of the business of such banks is to be conducted.2. Maximum LTV2.1Commencing 15 September 2015, every LCB and LSB shall notRatiogrant loans and advances for the purpose of purchase or utilisation of a motor vehicle in excess of 70 per cent of the value of such vehicle (LTV Ratio of 70 per cent).2.2An LCB or LSB shall not grant loans and advances for the purpose of purchase or utilisation of motor vehicles, other than loans and advances granted in accordance with Direction 2.1 above.3. Interpretations3.1 In these Directions,(a) Loans and advances shall include finance leases, hire purchase facilities and other loans and advances granted for the purpose of purchase or utilisation of motor vehicles.(b) The value of the motor vehicle shall be the market value obtained from a professional valuer at the time of granting loans and advances, as per the prevailing practice.VjprXJ \"Arjuna MahendranChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2015\\Banking_Act_Direction_2_2015_e_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKAOctober 2015BANKING ACT DIRECTIONSNo. 03 of 2015LOAN TO VALUE RATIO FOR LOANS AND ADVANCESIN RESPECT OF MOTOR VEHICLESIssued under Sections 46(1) and 76J(1) of the Banking Act, No. 30 of 1988, as amended.Banking Act Direction No. 02 of 2015 dated 14 September 2015 on the above subject shall come in to force with effect from 01 December 2015.Arjuna MahendranChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2015\\Banking_Act_Direction_3_2015_e_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "$ goor Oco OuotgO\nEamfuma r$didfiu arnid\nCEHINff. BAilT OF $NI LIilI(A\n03 August 2015 CIRCULAR nlefz 021171500/0063/001\nBank Supervision Department\nTo: The Chief Executive Officers of Licensed Commercial Banks and\nLicensed Specialised Banks\nSuspension of Lanka Rating Agency Ltd. as an Acceptable Credit Rating Agency\nThe Monetary Board has decided to suspend Lanka Rating Agency Ltd (LRA) as an\naccepable credit rating agency for regulatory requirements pertaining to licenced commercial\nbanks and licensed specialised banks with effect from 01.07.2015, consequent to the non-\nrenewal of registration granted to LRA by the Securities and Exchange Commission of Sri\nLanka.\nAccordingly, you are requested to take appropriate measures in this regard.\n(Mrs.)TMJYPFernando\nDirector of Bank Supervision\n6 OeD O.DO, eclo 30, deDrA\u20acd oJO(D,\nlD.. s(r. 5OO, slo\u20acO Of, \u20ac Cplooo\nI s+fizanlooasg6 qgLb onrg, @o. 30 uor$u$ mnopmp GEr(BDq I\ng. Glu. Qo.590, Gengdq 01, e$do6lortol 6, t{0.30, Janadhlpdrl Mardra, Colombo 1\nP. 0. Bu.590, Colombo 01, Sil lrnlo.\n@ www.cbsl.gov.lk ld gau24ttz11 M banksup@cbsl.lk\n)", "metadata": {"source": "data\\CBSL\\2015\\bsd_Circular_Suspension_of_Lanka_Rating_Agency_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "02 December 2015$ goaor Oco 0roAO\nBoildffire rofrdfu nrdld\nCE]{TRAI BAIT OF $H I.tr*I(A\nGUIDELINE\nBANK SUPERVISION DEPARTMENTRefz 02 I 17 I 550/0002/003\nTo: The Chief Executive Officers of Licensed Commercial Banks\nKey Management Personnel in Banking Act Direction on Corporate Governance\nWe write to inform you that key management personnel in Banking Act Direction No. 1l of\n2007 on Corporate Govemance for Licensed Commercial Banks (LCBs) in Sri Lanka shall\nmean Officers Performing Executive Functions of LCBs as referred to in the Banking Act\nDetermination No. 3 of 2010 on Assessment of Fitness and Propriety of Offrcers Performing\nExecutive Functions in LCBs.\nMs. S H Gunawardena\nDirector of Bank Supervision\n6 OeD g(D\u20acb qclo 80, dr'oaeo EOo,\na, scr.5OO, slsreo Of, \u20ac CpoO\n( sa rr zczzrooless6q5rir ong, OdD. 30 entrrfuCl onogmg 66rT(Uriq I\np. Ou. Qo.590, Oon@dq 01, E.)doEl-eyol 6, ilo.30, Janadhlpahl ilaur0r!, ColomDo I\nP. 0. Bu.59O, ColomDo 01, Srl lr.rlo.\n@ www.cbsl.gov.lk H gnn24tTrtl 4 banksup@cbsl.lk", "metadata": {"source": "data\\CBSL\\2015\\bsd_Guideline_Key_Personnel_CG_LCBs_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "$ goorQlo0soe0\nBsiltims rofri$rr eisdld\ncEI{I[At 3A1{l( 0F sRl L[*l(A\nGUIDELINE\nBANK SUPERYISION DEPARTMENTRef: 02/171550/0002/00302 December 2015\nTo:The chief Executive oflicers of Licensed Specialised Banks\nKey Management Personnel in Banking Act Direction on corporate Governance\nWe write to inform you that key management personnel in Banking Act Direction No' 12 of\n2007 oncorporate Governance for Licensed Specialised Banks (LSBs) in Sri Lanka shall\nmean officers performing Executive Functions of LSBs as referred to in the Banking Act\nDetermination No. 4 0f 2010 0n Assessment of Fitness and propriety of officers Performing\nExecutive Functions in LSBs.\nMs. S H Gunawardena\nDirector of Bank SuPervision\no O{D OtD\u20acb ttoo so' dooaed &Oo'\ns.scr.Soo, eloogo or, \u20ac eplooo\n( sa rt zlzzroomss6 ggrb onq, So. ao umn$u$ onoporp o6n(9d'q I\npi. Ou. Qo.590, O\"og1Ol 01' 6a:doelrvd 6, ilo.30, hnadhlgdil t.uiul., Colombo 1\nP . 0. Bor 590, Golombo 01' $l t nlo'\n@ www.cbsl'gov.lkH gqu247771i 4 banksup@cbsl.lk", "metadata": {"source": "data\\CBSL\\2015\\bsd_Guideline_Key_Personnel_CG_LSBs_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "@ goor @co OcoqO\n@onjma lo$dur onid\nCENTRAL BANK OF SR! TANKA\nOcoug@lw6oqettsoo@dqo ourridl Gro$unrianorg plomur6eonro BankSupervislon Department\nRef: 02 / 04 / 002 I 00 | 5 / 002\n\\S April20l5\nTo: The Chief Executive Officers of Licensed Commercial Banks\nand Licensed Specialised Banks\nDear Sir/Madam\nExpanding Access to Banking\nWe wish to draw your attention to the Interim Budget - 2015 enumerating several measures to\nenhance access to banking as summarised below:\n(i) Commercial banks to open their branches in remote areas.(ii) To open accounts to new customers without requiring a minimum initial deposit.(iii) To make all efforts to initiate bank accounts for all citizens and all grants and\nallowances that may devolve on them to be remitted through the banking system in the\nnear future.\n(iv) To simplifu rules and regulations, particularly in lending operations, to facilitate\nborrowers and the new simplified systems to be implemented from September 2015.\n2. We request you to take appropriate measures to implement the above.\nYours faithfully\nffi*JypFernando\nDirector of Bank Supervision\n6 Oo Oo@, qeo 80, dooule6 &Oo,\nqts. ec,.5OO, slotgo Ol, \u20ac \u20acp@O6 qSLb onq, Oa>. 30 s6rn!6lultl urogog Ostr@rbq 1\nF. Ou. eo.590, Oenqed'q 01, ea:flioalrvol 6, ilo.30, ranadhl9itrl illaua$a, Colombo 1\nP.0.Botr 590,Colombo 01, Sil tanlo.\nH safi2471211 www.cbsl.gov,lk", "metadata": {"source": "data\\CBSL\\2015\\Expanding Access to Banking_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "03 August 2015S goor @en Orerg0\nSa:rdrmra r.c4iidrl eurdd\nCEIIITRAL BAilI{ OF SRI lAHlffi\nCIRCULAR Ref: o2lo1too6to2ootoo2\nBank Supervision Department\nTo: The Chief Executive Officers of Licensed Commercial Banks\nand Licensed Specialised Banks\nIntroduction of Web-based Returns on Operations of Banking Outlet\nThe following new web based retums will be introduced in order to replace the information on\noperations of banking outlets currently being submitted quarterly by e-mail as per schedules\nII, III and IV of our letter dated 18.01.2012.\ni. BSD-QF-16-BD - Branch Distribution\nii. BSD-QF-16-TM - Automated Teller Machines (ATMs)\niii. BSD-QF-16-SU - Student Savings Units\niv. BSD-QF-16-BP - Branch Performance\nFor the purpose of maintaining consistency, banks are required to submit the relevant\ninformation for the quarters ended 31.12.2014,31.03.2015 and 30.06.2015 by 31.08.2015.\nThereafter, these returns should be submitted on a quarterly basis, within 21 days after the end\nof each quarter.\nThe information required to be submitted under schedule I of the letter mentioned\nabove should continue to be emailed within 7 days of occurrence to banksup@cbsl.lk.\n#fl=.(Mrs.)TMJYPFernando\nDirector of Bank Supervision\n6 OeD Oog, qorD 30, deDrA\u20ac6 gloo,\nlDE. ocr.500, @lo1\u20ac0 Ol, 6 eprolo\nI %fi zttz'toorcss6 ggLb onrg, 6N. 30 efltrptupil mrogog G*ffi1gbq I\nE. Ou. Od.590, GsrcArirq 01, Oo)rio6Lev6l 0, N0.30, Janadhipathl Mawatha, Colombo 1\nP . 0. Box 590, Colombo 01, Sd lanka.\n@ www.cbsl.gov.lk lJ ga't't 2477711 fi banksup@cbsl.lk", "metadata": {"source": "data\\CBSL\\2015\\introduction of_web_based_returns on Operations of Banking Outlet_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "31 March 2015,<ffi,'i#a'fuffi\\ry*sryz\nMONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.01 of 2015\nLIQUIDITY COVERAGE RATIO UNDER BASEL III LIQUIDITY STANDARDS FOR\nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nIssued under Sections 46(l) and 76(J)(1) of the Banking Act, No. 30 of 1988, last amended by\nthe Banking Act, No. 46 of 2006.\nThe Monetary Board issues these Directions for the implementation of Liquidity Coverage Ratio\nfor Licensed Commercial Banks (LCBs) and Licensed Specialised Banks (LSBs) in accordance\nwith \"Basel III: International Framework for Liquidity Risk Measurement, Standards and\nMonitoring\" and'oBasel III: The Liquidity Coverage Ratio and Liquidity Risk Monitoring Tools\"\nissued by the Basel Committee on Banking Supervision in December 2010 and January 2013,\nrespectively.\n1. Empowerment\nunder the\nBanking Act\n2. Minimum LCR\nRequirementIn terms of Sections a6(1) and 76(J)(1) of the Banking Act, in\norder to ensure the soundness of the banking system, the\nMonetary Board is empowered to issue Directions to all or any\nLCB and LSB, respectively, regarding the manner in which any\naspect ofthe business of such banks are to be conducted.\nCommencing from 1 April 2015, every LCB and LSB shall\nmaintain Liquidity Coverage Ratios (LCR) as prescribed in Annex\nI hereto in respect of Rupee Liquidity Minimum Requirement for\nlocal currency operations and All Currency Liquidity Minimum\nRequirement for the overall operations effective from the dates\nindicated below.\nEffective Date1\nApril\n2015I\nJanuary\nzAt61\nJanuary\n20171\nJanuary\n20181\nJanuary\n2019\nonwards\nMinimum\nRequirement\n(per cent)60 70 80 90 100", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "31 March 2015\u20ac\nMONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.01 of2015\n3.Implement\nappropriate\nsystems\n4. Regulatory\nReporting\n5. Monitoring\nToolsEvery LCB and LSB shall develop and implement appropriate\nsystems and provide all resources necessary to implement LCR as\nper the Direction 2 above.\nEvery LCB and LSB shall submit two separate retums on a\nmonthly basis on or before the fifteenth day of the following\nmonth as per the formats and guidelines given in Appendices I to\nIII to the Annex I hereto, via the Web-based Off-site Surveillance\nSystem.\nEvery LCB and LSB shall also monitor its liquidity position using\nthe monitoring tools stated below as recorlmended in \"Basel III:\nThe Liquidity Coverage Ratio and Liquidity Risk Monitoring\nTools\" issued on January 2013 and document processes for\napplication of such tools. However, this monitoring shall be only\nan additional minimum requirement and every LCB and LSB shall\nalso monitor the liquidity position further relative to its size and\nnature of the business operations.\n(i) Contractual Maturity Mismatch: Develop a metric to\nidentifr contractual maturity mismatch profile, i.e., the gaps\nbetween the contractual inflows and outflows of liquidity for\ndefined time bands to assess the potential liquidity needs.\n(iD Concentration of Funding: Develop a metric to mitigate\nthe funding concentration risk that may arise from\nsignifi cant counterparties, products/instruments, currencies,\netc.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 1, "year": 2015}, "type": "Document"}
{"page_content": "31 March 2015+\nMONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBAIIKING ACT DIRECTIONS No.01 of 2015\n(iiD LCR by Significant f,'oreign Currency: Develop a metric\nto monitor LCR in each significant currency on an ongoing\nbasis in order to capture potential curency mismatches. For\nthe purpose of this Direction, significant currencies shall be\ndetermined intemally based on the bank's volume of\ntransactions in such currencies and its ability to raise funds\nin foreign crtrrency markets.\n(iv) Available Unencumbered Assets: Develop a metric to\nprovide data on the volume and key characteristics of all\navailable unencumbered assets which have the potential to\nbe used as collateral for raising additional funding from the\nsecondary market and/or central banks.\nfu^\nP Samarasiri\nSenior Deputy Governor\nCentral Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 2, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 2015  \nLiquidity Coverage Ratio under Basel III Liquidity Standards for  \nLicensed Commercial Banks and  Licensed Specialised Banks  \n \n \n Annex I  \n \n   \n \n \n \n \n \n \n \n \n \nBASEL III LIQUIDITY STANDARDS  \nON LIQUIDITY COVERAGE RATIO", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 3, "year": 2015}, "type": "Document"}
{"page_content": "Page intentionally left blank", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 4, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 2015  \nLiquidity Coverage Ratio under Basel III Liquidity Standards for  \nLicensed Commercial Banks an d Licensed Specialised Banks  \n \n \n Annex I  \n \nCONTENTS  \n1. INTRODUCTION  ................................ ................................ ................................ ..............  1 \n2. THE REGULATORY FRAMEWORK  ................................ ................................ ..............  1 \n2.1. Objective of LCR ................................ ................................ ................................ .........  1 \n2.2. Scope of application  ................................ ................................ ................................ .... 2 \n2.3. LCR computation  ................................ ................................ ................................ ........  2 \n2.4. Definition of High Quality Liquid Assets (HQLA)  ................................ .....................  2 \n2.5. Categories of HQLA  ................................ ................................ ................................ .... 3 \n2.6. Total net cash outflows  ................................ ................................ ................................  4 \n2.7. Appendices  ................................ ................................ ................................ ..................  5", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 5, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 2015  \nLiquidity Coverage Ratio under Basel III Liquidity Standards for  \nLicensed Commercial Banks an d Licensed Specialised Banks  \n1 \n \n Annex I  \n1. INTRODUCTION   \n1.1. The re cent global financial crisis that began in 2007 revealed that certain banks even \nwith adequate capital levels experienced severe stress due to lack of prudent liquidity \nrisk management practices and due to sudden evaporation of liquidity from the market \nresulting from withdrawals of credit lines by market participants.   \n1.2. The Basel Committee on Banking Supervision (BCBS) issued the Basel III rules on \nliquidity risk measurement, standards and monitoring on 16.12.2010. Two minimum \nstandards, viz., the Liquidit y Coverage Ratio and the Net Stable Funding Ratio, were \nprescribed by BCBS. In January 2013, the Basel Committee's oversight body, the \nGroup of Central Bank Governors and Heads of Supervision (GHOS) endorsed the \nBasel III Liquidity Rule on LCR as the globa l minimum standard for liquidity risk.  \n1.3. LCR is expected to improve the banking sector\u2019s ability to absorb shocks arising from \nfinancial and economic stress, thus, reducing the risk of spillover from the financial \nsector to the real economy. LCR is one of t he Basel Committee's key reforms to \nstrengthen global liquidity regulations with the goal of promoting a more resilient \nbanking sector.  \n1.4. Basel III Liquidity Standards mainly focus on internationally active banks. However, \nregulators have adopted these stan dards for other  banks too with the view to further \nstren gthen liquidity risk management, better comparison wit h international best \npractices, facilitate entity rating, Sovereign rating and international fund raising \nactivities.  \n \n2. THE REGULATORY FRAMEWORK  \n2.1. Objective of LCR:  \nLCR intends to:  \na) promote short -term resilience of the liquidity risk profile of banks ensuring that", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 6, "year": 2015}, "type": "Document"}
{"page_content": "a) promote short -term resilience of the liquidity risk profile of banks ensuring that \nbanks have an adequate stock of unencumbered high -quality liquid assets  that can \nbe converted easily and immediately into cash in secondary market to meet their \nliquidity needs for a period of 30 calendar days under a liquidity stress scenario ; \nand \nb) improve the banking sector\u2019s ability to absorb shocks arising from financial and \neconomic stress, whatever the source, thus reducing the risk of sp illover from the \nfinancial sector to the real economy.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 6, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 2015  \nLiquidity Coverage Ratio under Basel III Liquidity Standards for  \nLicensed Commercial Banks an d Licensed Specialised Banks  \n2 \n \n Annex I  \n \n2.2. Scope of application  \nInitially, LCR framework shall be applicable to banks on a standalone ( \u201cSolo\u201d) level \nincluding overseas operations through branches. Subsequently, for the banks \nincorporated in S ri Lanka, the scope will be extended to the consolidate d (\u201cGroup\u201d)  \nlevel.  \n2.3. LCR computation  \nThe computation of  LCR shall be based on the follo wing formula.  \n \n \n \n2.4. Definition of High Quality Liquid A ssets ( HQLA)  \n2.4.1. HQLA are assets that  satisfy all the following conditions : \na) can be easily and immediately converted into cash at little or no  loss of value,  \nb) can be rea dily sold or used as collateral to obtain funds  in a range of stress \nscenarios , and \nc) are unencumbered , i.e., without legal, regulatory or operational impediments.  \n \n2.4.2. Characteristics of HQLA  \nIn determining HQLA , banks shall consider the fundamental characteris tics and \nmarket related characteristics  of such assets.  \n \na) Fundamental characteristics  \ni)          Low credit and market risk : Assets that are less risky tend to have high \nliquidity. High credit standing of the issuer and a low degree of \nsubordination increases  an asset\u2019s liquidity. Low duration, low volatility, \nlow inflation risk and denomination in a convertible currency with low \nforeign exchange risk enhance an asset\u2019s liquidity.  \nii) Ease and certainty of valuation : An asset\u2019s liquidity increases if market \nparticipants are more likely to agree on its valuation. The pricing formula \nof a HQLA  must be easy to calculate and should not depend on strong \nassumptions. The inputs into the pricing formula must also be publicly \navailable. In practice, this should rule out t he inclusion of most structured \nor exotic products.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 7, "year": 2015}, "type": "Document"}
{"page_content": "or exotic products.  \n \n LCR =         Stock of high quality liquid assets                          *100    \n              Total net cash outflows over the next 30 calendar days", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 7, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 2015  \nLiquidity Coverage Ratio under Basel III Liquidity Standards for  \nLicensed Commercial Banks an d Licensed Specialised Banks  \n3 \n \n Annex I  \n \niii) Low correlation with risky assets : The stock of HQLA  should not be \nsubject to highly correlated risk. For example, assets issued by financial \ninstitutions are more likely to be illiquid in times of li quidity stress in the \nbanking sector.  \niv) Listed on a developed and recognised exchange market : Being listed \nincreases an asset\u2019s transparency.  \n \nb) Market related characteristics  \ni)       Active and sizable market : The asset should have active outright sale or \nrepurchase agreement (repo) market at all times, i.e., a large number of \nmarket participants and a high trading volume. There should be historical \nevidence of market breadth such as price impact per unit of liquidity and \nmarket depth such as units of the asse t that can be traded for a given price \nimpact.  \nii) Presence of committed market makers : Quotes should be available for \nbuying and/or selling a high -quality liquid asset.  \niii) Low market concentration : A diverse group of buyers and sellers in an \nasset\u2019s market inc reases the reliability of its liquidity.  \niv) Capital f light to wards  quality  assets: Historically, the market should \nhave shown tendencies to move into these types of assets in a systemic \ncrisis.  \n \n2.5. Categories of HQLA  \nHQLA are categori sed into two  broad catego ries. Assets to be included in each \ncategory are those that the bank is holding on the first day of the stress period, \nirrespective of their residual maturity . \na) Level 1  assets : Include cash in hand, qualifying Central Bank reserves and  \nqualifying marketable  securities that attract a 0% risk weight  under the Basel II \nCapital Adequacy Framework.  \nb) Level 2 assets:  Include Level 2A assets and Level 2B assets up to a maximum of \n40% of total HQLA.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 8, "year": 2015}, "type": "Document"}
{"page_content": "40% of total HQLA.   \n(i) Level 2A assets : Include qualifying marketable securities and quali fying \nnon-financial corporate debt securities that attract a 20% risk weight under \nthe Basel II Capital Adequacy Framework  and qualifying investments in gilt \nunit trusts , subject to a 15% haircut.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 8, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 2015  \nLiquidity Coverage Ratio under Basel III Liquidity Standards for  \nLicensed Commercial Banks an d Licensed Specialised Banks  \n4 \n \n Annex I  \n(ii) Level 2B assets : Include qualifying non -financial corporate  debt securities \nwith an External Credit Rating between A+ to BBB - and qualifying non -\nfinancial common equity shares , subject to a 50% haircut. Level 2B assets \nare limited to a maximum of 15% of total HQLA.   \n \nAssets to be included in each category  with the  applicable factors and limitations are \nindicated below.  \n \nItem  Factor  \nStock of HQLA  \nA. Level 1 assets   \n\uf0b7 Cash in hand   \n100%  \uf0b7 Qualifying C entral Bank balances and reserves in excess of the \nStatutory Reserves Ratio (SRR)  \n\uf0b7 Qualifying marketable securities with a 0% risk weight  \n B. Level 2 assets  (maximum of 40% of HQLA)   \nLevel 2A assets   \n\uf0b7 Qualifying marketable securities with a 20% risk weight  \n85% \uf0b7 Qualifying non-financial corporate debt securities (including \ncommercial paper and promissory notes)  \n\uf0b7 Qualifying  investments in gilt unit t rust backed by government of \nSri Lanka  securities  \nLevel 2B assets  (maximum of 15% of HQLA)   \n\uf0b7 Qualifying non-financial corporate debt securities (including \ncommercial paper and promissory notes) with an External Credit \nRating be tween A+ to BBB - 50% \n\uf0b7 Qualifying  non-financial  common equity shares  \nTotal value of stock of HQLA  \n \n2.6. Total net cash outflows  \n2.6.1 Total net cash outflows are defined as the total expected cash outflows minus total \nexpected cash inflows for the subsequent 30 cal endar days. Total expected cash \noutflows are calculated by multiplying the outstanding balances of various categories \nor types of liabilities and off -balance sheet commitments by the rates at which they are \nexpected to run off or be drawn down. Total expec ted cash inflows are calculated by \nmultiplying the outstanding balances of various categories of contractual receivables", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 9, "year": 2015}, "type": "Document"}
{"page_content": "multiplying the outstanding balances of various categories of contractual receivables \nby the rates at which they are expected to flow in up to an aggregate cap of 75% of the \ntotal expected cash outflows.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 9, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 2015  \nLiquidity Coverage Ratio under Basel III Liquidity Standards for  \nLicensed Commercial Banks an d Licensed Specialised Banks  \n5 \n \n Annex I  \n2.6.2 Banks shall  not double count items, i .e., if an asset is included as part of the \u201cstock of \nHQLA\u201d (i.e. numerator), the associated cash inflows cannot be counted as \u201ccash \ninflows \u201d (i.e. part of the denominator).  \n2.7. Appendices  \nThe R eporting formats for Rupee Liquidity Requirement  (BSD -MF-19-RR) and  All \nCurrency Liquidity Requirement  (BSD -MF-19-AR) along with the Guidelines for \ncalculation of LCR and  Mapping of notations of the Credit Rating Agencies for \nclassification of assets for LCR  are attached as follows.    \n2.7.1 Appendix  I - Reporting formats  for both Rupee Liquidity Requirement and All \nCurrency Liquidity Requirement . \n2.7.2 Appendix  II - Guide lines  for calculation of Liquidity Coverage ratio .  \n2.7.3 Appendix  III - Mapping of notations of the Credit Rating Agencies for classification \nof assets for LCR .", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 10, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \n Liquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks  and Licensed Specialised Banks  \n \ni \n  \nAppendix I  \n \nReporting Formats for Rupee Liquidity Requirement (BSD -MF-19-RR) \nReporting Formats for  All-Currency Liquidity Requirement  (BSD -MF-19-AR) \nMonthly  Financial Return (LKR'000)  \n  \nName of the  Bank : \n \nAs at:  \n \n \nPart I - Calculation of LCR  \nWeb -based \nReturn Code  Item  Amount  \n19.1.1.0.0.0  Total Stock of H QLA = 19.2.0.0.0.0 of Part II   \n19.1.2.0.0.0  Total Cash Outflows = 19.3.0.0.0.0 of Part III   \n19.1.3.0.0.0  Total Cash Inflows = 19.4.0.0.0.0 of  Part IV   \n19.1.4.0.0.0  Net Cash Outflows = 19.1.2.0.0.0  - MIN( 19.1.3.0.0.0 , 75%* 19.1.2.0.0.0)   \n19.1.5.0.0.0  Liquidity Coverage Ratio,%  = ( 19.1.1 .0.0.0/19 .1.4.0.0.0)*100   \n \nPart II - Calculation of High Quality Liquid Assets (HQLA)     \nWeb -based \nReturn Code  Asset  Amount  Factor  Weighted \nAmount  \n19.2.0.0.0.0  Total stock of HQLA       \n19.2.1.0.0.0  Total Adjusted Level 1 Assets       \n19.2.1.1.0.0  Level 1 Assets       \n19.2.1.1.1.0  Cash in hand   100%   \n19.2.1.1.2.0  Qualifying central bank balances and reserves in excess of \nStatutory Reserve Ratio   100%   \n19.2.1.1.3.0  Qualifying marketable securities with a 0% risk weight       \n19.2.1.1.3.1  Issued by sovereigns   100%   \n19.2.1.1.3.2  Guaranteed by sovereigns   100%   \n19.2.1.1.3.3  Issued or guaranteed by central banks   100%   \n19.2.1.1.3.4  Issued or guaranteed by BIS, IMF, ECB and European \nCommunity or MDBs   100%   \n19.2.1.2.0.0  Adjustments      \n19.2.1.2.1.0  Add: Market value of level 1 securities pledged for secured \nfunding   100%   \n19.2.1.2.2.0  Add: Amounts extended through  secured lending   100%   \n19.2.1.2.3.0  Less: Market value of level 1 securities received for \nsecured lending   100%   \n19.2.1.2.4.0  Less: A mount s raised through  secured funding   100%   \n19.2.2.0.0.0  Total Adjusted Level 2A Assets", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 11, "year": 2015}, "type": "Document"}
{"page_content": "19.2.2.0.0.0  Total Adjusted Level 2A Assets       \n19.2.2.1.0.0  Level 2A Assets       \n19.2.2.1.1.0  Qualifying marketable securities with a 20% risk weight:       \n19.2.2.1.1.1  Issued or guaranteed by sovereigns   85%  \n19.2.2.1.1.2  Issued or guaranteed by central banks   85%  \n19.2.2.1.1.3  Issued or guarantee d by Public Sector Enterprises   85%  \n19.2.2.1.1.4  Issued or guaranteed by MDBs   85%  \n19.2.2.1.2.0  Qualifying non -financial Corporate debt securities \n(including commercial paper and promissory notes)   85%", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 11, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \n Liquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks  and Licensed Specialised Banks  \n \nii \n  \nAppendix I  \n19.2.2.1.3.0  Qualifying investments in  gilt unit trust backed by \nGovernment of Sri Lanka (GOSL) securities           85%  \n19.2.2.2.0.0  Adjustments       \n19.2.2.2.1.0  Add: Market value of level 2A securities pledged for \nsecured funding   85%  \n19.2.2.2.2.0  Add: Amounts extended through  secured lending   85%  \n19.2.2.2.3.0  Less: Market value of level 2A securities received for \nsecured lending   85%  \n19.2.2.2.4.0  Less: A mount s raised through  secured funding   85%  \n19.2.3.0.0.0  Total Adjusted Level 2B Assets       \n19.2.3.1.0.0  Level 2B Assets       \n19.2.3.1.1.0  Qualifying non -financial corporate debt securities \n(including commercial paper and promissory notes) \nwith an External Credit Rating between A+ to BBB -   50%  \n19.2.3.1.2.0  Qualifying non -financial common equity shares   50%  \n19.2.3.2.0.0  Adjustments       \n19.2.3.2.1.0  Add: Market value of level 2B securities pledged for \nsecured funding   50%  \n19.2.3.2.2.0  Add: Amounts extended through  secured lending   50%  \n19.2.3.2.3.0  Less: Market value of level 2B securities received for \nsecured lending   50%  \n19.2.3.2.4.0  Less: A mount s raised through  secured funding   50%  \n \nPart III - Calculation of Total C ash Outflows  \n   Web -based \nReturn Code  Item  Amount  Factor  Weighted \nAmount  \n19.3.0.0.0.0  Total c ash outflows       \n19.3.1.0.0.0  Deposits       \n19.3.1.1.0.0  Demand , savings  and term deposits (less than 30 days \nmaturity)        \n19.3.1.1.1.0  Retail customers   10%  \n19.3.1.1.2.0  Small business customers   10%  \n19.3.1.2.0.0  Term deposits with residual maturity greater than 30 days   0%  \n19.3.2.0.0.0  Unsecured wholesale funding      \n19.3.2.1.0.0  Operational deposits generated by clearing, custody and \ncash management activities   25%", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 12, "year": 2015}, "type": "Document"}
{"page_content": "cash management activities   25%  \n19.3.2.2.0.0  Cooperative banks in an institutional network (qualifying \ndeposits with the ce ntralised institution)   25%  \n19.3.2.3.0.0  Non-financial corporates, sovereigns, central bank s, \nMDBs and P ublic Sector Enterprise s   40%  \n19.3.2.4.0.0  Other legal entity customers   100%   \n19.3.3.0.0.0  Secured funding transaction s      \n19.3.3.1.0.0  Backed by Level 1 assets   0%  \n19.3.3.2.0.0  Backed by Level 2A assets   15%  \n19.3.3.3.0.0  Backed by Level 2B assets   50%  \n19.3.3.4.0.0  Backed by  all other assets   100%   \n19.3.4.0.0.0  Undrawn portion of committed (irrevocable) facilities \nand other contingent funding obligations      \n19.3.4.1.0.0  Committed (irrevocable) credit & liquidity facilities", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 12, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \n Liquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks  and Licensed Specialised Banks  \n \niii \n  \nAppendix I  \n19.3.4.1.1.0  Undrawn committed credit & liquidity facilities to retail \nand small business customers   5%  \n19.3.4.1.2.0  Undrawn committed credit facilities to non -financial \ncorporates, sovereigns, CBs, PSEs and MDBs   10%  \n19.3.4.1.3.0  Undrawn committed liquidity facilities to non -financial \ncorporates, sovereigns, CBs, PSEs and MDBs   30%  \n19.3.4.1.4.0  Undrawn committed liquidity facilities to banks subject to \nprudential supervision   40%  \n19.3.4.1.5.0  Undrawn committed credit facilities to other financial \ninstitutions   40%  \n19.3.4.1.6.0  Undrawn committed liquidity facilities to other financial \ninstitutions   100%   \n19.3.4.1.7.0  Undrawn committed credit & liquidity facilities to other \nlegal entities   100%   \n19.3.4.2.0.0  Other contingent funding obligations       \n19.3.4.2.1.0  Unconditionally revocable \"uncommitted\" credit and \nliquidity facilities   0%  \n19.3.4.2.2.0  Trade Finance related obligations (including guarantees \nand letters of credit)   5%  \n19.3.4.2.3.0  Guarantees unrelated to trade finance obligations   0%  \n19.3.4.2.4.0  Other contractual cash outflows   100%   \n19.3.5.0.0.0  Additional requirements      \n19.3.5.1.0.0  Net derivative cash outflows   100%   \n19.3.5.2.0.0  Any other contractual cash outflows   100%   \n \nPart IV - Calculation of Total C ash Inflows     \nWeb -based \nReturn Code  Item  Amount  Factor  Weighted \nAmount  \n19.4.0.0.0.0  Total c ash inflows       \n19.4.1.0.0.0  Maturing secured lending transactions backed by the \nfollowing collateral       \n19.4.1.1.0.0  Backed by Level 1 assets   0%  \n19.4.1.2.0.0  Backed by  Level 2A assets   15%  \n19.4.1.3.0.0  Backed by Level 2B assets   50%  \n19.4.1.4.0.0  Margin lending backed by non-Level 1 or non -Level 2  \ncollateral   50%", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 13, "year": 2015}, "type": "Document"}
{"page_content": "19.4.1.4.0.0  Margin lending backed by non-Level 1 or non -Level 2  \ncollateral   50%  \n19.4.1.5.0.0  Backed by all other assets   100%   \n19.4.2.0.0.0  Committed facilities       \n19.4.2.1.0.0  Credit facilities   0%  \n19.4.2.2.0.0  Liquidity facilities   0%  \n19.4.2.3.0.0  Other contingent funding facilities   0%  \n19.4.3.0.0.0  Other inflows by counterparty which are maturing within \n30 days       \n19.4.3.1.0.0  Retail and small business customers   50%  \n19.4.3.2.0.0  Non-financial wholesale counterparties   50%  \n19.4.3.3.0.0  Cent ral Banks, Banks and Financial I nstitutions   100%   \n19.4.4.0.0.0  Operational deposits   0%  \n19.4.5.0.0.0  Other cash inflows      \n19.4.5.1.0.0  Net derivative cash inflow s  100%   \n19.4.5.2.0.0  Other contractual cash inflows   50%", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 13, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \nLiquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks and Licensed Specialised Banks  \n \niv \n  \nAppendix I I \nGuid elines for Calculation of Liquidity Coverage Ratio  \nWeb -based \nReturn Code  Item  \n19.2.0.0.0.0  Total stock of HQLA  \n19.2.1.0.0.0  Total Adjusted Level 1 Assets  \n19.2.1.1.0.0  Level 1 Assets  \n19.2.1.1.1.0  Cash in hand  \n  All cash (coins and bank notes) held by the bank that is  immediately available to meet obligations.  \n19.2.1.1.2.0  Qualifying central bank balances and reserves in excess of Statutory Reserve Ratio (SRR)  \n  Central Bank  balances and reserves in excess of SRR maintained which can be drawn down in times of \nstress. The balance held at CBSL which represents part of the capital held in foreign currency  \nshould not be included, since it is part of capital.  \n19.2.1.1.3.0  Qualifying marketable securities with a 0% risk weight and shall satisfy all of the following:  \n(i) Traded in large, deep and active repo or cash markets characterized by  a low level of concentration;  \n(ii) Have a proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed \nmarket conditions;  \n(iii) Not an obligation of a financial institution or any of its affiliated entities;  \n(iv) At the mark to market value;  \n(v) Excluding securities pledged for secured funding/ repo irrespective of the maturity ; \n(vi) Including securities received for secured lending/ reverse repo maturing over 30 days.  \n19.2.1.1.3.1  Issued by sovereigns  \n  Government of Sri Lanka - all claims. Foreign Sovereigns - where the sovereign attracts an External \nCredit Rating between AAA to AA -. \n19.2.1.1.3.2  Guaranteed by sovereigns  \n  Government of Sri Lanka - all claims. Foreign Sovereigns - where the sovereign attracts an External \nCredit Rating between AAA to AA -. \n19.2.1.1.3.3  Issued or guaranteed by central banks  (CBs)", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 14, "year": 2015}, "type": "Document"}
{"page_content": "Credit Rating between AAA to AA -. \n19.2.1.1.3.3  Issued or guaranteed by central banks  (CBs)  \n  Central Bank of Sri Lanka - all claims. Foreign Central Banks - where the sovereign attracts an \nExternal C redit Rating between AAA to AA -. \n19.2.1.1.3.4  Issued or guaranteed by BIS, IMF, ECB and European Community or MDBs  \n  Issued or guaranteed by Bank for International Settlements (BIS), the International Monetary Fund \n(IMF), the European Central Bank (ECB), European Community (EC) and the following eligible \nMultilateral Development Banks (MDBs)  \n* The World Bank Group comprising of the International Bank for Reconstruction and Development \n(IBRD) and the International Finance Corporation (IFC)  \n* The Asian Development Bank (ADB)  \n* The African Development Bank (AFDB)  \n* The European Bank for Reconstruction and Development (EBRD)  \n* The Inter -American Development Bank (IADB)  \n* The European Investment Bank (EIB)  \n* The European Investment Fund (EIF)  \n* The Nordic Investment Bank (NIB)  \n* The Caribbean Development Bank (CDB)  \n* The Islamic Development Bank (IDB)  \n* The Council of Europe Development Bank (CEDB)  \n* The International Finance Facility for Immunization (IFFIm)", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 14, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \nLiquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks and Licensed Specialised Banks  \n \nv \n  \nAppendix I I \n19.2.1.2.0.0  Adjustments  \n19.2.1.2.1.0  Add: Market value of level 1 securities pledged for secured funding  \n  Market value of the Level 1 asset collateral extended on secured funding or repo transactions that \nmature within 30 days.  \n19.2.1.2.2.0  Add: Amounts extended through  secured lending          \n  Amounts extended through  secured lending or reverse repo transactions maturing within 30 days, in \nwhich the bank has extended cash and obtained collateral in the form of Level 1 (where collateral \nobtained not re -used).  \n19.2.1.2.3.0  Less: Market value of level 1 securities received for secured lending  \n  Market value of the Level 1 asset collateral (where collateral obtained not re -used) received on secured \nlending or reverse repo transactions maturing within 30 days, in which the bank has extended cash and \nobtained collateral in the form of Level 1.  \n19.2.1.2.4.0  Less: Amounts raised through  secured funding  \n  Amount s raised through  secured funding or repo transactions conducted that mature within 30 days and \nare backed by Level 1 assets.  \n19.2.2.0.0.0  Total Adjusted Level 2A Assets  \n19.2.2.1.0.0  Level 2A Assets  \n19.2.2.1.1.0  Qualifying marketable securities with a 20% risk weight and shall satisfy all of the following \nconditions:  \n(i) Traded in large, deep and active repo or cash markets characterised by a low level of concentration;           \n(ii) Have a proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed \nmarket conditions (i.e. A maximum decline of price or increase in haircut not exceeding 10% over a \n30-day period of significant liquidity stress );", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 15, "year": 2015}, "type": "Document"}
{"page_content": "(iii) Not an obligation of a financial institution or any of its affiliated entities;  \n(iv) At the mark to market value;  \n(v) Excluding securities pledged for secured funding/ repo irrespective of the maturity;  \n(vi) Including securities received for secured lending/ reverse repo maturing over 30 days.  \n19.2.2.1.1.1  Issued or guaranteed by sovereigns  \n  Foreign Sovereigns - where the sovereign attracts an External Credit Rating between A+ to A -. \n19.2.2.1.1.2  Issued  or guaranteed by CBs  \n  Foreign Central Banks - where the sovereign attracts an External Credit Rating between A+ to A -. \n19.2.2.1.1.3  Issued or guaranteed by Public Sector Enterprises (PSEs)  \n  Domestic and foreign PSEs - where PSE attracts an External Credit Rating between AAA to AA -. \n19.2.2.1.1.4  Issued or guaranteed by MDBs  \n  MDBs other than MDBs listed above in 19.2.1.1.3. 4 where MDB attracts an External C redit Rating \nbetween AAA to AA -. \n19.2.2.1.2.0  Qualifying non -financial corporate debt securities (including commercial paper and promissory \nnotes)  that satisfy all of the following conditions:  \n(i) Not issued by a financial institution or any of its affiliated entities;  \n(ii) With  an External  Credit Rating  of at least AA -; \n(iii) Traded in large, deep and active repo or cash markets characterised by a low level of concentration;           \n(iv) Have a proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed \nmarket conditions. (i.e. A maximum decline of price or increase in haircut not exceeding 10% over a \n30-day period of  significant liquidity stress);  \n(v) At the mark to market value;  \n(vi) Excluding securities pledged for secured funding/ repo irrespective of the maturity;  \n(vii) Including securities received for secured lending/ reverse repo maturing over 30 days.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 15, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \nLiquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks and Licensed Specialised Banks  \n \nvi \n  \nAppendix I I \n  In case of commercial paper and promissory notes  \n(i) The issuer should be a non -financial institution  \n(ii) All existing facilities obtained by the issuer from the investee bank should be \"performing\" in terms of \nthe Banking Act Direction on Classification of Loans and Advances, Income Recognition and \nProvisioning.   \n(iii) Commercial Paper/Promissory Notes should be backed by an approved standby credit line supporting \nthe issue to the full redemption value from another licensed bank.  \n19.2.2.1.3.0  Qualifying investments in Gilt Unit Trust (GUT) backed by GOSL securities, subject to:  \n(i) GUTs should be open ended mutual funds;  \n(ii) Underlying investment portfolio of GUTs should always be Sri Lanka Government Securities;  \n19.2.2.2.0.0  Adjustments  \n19.2.2.2.1.0  Add: Market value of level 2A securities pledged for secured funding  \n  Market value of the Level 2A asset collateral extended on secured funding or repo transactions that \nmature within 30 days.  \n19.2.2.2.2.0  Add: A mounts extended through  secured lending          \n  Amounts extended through  secured lending or reverse repo transactions maturing within 30 days, in \nwhich the bank has extended cash and obtained collateral in the form of Level 2A (where collateral \nobtained not re -used).  \n19.2.2.2.3.0  Less: Market value of level 2A securities received for secured lending  \n  Market value of the Level 2A asset collateral (where collateral obtained not re -used) received on \nsecured lending or reverse repo transactions maturing within 30 days, in which the bank has extended \ncash and obtained collateral in the form of Level 2A.  \n19.2.2.2.4.0  Less: A mounts raised through  secured funding  \n  Amount s raised through  secured funding or repo transactions that mature within 30 days and are", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 16, "year": 2015}, "type": "Document"}
{"page_content": "Amount s raised through  secured funding or repo transactions that mature within 30 days and are \nbacked by Level 2A assets.  \n19.2.3.0.0.0  Total Adjusted Level 2B Assets  \n19.2.3.1.0.0  Level 2B Assets  \n19.2.3.1.1.0  Qualifying non -financial corporate debt securities (including commercial paper and promissory \nnotes) that satisfy all of the following conditions:  \n(i) Not issued by a financial institution or any of its affiliated entities;  \n(ii) With  an External Credit Rating between A+ and BBB -; \n(iii) Traded in large, deep and active repo or cash markets characterised by a low level of concentration;  \n(iv) Have a proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed \nmarket conditions (i.e. A maximum decline of price or increase in haircut not exceeding 20% over a \n30-day period of significant liquidity stress);  \n(v) At the mark to market value;  \n(vi) Excluding securities pledged for secured funding/ repo irrespective of the maturity ; \n(vii) Including securities received for secured lending/ reverse repo maturing over 30 days.  \n  In case of commercial paper and promissory notes  \n(i) The issuer should be a non -financial institution  \n(ii) All existing facilities obtained by the issuer from the investee bank should be \"performing\" in terms of \nthe Banking Act Direction on Classification of Loans and Advances, Income Recognition and \nProvisioning   \n(iii) Commercial Paper/Promissory Notes should be backed by an approved standby credit line , supporting \nthe issue to the full redemption value from another licensed bank.  \n19.2.3.1.2.0  Qualifying non -financial common equity shares that satisfy all of the following conditions:  \n(i) Not issued by a financial institution or any of its affiliated entities;  \n(ii) Traded at recognized stock exchange and centrally cleared;  \n(iii) Traded in large, deep and active repo or cash markets characterised by  a low level of concentration;", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 16, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \nLiquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks and Licensed Specialised Banks  \n \nvii \n  \nAppendix I I \n(iv) Have a proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed \nmarket conditions (i.e. , maximum decline of share price or increase in haircut not exceeding 40% over \na 30 day period of significant liquidity stress);  \n(v) Excluding securities pledged for secured funding/ repo irrespective of the maturity;  \n(vi) Including securities received for secured lending/ reverse repo maturing over 30 days.  \n19.2.3.2.0.0  Adjustments  \n19.2.3.2.1.0  Add: Market value of level 2B securities pledged for secured funding  \n  Market value of the Level 2B asset collateral extended on secured funding or repo transactions that \nmature within 30 days.  \n19.2.3.2.2.0  Add: A mounts ext ended through  secured lending          \n  Amounts extended through  secured lending or reverse repo transactions maturing within 30 days, in \nwhich the bank has extended cash and obtained collateral in the form of Level 2B (where collateral \nobtained not re -used).  \n19.2.3.2.3.0  Less: Market value of level 2B securities received for secured lending  \n  Market value of the Level 2B asset collateral (where collateral obtained not re -used) received on \nsecured lending or reverse repo transactions maturing within 30 days, in which the bank has extended \ncash and obtained collateral in the form of Level 2B.  \n19.2.3.2.4.0  Less: Amounts raised through  secured funding  \n  Amount raised through  secured funding or repo transactions that mature within 30 days and are backed \nby Level 2B assets.  \n19.3.0.0.0.0  Total c ash outflows (Capital and accrued interest if any)  \n19.3.1.0.0.0  Deposits (including dormant deposits, collateralised customer deposits against lending , margin deposits  \nand insured deposits under the Sri Lanka Deposit Insurance Scheme)", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 17, "year": 2015}, "type": "Document"}
{"page_content": "and insured deposits under the Sri Lanka Deposit Insurance Scheme)  \n19.3.1.1.0.0  Demand, saving s and term deposits (less than 30 days maturity)   \n19.3.1.1.1.0  Retail customers  \n  Deposits placed with a bank by a natural person.  \n19.3.1.1.2.0  Small business customers  \n  Deposits placed with a bank by non -natural person (i.e. , legal entities of sole proprietorships, \npartnerships and clubs and societies).  \n19.3.1.2.0.0  Term deposits with residual maturity greater than 30 days  \n  Cash outflows related to retail term deposits with a residual maturity or withdrawal notice period of  \ngreater than 30 days will be excluded from total expected cash outflow s if the depositor has no legal \nright to withdraw deposits within 30 days or if early withdrawal results in a significant penalty that is \nmaterially greater than the loss of interest.  \n  If a bank allows a depositor to withdraw such deposit without applying the corresponding penalty, or \ndespite a clause that says depositor has no legal right to withdraw, the entire category should be treated \nas demand deposits regar dless of the remainin g maturity.  \n19.3.2.0.0.0  Unsecured wholesale funding  \n  Wholesale deposits and other general obligations that are raised from legal entities ( incorporated \ncompanies ). Wholesale deposits also include dormant deposits, collateralised  customer deposits against \nlending , margin deposits and insured deposits under the Sri Lanka Deposit Insurance and Liquidity \nSupport Scheme. In case of other general obligation s, they shall not be collateralised  by legal rights to \nspecifically designated assets owned by the borrowing institution in the case of bankruptcy, insolvency, \nliquidation or resolution. Obligations related to derivative contracts are explicitly excluded from this \ndefinition.   \n19.3.2.1.0.0  Operational deposits generated by clearing, custody and cash management activities", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 17, "year": 2015}, "type": "Document"}
{"page_content": "19.3.2.1.0.0  Operational deposits generated by clearing, custody and cash management activities  \n  Financial and non -financial customer deposits  place d with a bank , in order to facilitate their access and \nability to use payment and settlement systems or make payments. These services must be provided \nunder a legally binding agreement in addition to the account mandate to institutional customers (e.g. \nVostro Accounts a nd collection accounts).", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 17, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \nLiquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks and Licensed Specialised Banks  \n \nviii \n  \nAppendix I I \n19.3.2.2.0.0  Cooperative banks in an institutional network (qualifying deposits with the centralized \ninstitution)  \n  Group of legally autonomous banks with a statutory framework of cooperation with common strategic \nfocus and brand  where specific functions are performed by central institutions. (e.g. , Samurdhi banks, \nrural banks , sanasa saving societies , cooperative societies ). \n19.3.2.3.0.0  Non-financial Corporates, Sovereigns, CBs, MDBs and PSEs  \n  All deposits and other extensions of unsecured funding from non -financial corporate customers, \nsovereign s, CBs, MDB s and  PSEs not held specifically for operational purposes.  \n19.3.2.4.0.0  Other legal entity customers  \n  Deposits and other funding from other institutions (including banks, security firms, insurance \ncompanies,  etc.), fiduciaries, beneficiar ies, conduits and special purpose vehicles, affiliated entities of \nthe bank and other entities that are not specifically held for operational purposes and not included in the \nprior categories.  \n19.3.3.0.0.0  Secured  Funding  Transactions  \n19.3.3.1.0.0  Backed by Level 1 assets  \n  Amount s raised through  secured funding or repo transactions not conducted with the bank's domestic \ncentral bank and that  mature within 30 days and are backed by Level 1 assets.  \n19.3.3.2.0.0  Backed by Level 2A assets  \n  Amount s raised through  secured funding or repo transactions not conducted with the bank's domestic \ncentral bank and that  mature within 30 days and are backed by Level 2A assets.  \n19.3.3.3.0.0  Backed by Level 2B assets  \n  Amount s raised through  secured funding or repo transactions not conducted with the bank's domestic \ncentral bank and that  mature within 30 days and are backed by Level 2B assets.  \n19.3.3.4.0.0  Backed by all other assets", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 18, "year": 2015}, "type": "Document"}
{"page_content": "19.3.3.4.0.0  Backed by all other assets  \n  Amount s raised through  secured funding or repo transactions not conducted with the bank's domestic \ncentral bank and that  mature within 30 days and are backed by other assets (non -HQLA).  \n19.3.4.0.0.0  Undrawn portion of committed (irrevocable) facilities and other contingent funding obligations  \n19.3.4.1.0.0  Committed (irrevocable) credit & liquidity facilities  \n19.3.4.1.1.0  Undrawn committed credit & liquidity facilities to retail and small business customers  \n19.3.4.1.2.0  Undrawn committed credit facilities to non -financial corporates, sovereigns, CBs, PSEs and MDBs  \n19.3.4.1.3.0  Undrawn committed liquidity facilities to non -financial corporates, sovereigns, CBs, PSEs and MDBs  \n19.3.4.1.4.0  Undrawn committed credit & liquidity facilities to banks subject to prudential supervision  \n19.3.4.1.5.0  Undrawn committed credit facilities to  other financial institutions  \n19.3.4.1.6.0  Undrawn committed liquidity facilities to financial institutions  \n19.3.4.1.7.0  Undrawn committed credit & liquidity facilities to other legal entities  \n19.3.4.2.0.0  Other contingent funding obligations  \n  Other contingent funding liabilities such as guarantees, Letter of Credit (LC), recoverable credit and \nliquidity facility.  \n19.3.4.2.1.0  Unconditionally revocable \"uncommitted\" credit and liquidity facilities  \n  Balances of undrawn credit and liquidity facilities where the bank has the right to unconditionally \nrevoke the undrawn portion of these facilities (e.g. , Overdraft and credit card undrawn portion).  \n19.3.4.2.2.0  Trade Finance related obligations (including guarantees and letters of credit)  \n  Trade finance instruments consist of trade -related (import - export related) obligations directly \nunderpinned by the movement of goods or the provision of services.  \n19.3.4.2.3.0  Guarantees unrelated to trade finance obligations  \n  The outstanding amount of guarantees unrelated to trade finance obligations.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 18, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \nLiquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks and Licensed Specialised Banks  \n \nix \n  \nAppendix I I \n19.3.4.2.4.0  Other contractual cash outflows  \n  Any other contractual cash outflows within the next 30 calendar days should be captured in this \nstandard, such as outflows to cover unsecured collateral borrowings, uncovered short positions, \ndividends or contractual interest payments as to what comprises the amounts included in this line.  \n19.3.5.0.0.0  Additional requirements  \n19.3.5.1.0.0  Net derivative cash outflows   \n  Banks should calculate, in accordance with their existing valuation methodologies, expected \ncontractual derivative cash inflows and outflows. Cash flows may be calculated on a net basis (i.e. , \ninflows can offset outflows) by counterparty. The sum of all net cash outflows should be r eported here. \nThe sum of all net cash inflows should be reported in net derivative cash inflow s. Where derivative \npayments are collateralised  by HQLA, cash outflows should be calculated net of any corresponding \ncash or collateral inflows that would result, all other things being equal, from contractual obligations \nfor cash or collateral to be provided to the bank, if the bank is legally entitle d and operationally capable \nto re -use the collateral in new cash raising transactions once the collateral is received. This is in line \nwith the principle that banks should not double count liquidity inflows and outflows.  \n19.3.5.2.0.0  Any other contractual cash outflows  \n  Including any amount required to be installed in the central bank reserves within 30 days, any other \ncontractual cash outflows.  \n19.4.0.0.0.0  Total c ash inflows  \n19.4.1.0.0.0  Maturing secured lending transactions backed by the following collateral  \n19.4.1.1.0.0  Backed by Level 1 assets  \n  Amounts extended through  secured lending or reverse repo transactions maturing within 30 days, in", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 19, "year": 2015}, "type": "Document"}
{"page_content": "which the bank has extended cash and obtained collateral in the form of Level 1 (where collateral \nobtained not re -used).  \n19.4.1.2.0.0  Backed by Level 2A Assets  \n  Amounts extended through  secured lending or reverse repo transactions maturing within 30 days, in \nwhich the bank has extended cash and obtained collateral in the form of Level 2A (where collateral \nobtained not re -used).  \n19.4.1.3.0.0  Backed by Level 2B Assets  \n  Amounts extended through  secured lending or reverse repo transactions maturing within 30 days, in \nwhich the bank has extended cash and obtained collateral in the form of Level 2B  (where collateral \nobtained not re -used).  \n19.4.1.4.0.0  Margin lending backed by non -Level 1 or non -Level 2 collateral  \n  Amounts extended through  collateralised loans extended to customers for the purpose of taking \nleveraged trading positions (\u201cmargin loans\u201d) made against non -HQLA collateral.  \n19.4.1.5.0.0  Backed by all other assets  \n  Amounts extended through  such transactions (other than those reported in 19.4.1.4.0.0) in which the \nbank has obtained collateral in another form than Level 1 or Level 2 assets.  \n19.4.2.0.0.0  Committed facilities  \n  Committed credit , liquidity or other contingent funding facilities that  the bank holds  in other \ninstitutions for its own purpose.  \n19.4.2.1.0.0  Credit facilities  \n19.4.2.2.0.0  Liquidity facilities  \n19.4.2.3.0.0  Other contingent funding facilities  \n19.4.3.0.0.0  Other inflows by counterparty w hich are maturing within 30 days  \n19.4.3.1.0.0  Retail and small business customers  \n All payments (including interest payments and installments) from retail customers on performing \nfacilities that is contractually due within the 30-day horizon.  \n19.4.3.2.0.0  Non-financial wholesale counterparties  \n All payments (including interest payments and installments) from non -financi al wholesale \ncounterparties on performing facilities that is contractually due within the 30 -day horizon.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 19, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \nLiquidity Coverage Ratio under Basel III Liquidity Standards f or \nLicensed Commercial Banks and Licensed Specialised Banks  \n \nx \n  \nAppendix I I \n19.4.3.3.0.0  Cent ral Banks, Banks and Financial I nstitutions  \n All payments (including interest payments and installments) from central banks, banks and financial \ninstitutions on performing facilities that is contractually due within the 30 -day horizon.   \n19.4.4.0.0.0  Operational deposits  \n  Deposits held at other financial institutions for operational purposes such as clearing, custody and cash \nmanagement purposes. Also includes deposits held at centralised  institution of network of co -operative \nbanks. These services must be provided under a legally binding agreement to institutional customers \n(e.g., Nostro Accounts , collection accounts , cash items in process of collection ). \n19.4.5.0.0.0  Other cash inflows  \n19.4.5.1.0.0  Net derivative cash inflow s   \n Banks should calculate, in accordance with their existing valuation methodologies, expected \ncontractual derivative cash inflows and outflows. Cash flows may be calculated on a net basis (i.e. , \ninflows can offset outflows) by counterparty. The sum of all net cash inflows should be reported here. \nThe sum of all net cash outflows should be reported in net derivative cash outflow s. Where derivatives \nare collateralised by HQLA, cash inflows should b e calculated net of any corresponding cash or \ncontractual collateral outflows that would result, all other things being equal, from contractual \nobligations for cash or collateral to be posted by the bank, given these contractual obligations would \nreduce th e stock of HQLA. This is in line with the principle that banks should not double count \nliquidity inflows and outflows.  \n19.4.5.2.0.0  Other contractual cash inflows  \n  Any other contractual cash inflows to be captured.", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 20, "year": 2015}, "type": "Document"}
{"page_content": "Banking Act Direction s No. 01 of 201 5 \nLiquidity Coverage Ratio under  Basel III Liquidity Standards f or \nLicensed Commercial Banks and Licensed Specialised Banks  \n \n \nxi \n  \nAppendix III  \nMapping of Notations of the Credit Rating Agencies  for classification of assets for LCR  \n       \nFitch \nRating \nLanka  RAM \nRatings \n(Lanka) \nLimited  ICRA \nLanka \nLimited  Standard \nand Poor\u2019s  Moody\u2019s   Fitch \nRatings  Rating \nScale for \nLCR  \nAAA (lka)  AAA  (SL) AAA  AAA  Aaa  AAA  AAA  \nAA+ (lka)  AA+  (SL) AA+  AA+  Aa1  AA+  AA+  \nAA (lka)  AA (SL) AA  AA  Aa2  AA  AA \nAA- (lka)  AA- (SL) AA - AA-  Aa3  AA-  AA- \nA+ (lka)  A+ (SL) A+  A+  A1  A+  A+ \nA (lka)  A (SL) A  A  A2  A  A \nA-    (lka)  A- (SL) A - A-  A3  A-  A- \nBBB+ (lka)  BBB+  (SL) BBB+  BBB+  Baa1  BBB+  BBB+  \nBBB (lka)  BBB  (SL) BBB  BBB  Baa2  BBB  BBB  \nBBB - (lka)  BBB - (SL) BBB - BBB -  Baa3  BBB -  BBB - \nBB+ (lka)  BB+  (SL) BB+  BB+  Ba1  BB+  BB+  \nBB (lka ) BB (SL) BB  BB  Ba2  BB  BB \nBB- (lka)  BB- (SL) BB - BB-  Ba3  BB-  BB- \nB+ (lka)  B+ (SL) B+  B+  B1  B+  B+ \nB (lka)  B (SL) B  B  B2  B  B \nB- (lka) & \nLower  B- & Lower  (SL) B - & \nLower  B- & Lower  B3 & Lower  B- & Lower  B- & Lower", "metadata": {"source": "data\\CBSL\\2015\\Liquidity coverage ratio under Basel III liquidity standards for licensed com banks and licensed specialised banks-compressed_0.pdf", "page": 21, "year": 2015}, "type": "Document"}
{"page_content": "@ goor @eo OooqO\n@odrarm lopdu orrjd\nCENTRAL BANK OF SRI TANKA\nareOq6lxaas\u20accro6tas@dag ounirdl GLo$unrtoror$ $enourd;oonrb BankSupervlslon Department\nRef: 02 I 17 I 600 I 00021 002\n28 May 2015\nTo: The Chief Executive Officers of Licensed Commercial Banks\nDear Sir/ Madam\nRecovery of Accommodation to Exporters\nWe write to inform you that:\na. the Circular dated 16 October 2014 on the above subject is hereby rescinded, and\nb. the Circulars dated 22 January 2001,29 January 2001, 16 February 2001 and 30 March\n2001 on the above subject shall come into effect with an amendment to reduce the\nenhanced interest rate stated in the said Circulars from 1,000 basis points to 500 basis\npoints.\nThis Circular shall come into operation with effect from 01 June 2015 and banks shall ensure that\nrelevant customers are informed of the applicability of this Circular in advance.\nYours faithfully,\n&-\nffittJYPFernando\nDirector of Bank Supervision\no Oo Otoe, eelo t0, d\u20acDoEleA gJOo,\ntDs.ec,.59O, @eO Ol, \u20ac Oplo\u20ac\n, ( s4fi24771oot6ss6 qb6 Dnq, Qa:. ro con$u$ onopog O6tr(9tnl 1\nD. Ou. eo.590, OcnO6q 01, Sddo6ld E, ilo. 30, Jantdhlpdil tlaxilta, Colombo I\nP .0, Bd. 500, oolombo 01, &l Lntka,\n@ www.cbsl.gov.lk H sau24r7711 E banksup@cbsl.lk", "metadata": {"source": "data\\CBSL\\2015\\Recovery of Accommodation to Exporters Circular issued on 28th May 2015_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "6 golur @lo OrosUO\nBeunirene lo$#u nrdxff\nCEilIRAL BAilK OF SRI I.AillU\n03 August 2015 CIRCULAR Rer: o2n7t6ootooo2too2\nBank Supervision Department\nTo: The Chief Executive Officers of Licensed Commercial Banks\nRecovery of Accommodation to Exporters\nFurther to our Circular dated 28 May 2015 on the above subject, licensed commercial banks\n(LCBs) are informed of the following.\nl) The Central Bank of Sri Lanka, after considering the representations made by the Tea\nexporters that remittance of export proceeds is delayed due to geopolitical factors\nconfronted by countries importing tea products from Sri Lanka, has decided that LCBs\nmay use their judgment and discretion to enhance the period granted to settle export\ncredit out of export proceeds up to 180 days from the date of shipment in respect of\ncredit granted to tea exports, provided that such decision be taken by a duly authorised\nofficer performing executive functions in the respective bank.\n2) This Circular shall come into operation with effect from 01 June 2015.\nfr(IvIrs.)TMJYPFemando\nDirector of Bank Supervision\no OeD Oog, qelD 30, deDoAcro olO(D,\nlD6. @e. 5OO, elot\u20acio Ol, \u20ac \u20acplDro\n( sn r zazztoolesg6 eU6 @mg, ga). 30 etrrgtlugfl onopop Ostr(grbq 1\np. Gu. Qa>.590, Oonqeiix{ 0l, ea)rd|o6[6v6] 6, t{0,30, Janadhlpathl Maf,alha, Colombo 1\nP.0.Bor590,Colombo 01, Srl lrnka,\n@ www.cbsl.gov.lk ld %u2417211 M banksup@cbsl.lk", "metadata": {"source": "data\\CBSL\\2015\\Recovery_of_Accommodation_to_Exporters Circular issued on 03rd August 2015_0.pdf", "page": 0, "year": 2015}, "type": "Document"}
{"page_content": "29 December2016MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.01 of2016\nCAPITAL REQUIREMENTS UNDER BASEL III\nF'OR LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nIn terms of powers conferred by Sections l9(7Xa) and 76G(7) of the Banking Act No. 30 of\n1988, the Monetary Board has determined the minimum capital ratios for licensed commercial\nbanks (LCBs) and licensed specialised banks (LSBs) having regard to the guidelines issued by\nthe Bank for Intemational Settlements in June 2006, December 2010 and revised in June zDll.\n1. Empowerment 1.1\nScope of\nApplication\n3. Minimum\nCapital\nRequirements\nand Buffers1.2\n2.1In terms of Section 102 of the Monetary Law Act, the Monetary\nBoard may from time to time by Order prescribe the minimum capital\nratios which the capital of LCBs and LSBs shall bear to the total\nvolume of their assets or to any specified category of such assets.\nIn terms of Sections 46(1) and 76J(l) of the Banking Act, in order to\nensure the soundness of the banking system, the Monetary Board is\nempowered to issue Directions to all or any LCB and LSB, regarding\nthe manner in which any aspect of the business of such banks is to be\nconducted.\nThese Directions shall be applicable to every LCB and LSB:\n(i) Incorporated in Sri Lanka on a solo and consolidated basis\n(ii) Branches of banks incorporated or established outside Sri\nLanka on a standalone basis\n3.1 Commencing 01 July 2017, every LCB and LSB shall maintain, at\nall times, the minimum capital ratios and buffers as prescribed in\nSchedule I hereto in respect of total risk weighted assets.\n3.2 The effective dates for implementation and ratios are indicated in\nTables I and2 below.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 0, "year": 2016}, "type": "Document"}
{"page_content": "29 December 2016MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.01 of2016\nTable 1 - Banks with Assets Less than Rs. 500 billion\nComponents of Capital 0t.w.wt7 01.01.2018 01.01.2019\nCommon Equity Tier 1\nincluding Capital\nConservation Buffer5.75o/\" 6.375% 7.00Y,\nTotal Tier I including\nCapital Conservation Buffer7.25% 7.875% 8.54o/o\nTotal Capital Ratio\nincluding Capital\nConservation Buffer11.25% |t.875% 12.50%\n4.t 4.Maintain\nAdequate Capital\nabove the\nMinimum Capital\nRequirementTable 2 - Banks with Assets of Rs. 500 billion and Above\nCompouents of Capital 0t.w.2tt7 01.81.2018 01.sl.2019\nCommon Equiry Tier I\nincluding Capital\nConservation Buffer and\nCapital Surcharge on\nDomestic Systemically\nImportant Banks6.25% 7.37s% 8.50%\nTotal Tier I including\nCapital Conservation Buffer\nand Capital Surcharge on\nDomestic Systemically\nImportant Banks7.75% 8.875% 10.00%\nTotal Capital Ratio including\nCapital Conservation Buffer\nand Capital Surcharge on\nDomestic Systemically\nImportant Banks11.75% 12.875% 14.00%\nEvery LCB and LSB shall, at all times maintain adequate capital to\ncover its exposures to all risks considering the requirements specified\nin the Regulatory Framework on Supervisory Review Process (SRp)\nin Schedule II hereto.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 1, "year": 2016}, "type": "Document"}
{"page_content": "29 December2016MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.01 of20l6\n5. Disclosure\nRequirements\n6. Steps to Secure\nCompliance\n7. Revocation of\nDirections and\nCirculars6.1\n6.24.2 Every LCB and LSB shall develop and implement a sound Internal\nCapital Adequacy Assessment Process (ICAAP) in accordance with\nthe requirements specified in Regulatory Framework on SRP.\n4.3 All LCBs and LSBs shall submit a Board approved ICAAP\nDocument to the Director of Bank Supervision within five months\nfrom the end of its financial year.\n5.1 Commencing 1 July 2017, every LCB and LSB shall disclose key\ninformation in relation to regulatory capital, liquidity and risk\nmanagement with the published financial statements as specified in\nSchedule III with comparative information on both solo and\nconsolidated basis.\nIn the event any bank needs to augment its capital to meet the above\nregulatory capital ratios, such bank shall comply with these\nDirections commencing 01 July 2017.\nWhere an LCB or an LSB has failed to comply with these Directions,\nsuch LCB or LSB shall not pay dividends or repatriate profits or\nadopt any other measure that will further deteriorate the regulatory\ncapital position of such LCB or LSB until such compliance is\neffected and confirmed by the Director of Bank Supervision.\nThe following Directions and Circulars are hereby revoked.\n(i) Circulars No. 02104/002/0105/001 and 02/04100210151/001\ndated 20 March 2001 on Publication of Capital Adequacy\nStatements in the Annual Report\n(iD Circular No. 02104/003/0400/002 dated 16 December 2004 on\nShipping Guarantees Issued by Banks\n(iii) Circular dated 26 December 2007 on the Adoption of Basel II\nCapital Adequacy Framework beginning 2008", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 2, "year": 2016}, "type": "Document"}
{"page_content": "29 December 2016MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.01 of2016\n(iv) Banking Act Directions No. 9 and 10 of 2007 on Maintenance\nof Capital Adequacy Ratio\n(v) Disclosure requirements in Section H of the Banking Act\nDirections No. 7 of 2011 on Integrated Risk Management\nFramework for Licensed Banks\n(vi) Banking Act Directions No. 9 and l0 of 20ll on Amendment\nto Directions on Maintenance of Capital Adequacy Ratio\n(vii) Circular No. 021171500/0086/001 dated 07 Decemb er 2012 on\nICRA Lanka Limited - Recognition as an Extemal Credit\nAssessment Institution\n(viii) Banking Act Directions No. 5 of 2013 on Supervisory Review\nProcess (Pillar 2 of Basel II) for Licensed Commercial Banks\nand Licensed Specialised Banks\n(ix) Revised Guidelines dated 31 March 2014 on Computation of\nRisk Weighted Amount for Operational Risk - Implementation\nof the Standardised Approach\n(x) Circular No. 021171600100291001 dated 31 March 2014 on\nImplementation of the Standardised Approach on Computation\nof Risk-Weighted Amount for Operational Risk under Basel II\nCapital Adequacy Framework issued to LCBs and LSBs\n*/r;\"Jo^-7,\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 3, "year": 2016}, "type": "Document"}
{"page_content": "Banking Act Directions No. 01 of 2016  \nCapital Requirements Under Basel III for Licensed Commercial Banks a nd  \nLicensed Specialised Banks  \n1 \n \n \nSCHEDULE I  \n \n \n \nPILLAR I  \nMINIMUM CAPITAL REQUIREMENTS AND \nBUFFERS", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 4, "year": 2016}, "type": "Document"}
{"page_content": "2 \n ABBREVIATIONS  \n \nAMA  \u2013  Advanced Measurement Approaches  \nAT1 \u2013 Additional Tier 1  \nBIA \u2013  Basic Indicator Approach  \nBIS \u2013  Bank for International Settlements  \nBCBS  \u2013  Basel Committee on Banking Supervision  \nCAR  \u2013  Capital Adequacy Ratio  \nCBSL  \u2013  Central Bank of Sri Lanka  \nCCB  \u2013 Capital Conservation Buffer  \nCCR  \u2013  Counterparty Credit Risk  \nCET1  \u2013 Common Equity Tier 1  \nCIPC  \u2013  Cash Items in the Process of Collection  \nCRM  \u2013  Credit Risk Mitigation  \nD-SIB \u2013 Domestic Systemically Important Bank  \nECAI  \u2013  External Credit Assessment Institution  \nGOSL  \u2013  Government of Sri Lanka  \nIMF  \u2013  International Monetary Fund  \nLKR  \u2013  Sri Lanka  Rupee  \nMDB  \u2013  Multilateral Development Bank  \nNPA  \u2013  Non Performing Assets  \nPSE  \u2013  Public Sector Entities  \nRWA  \u2013 Risk Weighted Assets  \nSA  \u2013  Standardised Approach  \nSLECIC  \u2013  Sri Lanka Export Credit Insurance Corporation  \nSME  \u2013  Small and Medium Enterp rise  \nSMM  \u2013  Standardised Measurement Method  \nLCB  \u2013  Licensed Commercial Bank  \nLSB  \u2013  Licensed Specialised Bank", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 5, "year": 2016}, "type": "Document"}
{"page_content": "3 \n MINIMUM CAPITAL REQUIREMENTS AND BUFFERS UNDER BASEL III  \n1. Implementation of Basel III Framework  \n1.1 Commencing 01 July 2017 capital ratios  of licensed banks will be computed based on \nthe document \u201c Basel III: A Global Regulatory Framework for More Resilient Banks \nand Banking System\u201d  issued by the Basel Committee o n Banking Supervision (BCBS)  \nof the Bank for International Settlement in Decembe r 2010 (Revised in June 2011) . \n2. Capital Requirements  \n2.1 Total Regulatory Capital   \nRegulatory capital  of licensed banks  will consist the following:  \ni) Tier 1 Capital  \na) Common Equity Tier 1 capital (CET1)  \nb) Additional Tier 1 capital (AT1)  \nii) Tier 2 Capital  \n2.2 Risk Weighted Assets  \nCapital  requirements  shall be maintained as a percentage of risk weighted assets (RWA) \ncalculated based on the following approaches:  \ni) The Standardised Approach for credit risk  \nii) The Standardised Measurement Method for market risk  \niii) The Ba sic Indicator Approach, the Standardised Approach or the Alternative \nStandardised Approach for operational risk  \n2.3 Capital Buffers  \nCapital buffers shall  be implemented on staggered basi s and are required to be \nmaintained above the minimum CET1 and total capi tal as a percentage of RWA as \nfollows :  \ni) Capital Conservation Buffers  (CCB s) for all licensed banks  \nii) Capital Surcharge for Domestic Systemically Important Banks (D -SIBs) for \nlicensed banks with total asset s equal to or greater than  Rs. 500 billion  \niii) Countercyclical Buffers w ill be implemented as and when excess aggregate credit \ngrowth is judged to be associated with a build -up of system wide risk", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 6, "year": 2016}, "type": "Document"}
{"page_content": "4 \n 2.4 Timeline of Implementation  \nCapital requirements  as a percentage of RWA  shall be applied  on a staggered basis to \nbe fully implemented by 01 January 2019 as indicated in Table 1  and 2  below.  \nTable 1   \nCapital Requirements  for Banks with Assets Less t han Rs. 500 billion  \nRatios (%)  01.07.2017  01.01.2018  01.01.2019  \nMinimum CET1  4.50 4.50 4.50 \nCCB  1.25 1.875  2.50 \nMinimum CET1 plus CCB  5.75 6.375  7.00 \nMinimum Tier 1 plus CCB  7.25 7.875  8.50 \nMinimum Total Capital plus CCB  11.25  11.875  12.50  \nTable 2   \nCapital Requirements  for Banks with Total Assets of Rs. 500 billion  or above  \nRatios (%)  01.07 .2017  01.01.2018  01.01.2019  \nMinimum CET1  4.50 4.50 4.50 \nCCB  1.25 1.875  2.50 \nCapital Surcharge for D -SIBs  0.50 1.000  1.50 \nMinimum CET1 plus CCB and \nCapital Surcharge for D -SIBs  6.25 7.375  8.50 \nMinimum Tier 1 plus CCB and \nCapital Surcharge for  D -SIBs  7.75 8.875  10.00  \nMinimum Total Capital plus CCB  \nand Capital Surcharge for D -SIBs  11.75  12.875  14.00  \n2.5 The difference between the m inimum total c apital ratio (including buffers)  and the \nminimum Tier 1 r atio (including buffers)  can be met with Tier 2 c apital or higher forms  \nof capital subject to the condition th at the bank shall raise Tier 2 c apital only up to a \nmaximum of 100 per cent of CET1 capital.  \n3. Transitional Arrangements  \n3.1 Capital instruments that do not meet the eligibility criteria for inclusion in CET1 c apital \nwill be excluded with effect from 01 July  2017 . \n3.2 Capital instruments issued up to 31 December 2016 will be eligible to be included in \nTier 2 capital subject to a discount of 1/5th each year during the four years  immediately  \npreceding maturity.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 7, "year": 2016}, "type": "Document"}
{"page_content": "5 \n 4. Submission of Data  \n4.1 All banks shall report  the position as at the last calendar day of ea ch quarter/financial \nyear, through t he web -based system as follows:  \ni) The q uarterly return (BSD -QF-20-CR) within 1 month after the end of each \nquarter . \na) Revision to the return shall be made in the following  quarter immediately after \ncompletion of the audit . \nii) The a nnual audited return  (BSD -AF-20-CR) within 6 months afte r the end of the \nfinancial year.  \n4.2 If the submission deadline falls on a bank holiday, it will be deferred to the next working \nday. \n4.3 The reporting formats and instructions on calculation of capital ratios  are given  as \nfollows :  \n Appendix I :  Reporting Formats for Capital Requirements  \n Appendix I I :  Part I - Computation of Capital Ratio s \n Appe ndix II I :  Part II - Guidelines for Computation  of Total Capital   \n Appendix I V :  Part III  - Guidelines on Computation of Total Risk Weighted Assets", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 8, "year": 2016}, "type": "Document"}
{"page_content": "Appendix I  \n6 \n REPORTING FORMATS FOR CAPITAL  REQUIREMENTS  \n \nPart I \u2013 Computation of Capital Ratio s  \nWeb Based  \nReturn Code  Item  Amount  \n20.1.1 .0.0.0 Common Equity Tier 1  Capital   \n20.1.2.0.0.0  Total Tier 1 Capital   \n20.1.3 .0.0.0 Total Capital   \n20.1.4 .0.0.0 Total Risk Weighted Amount   \n20.1.4.1.0 .0 Risk Weighted Amount  for Credit Risk   \n20.1.4.2.0 .0 Risk Weighted A mount  for Market Risk   \n20.1.4 .3.0.0 Risk Weighted A mount  for Operational Risk   \n20.1. 5.0.0 .0 Common Equity Tier 1 Capital Ratio   \n20.1. 5.1.0.0  Capital conservation buffer   \n20.1. 5.2.0 .0 Capital surcharge on D -SIBs   \n20.1. 6.0.0 .0 Total Tier 1 Capital Ratio   \n20.1. 7.0.0 .0 Total Capital Ratio    \n \nPart II \u2013 Computation of Total Capital  (Rs. \u2018000)  \nWeb Based \nReturn Code  Item  Amount  \n20.2.1.1.0.0  Common Equity Tier 1 (CETI) Capital after Adjustments   \n20.2. 1.1.1.0  Total Common Equity Tier 1 (CET1) Capital   \n20.2. 1.1.1.1  Equity capital or stated capital/ assigned capital   \n20.2. 1.1.1.2  Reserve fund   \n20.2. 1.1.1.3  Published retained earnings/(Accumulated retained losses)   \n20.2. 1.1.1.4  Accumulated other comprehensive income (OCI)   \n20.2. 1.1.1.5  General and other disclosed reserves   \n20.2. 1.1.1.6  Unpublished current year's profit/ (losses ) and gains reflected in OCI   \n20.2. 1.1.1.7  Ordinary shares issued by consolidated banking and financial subsidiaries of the \nbank and held by third parties   \n20.2. 1.1.2.0  Total Adjustments to CET1 Capital   \n20.2. 1.1.2.1  Goodwill (net)   \n20.2. 1.1.2.2  Other i ntangible assets (net)   \n20.2. 1.1.2.3  Revaluation losses  of property, plant and equipment   \n20.2. 1.1.2.4  Deferred tax assets (net)   \n20.2. 1.1.2.5  Cash flow hedge reserve   \n20.2. 1.1.2.6  Unrealised gains on sale related securitisation transactions   \n20.2. 1.1.2.7  Shortfall of the cumulative impairment to specific provisions   \n20.2. 1.1.2.8  Changes in own credit risk   \n20.2. 1.1.2.9  Defined benefit pension fund assets", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 9, "year": 2016}, "type": "Document"}
{"page_content": "20.2. 1.1.2.8  Changes in own credit risk   \n20.2. 1.1.2.9  Defined benefit pension fund assets   \n20.2. 1.1.2.10  Investment in own shares   \n20.2. 1.1.2.11  Reciprocal cross holdings in the capital of banking and other financial institutions   \n20.2. 1.1.2.12  Investments in the capital of banking and financial institutions where the bank does \nnot own more than 10 per cent of the  issued ordinary share capital of the entity", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 9, "year": 2016}, "type": "Document"}
{"page_content": "7 Web Based \nReturn Code  Item  Amount  \n20.2. 1.1.2.13  Significant investments in the capital of financial institutions where the bank own s \nmore than 10 per cent of the issued  ordinary share capital of the entity   \n20.2. 1.1.2.14  Shortfall of capital  in financial subsidiaries   \n20.2. 1.1.2.15  Regulato ry adjustments applied to CET1 c apital due to insufficient AT1 and T ier 2 \ncapital to cover adjustments   \n20.2. 1.1.2.16  Amount due from head office & branches outside Sri Lanka in Sri Lanka n Rupees   \n20.2. 1.1.2.17  Amount due to head office & branches outside Sri Lanka in Sri Lanka n Rupees   \n20.2. 1.1.2.18  Amount due from head office & branches outside Sri Lanka in Foreign Currency \n(net)   \n20.2. 2.1.0.0  Additional Tier 1 (AT1) Capital after Adjustments   \n20.2. 2.1.1.0  Total Additional Tier 1 (ATI) Capital   \n20.2. 2.1.1.1  Qualifying Additional Tier 1 capital i nstruments   \n20.2. 2.1.1.2  Instruments issued by consolidated banking and  financial subsidiaries of the bank \nand held by third parties   \n20.2. 2.1.2.0  Total Adjustments to AT1 Capital   \n20.2. 2.1.2.1  Investment in own shares   \n20.2. 2.1.2.2  Reciprocal cross holdings in AT1 capital instruments   \n20.2. 2.1.2.3  Investments in the capital of banking and financial institutions where the bank does \nnot own more than 10 per cent of the issued ordinary share capital of the  entity   \n20.2. 2.1.2.4  Significant investments in the capital of banking and financial institutions where the \nbank own more than 10 per cent of the issued ordinary share capital of the entity   \n20.2.2.1.2.5  Regulatory adjustments applied to AT1 due to insufficient Tier 2 capital to cover \nadjustments   \n20.2. 3.1.0.0  Tier 2 Capital after Adjustments   \n20.2. 3.1.1.0  Total Tier 2 Capital   \n20.2. 3.1.1.1  Qualifying Tier 2 capital i nstruments   \n20.2. 3.1.1.2  Revaluation  gains   \n20.2. 3.1.1.3  General  provisions", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 10, "year": 2016}, "type": "Document"}
{"page_content": "20.2. 3.1.1.2  Revaluation  gains   \n20.2. 3.1.1.3  General  provisions   \n20.2. 3.1.1.4  Instruments issued by consolidated banking and financial subsidiaries of the bank \nand held by third parties   \n20.2. 3.1.2.0  Total Adjustments to Tier 2 Capital   \n20.2. 3.1.2.1  Investment in own shares   \n20.2. 3.1.2.2  Reciprocal cross holdings in Tier 2 capital instruments   \n20.2. 3.1.2.3  Investments in the capital of financial institutions and where the bank does not own \nmore than 10 per cent of the issued capital carrying voting  rights of the issuing entity   \n20.2. 3.1.2.4  Significant investments in the capital of banking and financial institutions where the \nbank own more than 10 per cent of the issued ordinary share capital of the entity   \n20.2. 4.1.0.0  Total Tier 1 Capital   \n20.2. 5.1.0.0  Total Capital", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 10, "year": 2016}, "type": "Document"}
{"page_content": "8 Part III( A) \u2013 Computation of Risk Weighted Amount for Credit Risk (Rs. \u2018000)  \nWeb Based \nReturn Code  Assets  Principal \nAmount of On -\nBalance Sheet \nItems  Credit \nEquivalent of \nOff-Balance \nSheet Items  Total  Risk \nWeight \n% Risk \nWeighted \nAssets \nAmount  \n20.3.1.0.0.0  Total Risk W eighted A mount for \nCredit Risk       \n20.3.1.1.0.0  Claims on Central Government and \nCentral Bank of Sri Lanka       \n20.3.1.1.1.0  Central Government       \n20.3.1.1.1.1  Rupee Claims on Central Government     0  \n20.3.1.1.2.2  Foreign Claims on Central \nGovernment     20  \n20.3.1.1.2.0  Central Bank of Sri Lanka     0  \n20.3.1.2.0.0  Claims on Foreign Sovereigns and \ntheir Central Banks       \n20.3.1.2.1.0  AAA to AA -    0  \n20.3.1.2.2.0  A+ to A -    20  \n20.3.1.2.3.0  BBB+ to BBB -    50  \n20.3.1.2.4.0  BB+ to B -    100  \n20.3.1.2.5.0  Below B -    150  \n20.3.1.2.6.0  Unrated     100  \n20.3.1.3.0.0  Claims on Public Sector Entities \n(PSEs)       \n20.3.1.3.1.0  AAA to AA -    20  \n20.3.1.3.2.0  A+ to A -    50  \n20.3.1.3.3.0  BBB+ to BB -    100  \n20.3.1.3.4.0  Below BB -    150  \n20.3.1.3.5.0  Unrated     100  \n20.3.1.4.0.0  Claims on Official Entities and \nMultilateral Development \nBanks(MDBs)       \n20.3.1.4.1.0  BIS,IMF, ECB, EC and Eligible \nMDBs     0  \n20.3.1.4.2.0  AAA+ to AA -    20  \n20.3.1.4.3.0  A+ to BBB -    50  \n20.3.1.4.4.0  BB+ to B -    100  \n20.3.1.4.5.0  Below B -    150  \n20.3.1.4.6.0  Unrated     100  \n20.3.1.5.0.0  Claims on Banks       \n20.3.1.5.1.0  Rupee Exposures less than 3 months       \n20.3.1.5.1.1  AAA to BBB -    20  \n20.3.1.5.1.2  BB+ to B -    50  \n20.3.1.5.1.3  Below B -    150  \n20.3.1.5.1.4  Unrated     100  \n20.3.1.5.2.0  Foreign Currency Exposures less \nthan 3 months       \n20.3.1.5.2.1  AAA to A -    20", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 11, "year": 2016}, "type": "Document"}
{"page_content": "9 Web Based \nReturn Code  Assets  Principal \nAmount of On -\nBalance Sheet \nItems  Credit \nEquivalent of \nOff-Balance \nSheet Items  Total  Risk \nWeight \n% Risk \nWeighted \nAssets \nAmount  \n20.3.1.5.2.2  BBB+ to BBB -    50  \n20.3.1.5.2.3  BB+ to B -    100  \n20.3.1.5.2.4  Below B -    150  \n20.3.1.5.2.5  Unrated     100  \n20.3.1.5.3.0  Rupee and Foreign Currency \nExposures more than 3 months       \n20.3.1.5.3.1  AAA to AA -    20  \n20.3.1.5.3.2  A+ to BBB -    50  \n20.3.1.5.3.3  BB+ to B -    100  \n20.3.1.5.3.4  Below B -    150  \n20.3.1.5.3.5  Unrated     100  \n20.3.1.6.0.0  Claims on Financial Institutions       \n20.3.1.6.1.0  Claims on Financial Institutions \nRegulated by CBSL       \n20.3.1.6.1.1  AAA to AA -    20  \n20.3.1.6.1.2  A+ to BBB -    50  \n20.3.1.6.1.3  BB+ to B -    100  \n20.3.1.6.1.4  Below B -    150  \n20.3.1.6.1.5  Unrated     100  \n20.3.1.6.2.0  Claims on Other Financial \nInstitutions       \n20.3.1.6.2.1  AAA to AA -    20  \n20.3.1.6.2.2  A+ to A -    50  \n20.3.1.6.2.3  BBB+ to BB -    100  \n20.3.1.6.2.4  Below BB -    150  \n20.3.1.6.2.5  Unrated     100  \n20.3.1.7.0.0  Claims on Corporates       \n20.3.1.7.1.0  AAA to AA -    20  \n20.3.1.7.2.0  A+ to A -    50  \n20.3.1.7.3.0  BBB+ to BB -    100  \n20.3.1.7.4.0  Below BB -    150  \n20.3.1.7.5.0  Unrated     100  \n20.3.1.8.0.0  Retail Claims       \n20.3.1.8.1.0  Retail claims that qualify for \nregulatory capital purposes       \n20.3.1.8.1.1  SME exposure s secured on immovable \nproperty     60  \n20.3.1.8.1.2  Other S ME exposures     75  \n20.3.1.8.1.3  Individual e xposures     75  \n20.3.1.8.2.0  Retail claims that do not qualify for \nregulatory capital purposes     100  \n20.3.1.8.3.0  Claims Secured by Gold       \n20.3.1.8.3.1  Loan to Value Ratio equal  to or less \nthan 70%     0", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 12, "year": 2016}, "type": "Document"}
{"page_content": "10 Web Based \nReturn Code  Assets  Principal \nAmount of On -\nBalance Sheet \nItems  Credit \nEquivalent of \nOff-Balance \nSheet Items  Total  Risk \nWeight \n% Risk \nWeighted \nAssets \nAmount  \n20.3.1.8.3.2  Loan to Value Ratio over 70% and less \nthan 100%     20  \n20.3.1.8.3.3  Loan to Value Ratio  equal to or  over \n100%     100  \n20.3.1.9.0.0  Claims Secured by Residential \nProperty       \n20.3.1.9.1.0  Claims that qualify for regulatory \ncapital purposes     50  \n20.3.1.9.2.0  Claims that do not qualify for \nregulatory capital purposes     100  \n20.3.1.10.0.0  Claims Secured by Commercial Real \nEstate     100  \n20.3.1.11.0.0  Non-Performing Assets (NPAs)       \n20.3.1.11.1.0  Specific Provisions are equal to or \nmore than 20%     100  \n20.3.1.11.2.0  Specific Provisions are less than 20%     150  \n20.3.1.12.0.0  Non-Performing Assets Secured by \nResidential Property       \n20.3.1.12.1.0  Specific Provisions are equal to or \nmore than 20%     50  \n20.3.1.12.2.0  Specific Provisions are less than 20%     100  \n20.3.1.13.0.0  Higher R isk Categories       \n20.3.1.13.1.0  Ventu re capital funds/companies and \nprivate equity investments     150  \n20.3.1.13.2.0  Significant investments in the capital \nof financial institutions     250  \n20.3.1.14.0.0  Cash Items and Other A ssets       \n20.3.1.14.1.0  Cash Items       \n20.3.1.14.1.1  Notes and c oins in own v ault    0  \n20.3.1.14.1.2  Gold b ullion held in own v ault    0  \n20.3.1.14.1.3  Cash items in the p rocess of collection     20  \n20.3.1.14.2.0  Other Assets       \n20.3.1.14.2.1  Property Plant and Equipment     100  \n20.3.1.14.2.2  Other Assets/Exposures     100  \n \nPart III(B ) \u2013 Credit Equivalent of Off -Balance Sheet Items (Rs. \u2018000)  \nWeb Based \nReturn Code  Description  Principal amount \nof Off -Balance \nSheet Items  Credit \nConversion \nFactor (%)  Credit Equivalent \nof Off-Balance \nSheet Items  \n20.3.2.0.0.0  Off-balance Sheet Items     \n20.3.2.1.0.0  Direct Credit Substitutes", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 13, "year": 2016}, "type": "Document"}
{"page_content": "20.3.2.0.0.0  Off-balance Sheet Items     \n20.3.2.1.0.0  Direct Credit Substitutes     \n20.3.2.1.1.0  General Guarantees of Indebtedness   100  \n20.3.2.1.2.0  Standby LCs serving as Financial Guarantees   100  \n20.3.2.1.3.0  Bank Acceptances   100", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 13, "year": 2016}, "type": "Document"}
{"page_content": "11 Web Based \nReturn Code  Description  Principal amount \nof Off -Balance \nSheet Items  Credit \nConversion \nFactor (%)  Credit Equivalent \nof Off-Balance \nSheet Items  \n20.3.2.1.4.0  Others (please specify)   100  \n20.3.2.2.0.0  Transaction -related Contingencies     \n20.3.2.2.1.0  Performance Bonds, Bid Bonds & Warranties   50  \n20.3.2.2.2.0  Standby LCs Related to Particular \nTransactions   50  \n20.3.2.2.3.0  Others (please specify)   50  \n20.3.2.3.0.0  Short -Term Self -Liquidating Trade -Related \nContingencies     \n20.3.2.3.1.0  Shipping Guarantees   20  \n20.3.2.3.2.0  Documentary Letters of Credit   20  \n20.3.2.3.3.0  Trade Related Acceptances   20  \n20.3.2.3.4.0  Others (please specify)   20  \n20.3.2.4.0.0  Sale and Repurchase Agreements and \nAssets Sale with recourse where the credit \nrisk remains with the Bank     \n20.3.2.4.1.0  Sale and Repurchase Agreements   100  \n20.3.2.4.2.0  Housing Loans Sold with Recourse   100  \n20.3.2.4.3.0  Other Assets Sold  with Recourse   100  \n20.3.2.4.4.0  Forward Assets Purchase   100  \n20.3.2.4.5.0  Partly Paid Shares/Securities   100  \n20.3.2.4.6.0  Others (please specify)   100  \n20.3.2.5.0.0  Obligations under an On -going \nUnderwriting Agreement     \n20.3.2.5.1.0  Underwriting of Shares/Securities Issue   50  \n20.3.2.5.2.0  Note Issuance Facilities and Revolving \nUnderwriting Facilities   50  \n20.3.2.5.3.0  Others (please specify)   50  \n20.3.2.6.0.0  Other commitments with an o riginal \nmaturity of up to one year or which can be \nunconditionally cancelled at any time     \n20.3.2.6.1.0  Formal Standby Facilities and Credit Lines   0  \n20.3.2.6.2.0  Undrawn Term Loans   0  \n20.3.2.6.3.0  Undrawn Overdraft Facilities/Unused Credit \nCard Lines   0  \n20.3.2.6.4.0  Others (please specify)   0  \n20.3.2.7.0.0  Commitments with an original maturity up \nto 1 year     \n20.3.2.7.1.0  Formal Standby Facilities and Credit Lines   20  \n20.3.2.7.2.0  Undrawn Term Loans   20  \n20.3.2.7.3.0  Others (please specify)   20", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 14, "year": 2016}, "type": "Document"}
{"page_content": "20.3.2.7.2.0  Undrawn Term Loans   20  \n20.3.2.7.3.0  Others (please specify)   20  \n20.3.2.8.0.0  Other commitments with an o riginal \nmaturity of over one year     \n20.3.2.8.1.0  Formal Standby Facilities and Credit Lines   50  \n20.3.2.8.2.0  Undrawn Term Loans   50  \n20.3.2.8.3.0  Others (please specify)   50", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 14, "year": 2016}, "type": "Document"}
{"page_content": "12 Web Based \nReturn Code  Description  Principal amount \nof Off -Balance \nSheet Items  Credit \nConversion \nFactor (%)  Credit Equivalent \nof Off-Balance \nSheet Items  \n20.3.2.9.0.0  Foreign Exchange Contracts     \n20.3.2.9.1.0  Original maturity -less than one year   2  \n20.3.2.9.2.0  Original maturity -more than one year and less \nthan two years   5  \n20.3.2.9.3.0  Original maturity -more than two years (for \neach additional year)   3  \n20.3.2.10.0.0  Interest Rate Contracts     \n20.3.2.10.1.0  Original maturity -less than one year   0.5  \n20.3.2.10.2.0  Original maturity -more than one year and less \nthan two years   1  \n20.3.2.10.3.0  Original maturity -more than two years (for \neach additional year)   1  \n \nPart III( C) \u2013 Exposures Recognised under Credit  Risk Mitigation (CRM)  (Rs. \u2018000)  \nWeb Based \nReturn Code  CRM techniques  Principal Amount  \n20.3.3.0.0.0  Total CRM exposure   \n20.3.3.1.0.0  Collateralised transactions   \n20.3.3.1.1.0  Retail Exposure   \n20.3.3.1.1.1  Cash   \n20.3.3.1.1.2  Government Securities   \n20.3.3.1.1.3  Provident Fund Balances   \n20.3.3.1.1.4  Debt securities rated by a r ecognised ECAI   \n20.3.3.1.1.5  Debt securities not rated by a recognised ECAI   \n20.3.3.1.1.6  Equities that are included in a main i ndex   \n20.3.3.1.2.0  Other Exposures   \n20.3.3.1.2.1  Cash   \n20.3.3.1.2.2  Government Securities   \n20.3.3.1.2.3  Provident Fund Balances   \n20.3.3.1.2.4  Debt Securities rated by a r ecognised ECAI   \n20.3.3.1.2.5  Debt Securities not rated by a r ecognised ECAI   \n20.3.3.1.2.6  Equities that are included in a main i ndex   \n20.3.3.2.0.0  Other CRM Techniques   \n20.3.3.2.1.0  On-balance s heet netting   \n20.3.3.2.2.0  Guarantees   \n \nPart IV \u2013 Computation of Risk Weighted Amount for Market Risk (Rs. \u2018000)  \nWeb Based \nReturn Code  Item  Capital Charge \nAmount  \n20.4.1.0.0.0  Total Capital Charge for Market Risk =   \n(20.4.1.1.0.0   +  20.4.1.2.0.0   +  20.4.1.3.0.0)", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 15, "year": 2016}, "type": "Document"}
{"page_content": "(20.4.1.1.0.0   +  20.4.1.2.0.0   +  20.4.1.3.0.0)   \n20.4.1.1.0.0  Capital Charge for Interest Rate =  (20.4.1.1.1.0  + 20.4.1.1.2.0)   \n20.4.1.1.1.0  General Interest Rate Risk", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 15, "year": 2016}, "type": "Document"}
{"page_content": "13 Web Based \nReturn Code  Item  Capital Charge \nAmount  \n20.4.1.1.1.1  Net Long or Short  Position   \n20.4.1.1.1.2   Horizontal Disallowance   \n20.4.1.1.1.3  Vertical Disallowance   \n20.4.1.1.1.4  Options   \n20.4.1.1.2.0  Specific Interest Rate Risk   \n20.4.1.2.0.0  Capital Charge for Equity =  (20.4.1.2.1.0  + 20.4.1.2.2.0)   \n20.4.1.2.1.0  General Equity Risk  \n20.4.1.2.2.0  Specific Equity Risk   \n20.4.1.3.0.0  Capital Charge for Foreign Exchange & Gold   \n20.4.2.0.0.0  Total Risk -Weighted Amount for Market Risk =  (20.4.1.0.0.0* \u2026)  \n \nPart V(A ) - Computation of Risk Weighted Amount for Operational Risk (Rs. \u2018000)  \nWeb Based \nReturn Code  Business Lines \n(20.5.1.4.0.0)  Capital Charge \nFactor  \n (\u03b1 and \u03b2 )  \n(20.5.1.5.0.0)  Fixed Factor \n\u2018m\u2019 \n(20.5.1.6.0.0)  Gross Income  \n(20.5.1.7.0.0)  Capital Charges \n(20.5.1.8.0.0)  \n1st  \nYr 2nd  \nYr 3rd  \nYr 1st  \nYr 2nd  \nYr 3rd  \nYr \n20.5.1.1.0.0  The Basic Indicator \nApproach  15%         \n20.5.1.2.0.0  The Standardised \nApproach          \n20.5.1.2.1.0  Corporate Finance  18%         \n20.5.1.2.2.0  Trading and Sales  18%         \n20.5.1.2.3.0  Payment and Settlement  18%         \n20.5.1.2.4.0  Agency Services  15%         \n20.5.1.2.5.0  Asset Management  12%         \n20.5.1.2.6.0  Retail Brokerage  12%         \n20.5.1.2.7.0  Retail Banking  12%         \n20.5.1.2.8.0  Commercial Banking  15%         \n20.5.1.3.0.0  The Alternative \nStandardised Approach          \n20.5.1.3.1.0  Sub Total          \n20.5.1.3.1.1  Corporate Finance  18%         \n20.5.1.3.1.2  Trading and Sales  18%         \n20.5.1.3.1.3  Payment and Settlement  18%         \n20.5.1.3.1.4  Agency Services  15%         \n20.5.1.3.1.5  Asset Management  12%         \n20.5.1.3.1.6  Retail Brokerage  12%         \n20.5.1.3.2.0  Sub Total          \n20.5.1.3.2.1  Retail Banking  12%  0.035        \n20.5.1.3.2.2  Commercial Banking  15%  0.035        \n20.5.1.9.0.0  Capital Charges for \nOperational Risk          \n20.5.1.9.1.0  The Basic Indicator \nApproach", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 16, "year": 2016}, "type": "Document"}
{"page_content": "14 Web Based \nReturn Code  Business Lines \n(20.5.1.4.0.0)  Capital Charge \nFactor  \n (\u03b1 and \u03b2 )  \n(20.5.1.5.0.0)  Fixed Factor \n\u2018m\u2019 \n(20.5.1.6.0.0)  Gross Income  \n(20.5.1.7.0.0)  Capital Charges \n(20.5.1.8.0.0)  \n1st  \nYr 2nd  \nYr 3rd  \nYr 1st  \nYr 2nd  \nYr 3rd  \nYr \n20.5.1.9.2.0  The Standardised \nApproach          \n20.5.1.9.3.0  The Alternative \nStandardised Approach          \n20.5.1.10.0.0  Risk -Weighted Amount \nfor operational Risk          \n20.5.1.10.1.0  The Basic Indicator \nApproach (20.5.1.9.1.0 \n*\u2026)         \n20.5.1.10.2.0  The Standardised \nApproach (20.5.1.9.2.0 \n* \u2026)          \n20.5.1.10.3.0  The Alternative \nStandardised Approach \n(20.5.1.1.9.3 * \u2026)          \n \nPart V( B) \u2013 Computation of Gross Income  for Operational Risk - Basic Indicator Approach and t he \nStandardised Approach  (Rs. \u2018000)  \n Interest Income \n20.5.2.3.0.0  Interest \nExpenses  \n20.5.2.4.0.0  Non-Interest  \nIncome \n20.5.2.5.0.0  Realized Profits \nfrom the Sale of \nSecurities in the \nBanking Book \n20.5.2.6.0.0  Extraordinary/ \nIrregular Item  of \nIncome \n20.5.2.7.0.0  \nWeb Based \nReturn Code  Business Lines  1st \nYr 2nd \nYr 3rd \nYr 1st \nYr 2nd \nYr 3rd \nYr 1st \nYr 2nd \nYr 3rd \nYr 1st \nYr 2nd \nYr 3rd \nYr 1st  \nYr 2nd \n Yr 3rd \nYr \n20.5.2.1.0.0  Basic Indicator \nApproach                 \n20.5.2.2.0.0  Standardised \nApproach                 \n20.5.2.2.1.0  Corporate Finance                 \n20.5.2.2.2.0  Trading and Sales                 \n20.5.2.2.3.0  Payment and \nSettlement                 \n20.5.2.2.4.0  Agency Services                 \n20.5.2.2.5.0  Asset Management                 \n20.5.2.2.6.0  Retail Brokerage                 \n20.5.2.2.7.0  Retail Banking                 \n20.5.2.2.8.0  Commercial \nBanking", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 17, "year": 2016}, "type": "Document"}
{"page_content": "15 Part V(B) \u2013 Computation of Gross Income  for Operational Risk - The Alternative  Standardised \nApproach (Rs. \u2018000)  \n Interest Income \n20.5.2.3.0.0  Interest \nExpenses  \n20.5.2.4.0.0  Non-Interest \nIncome \n20.5.2.5.0.0  Realized Profits \nfrom the Sale of \nSecurities in the \nBanking Book \n20.5.2.6.0.0  Extraordinary/ \nIrregular Item of \nIncome \n20.5.2.7.0.0  \nWeb Based \nReturn Code  Business Lines  1st \nYr 2nd \nYr 3rd \nYr 1st \nYr 2nd \nYr 3rd \nYr 1st \nYr 2nd \nYr 3rd \nYr 1st \nYr 2nd \nYr 3rd \nYr 1st  \nYr 2nd \n Yr 3rd \nYr \n20.5.2.3.0.0  \n The Alternative \nStandardised \nApproach                 \n20.5.2. 3.1.0  Sub Total                 \n20.5.2. 3.1.1  Corporate Finance                 \n20.5. 2.3.1.2  Trading and Sales                 \n20.5.2. 3.1.3  Payment s and \nSettlement                 \n20.5.2. 3.1.4  Agency Services                 \n20.5.2. 3.1.5  Asset Management                 \n20.5.2. 3.1.6  Retail Brokerage", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 18, "year": 2016}, "type": "Document"}
{"page_content": "Appendix II \n16 \n PART I \u2013 GUIDELINES FOR COMPUTATION OF CAPITAL RATIO S  \n \nWeb Based  \nReturn Code  Item  \n20.1.1.0.0.0  Common Equity Tier 1 Capital  \nTotal Common Equity Tier 1 capital after adjustment = WBRC 20.1.1.1.0.0 of \nPart II . Automatically added.  \n20.1.2.0.0.0  Total Tier 1 Capital  \nTotal Tier 1  capital after adjustment = WBRC 20.1.4.1.0.0 of Part II . \nAutomatically added . \n20.1.3.0.0.0  Total Capital  \nTotal capital = WBRC 20.1.5.1.0.0 of Part II. Automatically added . \n20.1.4.0.0.0  Total Risk Weighted Amount  \n20.1.4.1.0.0  Risk Weighted Amount for Credit Risk =  WBRC 20.3.1.0.0.0 of Part III (A) \n20.1.4.2.0.0  Risk Weighted Amount for Market Risk  = WBRC 20.4.2.0.0.0 of Part IV  \nAutomatically added . \n20.1.4.3.0.0  Risk Weighted Amount for Operational Risk = WBRC 20.5.1.10.1.0  or \n20.5.1.10.2.0  or 20.5.1.10.3.0 of Part V( A) \nAutomatically added .  \n20.1.5.0.0.0  Common Equity Tier 1 Capital Ratio = 20.1.1.0.0.0/20.1.4.0.0.0  \n20.1.5.1.0.0  Capital conservation buffer  \n20.1.5.2.0.0  Capital surcharge on D -SIBs  \n20.1.6.0.0.0  Total Tier 1 Capital Ratio = 20.1.2.0.0.0/20.1.4.0.0.0  \n20.1.7.0.0.0  Total Capital Ratio  = 20.1.3.0.0.0/20.1.4.0.0.0", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 19, "year": 2016}, "type": "Document"}
{"page_content": "Appendix III \n17 \n PART II - GUIDELINES FOR CALCULATION OF TOTAL CAPITAL   \nPart II(A) \u2013 COMPUTATION OF TOTAL REGULATORY CAPITAL  \nWeb Based \nReturn \nCode  Item  \n20.2. 1.1.0.0  Common Equity Tier 1 (CET1 ) Capital after Adjustments  \n20.2.1.1.1.0  Common Equity Tier 1 (CET1) Capital  \n20.2.1.1.1.1  Equity Capital ( Stated Capital)/Assigned Capital  \n(1)  Licensed Banks Incorporated in Sri Lanka  \n i) Equity capital shall comprise both voting and non -voting ordinary share capital, including share \npremium/discounts . \n ii) Non-voting ordinary shares should be identical in all aspects to voting ordinary shares except for \nvoting rights . \n(2)  Licensed Banks Incorporated Outside Sri Lanka (branches or subsidiaries of foreign banks \nestablished in Sri Lanka)  \n Capital that shall be assigned to the branch/subsidiary by the head office of licensed banks \nincorporated or established outside Sri Lanka.  \n(3)  Criteria for Classification/Inclusion as Equity Capital for Regulatory Capital Purposes  \n i) Highest subordinated claim at the time of liquidation of the bank . \n ii) Entitled to a claim on the residual assets that is proportional to its share of issued capital, after \nall senior claims have been repaid in liquidation . \n iii) Principal is perpetual and never repaid outside of liquidation . \n iv) Bank will not indicate any expectation that the instrument will be bought back, redeemed or \ncancelled and the statutory or contractual terms shall not provide any feature which might give \nrise to such an expectation . \n v) Distributions are paid out of distributable items available for ordinary shareholders. The level \nof distributions is not tied or linked to the amount paid at issuance and is not subject to a \ncontractual cap. However, the amount of distributions shall be limited to a maximum of \ndistributable items . \n vi) There are no circum stances under which the distributions are obligatory .", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 20, "year": 2016}, "type": "Document"}
{"page_content": "vi) There are no circum stances under which the distributions are obligatory . \n vii) Distributions are paid only after all legal and contra ctual obligations have been met and \npayments on more senior capital instruments have been made. Accordingly, no preferential \ndistributions are permitted . \n viii) It is the issued capital that takes the first and proportionately greatest share of any losses as they \noccur . \n ix) The paid -in amount is recognised as equity capital for determining the statement of financial \nposition insolvency .", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 20, "year": 2016}, "type": "Document"}
{"page_content": "18 Web Based \nReturn \nCode  Item  \n x) The paid -in amount is classified as equity under Sri Lanka Accounting Standards.  \n xi) It is directly issued and paid -in and the bank has not directly or indirectly funded the purchase \nof the instrument . \n xii) The paid -in amount is neither secured nor covered by a guarantee of the issuer or a related entity \nor subject to any other arrangement that legally or economically enhances the seniority of the \nclaim . \n xiii) It is issued only with the approval of the Board of Directors of the issuing bank and in line with \nother p rovisions specified in the Articles of Association and the Companies Act No. 7 of 2007 . \n xiv) It is clearly and separately disclosed in the bank\u2019s financial statements . \n20.2. 1.1.1.2  Reserve Fund  \n Reserve fund as in the latest audited financial statements maintained in terms of Section 20 of the \nBanking Act  No. 30 of 1988.  \n20.2. 1.1.1.3  Published Retained Earnings/(Accumulated Retained Losses)  \n(1)  Accumulated published retained earnings/(losses) reflected in the statement of changes in equity in \nthe latest audited financial statements . \n(2)  Dividends paid and/or declared shall be deducted from retained earnings . \n(3)  Losses arising from items that will not be recycled into the income statement shall be deducted from  \nthe published retained earnings accordingly . i.e., changes in revaluation surplus  of property, plant \nand equipment  and actuarial gains and losses on defined benefit plans . \n20.2. 1.1.1.4  Other Comprehensive Income (OCI)  \n(1)  Items that are or may be reclassified/recycled subsequently to the income statement   \n i) 60 percent of accumulated OCI gains reflected in the statement of changes in equity in the latest \naudited financial statements subject to reclassification to the income statement shall be included \nin CET1 capital.  \n ii) Maximum amount of OCI gains recognised is limited to 10  percent of total CET1 capital before \nitem (i) above.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 21, "year": 2016}, "type": "Document"}
{"page_content": "item (i) above.  \n iii) OCI gains (net of tax) that are already realised and recycled on disposal and shall be excluded.  \n iv) OCI losses arising from items subject to reclassification must be immediately deducted.  \nv) Items that are or may be reclassified/recycled subsequently to the income statement.  \na) Gains and losses arising from translating the financial statements of a foreign operation  \nb) Gains and losses on re -measuring available -for-sale financi al assets  \nc) Gains and losses on cash flow hedges  \n(2)  Items that will not be reclassified/recycled subsequently to the income statement  \n Gains that will not be reclassified shall not be taken into C ET1 c apital  (i.e. changes in revaluation \nsurplus of property, plant and equipment and actuarial gains and losses on defined benefit plans ).", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 21, "year": 2016}, "type": "Document"}
{"page_content": "19 Web Based \nReturn \nCode  Item  \n20.2. 1.1.1.5  General and Other Disclosed Reserves  \n General and other disclosed reserves  created or increased by appropriation of retained earnings as in \nthe latest audited financial statements excluding reserves maintained for specific purposes.  \n20.2. 1.1.1.6  Unpublished current year profit/(losses) and OCI gains in the latest reporting period  \n(1)  The unpublished current year profit and OCI gains subject to item 20.2. 1.1.1.4 shall be included with \nthe certification of the  external auditor . \n(2)  The unpublished current year loss reflected in the income statement shall be deducted  \n20.2. 1.1.1.7  Voting and Non -Voting Ordinary Shares Issued by Consolidated Banking and Financial \nSubsidiaries of the Bank and Held by Third Parties  \n Minority interest arising from the issue of ordinary shares by a consolidated banking and financial \nsubsidiary of the bank . \n(1)  Criteria for Inclusion of Minority Interest in CET1 Capital  \n i) Meet all of the criteria for classification as ordinary shares for regulatory capital \npurposes given in WBRC 20.2.1.1.1.1  \n ii) The consolidated subsidiary is a financial institution regulated by CBSL  \n(2)  Calculation of Minority Interest Recognised in Consolidated CET1 Capital  \n Step 1 - Surplus CETI Capital of the Subsidiary  \n= CET1 capital of the Subsidiary - (Minimum CET1 c apital requirement of the subsidiary + CCB \non a staggered basis over a period of 2.5 years)  \n Step 2 - Surplus CET1 Capital of the Subsidiary Attributable to Minority Shareholders  \n= Surplus CET1 c apital of the S ubsidiary * Percentage of CET1 c apital held by Minority \nShareholders  \n Step 3 - Minority Interest Recognised in Consolidated CET1 Capital  \n= Total Eligible Mi nority Interest - Surplus CET1 c apital of the subsidiary attributable to minority \nshareholders  \n20.2. 1.1.2.0  Adjustments to CET1  \n Adjustments to be applied both on a solo and a consolidated basis . \n20.2. 1.1.2.1", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 22, "year": 2016}, "type": "Document"}
{"page_content": "Adjustments to be applied both on a solo and a consolidated basis . \n20.2. 1.1.2.1  \n(1) Less: Goodwill  \nGoodwill as shown in the balance sheet.  \n(2) Goodwill shall be in accordance with the Sri Lanka Accounting Standard \u2013 SLFRS 3 on Business \nCombinations.  \n20.2. 1.1.2.2  Less: Other Intangible Assets  \n Intangible assets shall be in accordance with the Sri Lanka Accounting Standard - LKAS 38 on \nIntangible Assets .", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 22, "year": 2016}, "type": "Document"}
{"page_content": "20 Web Based \nReturn \nCode  Item  \n20.2. 1.1.2.3  Less: Revaluation Losses of Property, Plant and Equipment   \n(1)  Revaluation losses shall not be netted against the revaluation gains .  \n(2)  Sri Lanka Accounting Standard - LKAS 16 on Property Plant and Equipment will be applicable . \n20.2. 1.1.2.4  Less: Deferred Tax Assets  (DTAs)  (net)  \n(1)  DTAs shall be netted with Deferred Tax Liability (DTLs) . \n(2)  Sri Lanka  Accounting Standard - LKAS 12 on Income Taxes will be applicable . \n20.2. 1.1.2.5  Cash Flow Hedge Reserve  \n The amount of the cash flow hedge reserve which relates to the hedging of items that are not fair \nvalued, i.e., valued at amortised cost, in the statement of financial position (including projected cash \nflows) . \nLess:  Positive amounts of the cash flow hedge  \nAdd:  Negative amounts of the cash flow hedge  \n20.2. 1.1.2.6  Less: Unrealised Gains on Sale Related Securitisation Transactions  \n An increase in equity capital due to  unrealised gains related to  securitisation transactions  \n20.2. 1.1.2.7  Less: Shortfall of the Cumulative Impairment to Specific  Provisions  \n Any shortfall in specific  provisions as per Banking Act Directions on Classification of Loans and \nAdvances, Income Recognition and Provisio ning over cumulative impairment.  \n20.2. 1.1.2.8  Changes in Own Credit Risk  \n Changes in fair value of financial liabilities measured at fair value recognised in the income statement  \n Add:  Unrealised losses from changes in fair value of liabilities due to changes in the bank\u2019s own \ncredit risk  \n Less:  Unrealised gains from changes in fair value of financial liabilities due to changes in bank\u2019s \nown credit risk  \n20.2. 1.1.2.9  Less: Defined Benefit Pension Fund Assets (Net)  \n(1)  Defined benefit asset s in excess of defined benefit liabilit ies. \n(2)  Sri Lanka Accounting Standard - LKAS 19 on Employee Benefits and the Sri Lanka Accounting", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 23, "year": 2016}, "type": "Document"}
{"page_content": "(2)  Sri Lanka Accounting Standard - LKAS 19 on Employee Benefits and the Sri Lanka Accounting \nStandard - LKAS 26 on Accounting and Reporting by Retirement  Benefit Plans  will be applicable.  \n20.2. 1.1.2.10  Less: Investment in Own Shares  \n(1)  Bank\u2019s investments  in own shares or invest ment /purchase s in its capital instruments (shares and debt \ninstruments) due to contractual obligations shall be deducted in the relevant Tiers of capital in the \ncomputation of capital ratios. The same application shall be adopted to  investments in own shares \nwithin the group entities as well.  However, prior approval of the Monetary Board  is required to invest \nin own shares.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 23, "year": 2016}, "type": "Document"}
{"page_content": "21 Web Based \nReturn \nCode  Item  \n20.2. 1.1.2.11  Less: Reciprocal Cross Holdings in the Capital of Banking and Other Financial Institutions  \n(1)  Reciprocal crossholding s shall mean lower amount of both entities\u2019 investments in the capital \ninstruments in different Tiers of capital . \n(2)  The bank should total its own investments in investee entity, i.e., financial institutions, and investee \nentity\u2019s investment in the bank. Banks shall apply a corresponding deduction approach for such \ninvestments.  \n(3)  The remaining portion of such investments, i.e., above the lower amount of both entities, shall be \ndeducted in different Tiers of capital under the provisions of WBRC 20.2. 1.1.2.12  and 20.2. 1.1.1.2.13  \n(4)  Corresponding Deduction Approach  \nDeduction should be  applied to the same component of capital (Common Equity Tier 1, Additional \nTier 1 and Tier 2 capital) for which the capital would qualify if it was issued by the bank itself.  \n20.2. 1.1.2.12  Less: Investments in the Capital of Banking and Financial Institutions where the Bank does \nnot own more than 10 per cent of the Issued Ordinary Share Capital of the Entity  \n(1)  The following types of investments shall be considered for the purpose of this calculation:  \n i) Capital including ordinary shares (only direct  holdings of both voting and non -voting ordinary \nshares) and all other types of capital instruments (e.g.: preference shares and subordinated debt) . \n ii) If the instrument is issued by a regulated financial entity and not included in regulatory capital \nof such entity, such investments shall not be included . \n(2)  If the total of all investments listed above in aggregate exceed 1 per cent of the bank\u2019s CET1 capital \n(after applying all regulatory adjustments listed prior to this deduction in full) then the amount  above \n1 per cent is required to be deducted, applying a corresponding deduction approach .", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 24, "year": 2016}, "type": "Document"}
{"page_content": "1 per cent is required to be deducted, applying a corresponding deduction approach . \n(3)  The amount to be deducted from CET1 capital should be calculated as the total of all holdings which \nin aggregate exceed 1 per cent of the bank\u2019s CET1 capital multiplied by the ordinary share \ninvestments as a percentage of the total capital investments . \n(4)  A similar approach shall be applied for deduction from AT1 and Tier 2 capital . \n(5)  The remaining investment,  i.e., investment less than 1 per cent of CET1 capital, which is not deducted \nfrom the respective Tiers of capital should be risk weighted appropriately . \n(6)  For the application of risk weighting, the amount of investments must be allocated on a pro rata basis \nbetween portfolios based on the credit risk (WBRC 20.3.1.5.0.0  to 20.3.1.6.0.0 ) and market risk \n(WBRC 20.4.1.1.0.0  to 20.4.1.2.0.0 ) rules.  \n20.2. 1.1.2.13  Less: Significant Investments in the Capital of Financial Institutions where the Bank owns \nmore than 10 per cent of the Issued Ordinary Share Capital of the Entity  \n(1)  The types of investments for this purpose  shall be equal to 20.2. 1.1.2.12  (1).  \n(2)  All investments included in 20.2. 1.1.2.1 2 (1) above that are not ordinary shares must be fully \ndeducted following a corresponding deduction approach .", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 24, "year": 2016}, "type": "Document"}
{"page_content": "22 Web Based \nReturn \nCode  Item  \n(3)  The deduction of investments which are not ordinary shares should be applied to the same Tier of \ncapital for which the capital would qualify if it was issued by the financial institution itself. If the \nbank is required to make a deduction from a particular Tier of capital and it does not have enough of \nthat Tier of capital to satisfy that deduction, the shortfall will be deducted from the next higher Tier \nof capital . \n(4)  All investments included in 20.2. 1.1.2.1 2 (1) above that are ordinary shares in excess of 1 per cent of \nCET1 capital (after making all regulatory deductions prior to this deduction) of the bank shall be \nfully deducted from CET1 Capital. The investments les s than 1 per cent shall be risk weighted at 250 \nper cent (WBRC 20.3.1.13.2.0 ). \n20.2. 1.1.2.14  Less: Shortfall of Capital in Financial Subsidiaries  \n Any shortfall of capital applicable for financial subsidiaries  \n20.2. 1.1.2.15  Regulatory adjustments applied to CET1 capital due to Insufficient AT1 and Tier 2 Capital to \ncover deductions  \n Indicative List of Financial Institutions  \ni) Licensed commercial banks and licensed specialised banks licensed under the Banking Act No. \n30 of 1988 (as amended)  \nii) Licensed finance companies licensed under the Finance Business Act No. 42 of 2011  \niii) Specialised leasing companies registered under the Finance Leasing Act No. 56 of 2000  \niv) Microfinance i nstitutions registered under the Microfinance Act No. 6 of 2016  \nv) Insurance companies, their agents and insurance brokers registered under the Insurance Industry \nAct No. 43 of 2000 (as amended)  \nvi) Primary d ealers licensed under the Local Treasury Bills Ordinance No. 8 of 1923  (as amended) \nand Registered Stocks and Securities Ordinance No. 7 of 1937  (as ame nded)  \nvii) Merchant/investment banks and venture capital companies incorporated under the Compani es \nAct No. 7 of 2007", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 25, "year": 2016}, "type": "Document"}
{"page_content": "Act No. 7 of 2007  \nviii) Registered market intermediaries, including margin providers, investment managers, \nunderwriters, securities clearing houses, credit rating agencies, stock brokers/dealer companies \nand managing companies of unit trust registered under t he Securities and Exchange \nCommission of Sri Lanka Act No. 36 of 1987 (as amended)  \nix) Any other financial subsidiaries/institutions established in or outside Sri Lanka  \n Adjustments to CET1 applicable only for Branches of Foreign Banks  \n20.2. 1.1.2.16  Less: Amount due from head office & branches outside Sri Lanka in Sri Lanka n Rupees  \nDebit balances in VOSTRO current accounts in Sri Lanka Rupees held by Head Office and branches \noutside Sri Lanka in Sri Lanka Rupees.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 25, "year": 2016}, "type": "Document"}
{"page_content": "23 Web Based \nReturn \nCode  Item  \n20.2. 1.1.2.17  Add: Amount due to head office & branches outside Sri Lanka in Sri Lanka Rupees  \nCredit balances in VOSTRO current accounts in Sri Lanka Rupees held by Head Office and branches \noutside Sri Lanka in Sri Lanka Rupees.  \n20.2. 1.1.2.18  Less: Amount due from he ad office & branches outside Sri Lanka in Foreign Currency (net)  \nNet d ebit balances (after netting of credit balances) in NOSTRO current accounts in foreign currency \nheld with Head Office and branches outside Sri Lanka and the net amount of fixed and othe r deposits \nplaced with and amounts lent to Head Office and branches outside Sri Lanka (after netting of fixed \nand other deposits and amounts borrowed from Head Office and branches outside Sri Lanka) in \nforeign currency. Ignore any net credit balance.  \n \n20.2. 2.1.0.0  Additional Tier 1 (AT1) Capital after Adjustments   \n20.2. 2.1.1.0  Additional Tier 1 (ATI) Capital  \n20.2.2.1.1.1  Qualifying Additional Tier 1 Capital Instruments  \n Instruments issued by the bank that meet the criteria for inclusion in AT1 capital.  \n Criteria for Classification/Inclusion in Additional Tier 1 Capital  \n(1)  Issued and fully paid -in cash. Only the net proceeds received from the issuance of the capital \ninstrument shall be included as capital . \n(2)  Subordinated to the claims of depositors, c reditors and holders of Tier 2 c apital instruments issued \nby the bank . \n(3)  Is neither secured nor covered by a guarantee of the issuer, related entity or any other arrangement \nthat legally or economically enhances the seniority of the claim abov e the depositors, creditors and \nsubordinated debt capital i nstruments issued under Tier 2 c apital . \n(4)  Perpetual, i.e., has no maturity date and have  no step -ups or other incentives for early redemption . \n(5)  The capital instrument may be callable at the initiative of the issuer only after a minimum of five", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 26, "year": 2016}, "type": "Document"}
{"page_content": "years from the date of issue, subject to satisfying the following minimum requirements:  \ni) Prior approval of the Monetary Board to exercise a call option has been obtained by the bank;  \nii) The bank shall not create an expectation that the call option will be exercised; and  \n iii) The bank shall not exercise a call option unless:  \na) The capital instrument is replaced by the bank with capital of the  same or better quality and \nthe replacement of this capital is done in a  manner that does not affect the income capacity \nof the issuing bank; or  \nb) The bank demonstrates that its capital position/ratios will be maintained well above the \nminimum after the call option is exercised .", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 26, "year": 2016}, "type": "Document"}
{"page_content": "24 Web Based \nReturn \nCode  Item  \n(6)  Any repayment of principal ( e.g. through repurchases or redemptions) is done only with the prior \napproval of the Monetary Board. The bank shall not assume or create expectations that approval will \nbe given by the Monetary Board.  \n(7)  Dividend/Coupon discretion:  \ni) The bank has full discretion at all times to cancel distributions or payments: In this regard, \ndividend pushers and mandatory distributions are prohibited;  \nii) Any cancellation of dividend or coupon is not an event of default;  \niii) The bank must have full access to cancelled dividend or coupon paymen ts to meet obligations \nas they fall due; and  \niv) Any cancellation of dividend or coupon does not impose restrictions on the bank, except in \nrelation to distributions to ordinary shareholders.  \n(8)  Dividends/coupons must be paid out of distributable items: Any div idend or coupon to be paid under \nthe capital instrument is only paid to the extent that the bank has retained profits for distributions.  \n(9)  The capital instrument shall not have a credit sensitive dividend feature. In this regard, the capital \ninstrument shall not have a dividend or coupon that is reset periodically, based in whole or in part on \nthe credit standing of the bank or any banking group.  \n(10)  The instrument cannot contribute to liabilities exceeding assets if such a statement of financial \nposition forms part of the solvency test as specified in the Companies Act No. 7 of 2007.  \n(11)  Instruments classified as liabilities for accounting purposes must have principal loss absorption \nthrough:  \n i) Conversion to ordinary shares at an objective pre -specified trigger point;  \n ii) A write -down mechanism which allocates losses to the instrument at a pre -specified trigger \npoint. The write -down will have the following effects:  \n a) It reduces the claim of the capital instrument in liquidation of the issuing bank;", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 27, "year": 2016}, "type": "Document"}
{"page_content": "a) It reduces the claim of the capital instrument in liquidation of the issuing bank;  \n b) It reduces the amount to be repaid when a call option is exercised; and  \n c) It partially or fully reduces dividend or coupon payments on the capital instrument.  \n iii) Trigger points/events for the purpose of loss absorption at the point of non -viability:  The \ntrigger point/event is the earlier of:  \n a) A decision that a write -down, without which the bank would become non -viable, is \nnecessary, as determined by the Monetary Board; and  \n b) The decision to make a public sector injection of capital, or equivalent support, without \nwhich the bank would have become non -viable, as determined by the Monetary Board.  \n iv) Any compensation paid to the instrument holders as a result of the write -down must be paid \nimmediately in the form of ordinary shares or its equivalent.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 27, "year": 2016}, "type": "Document"}
{"page_content": "25 Web Based \nReturn \nCode  Item  \n v) The issuing bank must maintain at all times all prior authorisation necessary to immediately issue \nthe relevant number of shares at the time of trigger event occurs.  \n(12)  The issuance of any new shares as a result of the trigger point/event must occur prior to any public \nsector injection of capital.  \n(13)  Neither the bank nor a banking group over which the bank exercises control or significant influence \ncan have purchased the instrument, nor can the bank directly or indirectly have funded the purchase \nof the instrument.  \n(14)  The capital instrument does not have any feature that hinders recapitalisation, such as provisions that \nrequire the issuer to compensate investors if a new instrument is issued at a lower price during a \nspecified time frame.  \n(15)  If the capital instrument is not issued by an operating entity or the holding company of the bank [e.g. \nissued through a special purpose vehicle (SPV)], the proceeds from the issuance o f the capital \ninstrument shall be immediately available, without limitation, to an operating entity or the holding \ncompany of the bank in a form which meets or exceeds all of the other criteria for inclusion in AT1 \ncapital.  \n(16)  Prior approval of the Monetary  Board is required for inclusion of capital instruments in AT1 capital.  \n(17)  If AT1 capital instruments issued out of a branch or a subsidiary in a foreign jurisdiction such \ninstruments shall meet the eligibility criteria in both home and host country regulations relating to \nBasel III.  \n20.2.2.1.1.2  Instruments Issued by Consolidated Banking and Financial Subsidiaries of the Bank and Held \nby Third Parties  \n Instruments issued by consolidated banking and financial subsidiaries of the bank and held by third \nparties that meet the criteria for inclusion in AT1 capital and are not included in CET1 capital.  \n20.2.2.1.2.0  Adjustments to AT1 Capital  \n20.2.2.1.2.1  Less: Investment in Own Instruments", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 28, "year": 2016}, "type": "Document"}
{"page_content": "20.2.2.1.2.0  Adjustments to AT1 Capital  \n20.2.2.1.2.1  Less: Investment in Own Instruments  \n Bank\u2019s investments or investment/purchases in its capital instruments due to contractual obligations \nshall be deducted in the relevant Tiers of capital in the computation of capital ratios. The same \napplication shall be adopted to investments in own capital instruments within the group entities as \nwell. However, prior approval of the Monetary Board is required to invest in own capital instruments.  \n20.2.2.1.2.2  Less: Reciprocal Cross Holdings in AT1 Capital Instruments  \nInstructions as given under WBRC 20.2.1.1.2.11  \n20.2.2.1.2.3  Less: Investments in the Capital of Banking and Financial Institutions where the Bank does \nnot own more than 10 per cent of the Issued Ordinary Share Capital of the Entity  \nInstructions as given under WBRC 20.2.1.1.2.12", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 28, "year": 2016}, "type": "Document"}
{"page_content": "26 Web Based \nReturn \nCode  Item  \n20.2.2.1.2.4  Less: Significant Investments in the Capital of Financial Institutions where the Bank owns \nmore than 10 per cent of the Issued Ordinary Share Capital of the Entity  \nInstructions as given under WBRC 20.2.1.1.2.13  \n20.2.2.1.2.5  Regulatory Adjustments Applied to AT1 Due to Insufficient Tier 2 Capital to Cover \nAdjustments  \n \n20.2.3.1.0.0  Tier 2 Capital after Adjustments  \n20.2.3.1.1.0  Tier 2 Capital  \nMaximum Tier 2 capital shall be limited to 100 per cent of CET1 capital.  \n20.2.3.1.1.1  Qualifying Tier 2 Capital Instruments  \n Criteria for Classification/Inclusion in Tier 2 Capital  \n(1)  Issued and fully paid -in cash. Only the net proceeds received from the issuance of the capital \ninstrument /term debt  shall be included as capital.  \n(2)  Subordinated to the claims of depositors and general creditors.  \n(3)  Is neither secured nor covered by a guarantee or any other arrangement that legally or economically \nenhances the seniority of the claim above the depositors and general creditors of the bank.  \n(4)  Prior approval of the Monetary Board is required for inclusion of capital instruments /term debt  in \nTier 2 capital.  \n(5)  Shall be listed in a recognised s tock exchange.  \n(6)  The total approved Tier 2 capital instruments /term debt shall not exceed 50 per cent of total CET1 \ncapital.  \n(7)  Maturity of the capital instrument /term debt : \n i) Minimum original maturity of at least five years . Where the agreement governing the issuance \nof the capital instrument/ term debt provides for the loan to be drawn down in a series of tranches, \nthe minimum original maturity for each tranche shall be 5 years from the date of its draw -down.  \n ii) Recognition in regulatory capital in the remaining five years before maturity will be amortised \non a straight line basis as specified in Table 1. The eligible amount to be amortised shall be", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 29, "year": 2016}, "type": "Document"}
{"page_content": "on a straight line basis as specified in Table 1. The eligible amount to be amortised shall be \nequally distributed among the four quarters of that financial year when computing the quarterly \ncapital ratios.  \n Table 1: The Amortization Schedule for Tier 2 Capital Instrum ents \nRemaining years to \nmaturity (X)  Amount eligible to be \nincluded in Tier 2 capital  \nX > 4  100%  \n3 < X \u2264 4  80% \n2 < X \u2264 3  60% \n1 < X \u2264 2  40% \nX \u2264 1  20%", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 29, "year": 2016}, "type": "Document"}
{"page_content": "27 Web Based \nReturn \nCode  Item  \n iii) There are no step -ups (changes in coupon rate or taxes) or other provisions that mandate or create  \nan incentive for the bank to redeem the capital instrument /term debt . \n(8)  The capital instrument /term debt  may be callable at the initiative of the issuer only after a minimum \nof five years from the date of issue, subject to the following minimum requiremen ts: \n i) The bank must obtain prior approval of the Monetary Board to exercise a call option  \n ii) A bank shall not create an expectation that the call option will be exercised; and  \n iii) The bank shall not exercise a call option unless:  \n a) The capital instrument /term  debt is replaced by the bank with capital of the same or better \nquality and the replacement of this capital is done in a manner that does not affects the \nincome of the issuing bank; or  \n b) The bank demonstrates that its capital position/ratios will be maintained well above the \nminimum after the call option is exercised  \n(9)  The investors in the capital instrument /term debt  have no rights to accelerate the repayment of future \nscheduled payments (either coupon or principal), except in bankruptcy and liquidation of the bank.  \n(10)  Instruments classified as liabilities for accounting purposes must have principal loss absorption \nthrough:  \n i) Conversion to ordinary shares at an objective pre -specified trigger point  \n ii) A write -down mechanism which allocates losses to the instrument at a pre -specified trigger \npoint. The write -down will have the following effects:  \n a) It reduces the claim of the capital instrument in liquidation of the issuing bank  \n b) It reduces the amount to be repaid when a call option is exercised  \n c) It partially or fully reduces dividend or coupon payments on the capital instrument  \n iii) Trigger points/events for the purpose of loss absorption at the point of non -viability: The trigger \npoint/event is the earlier of:", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 30, "year": 2016}, "type": "Document"}
{"page_content": "point/event is the earlier of:  \n a) A decision that a write -down, without which the bank would become non -viable, is \nnecessary, as determined by the Monetary Board  \n b) The decision to make a public sector injection of capital, or equivalent support, without \nwhich the bank would have become non -viable, as determined by the Monetary Board  \n iv) Any compensation paid to the instrument holders as a result of the write -down must be paid \nimmediately in the form of ordinary shares or its equivalent.  \n v) The issuing bank must maintain at all times all prior authorisation necessary to immediately issue \nthe relevant number of shares at the time of trigger event.  \n vi) The issuance of any new shares as a result of the trigger event must occur prior to any public \nsector injection of capital.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 30, "year": 2016}, "type": "Document"}
{"page_content": "28 Web Based \nReturn \nCode  Item  \n(11)  The capital instrument /term debt  shall not have a credit sensitive dividend/coupon feature. In this \nregard, the capital instrument /term debt  shall not have a dividend or coupon that is reset periodically, \nbased in whole or in part on the credit standing of the bank or any banking group.  \n(12)  Neither the bank nor a banking group over which the bank exercises control or significant influence \ncan have purchased the instrument and the bank cannot directly or indirectly have funded the \npurchase of the instrument.  \n(13)  If the capital instrument /term debt  is not issued by an operating entity or the holding company of the \nbank (e.g. issued through an SPV), the proceeds from the issuance of the capital instrument /term debt  \nshall be immediately available without limitation to an operating entity or the holdin g company of \nthe bank in a form which meets or exceeds all of the other criteria for inclusion in Tier 2 capital.  \n(14)  If Tier 2 capital instruments /term debt  issued out of a branch or a subsidiary in a foreign jurisdiction, \nsuch instruments shall meet the el igibility criteria in both home and host country regulations relating \nto Basel III.  \n20.2.3.1.1.2  Revaluation Gains  \n The revaluation gains shall satisfy the following requirements when including in Tier 2 capital.  \n i) Prior approval of the Monetary Board . \nii) The revaluation gains may be included in Tier 2 capital once in every three years subject to a \ndiscount of 50 per cent on the difference between the cost and the fair value/market value of \nproperty, plant and equipment.  \niii) Such revaluation is required to be p rudently valued to reflect the current market prices in terms \nof the Banking Act Direction No. 1 of 2014 on the Regulatory Framework for Valuation of \nImmovable Property of LCBs and LSBs.  \niv) Revaluation gains shall be based on the current valuation. Revaluatio n shall be made with", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 31, "year": 2016}, "type": "Document"}
{"page_content": "iv) Revaluation gains shall be based on the current valuation. Revaluatio n shall be made with \nsufficient frequency to ensure that the carrying amount does not differ materially from the fair \nvalue/market value at the end of the reporting period.  \nv) Sri Lanka Accounting Standard \u2013 LKAS 16 on Property Plant and Equipment, and the Sri Lanka \nAccounting Standard \u2013 LKAS 36 on Impairment of Assets will be applicable.  \nvi) Impairment charges taken against any property, plant and equipment are not netted against the \nrevaluation gains from any other asset.  \nvii) If an item of immovable property is re valued, the entire class of property, plant and equipment \nto which that asset belongs shall be revalued once in every three years.  \nviii) Newly acquired or developed properties shall be included in Tier 2 capital after completing 3 \nyears from the completion of ac quisition/development.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 31, "year": 2016}, "type": "Document"}
{"page_content": "29 Web Based \nReturn \nCode  Item  \n20.2.3.1.1.3  General Provisions  \nGeneral provisions based on the Banking Act Directions No. 3 of 2008 on Classification of Loans \nand Advances, Income Recognition and Provisioning shall be eligible for inclusion in Tier 2 capital \nwith a maximum of 1.25 per cent of risk weighted assets (RWA s) on credit risk under the \nStandardised Approach.  \n20.2.3.1.1.4  Instruments Issued by Consolidated Banking and Financial Subsidiaries of the Bank and \nHeld by Third Parties  \n These instruments shall meet the cr iteria for inclusion in Tier 2 c apital and are not included in Tier \n1 capital.  \n20.2.3.1.2.0  Adjustments to Tier 2 Capital  \n20.2.3.1.2.1  Less: Investment in Own Capital Instruments   \n Bank\u2019s investments or investment/purchases in its debt capital instruments due to contractual \nobligations shall be deducted in the relevant Tiers of capital in the computation of capital ratios. The \nsame application shall be adopted to investments in own c apital instruments within the group entities \nas well. However, prior approval of the Monetary Board is required to invest in its own capital \ninstruments.  \n20.2.3.1.2.2  Less: Reciprocal cross holdings in Tier 2 capital instruments  \nInstructions as given under WBRC 20.2.1.1.2.11  \n20.2.3.1.2.3  Less: Investments in the Capital of Banking and Financial Institutions where the Bank does \nnot own more than 10 per cent of the Issued Ordinary Share Capital of the Entity  \nInstructions as given under WBRC 20.2.1.1.2.12  \n20.2.3.1.2.4  Less: Significant Investments in the Capital of Financial Institutions where the Bank owns \nmore than 10 per cent of the Issued Ordinary Share Capital of the Entity  \nInstructions as given under WBRC 20.2.1.1.2.13  \n20.2.4.1.0.0  Total Tier 1 Capital  \n20.2.5.1.0.0  Total Capital", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 32, "year": 2016}, "type": "Document"}
{"page_content": "30 \n PART II(B) - GUIDELINES ON MAINTAINING CAPITAL BUFFERS  \n1. Capital Conservation Buffer (CCB)  \n1.1 Objective  \nCCB is designed to ensure that banks build up capital buffers during normal times (i.e. \noutside the period of stress) which can be drawn down during a stressed period.  \n1.2 Key Features of CCB  \ni) CCB that have been drawn down during a period of stress shall be re built by way \nof reducing discretionary distributions of earnings . \nii) Discretionary distribution s may include dividend payments and  share buy -backs .  \niii) Additional capital may be raised from the market to conserve internally generated \ncapital . \niv) Future predictions of recovery will not be accepted as justification for maintaining \ngenerous distributions when capital buffers are depleted . \nv) Fall in CCB in normal times, due to increasing RWAs without a commensurate \nincrease in CET1 capital ratio (although adhering to the restric tions on \ndistributions), will require  increasing  the buffer to the desired level within a time \nframe prescribed by the Monetary Board .  \n1.3 The Framework  \ni) Maintaining the full CCB requirement is mandatory from 01 January 2019 both on \na solo and consolida ted basis. However, this will not limit a draw -down of CCB \nduring a period of stress. The phase -in arrangement of CCB from 01 July 2017 is \nindicated in Table 1.  \nTable 1 - Phase -in Arrangements for CCB  \n 01.07 .2017  01.01.2018  01.01.2019  \nCCB  1.25%  1.875%  2.5%  \nii) CCB of 2.5 per cent of R WAs shall be met by using CET1 c apital remaining after \ncomplying with the minimum CET1 and Total Capital Ratios.  \niii) Commencing 01 July 2017 , distribution constraints will apply when a bank\u2019s capital \nlevel falls into the buffer ra nge. However, during the buffer range the bank can carry \nout its business as normal except for restrictions imposed by CBSL.  \niv) Table 2 and 3 below indicates the minimum capital conservation ratios (MCCR) a", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 33, "year": 2016}, "type": "Document"}
{"page_content": "iv) Table 2 and 3 below indicates the minimum capital conservation ratios (MCCR) a \nbank must meet at various levels of CET1 Capital an d Total Capital Ratios, \nrespectively.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 33, "year": 2016}, "type": "Document"}
{"page_content": "31 v) \u201cMinimum capital conservation ratios\u201d refer to the percentage of a bank\u2019s earnings \nfor a financial year that a bank is required to conserve in the subsequent financial \nyear.  \nTable 2 - Minimum Capital Conservation Ratios for CET1 Capital  \nCET1 capital ratio buffer \nrange  (%) MCCR  \n(percentage of earnings)  \n    4.50 - 5.125  100 \n> 5.125 - 5.75 80 \n> 5.75 - 6.375  60 \n> 6.375 - 7.00 40 \n> 7.00 0 \n \nTable 3 - Minimum Capital Conservation Ratios for Total Capital  \nTotal capital ratio buffer \nrange  (%) MCCR  \n(percentage of earnings)  \n10.0 - 0.625  100 \n>10.625  - 11.25  80 \n>11.25 - 11.875  60 \n>11.875 - 12.5 40 \n>12.5 0 \n1.4 Any distributions in excess o f constraints imposed in Table 2 and 3  shall require the \nprior approval of the Monetary Board . \n1.5 Any draw down of CCB shall require  the prior approval of the Monetary Board , and \nthe bank should submit a capital augmentation plan for rebuilding the CCB. Monetary \nBoard will provide an appropriate time frame to rebuild CCB.  \n1.6 Although the b uffer may be capable of being drawn down, banks shall not operate in \nthe buffer range during normal times . \n1.7 Other key aspects of CCB requirements:  \ni) Elements subject to the restriction on distributions :  \na) Cash dividends  \nb) Share buy -backs  \nc) Payments which do not result in depletion of CET1 capital are not considered \nas distributions.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 34, "year": 2016}, "type": "Document"}
{"page_content": "32 ii) Definition of E arnings: Distributable profits before the deduction of elements \nsubject to the restriction on distributions mentioned at (i) above.  \n \n2. Capital Surcharge on Domestic Systemically Important Banks (D -SIBs)  \n2.1 Objective  \nD-SIBs must have a higher capacity for loss absorbance to cover the greater risks that \nthey pose to the financial system . \n2.2 Key Features  \nBanks with total assets of Rs. 500Bn and over, as in the latest annual audited financial \nstatements would be identified as D -SIBs in the banking sector .  \n2.3 The Framework  \ni) The capital surcharge on D -SIBs would commence from 01 July 2017 both on a \nsolo and consolidated basis.  The phase -in arrangement of capit al surcharge on D -\nSIBs is indicated in Table 4 . \nTable 4 - Phase -in Arrangements for Capital Surcharge on D -SIBs  \n 01.07 .2017  01.01.2018  01.01.2019  \nCapital Surcharge on D -SIBs  0.5%  1.0%  1.5%  \nii) The capital surcharge requirements for D-SIBs are to be met with CET1 c apital.  \niii) If a bank fails to meet the capital surcharge on D -SIBs during the transitional period \nand full implementation time frame, licensed banks shall adhere to the  time frame \nfor meeting the requirement by imposing restrictions on discretionary dis tributions \nas stated below.   \nTable 5 - MCCR for CET1 Capital as of 01 July 2017  (in percentage)  \nCET1 Capital Ratio  MCCR  Total Capital Ratio  MCCR  \n    5.75  - 5.875  100 11.25 - 11.375  100 \n> 5.875 - 6.00 80 > 11.375  - 11.50  80 \n> 6.00 - 6.125  60 > 11.50 - 11.625  60 \n> 6.125 - 6.25 40 > 11.625 \u2013 11.75  40 \n> 6.25  0 > 11.75  0 \n \nTable 6 - MCCR for CET1 Capital as of 01 January 2018  (in percentage)  \nCET1 Capital Ratio  MCCR  Total Capital Ratio  MCCR  \n    6.875   - 7.00 100 12.375 - 12.5 100 \n> 7.00 - 7.125  80 > 12.5  - 12.625  80 \n> 7.125 - 7.25 60 > 12.625 - 12.75  60 \n> 7.25 - 7.375  40 > 12.75 - 12.875  40 \n>7.375  0 > 12.875   0", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 35, "year": 2016}, "type": "Document"}
{"page_content": "33 Table 7 - MCCR for CET1 Capital as of 01 January 2019  (in percentage)  \nCET1 Capital Ratio  MCCR  Total Capital Ratio  MCCR  \n8.00 - 8.125  100 13.5 - 13.625  100 \n> 8.125 - 8.25 80 > 13.625 - 13.75  80 \n> 8.25 - 8.375  60 > 13.75 - 13.875  60 \n> 8.375 - 8.5 40 > 13. 875 - 14.00  40 \n> 8.50  0 > 14.00  0", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 36, "year": 2016}, "type": "Document"}
{"page_content": "Appendix IV \n34 \n PART III  - GUIDELINES ON COMPUTATION OF TOTAL RISK WEIGHTED \nASSETS  \nRisk Weighted Amount  for Credit Risk  Based On the Standardised Approach  \n1 General Rules for Measuring Credit Risk Based on the Standardised Approach  \n1.1 Under the Standardised Approach (SA), the rating assigned by the eligible external \ncredit assessment institutions (ECAIs) will largely support the measure of credit risk. \nBanks may rely upon the ratings assigned by the ECAIs recognised by CBSL (See \nparagra ph 2) for assigning risk weights for capital requirement  purposes as per the  \nmappin g furnished in these guidelines.  \n1.2 The risk weighting of claims will be as described under Specific Rules for Measuring \nCredit Risk Based on the Standardised Approach.  \n1.3 Claims (exposures) on a counterpart would include placements with banks, \ninvestments, loans and advances or any other credit exposure.  \n1.4 On-balance sheet claims (exposures) would be risk weighted applying the risk weight \nas given in specific rules  while off -balance  sheet items would continue to be converted \nto credit equivalents using the credit conversion factors given in part III(B) and \nthereafter risk weighted according to the risk weight applicable to the counterpart.  \n1.5 All exposures should be risk -weighted net of  specific provisions and interest in \nsuspense that has been charged to the respective customer account.  \n2 External Credit Assessments  \n2.1 Recognition of Eligible Credit Rating Agencies  \n2.1.1 The new c apital standards require  recognizing ECAIs and developing a mapping \nprocess to assign the ratings issued by eligible credit rating agencies to the risk weights \navailable under the Standardised Approach. CBSL has identified Fitch Ratings Lanka \nLtd and ICRA Lanka Limited operating in Sri Lanka for the purposes of risk weighting \nclaims by banks for capital requirement  purposes.  \n2.1.2 The following internationally recognized credit ratings agencies are also accepted as", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 37, "year": 2016}, "type": "Document"}
{"page_content": "2.1.2 The following internationally recognized credit ratings agencies are also accepted as \nECAIs.  \na) Moody\u2019s  \nb) Standard and Poor\u2019s  \nc) Fitch Ratings  \n2.1.3 Banks are required to  obtain the prior approval of CBSL for the use of other ECAIs.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 37, "year": 2016}, "type": "Document"}
{"page_content": "35 2.2 Scope of Application of External Ratings  \n2.2.1 Banks should use the chosen ECAIs and their ratings consistently for each type of \nclaim, for both risk weighting and risk management purposes. Banks wil l not be \nallowed to \u201ccherry pick\u201d the assessments provided by different ECAIs.  \n2.2.2 Banks shall not use one ECAI\u2019s rating for one exposure, while using another ECAI\u2019s \nrating for another exposure to the same counterpart, unless the respective exposures are \nrated by only one of the chosen ECAIs, whose ratings the bank has decided to use. \nExternal assessments for one entity within a corporate group cannot be used to risk \nweight other entities within the same group.  \n2.3 Mapping Process  \n2.3.1 The ratings issued by the eligibl e ECAIs have been mapped to the appropriate risk \nweights applicable as per the Standardised Approach under the Revised Framework. \nThe rating risk weight - mapping furnished in the tables below shall be adopted by all \nbanks:  \nTable 1 - Mapping of Notations o f the Credit Rating Agencies in Sri Lanka  \nFitch Rating Lanka  ICRA Lanka Limited  Rating Scale for C apital \nRatios   \nAAA (lka)  (SL) AAA  AAA  \nAA+ (lka)  (SL) AA+  AA+  \nAA (lka)  (SL) AA  AA  \nAA- (lka)  (SL) AA -  AA- \nA+ (lka)  (SL) A+  A+  \nA (lka)  (SL) A  A  \nA- (lka)  (SL) A -  A- \nBBB+ (lka)  (SL) BBB+  BBB+  \nBBB (lka)  (SL) BBB  BBB  \nBBB - (lka)  (SL) BBB -  BBB - \nBB+ (lka)  (SL) BB+  BB+  \nBB (lka)  (SL) BB  BB  \nBB- (lka)  (SL) BB -  BB- \nB+ (lka)  (SL) B+  B+  \nB (lka)  (SL) B  B  \nB-(lka) &  Lower  (SL) B - & Lower  B- & Lower", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 38, "year": 2016}, "type": "Document"}
{"page_content": "36 Table 2 - Mapping of Notations of the International Credit Rating Agencies  \nStandard and \nPoor\u2019s  Moody's  Fitch Ratings  Rating Scale of \nCapital Ratios  \nAAA  Aaa AAA  AAA  \nAA+  Aa1 AA+  AA+  \nAA Aa2 AA AA \nAA- Aa3 AA- AA- \nA+ A1 A+ A+ \nA A2 A A \nA- A3 A- A- \nBBB+  Baa1  BBB+  BBB+  \nBBB  Baa2  BBB  BBB  \nBBB - Baa3  BBB - BBB - \nBB+  Ba1 BB+  BB+  \nBB Ba2 BB BB \nBB- Ba3 BB- BB- \nB+ B1 B+ B+ \nB B2 B B \nB- & Lower  B3 & Lower  B- & Lower  B- & Lower  \nTable 3  - Mapping of Short Term Ratings  \nStandard and \nPoor\u2019s  Moody's  Fitch Ratings  ICRA Lanka  \nLimited  Risk weights  \nA - 1+/A - 1 P - 1 F1+/ F1  (SL) A1+ / A1  20% \nA - 2+/A - 2 P - 2 F2 (SL) A2+ / A2  50% \nA - 3+/A - 3 P - 3 F3 (SL) A3+ / A3  100%  \nBelow A - 3 NP Below F3  (SL) Below A3  150%  \n \n2.4 Short -Term Ratings  \n2.4.1 Short -term assessments may only be used for short -term claims against banks and \ncorporates.  \n2.4.2 For risk-weighting purposes, short -term ratings are deemed to be issue specific. They \ncan only be used to derive risk weights for claims arising from the rated facility. They \ncannot be generalised to other short -term claims. In no event can a short -term rating be \nused to support a risk weight for an unrated long -term claim.  \n2.4.3 If a short -term rated facility attracts a 50% risk weight, unrated short -term claims \ncannot attract a risk weight lower than 100%. If an issuer has a short -term facility with \nan assessment that warrants a risk weight of 150%, all unrated claims, whether long \nterm or short term, should also receive a 150% risk weight, unless the b ank uses \nrecognized CRM techniques for such claims.  \n2.4.4 The above risk weight mapping of both long term and short -term ratings of the chosen \ndomestic rating agencies would be reviewed annually by CBSL.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 39, "year": 2016}, "type": "Document"}
{"page_content": "37 2.5 Use of Unsolicited Ratings  \nA rating would be treated as solicited only if the issuer of the instrument has requested \nthe credit rating agency for the rating and has accepted the rating assigned by the \nagency. As a general rule, banks should use only solicited rating from the chosen \nECAIs.  No ratings issued by the credit rating agencies on an unsolicited basis should \nbe considered for risk weight computation as per the Standardised Approach.  \n2.6 Issuer versus Issues Assessment  \nWhere a bank\u2019s exposure is to a particular issue that has an i ssue-specific assessment, \nthe risk weight of the claim will be based on this assessment.  \n2.7 Use of Multiple Rating Assessments  \n2.7.1 Banks shall be guided by the following in respect of exposures/obligors having multiple \nratings from the eligible ECAIs chosen by the bank for the purpose of risk weight \nComputation:  \n(i) If there is only one rating by an eligible credit rating agency for a particular \nclaim, that rating would be used to determine the risk weight of the claim.  \n(ii) If there are two ratings accorded by eligible credit rating agencies, which map \ninto different risk weights, the higher risk weight should be applied.  \n(iii) If there are three or more ratings accorded by eligible credit rating agencies with \ndifferent risk weights, the ratings corresponding to the two lowest  risk weights \nshould be referred to and the higher of those two risk weights should be applied, \ni.e., the second lowest risk weight.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 40, "year": 2016}, "type": "Document"}
{"page_content": "38 \n PART III(A) \u2013 COMPUTATION OF RISK WEIGHTED AMOUNT FOR CREDIT RISK  \nWeb Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.3.1.0.0.0  Total risk -weighted amount for c redit risk \nThe amount must agree to  sum of total amount of on -balance sheet items (from \nWBRC 20.3.1.1.0.0 to 20.3.1.14.0.0) and total amount of credit equivalent items \nafter applying the specific risk weight assigned.   \n20.3.1.1.0.0  Claims on Central Government and Central Bank of Sri Lanka  \nThe amount must agree to sum of items WBRC 20.3.1.1.1.0 to 20.3.1.1. 2.0.  \n20.3.1.1.1.0  Central Government   \n20.3.1.1.1.1  Rupee Claims on Central Government  \nAll rupee claims on Government of Sri Lanka  0 \n20.3.1.1.1.2  Foreign Claims on Central Government  \nAll foreign claims on Government of Sri Lanka are risk -weighted commencing \n01.01.2018  20 \n20.3.1.1.2.0  Central Bank of Sri Lanka  \nAll claims on the Central Bank of Sri Lanka  0 \n20.3.1.2.0.0  Claims on Foreign Sovereigns and their Central Banks  \nExposures on foreign sovereigns and their central banks will attract risk weights as \nper the rating assigned to those sovereigns/sovereign exposures by international \nrating agencies as given.  \nThe amount must agree to sum of items from WBRC 20.3.1.2.1.0 to 20.3.1.2.6.0   \n20.3.1.2.1.0  AAA to AA - 0 \n20.3.1.2.2.0  A+ to A - 20 \n20.3.1.2.3.0  BBB+ to BBB - 50 \n20.3.1.2.4.0  BB+ to B - 100 \n20.3.1.2.5.0  Below B - 150 \n20.3.1.2.6.0  Unrated  100 \n20.3.1.3.0.0  Claims on Public Sector Entities (PSEs)  \nAll performing claims on domestic public sector entities (including public \ncorporations, statutory boards, provincial authorities, local government bodies, etc.) \nand claims on foreign PSEs will be risk weighted in a manner similar to claims on \ncorporates as given.  \nThe amount must agree to sum of items from WBRC 20.3.1.3.1.0 to 20.3.1.2.5.0   \n20.3.1.3.1.0  AAA to AA - 20", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 41, "year": 2016}, "type": "Document"}
{"page_content": "39 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.3.1.3.2.0  A+ to A - 50 \n20.3.1.3.3.0  BBB+ to BB - 100 \n20.3.1.3.4.0  Below BB - 150 \n20.3.1.3.5.0  Unrated  100 \n20.3.1.4.0.0  Claims on Official Entities and Multilateral Development Banks (MDBs)  \nThe amount must agree with the sum of the following items from WBRC 20.3.1.4.1.0 \nto 20.3.1.4.6.0 .  \n20.3.1.4.1.0  BIS, IMF,  ECB, EC and Eligible MDBs  \ni) Exposures on following official entities will be assigned a zero risk weight:  \na) Bank for International Settlements (BIS)  \nb) International Monetary Fund (IMF)  \nc) European Central Bank (ECB)  \nd) European Community (EC)  \nii) The following Eligible MDBs will be assigned a zero risk weight:  \na) The World Bank Group comprising of the International Bank for \nReconstruction and Development (IBRD) and the International Finance \nCorporation (IFC)  \nb) The Asian Development Bank (ADB)  \nc) The African Development Bank (AFD B) \nd) The European Bank for Reconstruction and Development (EBRD)  \ne) The Inter -American Development Bank (IADB)  \nf) The European Investment Bank (EIB)  \ng) The European Investment Fund (EIF)  \nh) The Nordic Investment Bank (NIB)  \ni) The Caribbean Development Bank (CDB)  \nj) The Islami c Development Bank (IDB)  \nk) The Council of Europe Development Bank (CEDB)  \nl) The International Finance Facility for Immunization (IFFIm)  \niii) The risk weight applicable to claims on other MDBs will depend on the external \nrating assigned for each MDBs as follows:  0 \n20.3.1.4.2.0  AAA+ to AA - 20 \n20.3.1.4.3.0  A+ to BBB - 50 \n20.3.1.4.4.0  BB+ to B - 100 \n20.3.1.4.5.0  Below B - 150", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 42, "year": 2016}, "type": "Document"}
{"page_content": "40 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.3.1.4.6.0  Unrated  100 \n20.3.1.5.0.0  Claims on Banks Exposures  \nTotal performing claims on banks denominat ed in LKR and foreign currency. The \namount must agree to sum of total rupee claims and foreign currency claims.  \n(WBRC 20.3.1.5.1.0  + 20.3.1.5.2.0  + 20.3.1.5.3.0)  \nShort -Term Claims:  In order to qualify for the preferential treatment for short -term \nclaims, they should have an original contractual maturity of 3 months or less, and \nshould not be rolled over.  \nBranches of banks incorporated abroad:  The rating applicable to the Head Office  \nmay be used as the rating applicable to the particular branch, if the branch is not rated \nlocally.   \n20.3.1.5.1.0  Rupee Exposures less than 3 months  \nAll performing claims on all banks (short -term) including LCBs and LSBs, \nexcluding investment in equity sh ares and other instruments eligible for capital \nstatus, denominated in LKR would be risk weighted based on their external credit \nassessment as follows:  \nThe amount must agree with the sum of the following items from WBRC 20.3.1.5.1.1 \nto 20.3.1.5.1.4   \n20.3.1.5.1.1  AAA to BBB - 20 \n20.3.1.5.1.2  BB+ to B - 50 \n20.3.1.5.1.3  Below B - 150 \n20.3.1.5.1.4  Unrated  100 \n20.3.1.5.2.0  Foreign Currency Exposures less than 3 months  \nAll performing claims denominated in foreign currency on banks (short -term) will \nbe risk weighted based on their external credit assessment as given in the table below.  \nThe amount must agree with the sum of the following items from WBRC 20.3.1.5.2.1 \nto 20.3.1.5.2.5   \n20.3.1.5.2.1  AAA to A - 20 \n20.3.1.5.2.2  BBB+ to BBB - 50 \n20.3.1.5.2.3  BB+ to B- 100 \n20.3.1.5.2.4  Below B - 150 \n20.3.1.5.2.5  Unrated  100 \n20.3.1.5.3.0  Rupee and Foreign Currency Exposures more than 3 months  \nAll performing claims , excluding investments adjusted under WBRC 20.2. 1.1.2.12 ,", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 43, "year": 2016}, "type": "Document"}
{"page_content": "41 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.2. 2.1.2.3 and 20.2. 3.1.2.3 in Part II(A) \u2013 Computation of Total Regulatory \nCapital, denominated in rupees and foreign currency on banks (more than 3 months) \nwill be risk weighted based on their external credit assessment as given in the table \nbelow.  \nThe amount must agree with the sum of the following items from WBRC 20.3.1.5.3.1 \nto 20.3.1.5.3.5  \n20.3.1.5.3.1  AAA to AA - 20 \n20.3.1.5.3.2  A+ to BBB - 50 \n20.3.1.5.3.3  BB+ to B - 100 \n20.3.1.5.3.4  Below B - 150 \n20.3.1.5.3.5  Unrated  100 \n20.3.1.6.0.0  Claims on Financial Institutions  \nTotal performing claims  on non -bank financial institutions,  excluding investments \nadjusted under WBRC 20.2.1.1.2.12, 20.2.2.1.2.3 and 20.2.3.1.2.3 in Part II(A) \u2013  \nComputation of Total Regulatory Capital.  \n(WBRC 20.3.1.6.1.0  + 20.3.1.6.2.0)   \n20.3.1.6.1.0  Claims on Institutions Regulated by the Central Bank of Sri Lanka  \nThe amount must agree with the sum of the following items from WBRC 20.3.1.6.1.1 \nto 20.3.1.6.1.5   \n20.3.1.6.1.1  AAA to AA - 20 \n20.3.1.6.1.2  A+ to BBB - 50 \n20.3.1.6.1.3  BB+ to B - 100 \n20.3.1.6.1.4  Below B - 150 \n20.3.1.6.1.5  Unrated  100 \n20.3.1.6.2.0  Claims on Other Financial Institutions  \nThe amount must agree with the sum of the following items from WBRC 20.3.1.6.2.1 \nto 20.3.1.6.2.5   \n20.3.1.6.2.1  AAA to AA - 20 \n20.3.1.6.2.2  A+ to A - 50 \n20.3.1.6.2.3  BBB+ to BB - 100 \n20.3.1.6.2.4  Below BB - 150 \n20.3.1.6.2.5  Unrated  100", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 44, "year": 2016}, "type": "Document"}
{"page_content": "42 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.3.1.7.0.0  Claims on Corporates  \nAll performing claims on corporates shall be risk weighted as per the ratings \nassigned.  \nBanks can, with prior approval of CBSL, exercise the option to rate all corporate \ncustomers at 100%. Once decided and approved by CBSL the banks should apply a \nsingle consistent approach.  \nThe amount must agree with the sum of the following items from WBRC 20.3.1.7.1.0 \nto 20.3.1.7.5.0 .  \n20.3.1.7.1.0  AAA to AA - 20 \n20.3.1.7.2.0  A+ to A - 50 \n20.3.1.7.3.0  BBB+ to BB - 100 \n20.3.1.7.4.0  Below BB - 150 \n20.3.1.7.5.0  Unrated  100 \n20.3.1.8.0.0  Retail Claims  \nAll performing retail claims include: Retail claims that qualify for regulatory capital \npurposes and retail claims that do not qualify for regulatory capital purposes  \nHowever, the following shall be excluded from the retail portfolio:  \na) Investments in securities such as bonds and equities (to be treated as \ninvestments).  \nb) Resid ential housing loans secured by mortgages over the residential property that \nqualify for inclusion as claims secured by residential property (refer WBRC \n20.3.1.9.0.0).  \nThe amount must agree with the sum of the retail claims that qualify for regulatory \ncapital purposes and retail claims that do not qualify for regulatory capital purposes.  \n(WBRC 20.3.1.8.1.0 to 20.3.1.8.3 .0)  \n20.3.1.8.1.0  Retail Claims that Qualify for Regulatory Capital Purposes  \nPerforming claims that meet the criteria given below qualify for inclusion in the \nregulatory retail portfolio.  \nThe qualifying criteria for the Regulatory Retail Portfolio (applicable to both the \nretail and SME portfolios):  \na) Orientation Criterion  \u2013 The exposure should be to an individual person or \npersons or to a SME.  \nb) Product Criterion  \u2013 The exposure should be of one of the following product \ntypes. Both fund based and non -fund based facilities to be included:", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 45, "year": 2016}, "type": "Document"}
{"page_content": "43 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \ni) Revolving credit and lines of credit including overdrafts and credit cards  \nii) Personal term loans and leases (e.g.  instalment loans, vehicle loans and \nleases, student and educational loans, personal finance)  \niii) SME facilities.  \nc) Granularity Criterion  \u2013 The regulatory retail portfolio must be sufficiently \ndiversified to a degree that reduces the risks in the portfolio.  In order to meet \nthis criterion,  \ni) No aggregate exposure without considering CRM, to one counterpart should \nexceed 0.2% of the overall retail portfolio (excluding any non -performing \nretail/ SME claims).  \nii)  \u201cTo one counterpart\u201d means one or several entities that constitute a single \nbeneficiary, eg: in the case of a small business affiliated to another small \nbusiness, the limit would apply to  the bank\u2019s aggregate exposure on both \nbusinesses.  \nd) Low value of Exposure   \ni) SME Exposures  \nI. The maximum credit exposure of the lending bank to an SME shall not \nexceed Rs. 250 million.  \nII. The annual turnover of the SME shall not exceed Rs.750 million.  \nIII. The annual t urnover should be based on the latest available audited \nfinancial statements at the time of granting the facilities.  \nIV. The annual turnover should be based on latest available audited financial \nstatements or certified by a Chartered Accountant or an Approved \nAccountant acceptable to the Department of Inland Revenue. In the case \nof draft financial statements, the turnover certified by a Chartered \nAccountant or an Approved Accountant should be obtained within the \nyear.  \nV. In the case of grant of credit facilities l ess than Rs. 50 million, the \ncondition III  and IV above shall not be applicable and banks shall adopt \ntheir own internal mechanism to verify the SME\u2019s annual turnover.  \nii) Individual Exposures  \nThe amount must agree with the sum of following items from WBRC \n20.3.1.8.1.1 to 20.3.1.8.1.3", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 46, "year": 2016}, "type": "Document"}
{"page_content": "44 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.3.1.8.1. 1 SME Exposures Secured on Immovable Property  \na) Qualifying SME exposures, fully secured by a primary mortgage over \nimmovable  property , qualify for a lower risk weight of 60% . \nb) The claims shall  meet the following qualifying criteria:  \ni) A margin of at least 25% on the forced sale value of the property based on \nthe latest valuation report . \nii) Valuation of property: valuation of property is carried out by an external \nindependent valuer or current internal assessment of the  value of the \nproperties subject to the conditions stated in the Directions on Classification \nof Loans and Advances , Income Recognition and Provisioning  issued under  \nthe Banking Act.  60 \n20.3.1.8.1. 2 Other SME Exposures  \nSum of qualifying SME exposures that do not meet the criteria given in WBRC \n20.3.1.8.1.1 above.     75 \n20.3.1.8.1.3  Individual Exposures  \nSum of claims with maximum aggregate retail exposure (not taking any CRM into \naccount) to one counterpart that does not exceed the lower of 0.2% of capital base \n(as included in the computation as at the reporting date) or Rs.10 million at the time \nof first granting.  75 \n20.3.1.8.2.0  Retail Claims that do not Qualify for Regulatory Capital Purposes  \nPerforming claims that  do not qualify for inclusion in the regulatory retail portfolio.  100 \n20.3.1.8.3.0  Claims Secured by Gold  \nThe amount must agree with the sum of the following items from WBRC 20.3.1.8.3.1 \nto 20.3.1.8.3.3   \n20.3.1.8.3.1  Loan to Value Ratio equal to or less than 70%  \nClaims collateralized by gold with a loan to value ratio of equal  to or less than 70% \nat the reporting date.  0 \n20.3.1.8.3.2  Loan to Value Ratio over 70% and less than 100%  \nTotal  value of c laims collateralized by gold with a loan to value ratio of over 70% \nand less than 100% at the reporting date.  20 \n20.3.1.8.3.3  Loan to Value equal to or over 100%", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 47, "year": 2016}, "type": "Document"}
{"page_content": "and less than 100% at the reporting date.  20 \n20.3.1.8.3.3  Loan to Value equal to or over 100%  \nClaims collateralized by gold with a loan to value ratio  of equal to or  over 100%  at \nthe reporting date.  \n 100", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 47, "year": 2016}, "type": "Document"}
{"page_content": "45 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.3.1.9.0.0  Claims Secured by Residential Property  \nThe amount must agree with the sum of the claims secured by residential property \nthat qualify for regulatory capital purposes and claims secured by residential \nproperty that do not qualify for regulatory capital purposes.  \n(WBRC 20.3.1.9.1.0 to 20.3.1.9.2.0)  \nThe exposures secured by mortgages on commercial real estates shall be excluded \nfrom here.   \n20.3.1.9.1.0  Claims that Qualify for Regulatory Capital Purposes  \na) Subject to conditions below, residential housing loans fully secured by a primary \nmortgage over such residential property that is or will be occupied by the \nborrower, or rented . \nb) The claims should strictly meet the following qualifying criteria to be able to use \nthe p referential risk weight : \n\uf0b7 A margin of at least 25% on the forced sale value of the property based on \nthe latest valuation report ; \n\uf0b7 Valuation of property: valuation of property is carried out by an external \nindependent valuer or current internal assessment of the value of the \nproperties subject to the conditions stated in the Directions on Classification \nof Loans and Advances, Income R ecognition and Provisioning issued under \nBanking Act.  \nc) Mortgages other than primary mortgages will qualify for the same risk weight, \nsubject to the above conditions, if:  \n\uf0b7 The mortgage is with the same bank  \n\uf0b7 The purpose of the loan is for residential purposes . 50 \n20.3.1.9.2.0  Claims that do not Qualify for Regulatory Capital Purposes  \nPerforming claims that do not meet the criteria given above  100 \n20.3.1.10.0.0  Claims Secured by Commercial Real Estate  \nCommercial real estate exposure is defined as exposures secured by mortgages on \ncommercial real estate such as office buildings, multi -purpose or multi -tenanted \ncommercial premises, multi -family residential buildings, industrial or warehouse", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 48, "year": 2016}, "type": "Document"}
{"page_content": "commercial premises, multi -family residential buildings, industrial or warehouse \nspace, hotels, land acquisition, land development and construction.  100", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 48, "year": 2016}, "type": "Document"}
{"page_content": "46 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.3.1.11.0.0  Non-Performing Assets (NPAs)  \nThe unsecured portion of NPAs, other than a qualifying residential mortgage loan \nwhich is addressed in item 20.3.1.12.0.0, net of specific provision will be risk \nweighted as items 20.3.1.11.1.0 and 20.3.1.11.2.0 below.  \nFor the purpose of computing the level of specific provisions of NPAs for deciding \nthe risk -weighting, all funded NPA exposures of a single counterparty (without \nnetting the value of the eligible collateral under CRM) should be reckoned i n the \ndenominator.  \nFor the purpose of defining the secured portion of the NPA, eligible collateral will \nbe the same as recognised for credit risk mitigation purposes. Hence, other forms of \ncollateral like land, buildings, plant, machinery, current assets, etc. will not be \nreckoned while computing the secured portion of NPAs for capital requirement \npurposes.  \nThe amount must agree with the sum of the following items WBRC 20.3.1.11.1.0 + \n20.3.1.11.2.0 .  \n20.3.1.11.1.0  Specific Provisions are equal  to or more than 20%  \nSpecific provisions equal or more than 20% of the outstanding amount of the NPA  100 \n20.3.1.11.2.0  Specific Provisions are less than 20%  \nSpecific provisions are less than 20% of the outstanding amount of the NPA  150 \n20.3.1.12.0.0  Non-Performing Assets Secured by Residential Property  \nThe unsecured portion of NPAs (without netting the value of property mortgage), \nnet of specific provision will be risk weighted as items WBRC 20.3.1.12.1.0 and \n20.3.1.12.2.0  \nFor the purpose of computing  the level of specific provisions in NPAs for deciding \nthe risk -weighting, all funded NPA exposures of a single counterparty (without \nnetting the value of property mortgage) should be reckoned in the denominator.  \nThe amount must agree with the sum of the f ollowing items WBRC 20.3.1.12.1.0 \nand 20.3.1.12.2.0   \n20.3.1.12.1.0  Specific Provisions are equal or more than 20%", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 49, "year": 2016}, "type": "Document"}
{"page_content": "and 20.3.1.12.2.0   \n20.3.1.12.1.0  Specific Provisions are equal or more than 20%  \nSpecific provisions equal or more than 20% of the outstanding amount of the NPA  50 \n20.3.1.12.2.0  Specific Provisions are less than 20%  \nSpecific provisions are less than 20% of the outstanding amount of the NPA  100 \n20.3.1.13.0.0  Higher -risk Categories  \nExposures to the following segments, which are considered as high -risk exposures:", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 49, "year": 2016}, "type": "Document"}
{"page_content": "47 Web Based \nReturn Code  Assets  Risk \nWeight  \n% \n20.3.1.13.1.0  Venture capital funds/companies and Private equity investments  150 \n20.3.1.13.2.0  Significant Investments in the Capital of Financial Institutions  \nAll investments in financial institutions that have not been adjusted under WBRC \n20.2. 1.1.2.13 , 20.2. 2.1.2.4 and 20.2. 3.1.2.4 in Part II(A) \u2013 Computation of Total \nRegulatory Capital  250 \n20.3.1.14.0.0  Cash Items and Other assets  \nThe amount must agree with the sum of cash items 20.3.1.14.1.0 and Other Assets \n20.3.1.14.2.0   \n20.3.1.14.1.0  Cash Items  \nTotal of cash items from 20.3.1.14.1.1 to 20.3.1.14.1.3   \n20.3.1.14.1.1  Notes and Coins in Own Vault  \nLocal currency notes and coins held by tellers, in ATMs, in vault and petty cash  0 \n20.3.1.14.1.2  Gold Bullion held in Own Vault  \nGold and bullion held in the bank\u2019s vaults. Gold items held in safe custody sh all be \nexcluded.  0 \n20.3.1.14.1.3  Cash Items in the Process of Collection  \nCheques, drafts and other cash items, such as money orders, postal orders drawn on \nbanks and other authorized institutions and pa id immediately on presentation and \ncash in transit. Trade bills, such as import bills and export bills, in the process of \ncollection should be excluded from this item and considered as loans and advances.  20 \n20.3.1.14.2.0  Other Assets  \nTotal of items 20.3.1.14.2.1 and 20.3.1.14.2.2   \n20.3.1.14.2.1  Property Plant and Equipment  \nThe item includes bank premises, immovable property, machinery and equipment, \nmotor vehicles, furniture and fittings and other fixed assets, reported at cost or at \nrevalued amount, net of accumulated depreciation  excluding intangible assets .  100 \n20.3.1.14.2.2  Other Assets/Exposures  \nAll other assets/exposures which are not specified elsewhere.  100", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 50, "year": 2016}, "type": "Document"}
{"page_content": "48 PART III(B) - COMPUTATION OF CREDIT EQUIVALENT AMOUNT OF OFF -BALANCE \nSHEET ITEMS  \nCode  Description  Credit \nConversion \nFactor (%)  \n20.3.2.0.0.0  Off-balance Sheet Items  \nThe exposure on off -balance sheet items is to be included in the computation of \nthe risk weighted capital ratio. The conversion of the credit risk inherent in each \noff-balance sheet item would be converted into an on -balance sheet credit \nequivalent by multiplying the principal amount by a credit conversion factor. The \ncredit equivalent amount would then be weighted according to the corresponding \nasset item.  \nThe amoun t must agree with the sum of the principal amount of off -balance sheet \nitems and credit equivalent of off -balance sheet items from WBRC 20.3.2.1.0.0 to \n20.3.2.10.0.0 . - \n20.3.2.1.0.0  Direct Credit Substitutes  \nTotal direct credit substitutes of the following items from WBRC 20.3.2.1.1.0 to \n20.3.2.1.4.0    \n20.3.2.1.1.0  General Guarantees of Indebtedness  \nGeneral guarantees of indebtedness where the risk of loss in the transaction may \ncrystallise into a direct liability and become a direct claim on the counterparty. \nThese include guarantees in respect of counterparties like insurance agents, sales \nagents, e tc. to cover any non -payment by them of premium, sales proceeds, etc. to \ntheir beneficiaries. Bank guarantees in favour of customs would cover any non -\npayment of customs duties by their counterparties.  100 \n20.3.2.1.2.0  Standby Letters of Credit serving as  Financial Guarantees  \nStand -by Letters of Credit, which are direct, credit substitutes where the risk of \nloss in the transaction is equivalent to that of a direct claim on the counterparty. \nThis includes stand -by Letters of Credit serving as financial guar antees for loans, \nsecurities and other financial liabilities.  100 \n20.3.2.1.3.0  Bank Acceptances  \nLiabilities arising from acceptances on accommodation of bills but excludes bills", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 51, "year": 2016}, "type": "Document"}
{"page_content": "Liabilities arising from acceptances on accommodation of bills but excludes bills \nthat have been discounted by the bank itself. Risk participation and other similar \ncommitments undertaken to repay the financial obligation of a customer, on his \nfailure to do so, should be included.  \n \n 100", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 51, "year": 2016}, "type": "Document"}
{"page_content": "49 Code  Description  Credit \nConversion \nFactor (%)  \n20.3.2.1.4.0  Others (please specify)  \nAny other obligation which carries the same risk of loss in the transaction and is \nequivalent to that of a direct claim on the counterparty  100 \n20.3.2.2.0.0  Transaction -related Contingencies  \nTotal transaction - related contingencies of following items from WBRC \n20.3.2.2.1.0 to 20.3.2.2.3.0   \n20.3.2.2.1.0  Performance Bonds, Bid Bonds & Warranties  \nTransaction -related contingent items such as Performance Bonds, Bid Bonds and \nWarranties, where the risk of loss arises from an irrevocable obligation to pay a \nthird party, the non -financial obligation of the customer upon his failure to fulfil  \nobligations under a contract or a transaction. Such contingencies would crystallise \ninto actual liabilities dependent upon the occurrence or non -occurrence of an event \nother than that of a default in payment by the counterparty.  50 \n20.3.2.2.2.0  Standby Letters of Credit  Related to Particular Transactions  \nContingent liabilities relating to particular transactions. Here too, there is a \nlikelihood of the contingencies crystallizing into actual l iabilities depending upon \nthe occurrence or non -occurrence of an  event other than that of a default in \npayment by counterparty.  50 \n20.3.2.2.3.0  Others (please specify)  \nOther contingent liabilities arising from an irrevocable obligation to pay a third \nparty, the non -financial obligation of a customer upon his failure to fulfil such \nobligation or terms under contract or transaction.  50 \n20.3.2.3.0.0  Short -Term Self -Liquidating Trade -Related Contingencies  \nTotal short -term self -liquidating trade -related contingencies of following items \nfrom WBRC 20.3.2.3.1.0 to 20.3.2.3.4.0 .  \n20.3.2.3.1.0  Shipping Guarantees  \nInvoice value of g uarantees issued by the reporting institution to customers where \nthe reporting institution agrees to indemnify fully, to a named shipping agent,", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 52, "year": 2016}, "type": "Document"}
{"page_content": "the reporting institution agrees to indemnify fully, to a named shipping agent, \nagainst all liabilities arising from the release of goods without production of Bills \nof Lading and/or other shipping documents by the receiving party.  20 \n20.3.2.3.2.0  Documentary Letters of Credit  \nDocumentary credits collateralised by the underlying shipments which are short -\nterm self-liquidating and trade -related transactions.  20", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 52, "year": 2016}, "type": "Document"}
{"page_content": "50 Code  Description  Credit \nConversion \nFactor (%)  \n20.3.2.3.3.0  Trade Related Acceptances  \nLiabilities arising from acceptances that are based on a specific trade transaction \neither domestic or foreign e.g. Letters of Credit.  20 \n20.3.2.3.4.0  Others (please specify)  \nContingent liabilities arising from short -term self -liquidating trade related \nobligations.  20 \n20.3.2.4.0.0  Sale and Repurchase Agreements and Assets Sale with recourse where the \ncredit risk remains with the Bank  \nTotal of following items f rom WBRC 20.3.2.4.1.0 to 20.3.2.4.6.0   \n20.3.2.4.1.0  Sale and Repurchase Agreements  \nSale and Repurchase Agreement (REPO) is an agreement whereby a bank sells an \nasset to a third party with a commitment to repurchase it at an agreed price on an \nagreed future date. Purchase and Resale Agreements (Reverse REPOS) should be \nconsidered as collateralised loans. The risk is to be measured as an exposure to the \ncounterparty unless the underlying asset has been reported as an on -balance sheet \nitem where the risk  weight appropriate to the underlying asset should be used.  100 \n20.3.2.4.2.0  Housing Loans Sold with Recourse  \nThe amount of housing loans sold to a counterparty with recourse where the credit \nrisk remains with the Bank.  100 \n20.3.2.4.3.0  Other Assets Sold  with Recourse  \nAssets sold with recourse where the credit risk remains with the reporting \ninstitution. The holder of the asset is entitled to put the assets back to the reporting \ninstitution within an agreed period or under certain prescribed circumstances  \u2013 e.g. \ndeterioration in the value or credit quality of the asset concerned.  100 \n20.3.2.4.4.0  Forward Assets Purchase  \nCommitment to purchase, at a specified future date and/or on pre -arranged terms, \na loan, security or other asset from another party.  100 \n20.3.2.4.5.0  Partly Paid Shares/Securities  \nUnpaid amounts on partly -paid shares and securities where the issuer may call", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 53, "year": 2016}, "type": "Document"}
{"page_content": "Unpaid amounts on partly -paid shares and securities where the issuer may call \nupon the bank to pay at a pre -determined or unspecified date in the future.  100 \n20.3.2.4.6.0  Others (please specify)  \nPlacements of forward deposits and other commitments with certain drawdown. A \nforward deposit is an agreement between two parties whereby one will place and 100", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 53, "year": 2016}, "type": "Document"}
{"page_content": "51 Code  Description  Credit \nConversion \nFactor (%)  \nthe other will receive, at a pre -determined future date, a deposit, at an agreed rate \nof interest. A commitment to place a forward deposit should be reported under this \nitem and weighted according to the risk -weight appropriate to the counterparty.  \n20.3.2.5.0.0  Obligations under an On -going Underwriting Agreement  \nTotal of following items from WBRC 20.3.2.5.1.0 to 20.3.2.5.3.0 . - \n20.3.2.5.1.0  Underwriting of Shares/Securities Issue  \nObligations due to underwriting of shares and securities, net of the amount sub -\nunderwritten by another institution.  50 \n20.3.2.5.2.0  Note Issuance Facilities and Revolving Underwriting Facilities  \nArrangements where a borrower may draw funds up to a prescribed limit over a \npre-defined period through the issue of notes which the reporting bank has \ncommitted to underwrite.  50 \n20.3.2.5.3.0  Others (please specify)  \nOthe r obligations due to on -going underwriting agreements.  50 \n20.3.2.6.0.0  Other Commitments with an Original maturity of up to one year or which \ncan be unconditionally cancelled at any time  \nTotal of following items from WBRC 20.3.2.6.1.0 to 20.3.2.6.4.0 .  \n20.3.2.6.1.0  Formal Standby Facilities and Credit Lines  \nCommitments include the undrawn portion of any binding arrangements which \nobligate the reporting institution to provide funds at some future date. Such \ncommitments would have an original maturity of less than one year or which can \nbe unconditionally cancelled at any time by the reporting bank at its discretion. \nFormal stand -by facilities and credit lines for Letters of Credit, Trust Receipts, etc. \nshould be included under the item.  0 \n20.3.2.6.2.0  Undrawn Term Loans  \nUndrawn portion of a term loans with an original maturity of less than one year or \nwhich can be unconditionally cancelled at any time by the reporting bank.  0 \n20.3.2.6.3.0  Undrawn Overdraft Facilities/Unused Credit Card Lines", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 54, "year": 2016}, "type": "Document"}
{"page_content": "20.3.2.6.3.0  Undrawn Overdraft Facilities/Unused Credit Card Lines  \nThe undrawn portion of overdraft facilities and credit card lines with an original \nmaturity of less than one year or which can be unconditionally cancelled at any \ntime by the reporting bank.  \n \n 0", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 54, "year": 2016}, "type": "Document"}
{"page_content": "52 Code  Description  Credit \nConversion \nFactor (%)  \n20.3.2.6.4.0  Others (please specify)  \nAny other commitment with an origin al maturity up to one year or which can be \nunconditionally cancelled at any time.  0 \n20.3.2.7.0.0  Commitments with an original maturity up to 1 year  \nTotal of following items from WBRC 20.3.2.7.1.0 to 20.3.2.7.3.0   \n20.3.2.7.1.0  Formal Standby Facilities and Credit Lines  \nThe commitments under formal standby facilities and credit lines with an original \nmaturity is up to one year.  20 \n20.3.2.7.2.0  Undrawn Term Loans  \nThe undrawn portion of term loans where the original maturity is up to one year.  20 \n20.3.2.7.3.0  Others (please specify)  \nAny other commitment with an original maturity up to one year.  20 \n20.3.2.8.0.0  Other Commitments with an Original Maturity of Over One Year  \nTotal of following items from WBRC 20.3.2.8.1.0 to 20.3.2.8.3.0   \n20.3.2.8.1.0  Formal Standby Facilities and Credit Lines  \nThe commitments under formal standby facilities and credit lines with an original \nmaturity are  over one year.  50 \n20.3.2.8.2.0  Undrawn Term Loans  \nThe undrawn portion of term loans where the original maturity is over one year.  50 \n20.3.2.8.3.0  Others (please specify)  \nAny other commitment with an original maturity over one year.  50 \n20.3.2.9.0.0  Foreign Exchange Contracts  \nExchange rate contracts shall include the following items ( \u2018a\u2019 to \u2018e\u2019), but exclude \nexchange rate contracts which have an original maturity o f 14 calendar days or \nless. \na) Forward  foreign exchange contracts  \nb) Currency futures  \nc) Currency options purchased  \nd) Cross c urrency FX swaps  \ne) Other similar instruments  \nTo arrive at the credit equivalent amounts of excha nge rate contracts, applying the \noriginal exposure method, a bank will have to apply one of the conversion factors \nas given from 20.3.2.9.1.0 to 20.3.2.9.3.0 to the notional principal amounts of each", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 55, "year": 2016}, "type": "Document"}
{"page_content": "as given from 20.3.2.9.1.0 to 20.3.2.9.3.0 to the notional principal amounts of each \ninstrument according to the nature of the instrument and  its maturity.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 55, "year": 2016}, "type": "Document"}
{"page_content": "53 Code  Description  Credit \nConversion \nFactor (%)  \n20.3.2.9.1.0  Original Maturity -less than One Year  2 \n20.3.2.9.2.0  Original Maturity -More than One year and less than Two years  5 \n20.3.2.9.3.0  Original Maturity -More than Two years (For each additional year)  3 \n20.3.2.10.0.0  Interest Rate Contracts  \nInterest rat e contracts shall include,  \na) Single c urrency interest rate swaps  \nb) Basis swaps  \nc) Forward rate agreements  \nd) Interest rate futur es \ne) Interest rate options purchased, and  \nf) Other similar instruments  \nTo arrive at the credit equivalent amounts of interest rate contracts, applying the \noriginal exposure method, a bank will have to apply one of the conversion factors \nas given from 20.3.2.10.1.0 to 20.3.2.10.3.0 to the notional principal amounts of \neach ins trument according to the nature of the instrument and its maturity.  - \n20.3.2.10.1.0  Original Maturity -less than One Year  0.5 \n20.3.2.10.2.0  Original Maturity -More than One year and less than Two years  1 \n20.3.2.10.3.0  Original Maturity -More than two years  (For each additional year)  1 \nNote:  In the case of foreign exchange and interest rate contracts above, the netting of contracts subject to novation \nwould be permitted. Therefore, the net rather than the gross claims arising out of swaps and similar contra cts (subject \nto novation) with the same counterparts will be weighted. In this context, novation is defined as a bilateral contract \nbetween two counterparties under which any obligation to each other to deliver a given currency on a given date is \nautomatic ally amalgamated with all other obligations for the same currency and value date, legally substituting one \nsingle net amount for the previous gross obligations.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 56, "year": 2016}, "type": "Document"}
{"page_content": "54 \n PART III(C): EXPOSURES RECOGNISED UNDER CREDIT RISK MITIGATION  \n  \n1 Overview of Credit Risk Mitigation (CRM)  \n1.1 Banks use a number of techniques to mitigate the credit risks to which they are exposed. \nFor example, exposures may be collateralised by first priority claims, in whole or in \npart with cash or securities, a loan exp osure may be guaranteed by a third party, or a \nbank may buy a credit derivative to offset various forms of credit risk. Additionally, \nbanks may agree to net loans owed to them against deposits from the same counterpart.  \n1.2 Credit risk mitigation allows a wide r range of credit risk mitigants to be recognised for \nregulatory capital purposes provided that these techniques meet the minimum \nconditions described below.  \n1.3 While the use of CRM techniques reduces or transfers credit risk, it simultaneously may \nincrease o ther risks (residual risks). Residual risks include legal, operational, liquidity \nand market risks. Therefore, it is imperative that banks employ robust procedures and \nprocesses to control these risks, including strategy, consideration of the underlying \ncredit, valuation, policies and procedures, systems, control of roll -off risks and \nmanagement of concentration risk arising from the bank\u2019s use of CRM techniques and \nits interaction with the bank\u2019s overall credit risk profile.  \n1.4 Treatment of Pools of CRM Techn iques: In case where a bank has multiple CRM \ntechniques covering a single exposure (e.g. a bank has both collateral and guarantee \npartially covering an exposure), the bank will be required to subdivide the exposure \ninto portions covered by each type of CRM  technique (e.g. portion covered by \ncollateral, portion covered by guarantee) and the risk -weighted assets of each portion \nmust be calculated separately. When credit protection provided by a single protection \nprovider has differing maturities, they must be  subdivided into separate protection as \nwell.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 57, "year": 2016}, "type": "Document"}
{"page_content": "55 \n PART III(C): GUIDELINES ON RECOGNISING EXPOSURES UNDER CREDIT RISK \nMITIGATION  \n \nCode  CRM Techniques  \n20.3.3.0.0.0  Total CRM exposure  \nTotal exposure of collateralised transactions and other CRM techniques.  \nAll exposures should be reported net of specific provisions and interest in suspense that has been \ncharged to the respective counterparty account. Exposures which are reported in this part under CRM \nshould not be reported in the other parts of the capital requirements  return. The amount is \nautomatically shown on web -based return.  \nThe amount must agree with the sum of items WBRC 20.3.3.1.0.0 and 20.3.3.2.0.0  \n20.3.3.1.0.0  Collateralised transactions  \nThe sum of collateralised retail exposures and collateralised other exposures. The amount must agree \nto sum of items WBRC 20.3.3.1.1.0 and 20.3.3.1.2.0. The amount is automatically shown on web -\nbased return.  \n(1)  A collateralised transaction is one in which:  \n\uf0b7 banks have a credit exposure or potential credit exposure; and  \n\uf0b7 that credit exposure or potential credit exposure is hedged in whole or in part by collateral posted \nby a counterpart or by a third party on behalf of the counterpart.  \n(2)  The Simple Approach wil l be Followed in computing the effects  of CRM  \na) In the Simple A pproach, the portions of claims collateralised by the market value of recognised \ncollateral receive the risk weight applicable to the collateral instrument. The risk weight on the \ncollateralised portion will be subject to a floor of 20%. The remainder of the claim should be \nassigned to the risk weight appropriate to the counterparty.  \nb) Mismatches in the maturity of the underlying exposure and collateral will not be allowed, i.e. the \ncollateral must be pledged for at least the life of the exposure.  \n(3)  Risk Weights  \nThe 20% floor for the risk weight on a collateralised transaction will not be applied and 0% risk", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 58, "year": 2016}, "type": "Document"}
{"page_content": "The 20% floor for the risk weight on a collateralised transaction will not be applied and 0% risk \nweight can be applied provided the exposure and the collateral are denominated in the same \ncurrency, and either:  \na) the collateral is cash on deposit , or \nb) the collateral is in the form of Government securities , or \nc) the collateral is in the form  of provident fund balances.  \n(4)  Minimum Conditions  \na) Legal Certainty:  All documentation used in collateralised transactions and guarantees must be \nbinding on all parties and legally enforceable in all relevant jurisdictions. Banks must have", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 58, "year": 2016}, "type": "Document"}
{"page_content": "56 Code  CRM Techniques  \nconducted sufficient legal review, which should be well documented, to verify this. Such \nverification should have a well -founded legal basis for reaching the conclusion about the binding \nnature and enforceability of the documents. Banks should also undertake such further review as \nnecessary to ensure continuing enforceability  \nb) Ability to L iquidate:  The bank should have the right to liquidate or take legal possession of it, \nin a timely manner, in the event of the default, insolvency or bankruptcy (or one or more \notherwise -defined credit events set out in the transaction documentation) of the  counterparty \n(and, where applicable, of the custodian holding the collateral). Furthermore banks must take all \nsteps necessary to fulfil those requirements under the law applicable to the bank\u2019s interest in the \ncollateral for obtaining and maintaining an enforceable security interest.  \nc) Material Correlation:   In order for collateral to provide protection, the credit quality of the \ncounterparty and the value of the collateral must not have a material positive correlation. For \nexample, securities issued by the  counter party or by any related group entity - would provide \nlittle protection and so would be ineligible.  \nd) Recovery Procedures:  Banks must have clear and robust procedures for the timely liquidation \nof collateral to ensure that any legal conditions requi red for declaring the default of the counter \nparty and liquidating the collateral are observed, and that collateral can be liquidated promptly. \nWhere the collateral is held by a custodian, banks must take reasonable steps to ensure that the \ncustodian segre gates the collateral from its own assets.  \n20.3.3.1.1.0  Retail Exposure  \nThe total amount of retail exposures against the collateral instruments given below from 20.3.3.1.1.1 \nto 20.3.3.1.1., which are eligible for recognition in the simple approach. The amo unt is automatically \nshown on web -based return.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 59, "year": 2016}, "type": "Document"}
{"page_content": "shown on web -based return.  \n20.3.3.1.1.1  Cash  \n(as well as certificates of deposit or comparable instruments, including fixed deposit receipts, issued \nby the lending bank) on deposit with the bank, which is incurring the counterparty exposure.  \n20.3.3.1.1.2  Government of Sri Lanka Securities  \n20.3.3.1.1.3  Provident Fund Balances  \n20.3.3.1.1.4  Debt securities rated by a r ecognised ECAI  \nThese are either  \ni) At least BB - when issued by sovereigns or PSEs that have been recognized, or  \nii) At least BBB - when issued by other entities (including banks), or  \niii) At least A -3//P-3 for short -term debt instruments", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 59, "year": 2016}, "type": "Document"}
{"page_content": "57 Code  CRM Techniques  \n20.3.3.1.1.5  Debt securities not rated by a r ecognised ECAI  \nThese are:  \ni) Issued by a bank; and  \nii) Listed on a recognized exchange, and  \niii) Classifi ed as senior debt  \niv) Other securities, specified by the Central Bank.  \n20.3.3.1.1.6  Equities that are included in a Main Index  \nEquities those are included in the S & P SL20 index, subject to a discount of 25% on the market \nvalue.  \n20.3.3.1.2.0  Other Exposures  \nThe total amount of other exposures against the collateral instruments given from  WBRC 20.3.3.1.2.1 \nto 20.3.3.1.2. which are eligible for recognition in the simple approach.  \nThe amount is automatically shown on web -based return.  \n(WBRC 20.3.3.1.2.1 to 20.3.3.1.2.)  \n20.3.3.1.2.1  Cash  \nCash ( as well as certificates of deposit or comparable instruments, including fixed deposit receipts, \nissued by the lending bank) on deposit with the bank, which is incurring the counterparty exposure.  \n20.3.3.1.2.2  Government Securities  \n20.3.3.1.2.3  Provident Fund Balances  \n20.3.3.1.2.4  Debt securities rated by a r ecognised ECAI  \nThese are either  \ni) At least BB - when issued by sovereigns  or PSEs that have been recognis ed, or  \nii) At least BBB - when issued by other entiti es (including banks), or  \niii) At least A -3//P-3 for short -term debt instruments.  \n20.3.3.1.2.5  Debt securities not Rated by a r ecognised ECAI  \nThese are:  \ni) Issued by a bank  \nii) Listed on a recognis ed exchange  \niii) Classified as senior debt  \niv) Other securities, specified by the Central Bank.  \n20.3.3.1.2.6  Equities th at are Included in a Main Index  \nEquities which  are included in the S&P SL20 index, subject to a discount of 25% on the market value.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 60, "year": 2016}, "type": "Document"}
{"page_content": "58 Code  CRM Techniques  \n20.3.3.2.0.0  Other CRM Techniques  \nThe total amount of exposures against the other CRM techniques (other than  collateralis ed \ntransactions). The amount is automatically shown on web -based return.   \n(WBRC 20.3.3.2.1.0 + 20.3.3.2.2.0)  \n20.3.3.2.1.0  On-balance Sheet Netting  \nThe total amount of exposures against the on -balance sheet netting.  \n(1)  A bank may use the net exposure of loans and deposits as the basis for its capital ratio computation \nwhere the bank:  \ni) has a well -founded legal basis for concluding that the netting or offsetting agreement is \nenforceable in each relevant jurisdic tion regardless of whether the counterpart is insolvent or \nbankrupt ; \nii) is able at any time to determine those assets (loans) and liabilities (deposits) with the same \ncounterpart that are subject to the netting agreement ; \niii) monitors and controls its roll -off risks ; and   \niv) monitors and controls the relevant exposures on a net basis . \n20.3.3.2.2.0  Guarantees  \nThe total amount of exposures against the guarantees should be reported in line with the \ninstructions given below.   \n(1)  Guaranteed Transactions: Where guarantees are direct, explicit, irrevocable and unconditional, \nbanks may take account of such credit protection in calculating capital requirements.  \n(2)  Minimum Conditions  \na) A guarantee (or counter -guarantee) must represent a direct claim on the protection provider and \nmust be explicitly referenced to specific exposures or a pool of exposures, so that the extent of \nthe cover is clearly defined and incontrovertible.  \nb) Other than  non-payment by a protection purchaser of money due in respect of the credit \nprotection contract it must be irrevocable; there must be no clause in the contract that would \nincrease the effective cost of cover as a result of deteriorating credit quality in the hedged \nexposure.  \nc) It must also be unconditional; there should be no clause in the protection contract outside the", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 61, "year": 2016}, "type": "Document"}
{"page_content": "c) It must also be unconditional; there should be no clause in the protection contract outside the \ncontrol of the bank that could prevent the protection provider from being obliged to pay out in a \ntimely manner in the event that the orig inal counterpart fails to make the payment(s) due.  \nd)  In addition to the legal certainty requirements above, the following conditions must also be \nsatisfied:  \n\uf0b7 On the qualifying default or non -payment of the counterpart, the bank may in a timely manner \npursue the guarantor for any monies outstanding under the documentation governing the", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 61, "year": 2016}, "type": "Document"}
{"page_content": "59 Code  CRM Techniques  \ntransaction. The guarantor may make one lump sum payment of all monies under such \ndocumentation to the bank, or the guarantor may assume the future payment obligations of \nthe co unterpart covered by the guarantee. The bank must have the right to receive any such \npayments from the guarantor without first having to take legal actions in order to pursue the \ncounterpart for payment.  \n\uf0b7 The guarantee is an explicitly documented obligatio n assumed by the guarantor.  \n\uf0b7 Except as noted in the following sentence, the guarantee covers all types of payments the \nunderlying obligor is expected to make under the documentation governing the transaction, \nfor example notional amount, margin payments, et c.  \n\uf0b7 Where a guarantee covers payment of principal only, interests and other uncovered payments \nshould be treated as an unsecured amount.  \n(3)  Eligible Guarantors (counter -guarantors): Credit protection given by the following entities will \nbe recognised: sovereign entities, PSEs and other entities with a risk weight of 20% or better and a \nlower risk weight than the counterpart.  \n(4)  Risk Weights:  \na) The protected portion is assigned the risk weight of the protection provider.  \nb) A zero risk weight will be applied to that portion of loans guaranteed by GOSL and CBSL . \nc) The portion of exposures guaranteed by the Sri Lanka Export Credit Insurance Corporation \n(SLECIC) and other guarantees acceptable to CBSL will receive a 50% risk weight.  \nd) The uncovered portion of the exp osure is assigned the risk weight of the underlying counterpart.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 62, "year": 2016}, "type": "Document"}
{"page_content": "60 \n PART IV - COMPUTATION OF RISK -WEIGHTED AMOUNT FOR MARKET RISK  \n1 Scope and Coverage of Capital Charge for Market Risks  \n1.1 Market risk is defined as the risk of losses in on -balance sheet and off balance sheet \npositions arising from movements in market prices. The market risk subject to the \ncapital charge requirements are:  \ni) The risks pertaining to interest rate related instrum ents in the trading book  \nii) The risks pertaining to equities in the trading book.  \niii) The risks pertaining to foreign exchange position (including gold positions) \nthroughout the bank.  \n1.2 For the purpose of this section, the trading book and foreign exchange position  will \ninclude the following:  \ni) Securities classified in the \u2018Tr ading Account\u2019 in terms of the D irection on \nPrudential Norms for Classification, Valuation and Operation of the Bank\u2019s \nInvestment Portfolio issued by CBSL dated 01 March 2006.  \nii) Open gold positions  \niii) Open foreign exchange positions  \n \n2 GUIDELINES ON COMPUTATION OF RISK -WEIGHTED AMOUNT FOR \nMARKET RISK  \nCode  Item  \n20.4.1.0.0.0  Total Capital Charge for Market Risk  \n(1)  The total amount of capital charge for  interest rate risk, capital charge for equity risk \nand capital charge for foreign exchange risk.  \n(WBRC 20.4.1.1.0.0 + 20.4.1.2.0.0 + 20.4.1.3.0.0)  \n(2)  The capital charge for interest rate derivatives will be excluded from the capital charge \nfor market risks.  \n(3)  Aggregation of the Capital Charge for Market Risk  \nThe capital charges for specific risk and general market risk are to be computed \nseparately before aggregation.  \n20.4.1.1.0.0  Capital Charge for Interest Rate  Risk  = (20.4.1.1.1.0 + 20.4.1.1.2.0)  \nThe total amount of capital charge for general interest rate risk and capital charge for \nspecific interest rate risk. The amount is automatically shown on web -based return.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 63, "year": 2016}, "type": "Document"}
{"page_content": "61 \n Code  Item  \n(1)  Measurement of Capital Charge for Interest Rate Risk  \nMeasuring the risk of holding or taking positions in debt securities and other interest \nrate related instruments denominated in Sri Lanka Rupees as well as foreign currencies \nin the trading book.  \ni) The capital charge for interest rate related instruments wou ld apply to the current \nmarket value of these items in the bank\u2019s trading book. Since banks are required \nto maintain capital for market risk on an ongoing basis, they are required to mark -\nto-market their trading positions on a daily basis. The current mark et value will be \ndetermined according to the Direction on Prudential Norms for Classification, \nValuation and Operation of the bank\u2019s investment portfolio issued by CBSL.  \nii) The minimum capital requirement is expressed in terms of two separately \ncalculated cha rges, \u201c specific risk \u201d charge for each security, which is akin to the \nconventional capital charge for credit risk, both for short and long positions, and \n\u201cgeneral market risk \u201d charge for interest rate risk in the portfolio, where long \nand short positions in  different securities or instruments can be offset.  \n20.4.1.1.1.0  General Interest Rate Risk  \n(1)  The capital requirements for general market risk are designed to capture the risk of \nloss arising from changes in market interest rates.  \nThe capital charge is the sum of four components WBRC 20.4.1.1.1.1 to 20.4.1.1.1.4.  \nNote \u2013 Items in WBRC 20.4.1.1.1.2, 20.4.1.1.1.3 and 20.4.1.1.1.4 will not apply at \npresent.  \n(2)  It has been decided to allow banks to initially adopt the Standardised Measurement \nMethod, as Sri Lankan banks are still developing internal risk management models. \nThere are two principal methods of measuring market risk under the Standardised \nMeasurement Method, i.e. a \u2018maturity\u2019 method and a \u2018duration\u2019 method. It has been \ndecided to adopt the \u2018durat ion\u2019 method to arrive at the capital charge. Accordingly,", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 64, "year": 2016}, "type": "Document"}
{"page_content": "decided to adopt the \u2018durat ion\u2019 method to arrive at the capital charge. Accordingly, \nbanks are required to measure the general market risk charge by calculating the price \nsensitivity of each instrument in the trading book separately and adding the resulting \nprice sensitivities based  on a maturity ladder, subject to disallowances if any.  \n(3)  The steps for the computation are as follows:  \ni) calculate the price sensitivity of each instrument in terms of a change in interest \nrates between 1.2 and 2.0 percentage points, depending on the maturi ty of the \ninstrument (see Table 1);  \nii) slot the resulting price sensitivities into a duration based maturity ladder with the \nfifteen time bands as set out in Table 1;", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 64, "year": 2016}, "type": "Document"}
{"page_content": "62 \n Code  Item  \niii) subject long and short positions in each time band to a 5% vertical disallowance \ndesigned to capture basis risk; and  \niv) carry forward the net positions in each time -band for horizontal offsetting subject \nto the disallowances set out in Table 2.  \nNote \u2013 Steps  (ii) to (iv) are not required at present.  \nTable 1 - Duration Method \u2013 Time Bands and Assumed Changes in Yield  \nTime Bands  Assumed Change in \nYield  \nMaturity Zone 1   \n1 month or less  2.00 \nOver 1 month to 3 months  2.00 \nOver 3 months to 6 months  2.00 \nOver  6 months to 12 months  2.00 \nMaturity Zone 2   \nOver 1.0 year to 1.9 years  1.80 \nOver 1.9 years to 2.8 years  1.60 \nOver 2.8 years to 3.6 years  1.50 \nMaturity Zone 3   \nOver 3.6 years to 4.3 years  1.50 \nOver 4.3 years to 5.7 years  1.40 \nOver 5.7 years to 7.3 years  1.30 \nOver 7.3 years to 9.3 years  1.20 \nOver 9.3 years to 10.6 years  1.20 \nOver 10.6 years to 12 years  1.20 \nOver 12 years to 20 years  1.20 \nOver 20 years  1.20 \nTable 2 - Horizontal Disallowances  \nMaturity \nZones  Time Band  Within \nthe \nzones  Between \nadjacent \nzones  Between \nzones 1 and \n3 \nMaturity \nZone 1  month or less  \nover 1 month to 3 months  \nover 3 months to 6 months  \nover 6 months to 12 \nmonths  40%  \n \n \n \n        40% \n \n \n \n \n \n \n40%  \n  \n \n \n \n \n \n \n      100%       \n \n \n Maturity \nZone 2  over 1.0 year to 1.9 years  \nover 1.9 years to 2.8 years  \nover 2.8 years to 3.6 years  30% \nMaturity \nzone 3  over 3.6 years to 4.3 years  \nover 4.3 years to 5.7 years  \nover 5.7 years to 7.3 years  \nover 7.3 years to 9.3 years  \nover 9.3 years to 10.6 years  \nover 10.6 years to 12 years  \nover 12 years  to 20 years  \nover 20 years  0%", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 65, "year": 2016}, "type": "Document"}
{"page_content": "63 \n Code  Item  \n20.4.1.1.1.1  Net Long or Short Position  \nThe net short or long position in the whole trading book . \n20.4.1.1.1.2  Horizontal Disallowance  \nA larger proportion of the matched positions across different time bands .  \n20.4.1.1.1.3  Vertical Disallowance  \nA smaller proportion of the matched positions in each time -band .  \n20.4.1.1.1.4  Options  \nA net charge for positions in options, where appropriate . \n20.4.1.1.2.0  Specific Interest Rate Risk  \nThe capital charge for specific risk is designed to protect against an adverse movement \nin the price of an individual security owing to factors related to the individual issuer.  \nThe risk charges to be used in the computation of specific risk will be as follows:  \ni) Specific risk charge for g overnment securities and central banks:  \na) Government securities issued by the GOSL and securities issued by the CBSL \nwill be subject to a risk charge of zero percent.  \nb) Securities issued by a foreign government or by a foreign central bank will be \nsubject to a  risk charge based on the credit rating as indicated in the following \ntable:  \nTable 3 - Specific Risk Charge for Securities Issued by Foreign \nGovernments/Central Banks  \nSovereign Rate  Capital Charge for Specific Risk  \nAAA to AA - 0% \nA+ to BBB - 0.25% (residual term to final maturity 6 months or less)  \n1% (residual term to final maturity greater than 6 and up to \nand including 24 months)  \n1.60% (residual term to final maturity exceeding 24 months)  \nAll others  Required total capital ratio (including buffers)  \nii) The \u2018Qualifying\u2019 category for Corporate entities:  \na) Corporate entities (local) will be given a risk charge for specific market risk \nbased on their ratings as indicated in the table below:  \nTable 4 - Specific Risk Charge for Corporates  \nExternal Ratin g Capital Charge for Specific Risk  \nAAA to AA - 0.25%  \nA+ to BBB - \n 1.00% (residual term to final maturity 6 months or less)", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 66, "year": 2016}, "type": "Document"}
{"page_content": "AAA to AA - 0.25%  \nA+ to BBB - \n 1.00% (residual term to final maturity 6 months or less)  \n1.60% (residual term to final maturity greater than 6 and up \nto and including 24 months)  \n10.00% (residual term to final maturity exceeding 24 months)  \nAll others  Required total capital ratio  (including buffers)", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 66, "year": 2016}, "type": "Document"}
{"page_content": "64 \n Code  Item  \nb) The specific risk charge for foreign corporates  would be one notch less  \nfavourable than the risk charge applied to the local corporates.  \niii) \u2018Public sector entities\u2019 should be treated like corporate entities unless they are \nbacked by an explicit Treasury guarantee, which warrants a risk charge of zero \npercent.  \niv) The \u2018Other\u2019 category: A capital charge based on the required  minimum total \ncapital ratio  (including buffers)  will apply to all other types of exposures.  \nv) Banks may rely upon the ratings assigned by the ECAIs recognised by CBSL [See \nparagraph 2 of Part III(A)]  for the purpose of ratings referred in the Table 3 and 4 \nabove.  \n20.4.1.2.0.0  Capital Charge for Equity  \nThe total amount of capital charge for general equity risk and capital charge for \nspecific equity risk. The amount is automatically shown on the web -based return.  \nWBRC 20.4.1.2.1.0 + 20.4.1.2.2.0  \n Measurement of Capital Charge for Equities  \nThe minimum capital requi rement to cover the risk of holding or taking positions in \nequities in the trading book is set out below.  It applies to all instruments that exhibit \nmarket behaviour similar to equities.  The instruments covered include equity shares \n(voting and non -voting) , convertible securities that behave like equities (e.g. units of \nunit trusts) and commitments to buy or sell equity securities (e.g. warrants, right issues \nand bonus issues).  \n20.4.1.2.1.0  General Equity Risk  \nGeneral market risk is defined as the overall net position in an equity market (i.e. the \ndifference between the sum of the longs and the sum of the shorts). The general market \nrisk charge will be the applicable minimum total capital ratio plus buffers.  \n20.4.1.2.2.0  Specific Equity Risk  \nSpecific risk is defined as the bank\u2019s gross equity positions (i.e. the sum of all long \nequity positions and of all short equity positions). The capital charge for specific risk", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 67, "year": 2016}, "type": "Document"}
{"page_content": "equity positions and of all short equity positions). The capital charge for specific risk \nfor equities on the S & P SL20 Price Index will be the required total  Tier 1 ratios with \nbuffers as applicable, while all other equities will have a specific risk charge of total \ncapital ratio plus buffers as applicable.  \n20.4.1.3.0.0  Capital Charge for Foreign Exchange & Gold  \nMinimum capital requirement to cover the risk of holding or taking positions in foreign \ncurrencies, including gold.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 67, "year": 2016}, "type": "Document"}
{"page_content": "65 \n Code  Item  \nThe capital charge will be calculated by multiplying the applicable otal capital ratio \nwith buffers by the overall net open position of foreign currency and gold.  \n(1)  Gold is treated as a foreign exchange position rather than a commodity because its \nvolatility is more in line with foreign currencies, and banks manage it in a similar \nmanner.  \n(2)  The off -balance sheet position, including forward contracts, will be included  in \ncomputation of the capital charge for foreign exchange risks.  \n(3)  Computing the capital requirement for foreign exchange risk consists of two processes.  \ni) Measuring the Exposure in a Single Currency Position  \nThe bank's net open position in each currency should be calculated by summing \nthe net position of all on balance sheet and off -balance sheet position, including \nforward contracts denominated in that particular currency.  \nii) Measuring the Risks Inherent in a Bank's Mix of Long and Short Positions \nin Different Currencies  \nBanks are required to adopt the shorthand method of computation. Under the \nshorthand method, the nominal amount of the net position in each foreign currency \nand in gold is converted at spot rates into the reporting currency (i.e. LKR).  The \noverall net open position is measured by aggregating:  \na) the sum of the net short positions or the sum of the net long positions, \nwhichever is the greater, plus  \nb) the net position (short or long) in gold, regardless of sign.  \nTable 5 - Example of the Short hand Measure of Foreign Exchange Risk  \nYEN  EURO  GB INR US$ GOLD  \n+50 +100  +150  -20 -180 -35 \n+300  -200 -35 \nIn the above example, the capital charge would be 12.5% for banks with asse ts less \nthan Rs. 500 bn and 14 % for banks with assets equal or greater than Rs. 500 bn in 2019 \nmultiplied by the higher of either the net long currency positions or the net short \ncurrency positions (i.e., 300) and of the net position in gold (35) = 335 x12.5% = 41.9 \nand =335x14% = 46.9 .", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 68, "year": 2016}, "type": "Document"}
{"page_content": "and =335x14% = 46.9 .  \n20.4.2.0.0.0  Total Risk -weighted Amount for Market Risk = (20.4.1.0.0.0 * reciprocal of \nrequired total capital ratio  including buffers )  \nThe total amount of risk -weighted amount for market risk should be the capital charge \nfor market risk multiplied by  the reciprocal of the required  minimum total capital ratio \n(with buffers) .", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 68, "year": 2016}, "type": "Document"}
{"page_content": "66 \n PART V - COMPUTATION OF RISK -WEIGHTED AMOUNT FOR OPERATIONAL \nRISK  \n1 Overview  \n1.1 Definition of Operational Risk  \nOperational risk is defined as the risk of loss resulting from inadequate or failed internal \nprocesses, people and s ystems or from external events. This definition includes legal \nrisk, but excludes strategic and reputational risk. Legal risk includes, but is not limited \nto, exposure to fines, penalties, or punitive da mages resulting from supervisory actions, \nas well as private settlements.  \n1.2 The Measurement Methodologies  \nThe Basel II Framework presents three methods for calculating operational risk capital \ncharges in a continuum of increasing sophistication and risk sens itivity:  \ni) The Basic Indicator Approach (BIA)   \nii) The Standardised Approach (TSA)  \niii) Advanced Measurement Approaches (AMA)  \nIn comparison with BIA, other approaches are more advanced methods to determine \nthe required capital for covering operational losses. Hence,  banks shall with supervisory \napproval migrate from BIA to other advance d approaches subject to complying with \nqualifying criteria.  \n \n2 Approaches for Calculating Operational Risk  \n2.1 A bank shall use one of the following approaches to calculate its operational R WA:  \ni) The BIA in accordance with item 3; or  \nii) The TSA in accordance with item 4; or  \niii) The Alternative Standardised Approach (ASA) in accordance with item 5.  \n2.2 A bank which has been allowed to use TSA or ASA shall not use a simpler approach \nwithout the prior writte n approval of the Director of Bank Supervision (DBS) of CBSL.  \n2.3 Once a bank moves to a simpler approach, such bank cannot use an advanced approach \nwithout the approval of DBS. DBS shall grant such app roval subject to requiring the \nbank to comply with other c onditions prior to migrating to the respective advanced \napproach.  \n2.4 When DBS is not satisfied that a b ank which has adopted TSA or ASA complies with", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 69, "year": 2016}, "type": "Document"}
{"page_content": "approach.  \n2.4 When DBS is not satisfied that a b ank which has adopted TSA or ASA complies with \nthe specified req uirements, DBS may require the b ank to use a simpler approach.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 69, "year": 2016}, "type": "Document"}
{"page_content": "67 \n 3 The Basic Indicator Approach  (BIA)  \n3.1 Bank shall calculate its operational risk capital requirement as follows:  \n\ud835\udc72\ud835\udc69\ud835\udc70\ud835\udc68= [\u2211(\ud835\udc6e\ud835\udc70\ud835\udfcf\u2026.\ud835\udc8f\u00d7\ud835\udf36)]\n\ud835\udc8f \nWhere ; \nKBIA = capital charge for operational risk under BIA  \nGI = annual gross income, where positive, over the preceding three years as set \nout in items 3.2 to 3.4  \nn = Number of years in the preceding three years when annual gross income \nis positive  \n\u03b1 = 15%, which is set by BCBS  \n3.2 Bank s shall calculate its gross income as the sum of net interest income and non -interest \nincome, taking into account the following adjustments:  \ni) gross of any provisions/impairments (including unpaid interest);  \nii) gross of operating expenses, including fees paid to  outsourcing service providers, \nin contrast to fees paid for services that are outsourced, fees received by banks that \nprovide outsourcing services shall be included in the definition of gross income but \nexcluding - \na) any realized profits/losses arising from the sale of securities in the b anking \nbook. Securities in the banking book shall be the securities that are classified as \n\u201cheld to maturity\u201d or \u201cavailable for sale\u201d, in accordance with Sri Lanka \nAccounting Standard - LKAS 39;  \nb) any income or expenses not der ived from the ordinary activities of the b ank and \nnot expected to recur frequently or regularly, i.e., sale of fixed assets, income \nderived from insurance recoveries, etc.     \n3.3 If the annual gross income/capital charge for any given year is negative or zero , it \nshould be excluded from both the numerator and denominator when calculating the \naverage capital charge.  \n3.4 Bank s shall calculate its annual gross income for the most recent year by aggregating \nthe gross income of the last four financial quarters and foll ow same to calculate annual \ngross income for each of the two years preceding the most recent year. Table 1 provides \nan illustration of the calculation of the annual gross income for the previous three years,", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 70, "year": 2016}, "type": "Document"}
{"page_content": "an illustration of the calculation of the annual gross income for the previous three years, \nfor a bank calculating its operational RWA as at  end June 2014.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 70, "year": 2016}, "type": "Document"}
{"page_content": "68 \n Table 1  - Illustration of Calculation of Annual Gross Income (GI)  \n Third Year  Second Year  First Year  \nGross  income  \nfor financial  \nquarter  ending  Jun\u201916  (GI 3a) Jun\u201915  (GI 2a) Jun\u201914  (GI 1a) \nMar\u201916  (GI 3b) Mar\u201915  (GI 2b) Mar\u20191 4 (GI 1b) \nDec\u201915  (GI 3c) Dec\u201914  (GI 2c) Dec\u201913  (GI 1c) \nSep\u201915  (GI 3d) Sep\u201914  (GI 2d) Sep\u20191 3 (GI 1d) \nTotal  GI3 = GI 3a + GI 3b \n+ GI 3c + GI 3d GI2 = GI 2a + GI 2b \n+ GI 2c + GI 2d GI1 = GI 1a + GI 1b \n+ GI 1c + GI 1d \n \n4 The Standardised Approach (TSA)  \n4.1 Banks  can use TSA  for computation of capital charge of operational risk with the prior \napproval of DBS subject to complying with qualifying criteria set out in item 4.4.  \n4.2 Banks  adopting TSA shall classify their business activities into eight business lines, \nnamely, corporat e finance, trading and sales, payment and settlement, agency services, \nasset management, retail brokerage, retail banking and commercial banking. The \ndefinition of these business lines are provided in detail in Table 2.  \nTable 2  -Mapping of Business Lines  \n Level 1  Level 2  Activity Groups  \n1 Corporate \nFinance  Corporate \nFinance  Mergers and acquisitions, underwriting, \nprivatisations, securitisation, research, debt \n(government, high yield), equity, \nsyndications, Initial Public Offering, \nsecondary private placements.  Government \nFinance  \nMerchant \nBanking  \nAdvisory Services  \n2 Trading & \nSales  Sales  Fixed income, equity, foreign exchange, \ncredit products, funding, own position \nsecurities, lending and repos, brokerage, \ndebt, prime brokerage and sale of \nGovernment bonds to retail investors.  Market Making  \nProprietary \nPositions  \nTreasury  \n3 Payment & \nSettlement  External Clients  Payments and collections, inter -bank funds \ntransfer (RTGS,  EFT, etc.), clearing and \nsettlement.  \n4 Agency \nServices  Custody  Escrow, securities lending (customers) \ncorporate actions, depository services.  \nCorporate  Agency  Issuer and paying agents.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 71, "year": 2016}, "type": "Document"}
{"page_content": "corporate actions, depository services.  \nCorporate  Agency  Issuer and paying agents.  \nCorporate Trust  Debenture trustee.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 71, "year": 2016}, "type": "Document"}
{"page_content": "69 \n  Level 1  Level 2  Activity Groups  \n5 Asset \nManagement  Discretionary \nFund \nManagement  Pooled, segregated, retail, institutional, \nclosed, open, private equity.  \nNon-\nDiscretionary \nFund \nManagement  Pooled, segregated, retail, institutional, \nclosed, open.  \n6 Retail \nBrokerage  Retail Brokerage  Execution and full service.  \n7 Retail \nBanking  Retail Banking  Retail lending and deposits, banking \nservices, trust and estates.  \nPrivate Banking  Private lending (personal loans) and private \n(institutional) deposits, banking services, \ntrust and estates, investment advice.  \nCard Services  Merchant/commercial/corporate cards, \nprivate labels and retail.  \n8 Commercial \nBanking  Commercial \nBanking  Lending including project finance, corporate \nloans, real estate, trade finance including \nexport and import loans, let ter of credit, bills  \nof exchange, leasing, factoring and \nguarantees.  \nDeposits and other repayable funds  \n4.3 Banks shall calculate its operational risk capital requirement by taking the three -year \naverage of the simple summation of the operational risk capital requirements across \neach of the business lines in each year as follows:  \n\ud835\udc72\ud835\udc7b\ud835\udc7a\ud835\udc68={\u2211 \ud835\udc8e\ud835\udc82\ud835\udc99 [\u2211(\ud835\udc6e\ud835\udc70\ud835\udfcf\u2212\ud835\udfd6\u00d7\ud835\udf37\ud835\udfcf\u2212\ud835\udfd6),\ud835\udfce]\ud835\udc8a=\ud835\udfd1\n\ud835\udc8a=\ud835\udfcf }\n\ud835\udfd1 \nWhere;  \nKTSA = capital charge for operational risk under TSA  \nGI1-8        = annual gross income in a given year, calculated in accordance with item \n3.2 and 3.4 under BIA, for each of the eight business lines set out in Table \n2 above  \n\u03b21-8         = fixed beta factor (Table 3 below) as set out by BCBS, relating the level of \nrequired capital to the level of the gross income for each of the eight \nbusiness lines  \ni = year", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 72, "year": 2016}, "type": "Document"}
{"page_content": "70 \n Table 3  - Beta (\u03b2)  factors for each business line  \nNo. Business Line  \u03b2 Factors  \n1 Corporate finance (\u03b2 1)  18% \n2 Trading and sales (\u03b2 2)  18% \n3 Payment and settlement (\u03b2 3)  18% \n4 Agency services (\u03b2 4)  15% \n5 Asset management (\u03b2 5)  12% \n6 Retail brokerage (\u03b2 6)  12% \n7 Retail banking  (\u03b27)  12% \n8 Commercial banking  (\u03b28)  15% \n \n4.3.1 In any given year, negative capital charges (resulting from negative gross income) in \nany business line may be set off against positive capital charges in other business lines. \nHowever, where the aggregate operational risk capital charges across all business lines \nwithin a given year is negative, then the operation al risk capital charges for the b ank \nfor that year is deemed to be zero (input to the numerator for that year will be zero).  \n4.3.2 Within each business line, gross income is a broad indicator that serves as a proxy for \nthe scale of business operations and thus t he likely scale of operational risk exposure \nwithin each of these business lines.  \n4.3.3 Each beta factor serves as a proxy for the industry -wide relationship between the \noperational risk loss experience for a given business line and the aggregate level of \ngross income for that business line.  \n4.3.4 Gross income should be measured for each business line and not for the whole \ninstitution, i.e., in commercial banking, the indicator is the gross income generated in \nthe commercial banking business line. However, the sum of t he gross income of the \neight business lines should be eq ual to the gross income of the b ank. \n4.4 Qualifying criteria  \n4.4.1 The Board of Directors and senior management shall actively involve in the oversight \nof the operational risk management of the bank. \n4.4.2 The bank shall have an operational risk management system that is conceptually sound \nand is implemented with integrity, and with clear responsibilities assigned to an \noperational risk management function. A bank shall ensure that operational risk", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 73, "year": 2016}, "type": "Document"}
{"page_content": "operational risk management function. A bank shall ensure that operational risk \nmanagement functio n:", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 73, "year": 2016}, "type": "Document"}
{"page_content": "71 \n i) develops strategies to identify, assess, monitor, control and mitigate operational \nrisk; \nii) codifies bank -level policies and procedures concerning operational risk \nmanagement and control; and  \niii) designs and implements the operational risk assessment methodolo gy and \noperational risk -reporting system of the bank. \n4.4.3 The bank shall have sufficient resources in the use of TSA in the major business lines \nas well as the control and audit area.    \n4.4.4 The bank shall have a system for regular reporting of operational exposur es, including \nmaterial operational losses to management of the business units, senior management \nand the Board of Directors.   \n4.4.5 Operational risk management system of the bank should be well documented.  It must \nhave a routine in place for ensuring compliance  with a documented set of internal \npolicies, controls and procedures concerning the operational risk management system, \nwhich must include policies for the treatment of non -compliance issues.  \n4.4.6 Operational risk management process and assessment system should  be subject to the \nvalidation and regular independent review at least annually. These reviews must include \nboth the activities of the business units and of the operational risk management \nfunction.  \n4.4.7 A bank shall develop specific policies and have a prudent documented procedure for \nmapping its current business activities to the appropriate business lines in accordance \nwith items i), ii), iii) below and Table 2 above.  \ni) The senior management shall be responsible in developing the mapping policy, \nwhich shall be s ubject to the approval of the Board of Directors. These mapping \npolicies should be reviewed and adjusted in line with new business activities as \nappropriate.  \nii) A bank shall comply with the following principles when mapping its business \nactivities to the appr opriate business lines:  \na) Subject to item (b) below, each activity or business of a bank shall be mapped", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 74, "year": 2016}, "type": "Document"}
{"page_content": "a) Subject to item (b) below, each activity or business of a bank shall be mapped \ninto eight Level 1 business lines (refer Table 2) in a mutually exclusive and \njointly exhaustive manner.  \nb) Any banking or non -banking activity or product t hat cannot be readily mapped \ninto any business line and which is ancillary to and supports a business line shall \nbe allocated to the business line it supports. If the activity supports more than", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 74, "year": 2016}, "type": "Document"}
{"page_content": "72 \n one business line, an objective criterion shall be used to al locate the annual gross \nincome.  \nc) Any activity which cannot be readily mapped into any business line shall be \nallocated to the business line with the highest beta factor, i.e., 18%.  \nd) Banks may use internal pricing methods to allocate gross income between \nbusiness lines provided that total gross income for the Bank (as would be \nrecorded under BIA) still equals the sum of gross income for the eight business \nlines.  \ne) Once an activity has been mapped to a particular business line, the activity shall \nbe mapped to th e same business line consistently over time.       \nf) The mapping of activities into business lines for operational risk capital \npurposes must be consistent with the definitions of business lines used for \nregulatory capital calculations in other risk categories, i.e. credit and market \nrisk. \ng) Processes must be in place to define the mapping of any new activities or \nproducts.  \nh) The mapping process shall be subject to regular independent reviews by the \ninternal or external auditors of a Bank.  \niii) Supplementary business line mapping guidelines: There are a variety of valid \napproaches that banks can use to map their activities to the eight business lines, \nprovided the approach used meets the bu siness line mapping principles. The \nfollowing is a possib le approach that could be used by a bank to map its gross \nincome:  \na) Gross income  for retail banking consists net interest income on loans and \nadvances to retail customers and SMEs treated as retail, plus fees related to \ntraditional retail activities, net inc ome from swaps and derivatives held to hedge \nthe retail banking book, and income on purchased retail receivables. To \ncalculate net interest income for r etail banking, a b ank takes the interest earned \non its loans and advances to retail customers less the w eighted average cost of", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 75, "year": 2016}, "type": "Document"}
{"page_content": "on its loans and advances to retail customers less the w eighted average cost of \nfunding of the loans (from whatever source \u2013 retail or other deposits).  \nb) Similarly, gross income from commercial banking consists  net interest income \non loans and advances to corporate (plus SMEs treated as corporate), interbank \nand sovereign customers and income on purchased corporate receivables, plus \nfees related to traditional commercial banking activities including", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 75, "year": 2016}, "type": "Document"}
{"page_content": "73 \n commitments, guarantees, bills of exchange, net income (e.g. from coupons and \ndividends) on securities held in the b anking book, and profits/losses on swaps \nand derivatives held to hedge the commercial banking book. Again, the \ncalculation on net interest income is based on interest earned on loans and \nadvances to corporate, interbank and sovereign customers less the wei ghted \naverage of funding for these loans (from whatever source).  \nc) For trading and sales, gross income consists, profits/losses on instruments held \nin the trading book, net of funding cost, plus fees from wholesale broking.  \nd) For the other five business lines,  gross income consists primarily of the net \nfees/commissions earned in each of these businesses. Payment and settlement \nconsists of fees to cover provision of payment/settlement facilities for wholesale \ncounterparties. Asset management is management of ass ets on behalf of others.  \n \n5 The Alternative Standardised Approach (ASA)  \n5.1 A bank may, with the prior approval of DBS, use ASA to calculate its operational risk \ncapital requirement. A bank shall not use ASA to calculate its operational risk capital \nrequirement unless it complies with all qualifying criteria set out in item 4.2 under TSA.  \n5.2 Under ASA, the operational risk capital requirement/methodology is the same as under \nTSA, except for two business lines,  namely,  retail  banking and commercial banking.  \nFor these  business lines, use outstanding amount of loans and advances after \nmultiplying by a fixed factor \u2018m\u2019 (0.035) as the exposure indicator which replaces gross \nincome.   \n5.3 A bank which has adopted ASA shall not use TSA or BIA without the prior approval \nof DBS.   \n5.4 The Bank shall calculate operational risk capital requirement under ASA as follows:  \n          \ud835\udc72\ud835\udc68\ud835\udc7a\ud835\udc68={\u2211 \ud835\udc8e\ud835\udc82\ud835\udc99 [\u2211(\ud835\udc6e\ud835\udc70\ud835\udfcf\u2212\ud835\udfd4\u00d7\ud835\udf37\ud835\udfcf\u2212\ud835\udfd4),\ud835\udfce]\ud835\udfd1\n\ud835\udc8a=\ud835\udfcf\n\ud835\udfd1}+(\ud835\udf37\ud835\udfd5\u00d7\ud835\udc8e\u00d7\ud835\udc73\ud835\udc68 \ud835\udc93)+(\ud835\udf37\ud835\udfd6\u00d7\ud835\udc8e\u00d7\ud835\udc73\ud835\udc68 \ud835\udc84)", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 76, "year": 2016}, "type": "Document"}
{"page_content": "74 \n Where;   \nKASA = capital charge for operational risk under ASA  \nGI1-6 = annual gross income in a given year calculated in accordance with item \n3.2 under BIA, for each of the eight business lines set out in Table 2, \nexcept for retail banking and commercial banking business lines  \n\u03b21-8      = fixed beta factor as set out in Table 3  \nm = 0.035 \nLA r = total outstanding loans and advances of the retail banking business line  \nLA c = total outstanding loans and advances of the commercial banking business \nline. \ni = year  \n5.5 For the purposes of the ASA, total outstanding loans and advances shall be as  follows:  \ni) Retail banking business line consists of the total on -balance sheet outstanding \namount of the retail, SMEs treated as retail, residential mortgages an d purchased \nretail receivables and credit portfolios.  \nii) Commercial business line consists of the t otal on -balance sheet outstanding amount \nof the  corporate, sovereign, bank, specialised lending, SMEs treated as corporate \nand purchased corporate receivables, credit portfolios and the book value of \nsecurities held in the held -to-maturity and available -for-sale categories.  \n5.6 For the purpose of determining LA r and LA c, a Bank shall take a simple average of the \ntotal outstanding loans and advances of the relevant business line over the 12 most \nrecent financial quarters without gross of any provisions/impairmen t charges.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 77, "year": 2016}, "type": "Document"}
{"page_content": "75 \n PART V(A)  - COMPUTATION OF RISK -WEIGHTED AMOUNT FOR OPERATIONAL RISK  \nWe Based \nReturn  \nCode  Description  \n20.5.1.7.0.0  Gross Income/ Loans and Advances  \n Gross Income:  The value of gross income for each year in respect of BIA (WBRC 20.5.1.1.0.0), \nbusiness lines of TSA  (WBRC 20.5.1.2.1.0 to 20.5.1.2.8.0) and business lines of ASA  (WBRC \n20.5.1.3.1.1 to 20.5.1.3.1.6) is automatically shown based on the data provided in the Part V(B) as \nfollows:  \nGross Income  = Interest Income (WBRC 20.5.2.3.0.0)  - Interest Expenses (WBRC 20.5.2.4.0.0)  + \nNon Interest Income (WBRC 20.5.2.5.0.0)  (+/-) Realised Profits/losses from the Sale of Securities \nin the Banking Book (WBRC 20.5.2.6.0.0) (+/-) Extraordinary/Irregular Item s of Income (WBRC \n20.5.2.7.0.0)  \n Example : \nIllustration of Calculation of Annual Gross Income  (Rs. \u2018000)  \nItem  Amount  Amount  \nInterest Income  200,000  200,000  \nLess: Interest Expense  (100,000)  (100,000)  \nNet Interest Income  100,000  100,000  \nNon-interest Income    \nFee and Commission Income  50,000  50,000  \nDividend Income  30,000  30,000  \nGain on sale of fixed assets  40,000   \nProfit/loss from Trading  20,000  20,000  \nRealised gains/losses from sale of banking book \nsecurities  50,000   \nOthers  10,000  10,000  \nNon-interest Income  200,000  110,000  \nOperating Income  300,000  210,000  \nLess: Operating expenses  (100,000)   \nLess: Allowances  (50,000)   \nLess: Taxes  (30,000)   \nProfit/loss for the period  120,000   \nGross Income for the purpose of operational risk \ncapital requirement   210,000  \n \n Loans and Advances:  The values of loans and advances in respect of retail banking (WBRC \n20.5.1.3.2.1) and commercial banking (WBRC 20.5.1.3.2.2) should be filled in accordance with the \nitem 5.6.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 78, "year": 2016}, "type": "Document"}
{"page_content": "76 \n We Based \nReturn  \nCode  Description  \n20.5.1.8.0.0  Capital Charges  \n The value of capital charges for each year in respect of BIA, TSA and ASA is calculated as follows : \n20.5.1.1.0.0  The Basic Indicator Approach (BIA)  \nMultiply the gross income for each year by \u03b1 (15%).  \n20.5.1.2.0 .0 The Standardised Approach (TSA)  \nMultiply the gross income of individual business line (WBRC 20.5.1.2.1.0 to 20.5.1.2.8.0) for each \nyear by \u03b2 assigned to each business line.  \n20.5.1.3.0.0  The Alternative Standardised Approach (ASA)  \n20.5.1.3.1.0  i) Sub Total  \nMultiply the gross income of individual business line (WBRC 20.5.1.3.1.1 to 20.5.1.3.1.6) for \neach year by \u03b2 assigned to each business line . \n20.5.1.3.2.0  ii) Sub Total  \nMultiply yearly average outstanding amount of loans and advances of retail banking business  line \n(WBRC 20.5.1.3.2.1) and commercial banking business line (WBRC 20.5.1.3.2.2), by a fixed \nfactor \u2018m\u2019  (20.5.1.6.0.0) , i.e., 0.035 with the respective \u03b2 of 12% and 15%, respectively.  \n20.5.1.9.0.0  Capital Charges for Operational Risk  \n(1)  The value of capital charges for operational risk in respect of BIA, TSA and ASA is automatically \nshown as follows:  \n20.5.1.9.1.0  The Basic Indicator Approach  \nAggregate the capital charges for the 3 years as reported under WBRC 20.5.1.8.0.0 and 20.5.1.1.0.0 \nof BIA and  divide by 3 (number of years).  \nThe number of years  may change in accordance with the item 3.3 . \n20.5.1.9.2.0  The Standardised Approach  \nAggregate the capital charges for the 3 years as reported under WBRC 20.5.1.8.0.0 and 20.5.1.2.0.0 \nof TSA  and divide by  3 (number of years) . \n20.5.1.9.3.0  The Alternative Standardised Approach  \nAggregate the capital charges for the 3 years as reported under WBRC 20.5.1.8.0.0 and 20.5.1.3.0.0 \nof ASA and divide by 3 (number of years) . \n(2)  Negative capital charge recorded in a given year/s of the these 3 years, shall be considered as a zero", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 79, "year": 2016}, "type": "Document"}
{"page_content": "value and not used to offset the positive capital charge recorded in other year/s.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 79, "year": 2016}, "type": "Document"}
{"page_content": "77 \n We Based \nReturn  \nCode  Description  \n20.5.1.10.0.0  Risk -weighted Amount for Operational Risk  \n The value of risk -weighted amount for operational risk in respect of BIA, TSA and ASA is the \nvalue arrived by multiplying the capital charge for operational risk under each approach by the \nreciprocal of required total capital ratio  including buffers, separ ately.  \n20.5.1.10.1.0  The Basic Indicator Approach ( 20.5.1.9.1.0 *  reciprocal of required total capital ratio ) \n20.5.1.10.2.0  The Standardized Approach ( 20.5.1.9.2.0 *  reciprocal of required total capital ratio ) \n20.5.1.10.3.0  The Alternative Standardized Approach ( 20.5.1.1.9.3 * reciprocal of required total capital ratio ) \n \nPART V(B)  - COMPUTATION OF GROSS INCOME UNDER OPERATIONAL RISK  \nCode  Description  \n The reporting of income and expenses items referred to in this Part should be in accordance with \nthe item 3.4  \n20.5.2.1.0.0  The Basic Indicator Approach  \n20.5.2.2.0.0  The Standardised Approach/The Alternative Standardised Approach  \n20.5.2.2.1.0  Corporate Finance  \nApplicable for both TSA and ASA  20.5.2.2.2.0  Trading and Sales  \n20.5.2.2.3.0  Payment and Settlement  \n20.5.2.2.4.0  Agency Service  \n20.5.2.2.5.0  Asset Management  \n20.5.2.2.6.0  Retail Brokerage  \n20.5.2.2.7.0  Retail Banking  \nApplicable only for TSA  \n20.5.2.2.8.0  Commercial Banking  \n20.5.2.3.0.0  Add: Interest Income  \n20.5.2.4.0.0  Less: Interest Expenses  \n20.5.2.5.0.0  Add: Non-Interest Income  \n20.5.2.6.0.0  Add/(Less): Realized Profits from the Sale of Securities in the Banking Book  \n20.5.2.7.0.0  Add/(Less): Extraordinary/ Irregular Item s of Income", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 80, "year": 2016}, "type": "Document"}
{"page_content": "Banking Act Directions No. 01 of 2016  \nCapital Requirements Under Basel III for Licensed Commercial Banks a nd  \nLicensed Specialised Banks  \n78 \n \n \n \nSCHEDULE II  \n \n \n \nPILLAR II  \nSUPERVISORY REVIEW PROCESS", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 81, "year": 2016}, "type": "Document"}
{"page_content": "79 \n \n REGULATORY FRAMEWORK ON SUPERVISORY REVIEW PROCESS  \nPART I \u2013 OVERVIEW  \n1 Introduction  \n1.1 The Supervisory Review Process  (SRP) of licensed commercial banks (LCBs) and \nlicensed specialised banks (LSBs) (hereinafter referred to as \u201cbanks\u201d) is conducted to \nassess their capital adequacy and to determine whether banks should hold additional \ncapital to cover risks that are not cov ered or adequately covered by the minimum capital \nrequirements under Pillar I.  \n2 Objectives of SRP  \n2.1 Encourage banks to utilise better risk management techniques \u2013 the level of risks a bank \nis exposed to, and the control environment that will determine the le vel of capital \nrequired to be maintained by banks.  \n2.2 Enhance the risk -based supervision of banks in order to assess the capital adequacy \nrelative to risks.  \n2.3 Evaluate the bank\u2019s Internal Capital Adequacy Assessment Process (ICAAP) that \ndetermines the level of capital to be maintained against all risks and ensure that banks \nhave adequate capital to support all risks.  \n2.4 Ensure that banks use ICAAP in more general business decisions and budgets, in more \nspecific decisions such as allocating capital to business unit s and when evaluating \nindividual credit decision process.  \n3 Principles governing SRP  \n3.1 SRP is conducted based on the following four key principles:  \na) Principle 1  - Banks shall have a process for assessing their overall capital adequacy \nin relation to their risk profiles and a strategy for maintaining their capital levels.  \nb) Principle 2  - The Central Bank of Sri Lanka (CBSL) as the regulator will review \nand evaluate  bank\u2019s ICAAP and strategies, as well as its ability to monitor and \nensure compliance with regulatory capital ratios.  \nc) Principle 3  - CBSL expects banks to operate above the minimum regulatory capital \nratios and requires banks to hold capital in excess of th e minimum.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 82, "year": 2016}, "type": "Document"}
{"page_content": "80 \n \n d) Principle 4  - CBSL will intervene at an early stage to prevent capital from falling \nbelow the minimum levels required to support the risk characteristics of a \nparticular bank.  \n4 Scope and Applicability  \nRegulatory Framework on Supervisory Review Pr ocess  shall be applicable to banks \non both standalone (\u201cSolo\u201d) level, as well as on the consolidated (\u201cGroup\u201d) level.  \nPART II - INTERNAL CAPITAL ADEQUACY ASSESSMENT PROCESS (ICAAP)  \n5 Developing and Maintaining ICAAP  \n5.1 Every bank shall develop and maintain a ri gorous and well -documented ICAAP \nproportional to its operations and risk profile and consistent with prudential \nrequirements.  \n5.2 ICAAP of a bank shall include the following six main features.  \na) Board and senior management oversight  \nb) Comprehensive assessment of risks  \nc) Sound capital assessment  \nd) Monitoring and reporting  \ne) Internal controls and independent review  \nf) Stress testing  \n5.3 A bank shall design its ICAAP according to the size, complexity and business strategies \nof the respective bank.  \n6 The Board of Directors and Seni or Management Oversight   \n6.1 Board responsibilities for ICAAP  \na) The Board shall ensure that the bank has in place a strategic plan which clearly \noutlines its current and future capital needs, anticipated capital expenditure, \ndesirable capital level, and external  capital sources.  \nb) The Board shall review and approve the target level and composition of capital, and \nthe process for setting and monitoring such targets at least, annually.  \nc) The Board shall ensure that the senior management:  \ni) performs an analysis of the current and future capital requirements of the bank \nin relation to its strategic objectives;", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 83, "year": 2016}, "type": "Document"}
{"page_content": "81 \n \n ii) establishes frameworks for assessing the categories of risks faced by the bank \nand develops systems related to these risks to the capital level of the bank;  \niii) establ ishes a method for monitoring compliance with internal policies on risk \nassessment and the processes  related to risks to capital levels;  \niv) establishes a strong internal control culture throughout the bank; and  \nv) effectively communicate all relevant policies and procedures throughout the \nbank.  \nd) The Board shall approve and exercise effective oversight over the bank\u2019s stress \ntesting processes.  \ne) The Board shall review ICAAP of the bank periodically, at least annually, to:  \ni) assess the level and trend of material ris ks and their effects on capital levels;  \nii) evaluate the sensitivity and reasonableness of key assumptions used in the \ncapital assessment measurement system;  \niii) determine that the bank holds adequate capital against the various risks and is \nin compliance with est ablished capital adequacy goals; and  \niv) assess the bank\u2019s future capital requirements based on its reported risk profile \nand make necessary  adjustments to the strategic plan, accordingly.  \nf) The Board shall ensure that public disclosures are made in the bank\u2019s a udited annual \nreport/audited financial statements, both qualitative and quantitative information, \nto assist in assessing the adequacy of bank\u2019s capital commensurate with all material \nrisks the bank is exposed to in relation to its current and future activi ties.  \ng) The Board shall approve the annual ICAAP document.  \n6.2 Senior management\u2019s responsibilities for ICAAP  \na) Ensure the appropriateness of ICAAP on an ongoing basis  \nb) Have a good understanding of the design and operation of ICAAP  \nc) Be responsible for developing a  risk management framework that is appropriate in \nlight of the risk profile and business strategy of a bank and integrating ICAAP with", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 84, "year": 2016}, "type": "Document"}
{"page_content": "light of the risk profile and business strategy of a bank and integrating ICAAP with \nthe capital planning and management processes of the bank. In this regard, senior \nmanagement shall, at a minimum:  \ni) establish robust policies and procedures to be approved by the Board to identify, \nmeasure and report all material risks;  \nii) evaluate the level and trend of material risks and their effects on capital levels;", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 84, "year": 2016}, "type": "Document"}
{"page_content": "82 \n \n iii) evaluate the sensitivity and reasonableness of key assumptions used in the \ncapital assessment and measurement system;  \niv) determine if the bank holds adequate capital against the risks faced by the bank;  \nv) assess future capital needs based on the risk profile of the bank and propose \nnecessary adjustments to its strategic plan; and  \nvi) ensure that ICAAP is subject to annual independent review for robustness and \nintegrity.  \nd) establish comprehensive and adequate written policies and procedures, to be          \napproved by the Board, on its stress testing processes taking a n active interest in the \ndevelopment and operation of stress -testing and, allocating sufficient skilled and \ncompetent resources to the modeling function.  \ne) ensure regular reporting of bank\u2019s ICAAP to the Board.  \nf) prepare the annual ICAAP document in accordance  with the specified format           \ngiven in Appendix I; and  \ng) submit the Board approved annual document of ICAAP to the Director of Bank \nSupervision within five months from the end of the financial year of the respective \nbank.  \n7 Comprehensive Assessment of Risks  \n7.1 Bank\u2019s ICAAP shall identify all material risks, which are arising from both on balance \nsheet and off -balance sheet exposures, faced by the bank and measure these risks that \ncan be reliably quantified under both normal and stressed conditions. ICAAP s hall, \ntherefore, address the following risks.  \na) Risks captured under Pillar 1: credit, market and operational risks;  \nb) Risks not fully captured under Pillar 1; concentration risk (credit risk), interest \nrate/rate of return risk in the banking book (market risk ) and  \nc) Risk types not covered by Pillar 1: risks which are not specifically addressed under \nPillar 1, which includes liquidity risk, concentration risk, reputational risk, \ncompliance risk, strategic and business risk, residual risk.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 85, "year": 2016}, "type": "Document"}
{"page_content": "compliance risk, strategic and business risk, residual risk.  \n7.2 A bank shall be able t o identify other external risk factors that may arise from the \nregulatory, economic or business environment. In addition, adequate corporate \ngovernance and proper risk management including internal control arrangements \nconstitute the foundation of an effec tive ICAAP.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 85, "year": 2016}, "type": "Document"}
{"page_content": "83 \n \n 7.3 The risk measurement systems shall be sufficiently comprehensive and rigorous to \ncapture the nature and magnitude of the risks faced by the bank.  \n7.4 The risks that are not easily quantifiable shall be evaluated using qualitative assessment \nand man agement judgment.  \n7.5 When measuring risks, comprehensive and rigorous stress tests shall be performed to \nidentify possible events or market changes that could have serious adverse effects or \nsignificant impact on the bank\u2019s capital and operations.  \n7.6 In assessin g risks , banks shall also consider the applicable Directions issued under the \nBanking Act.  \n8 Sound Capital Assessment  \nInternal capital allocation and assessment process shall meet the following \nrequirements.  \n8.1 Banks s hall have an explicit Board approved capital plan which states the objectives \nand the time period for achieving those objectives, and in broad terms the capital \nplanning process and the responsibilities for that process.  \n8.2 The plan shall also lay out how the bank will comply with capital requir ements in the \nfuture related to the level of risk, and a general contingency plan for dealing with \ndivergences and unexpected events such as raising additional capital, restricting \nbusiness activities or using risk mitigation techniques.  \n8.3 The bank shall set  capital targets which are consistent with their risk profile, stage of \nthe business cycle in which the bank is operating, and business plans.  \n8.4 An internal strategy for maintaining capital levels which should not only reflect the \ndesired level of risk cove rage but also incorporate factors such as loan growth \nexpectations, future sources and uses of funds, and dividend policy.  \n8.5 The amount of capital held shall reflect not only the measured amount of risks but also \nan additional amount to account for potentia l uncertainties in risk measurement.  \n8.6 In assessing capital, a bank shall also evaluate the quality and capacity of its capital to", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 86, "year": 2016}, "type": "Document"}
{"page_content": "8.6 In assessing capital, a bank shall also evaluate the quality and capacity of its capital to \nabsorb losses.  \n8.7 The bank shall demonstrate to CBSL  that its capital assessment approach is \nconceptually sound and that outputs and results are reasonable.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 86, "year": 2016}, "type": "Document"}
{"page_content": "84 \n \n 9 Monitoring and Reporting  \n9.1 The bank shall establish an adequate system for monitoring and reporting risk \nexposures and, assessing how the bank\u2019s changing risk profile affects the capital \nrequirements.  \n9.2 The bank\u2019s Board and the senior management shall:  \na) receive reports on the bank\u2019s risk profile and capital needs in a manner appropriate \nto facilitate the conduct of their responsibilities  \nb) evaluate the level and trend of material risks and their effects on capital levels  \nc) evaluate th e sensitivity and reasonableness of key assumptions used in the capital \nassessment measurement system  \nd) determine that the bank holds adequate capital against the risks and is in compliance \nwith established capital adequacy goals  \ne) assess its future capital re quirements based on the bank\u2019s reported risk profile and \nmake  necessary adjustments to the bank\u2019s strategic plan, accordingly  \n10 Internal Controls and Independent Review  \n10.1 The bank\u2019s internal control structure is essential to the capital assessment process. \nEffective control of the capital assessment process includes an independent review, and \nwhere appropriate, with the involvement of internal or external audits.  \n10.2 The person(s) responsible for the development or implementation of ICAAP shall not \nbe involved in t he independent review.  \n10.3 The bank shall conduct periodic independent reviews of its risk management processes \nto ensure their integrity, accuracy, and reasonableness. Areas that shall be reviewed \ninclude:  \na) appropriateness of the bank\u2019s capital assessment proc ess given the nature, scope \nand complexity of its activities;  \nb) identification of large exposures and risk concentrations;  \nc) accuracy and completeness of data inputs into the bank\u2019s assessment process;  \nd) reasonableness and validity of scenarios used in the asses sment process; and  \ne) stress testing and analysis of assumptions and inputs.  \n11 Stress Testing", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 87, "year": 2016}, "type": "Document"}
{"page_content": "e) stress testing and analysis of assumptions and inputs.  \n11 Stress Testing  \n11.1 Stress testing is a technique used to evaluate the potential effects on a bank\u2019s financial \ncondition due to changes in specified risk factors by adverse scenarios.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 87, "year": 2016}, "type": "Document"}
{"page_content": "85 \n \n 11.2 A forward -looking stress test should reasonably identify possible events or changes in \nmarket conditions that could adversely impact the bank\u2019 financial condition and capital \nposition.  \n11.3 Banks may follow the Guidelines on Stress Testing of Licensed Commercial Banks and \nLicensed Specialised Banks issued by Bank Supervision Department in September \n2014.  \nPART III - SUPERVISORY REVIEW AND EVALUATION PROCESS (SREP)  \n12 Key Components  \nSREP, which consists of the following key components, shall be carried out by the \nDirector of Bank Supervision or examiners of the Bank Supervision Department.  \na) Review of the bank\u2019s ICAAP  \nb) Review of the bank\u2019s risk profile  \nc) Review of the levels and quality of capital hel d \nd) Communication of SREP results to the bank  \n13 Review Methodologies  \nSREP shall involve a combination of:  \na) periodic examinations or inspections;  \nb) continuous supervision;  \nc) discussions with the bank management;  \nd) review of work of internal and external auditors; and  \ne) periodic reporting.  \n14 Objectives  \nThe objective of the review is to:  \na) evaluate the adequacy of bank\u2019s internal capital adequacy assessments and \nstrategies, as well as their ability to monitor and ensure compliance with regulatory \ncapital ratios;  \nb) ensure tha t the bank operates above the minimum regulatory capital ratios and \ncomposition of capital is appropriate for the nature and scale of the bank\u2019s business;  \nc) identify existing or potential problems and key risks faced by the bank, deficiencies \nin their inter nal control and risk management frameworks, and the degree of \nreliance that can be placed on the outputs of ICAAP;", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 88, "year": 2016}, "type": "Document"}
{"page_content": "86 \n \n d) intervene at an early stage to prevent capital from falling below the minimum levels \nrequired to support the risk characteristics of the bank ; \ne) take appropriate supervisory action and regulatory measures if results of this \nprocess are not satisfactory.  \n15 Coverage  \nSREP will cover a quantitative review of bank\u2019s Pillar 1 inherent risk exposures and \nPillar 2 inherent risk exposures.  \n16 Qualitative Assessment  \nIf Pillar 2 risks are not readily quantifiable, the supervisory judgment is to be used with \nrespect to qualitative assessments of the bank\u2019s ability to contain actual risk exposures \nwithin prudent, planned levels through effective risk governanc e, oversight, \nmanagement and control practices.  \n17 Dialogue with the bank  \n17.1 SREP involves an active dialogue with the bank regarding ICAAP, through which \nCBSL seeks to:  \na) gain deeper insights into the bank\u2019s overall control and risk management \nframework;  \nb) establis h a closer understanding of how the bank approaches the risks that are not \ncovered under the minimum capital requirements and the amount of internal capital \nallocated to them;  \nc) understand the mechanisms the bank has maintained for identifying, measuring, \nmonitoring, controlling, mitigating and reporting its risks; and  \nd) understand whether additional capital on top of that assessed is necessary to cover \nthe banks \u2018existing risk exposures, as well as future planned sources of capital.  \n17.2 The dialogue will provide an opportunity for the bank to make appropriate changes to \nits ICAAP.  \n17.3 Communication of SREP results:  \na) After completion of the SREP, the Director of Bank Supervision may conduct \ndiscussions with the bank based on the results of the assessment, including any  areas \nof concern which may lead to an increase in bank\u2019s minimum CAR.  \nb) The Director of Bank Supervision will explain the outcome of the assessment and", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 89, "year": 2016}, "type": "Document"}
{"page_content": "b) The Director of Bank Supervision will explain the outcome of the assessment and \nrecommend the prompt corrective actions to address the concerns of the bank, if", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 89, "year": 2016}, "type": "Document"}
{"page_content": "87 \n \n any. If there is a propos ed increase in the capital, the bank will be notified (with the \nopportunity to make representations) before the decision is finalised.  \nPART IV \u2013 SUPERVISORY INTERVENTION  \n18 Based on the outcome of SREP, CBSL shall intervene at an early stage to:  \na) prevent capi tal from falling below the minimum requirement of the respective bank; \nand \nb) prevent potential impact to the stability of the financial system.  \n19 Depending on the capital level, a range of supervisory actions including the following \nshall be initiated.  \na) moral s uasion to encourage the bank to improve their capital positions and levels;  \nb) improve the bank\u2019s ICAAP including  risk management systems and controls;  \nc) require the bank to submit a capital restoration plan;  \nd) impose restrictions on the payment of dividends, business activities, acquisitions, \ninvestments etc.; and  \ne) require the replacement of the Board and/or the senior management.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 90, "year": 2016}, "type": "Document"}
{"page_content": "APPENDIX I  \n88 \n FORMAT FOR THE PREPARATION OF ICAAP DOCUMENT  \n1 General  \n1.1 The purpose of ICAAP document is to inform the Board/senior management and the \nCBSL of the ongoing assessment of the bank's risks, how the bank intends to mitigate \nthose risks and how much current and future capital is necessary having considered \nother mitigating factors.  \n1.2 Annual document of ICAAP of a bank shall be prepared in accordance with the conten ts \ngiven in paragraph 2 below.  \n1.3 However, CBSL expects there to be a fair degree of variation in the length and format \nof submissions since banks\u2019 business and risk profiles differ from each other and \nICAAP document should be proportional to the size, nature  and complexity of a bank\u2019s \nbusiness.  \n1.4 Use of this format may, therefore, make the review process more efficient for both the \nbank and CBSL.  \n1.5 Base period and financial data of ICAAP document shall be in accordance with the \naudited financial data  as at the en d of the preceding financial year.  \n1.6 The projected financial data of ICAAP document should be at least for three financial \nyears.  \n2 Contents  \na) Executive Summary  \nb) Background  \nc) Board and Senior Management Oversight  \nd) Risk Governance  \ne) Sound stress testing processes  \nf) Capital Planning  \ng) Projected financial data and a ssessment of capital  \n3 Executive Summary  \nThis section will present an overview of ICAAP methodology and results. This \noverview will include:  \na) The purpose of the report and the group entities which are covered by ICAAP  \nb) Financial forecasts, including the strategic position of the bank, its balance sheet \nstrength, and future profitability", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 91, "year": 2016}, "type": "Document"}
{"page_content": "89 \n \n c) Regulatory capital management  \nd) Regulatory capital assessment - Pillar 1  \ne) Internal capital assessment - Pillar 2  \nf) Ratio management: How much and what composition of internal capital the bank \nconsiders it should hold as compared with the capital adequacy requirement under \nPillar 1  \ng) Risk management processes and assessment  \nh) Descriptions of the capital and dividend plan; the manner in which  the bank intends \nto manage capital going forward and for what purposes  \ni) Stress testing approach  \nj) Details of the approval  \n4 Background  \nThis section will include the relevant organization structure and business lines, group \nstructure (legal and operations) and financial data of the bank largely including the    \nprofit, dividends, equity, capital resources held and as compared with regulatory \nrequirements, total assets, total loan and advances, total deposits, and any conclusions \nthat can be drawn from trends in the data which may have implications for the bank\u2019s \nfuture.  \n5 Board and Senior Management Oversight  \nThis section would provide the following information:  \na) Corporate governance structure  \nb) Board and senior management oversight  \nc) ICAAP governance structure  \nd) Monitori ng and controls  \ne) Internal controls and independent review  \n6 Risk Governance  \nThis section will provide the following;  \na) Risk appetite  \nb) Risk management framework  \nc) Regulatory risk assessment (Pillar 1)  \ni) Credit risk  \nii) Market risk", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 92, "year": 2016}, "type": "Document"}
{"page_content": "90 \n \n iii) Operational risk  \nd) Internal risk assessment (Pillar 2)  \ni) Concentration risk  \nii) Interest rate risk in the \nbanking book  \niii) Settlement risk  \niv) Liquidity risk  \nv) Compliance risk  vi) Strategic/business risk  \nvii) Reputational risk  \nviii) Residual risk  \nix) Off-balance sheet exposures and \nsecuritizati on risk  \n7 Sound Stress Testing Processes  \nThis section will provide the following details of bank\u2019s stress testing practices:  \na) Overview of the stress testing process  \nb) Stress scenario/types  \nc) discuss the results of stress tests and its impact to the bank capital  \nd) risk mitigation or contingency plans across a range of stressed conditions  \n8 Capital Planning  \nThis section will provide details of bank\u2019s capital planning and management processes, \nwhich, at a minimum, includes:  \na) the bank\u2019s short -term and long-term capital adequacy goals in relation to its risk \nprofile, taking into account its strategic focus and business plan  \nb) the approved capital targets that are consistent with the bank\u2019s overall risk profile \nand financial position  \nc) the approach for determ ining the bank\u2019s overall capital adequacy to its risk profile  \nd) Conclusion  \n9 Projected Financial Position and A ssessment of Capital  \nThis section will explain Pillar 1 and 2 capital requirements, in respect to  \na) the expected changes to the business profile of the  bank, the environment in which \nit expects to operate, its projected business plans (by appropriate lines of business), \nand projected financial position for the next, three to five years; and  \nb) given these business plans, this section would also discuss the bank\u2019s assessment as \nto whether additional capital is necessary on top of that assessed to cover their \nexisting risk exposures, as well as future planned sources of capital.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 93, "year": 2016}, "type": "Document"}
{"page_content": "Banking Act Directions No. 01 of 2016  \nCapital Requirements Under Basel III for Licensed Commercial Banks a nd  \nLicensed Specialised Banks  \n91 \n \n \n \nSCHEDULE III  \n \n \n \nPILLAR III  \nMARKET DISCIPLINE", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 94, "year": 2016}, "type": "Document"}
{"page_content": "92 \n MARKET DISCIPLINE \u2013 MINIMUM DISCLOSURE REQUIREMENTS UNDER \nPILLAR III  \n \n1 Introduction  \n1.1 Pillar III aims to complement the minimum capital requirements and supervisory \nreview process by developing a set of disclosure requirements which will allow the \nmarket participants to gauge the capital adequacy and risk exposures of licensed banks.  \n1.2 These  requirements will improve the comparability and consistency of disclosures \namong licensed banks and facilitate assessment of the bank by others, including \ninvestors, analysts, customers, other banks and rating agencies, which leads to good \ncorporate gover nance.  \n1.3 Disclosures under these requirements broadly include; the regulatory capital \nrequirements and liquidity, risk weighted assets, linkages between financial statements \nand regulatory exposures, risk management and a discussion on adequacy/meeting \ncurrent and future capital requirements of banks.  \n \n2 Responsibility of the Management  \n2.1 The Board of Directors and Senior Management are responsible for establishing and \nmaintaining effective internal controls over the disclosure of financial information, \nincluding Pillar III disclosures. The information provided by licensed banks under Pillar \nIII must be at a minimum and be subject to the same level of internal review and internal \ncontrol processes as in financial reporting.  \n \n3 Scope, Frequency and Reporting  Location of Disclosures  \n3.1 All licensed banks shall make the required disclosures : \ni) on a both solo and group basis with comparative information  \nii) in the press, annual reports and websites,  in the frequencies as set out in tables \nbelow.  \n \n4 Implementation Date  \n4.1 Shall be effective from financial reporting periods beginning on o r after 01.07 .2017.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 95, "year": 2016}, "type": "Document"}
{"page_content": "93 \n MARKET DISCIPLINE - DISCLOSURE REQUIREMENTS  \n \nArea  Template Reference  Frequency &  \nPublication Location  \nNo Name  Quarterly  Annually  \nRegulatory \nRequirements \non Capital and \nLiquidity  1  Key Regulatory Ratios - Capital and Liquidity  P, W  P, A, W  \n2  Basel III Computation of Capital Ratio s W A, W  \n3  Basel III Computation of Leverage Ratio*  W A, W  \n4  Basel III Computation of Liquidity Coverage Ratio  W A, W  \n5  Main Features of Regulatory Capital Instruments  W A, W  \nRisk Weighted \nAssets (RWA)  6  Summary discussion on adequacy/meeting current \nand future capital requirements   A, W  \n7  Credit Risk under Standardised Approach: Credit \nRisk Exposures and Credit Risk Mitigation (CRM) \nEffects  W A, W  \n8  Credit Risk under Standardised Approach: \nExposures by Asset Classes and Risk Weights   A, W  \n9  Market Risk under Standardised Measurement \nMethod  W A, W  \n10  Operational Risk under Basic Indicator \nApproach/The Standardised Approach/The \nAlternative Standardised Approach  W A, W  \nLinkages \nBetween \nFinancial \nStatements & \nRegulatory \nExposures  11  Differences Between Accounting and Regulatory \nScopes and Mapping of Financial Statement \nCategories with Regulatory Risk Categories \u2013 Bank \nOnly  W A, W  \n12  Explanations of Differences Between  Accounting \nand Regulatory Exposure Amounts   A, W  \nRisk \nManagement  13  Bank Risk Management Approach  \n A, W  \n14  Risk Management related to Key Risk Exposures  A, W  \n \nA - Annual Report | P \u2013 Press | W \u2013 Website  \n \n*Disclosure requirements will commence with  the implementation of Leverage Ratio", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 96, "year": 2016}, "type": "Document"}
{"page_content": "94 \n Template 1  \nKey Regulatory Ratios - Capital and Liquidity  \n \nItem  Reporting Period  Previous Reporting \nPeriod  \nRegulatory Capital (LKR \u2019000)    \nCommon Equity Tier 1     \nTier 1 Capital                    \nTotal Capital                     \nRegulatory Capital Ratios (%)    \nCommon Equity Tier 1 Capital Ratio (Minimum \nRequirement - \u2026)   \nTier 1 Capital Ratio (Minimum Requirement - \u2026)   \nTotal Capital Ratio (Minimum Requirement - \u2026)   \nLeverage Ratio (Minimum Requirement - \u2026)   \nRegulatory Liquidity    \nStatutory Liquid Assets (LKR\u2019000)    \nStatutory Liquid Assets Ratio (Minimum Requirement - \n\u2026)   \nDomestic Banking Unit (%)    \nOff-Shore Banking Unit (%)    \nLiquidity Coverage Rat io (%)  \u2013 Rupee  (Minimum \nRequirement - \u2026)   \nLiquidity Coverage Ratio (%) \u2013 All Currency   (Minimum \nRequirement - \u2026)", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 97, "year": 2016}, "type": "Document"}
{"page_content": "95 \n Template 2  \nBasel III Computation of Capital Ratio s \nItem  Amount (LKR \u2018000)  \nReporting \nPeriod  Previous \nReporting \nPeriod  \nCommon Equity Tier 1 (CET1) Capital after Adjustments     \nCommon Equity Tier 1  (CET1) Capital     \nEquity Capital (Stated Capital)/Assigned Capital     \nReserve Fund     \nPublished Retained Earnings/(Accumulated Retained Losses)     \nPublished Accumulated Other Comprehensive Income (OCI)     \nGeneral and other Disclosed Reserves     \nUnpublis hed Current Year's Profit/Loss  and Gains reflected in OCI     \nOrdinary Shares issued by Consolidated Banking and Financial Subsidiaries of \nthe Bank and held by Third Parties     \nTotal Adjustments to CET1 Capital     \nGoodwill (net)     \nIntangible Assets (net)     \nOthers (specify)     \nAdditional Tier 1 (AT1) Capital after Adjustments     \nAdditional Tier 1 (AT1 ) Capital     \nQualifying Additional Tier 1 Capital Instruments     \nInstruments issued by Consolidated Banking and  Financial Subsidiaries of the \nBank and held by Third Parties     \nTotal Adjustments to AT1 Capital    \nInvestment in Own Shares     \nOthers (specify)     \nTier 2 Capital after Adjustments     \nTier 2 Capital     \nQualifying Tier 2 Capital Instruments     \nRevaluation Gains     \nLoan Loss Provisions     \nInstruments issued by Consolidated Banking and Financial Subsidiaries of the \nBank and held by Third Parties     \nTotal Adjustments to Tier 2     \nInvestment in Own Shares     \nOthers (specify)     \nCET1 Capital     \nTotal Tier 1 Capital     \nTotal Capital", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 98, "year": 2016}, "type": "Document"}
{"page_content": "96 \n Item  Amount (LKR \u2018000)  \nReporting \nPeriod  Previous \nReporting \nPeriod  \nTotal Risk Weighted Assets (RWA)     \nRWAs for Credit Risk     \nRWAs for Market Risk     \nRWAs for Operational Risk     \nCET1 Capital Ratio (including Capital Conservation Buffer, \nCountercyclical Capital Buffer & Surcharge on D -SIBs) (%)     \nof which: Capital Conservation Buffer  (%)     \nof which: Countercyclical Buffer (%)     \nof which: Capital Surcharge on D -SIBs (%)     \nTotal Tier 1 Capital  Ratio (%)     \nTotal Capital Ratio (including Capital Conservation Buffer, Countercyclical \nCapital Buffer & Surcharge on D -SIBs) (%)     \nof which: Capital Conservation Buffer  (%)     \nof which: Countercyclical Buffer (%)     \nof which: Capital Surcharge on D-SIBs (%)     \nNote:  Banks are expected to supplement the template with a narrative commentary to explain any significant \nchange over the reporting period and the key drivers of such changes.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 99, "year": 2016}, "type": "Document"}
{"page_content": "97 \n Template 3  \nComputation of Leverage Ratio*  \nItem  Amount (LKR \u2018000)  \nReporting Period  Previous Reporting \nPeriod  \nTier 1 Capital    \nTotal Exposures    \nOn-Balance Sheet Items  \n(excluding Derivatives and Securities  Financing \nTransactions , but including Collateral)    \nDerivative Exposures    \nSecurities Financing Transaction Exposures    \nOther Off -Balance Sheet Exposures    \nBasel III Leverage Ratio (%) (Tier 1/Total Exposure)    \n \n*  Disclosure will commence with implementation", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 100, "year": 2016}, "type": "Document"}
{"page_content": "98 \n Template 4  \nBasel III Computation of Liquidity Coverage Ratio  \nItem  Amount (LKR\u2019000)  \nReporting Period  Previous Reporting \nPeriod  \nTotal  \nUn-weighted \nValue  Total \nWeighted \nValue  Total  \nUn-\nweighted \nValue  Total \nWeighted \nValue  \nTotal Stock of High -Quality Liquid Assets \n(HQLA)        \nTotal Adjusted Level 1A Assets      \nLevel 1 Assets        \nTotal Adjusted Level 2A Assets        \nLevel 2A Assets        \nTotal Adjusted Level 2B Assets      \nLevel 2B Assets        \nTotal Cash Outflows        \nDeposits        \nUnsecured Wholesale Funding        \nSecured Funding Transactions        \nUndrawn Portion of Committed (Irrevocable) \nFacilities and Other Contingent Funding \nObligations        \nAdditional Requirements        \nTotal Cash Inflows        \nMaturing Secured Lending Transactions \nBacked by Collateral        \nCommitted Facilities        \nOther Inflows by Counterparty which are \nMaturing within 30 Days        \nOperational Deposits        \nOther Cash Inflows        \nLiquidity Coverage Ratio (%) (Stock of \nHigh Quality Liquid Assets/Total Net Cash \nOutflows over the Next 30 Calendar Days) * \n100", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 101, "year": 2016}, "type": "Document"}
{"page_content": "99 \n Template 5  \nMain Features of Regulatory Capital Instruments  \n \nMust be provided for each type of capital instrument separately  \nDescription of the Capital Instrument   \nIssuer   \nUnique Identifier (e.g., ISIN or Bloomberg Identifier for Private \nPlacement)   \nGoverning Law(s) of the Instrument   \nOriginal Date of Issuance   \nPar Value of Instrument   \nPerpetual or Dated   \nOriginal Maturity Date, if Applicable   \nAmount Recognised in Regulatory Capital (in LKR \u2018000 as at the \nReporting Date)   \nAccounting Classification (Equity/Liability)   \nIssuer Call subject to Prior Supervisory Approval   \nOptional Call Date, Contingent Call Dates and Redemption Amount (LKR \n\u2018000)   \nSubsequent Call Dates, if Applicable   \nCoupons/Dividends   \nFixed or Floating Dividend/Coupon   \nCoupon Rate and any Related Index   \nNon-Cumulative or Cumulative   \nConvertible or Non -Convertible   \nIf Convertible, Conversion Trigger (s)   \nIf Convertible, Fully or Partially   \nIf Convertible, Mandatory or Optional   \nIf Convertible, Conversion Rate", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 102, "year": 2016}, "type": "Document"}
{"page_content": "100 \n Template 6  \n Summary Discussion on Adequacy/Meeting Current and Future Capital Requirements  \n \nItem  \nProvide qualitative information on capital planning to meet current and future capital requirements \nincluding:  \n(a) Overview of capital planning and assessment process;  \n(b) Material risk exposures in line with strategic plan;  \n(c) Current and future capital needs, anticipated capital expenditure and desirable capital level;  \n(d) Discussion on possible internal and external  capital sources;  \n(e) Assessment of the adequacy of bank\u2019s capital commensurate with all material risks and other \ncapital needs in relation to its current and future activities;  \nGeneral contingency plan for dealing with divergences and unexpected events such a s raising additional \ncapital, restricting business activities or using risk mitigation techniques", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 103, "year": 2016}, "type": "Document"}
{"page_content": "101 \n Template 7  \nCredit Risk under Standardised Approach \u2013  \nCredit Risk Exposures and Credit Risk Mitigation (CRM) Effects  \nAsset Class  Amount (LKR\u2019000) as at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..  \nExposures before  \n Credit Conversion \nFactor (CCF) and \nCRM  Exposures post CCF \nand CRM  RWA and RWA \nDensity (%)  \nOn-\nBalance  \nSheet \nAmount  Off-\nBalance  \nSheet \nAmount  On-\nBalance \nSheet \nAmount  Off-\nBalance \nSheet \nAmount  RWA  RWA \nDensity(ii) \nClaims on Central \nGovernment and CBSL        \nClaims on Foreign \nSovereigns and their \nCentral Banks        \nClaims on Public Sector \nEntities        \nClaims on Official Entities \nand Multilateral \nDevelopment Banks        \nClaims on Banks \nExposures        \nClaims on Financial \nInstitutions        \nClaims on Corporates        \nRetail Claims        \nClaims Secured by \nResidential Property        \nClaims Secured by \nCommercial Real Estate        \nNon-Performing Assets \n(NPAs)(i)       \nHigher -risk Categories        \nCash Items and Other \nAssets        \nTotal        \nNote:  \n(i) NPAs \u2013 As per Banking Act Directions on Classification of loans and advances, income recognition and \nprovisioning.  \n(ii) RWA Density \u2013 Total RWA/Exposures post CCF and CRM.  \n(iii) Banks are expected to supplement the template with a narrative commentary to explain any significant \nchange over the reporting period and the key drivers of such changes.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 104, "year": 2016}, "type": "Document"}
{"page_content": "102 \n Template 8  \n Credit Risk under Standardised Approach: Exposures by Asset Classes and Risk Weights  \nDescription  Amount (LKR\u2019 000) as at \u2026\u2026\u2026\u2026\u2026. (Post CCF & CRM)  \n            Risk Weight  \nAsset Classes  0% 20%  50%  75%  100%  150%  >150%  Total Credit \nExposures \nAmount  \nClaims on Central \nGovernment and Central \nBank of Sri Lanka          \nClaims on Foreign \nSovereigns and their \nCentral Banks          \nClaims on Public Sector \nEntities          \nClaims on Official Entities \nand Multilateral \nDevelopment Banks          \nClaims on Banks Exposures          \nClaims on Financial \nInstitutions          \nClaims on Corporates          \nRetail Claims          \nClaims Secured by \nResidential Property          \nClaims Secured by \nCommercial Real Estate          \nNon-Performing Assets \n(NPAs)          \nHigher -risk Categories          \nCash Items and Other Assets          \nTotal          \n \nNote:  Banks are expected to supplement the template with a narrative commentary to explain any significant \nchange over the reporting period and the key drivers of such changes.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 105, "year": 2016}, "type": "Document"}
{"page_content": "103 \n Template 9  \nMarket Risk under Standardised Measurement Method  \nItem  RWA Amount  \n(LKR\u2019000)  \nas at \u2026\u2026\u2026\u2026\u2026  \n(a) RWA for Interest Rate Risk   \nGeneral Interest Rate Risk   \n(i) Net Long or Short Position   \n(ii) Horizontal Disallowance   \n(iii) Vertical Disallowance   \n(iv) Options   \nSpecific Interest Rate Risk   \n(b) RWA for Equity   \n(i) General Equity Risk   \n(ii) Specific Equity  Risk  \n(c) RWA for Foreign Exchange & Gold   \nCapital Charge for Market Risk [(a) + (b) + (c)]  * CAR   \n \nNote:  Banks are expected to supplement the templ ate with a narrative commentary to explain any significant \nchange over the reporting period and the key drivers of such changes.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 106, "year": 2016}, "type": "Document"}
{"page_content": "104 \n Template 10  \nOperational Risk under Basic Indicator Approach/The Standardised Approach/The Alternative \nStandardised Approach  \n \nBusiness Lines  Capital \nCharge \nFactor  Fixed \nFactor  Gross Income (LKR\u2019000) as at \n\u2026\u2026\u2026\u2026\u2026\u2026.  \n1st Year  2nd Year  3rd Year  \nThe Basic Indicator Approach  15%     \nThe Standardised Approach       \nCorporate Finance  18%     \nTrading and Sales  18%     \nPayment and Settlement  18%     \nAgency Services  15%     \nAsset Management  12%     \nRetail Brokerage  12%     \nRetail Banking  12%     \nCommercial Banking  15%     \nThe Alternative Standardised Approach       \nCorporate Finance  18%     \nTrading and Sales  18%     \nPayment and Settlement  18%     \nAgency Services  15%     \nAsset Management  12%     \nRetail Brokerage  12%     \nRetail Banking  12% 0.035     \nCommercial Banking  15% 0.035     \nCapital Charges for Operational Risk  (LKR\u2019000)  \nThe Basic Indicator Approach      \n  \n The Standardised Approach    \nThe Alternative Standardised Approach    \nRisk Weighted Amount for Operational Risk (LKR\u2019000)  \nThe Basic Indicator Approach      \n  \n The Standardised Approach    \nThe Alternative Standardised Approach", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 107, "year": 2016}, "type": "Document"}
{"page_content": "105 \n Template 11  \nDifferences between Accounting and Regulatory Scopes and  \nMapping of Financial Statement Categories with Regulatory Risk Categories \u2013 Bank Only  \n \nItem  Amount (LKR \u2018000) as at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \na b c d e \nCarrying \nValues as \nReported \nin \nPublished \nFinancial \nStatements  Carrying \nValues  \nunder \nScope of \nRegulatory \nReporting  Subject to \nCredit Risk \nFramework  Subject to \nMarket \nRisk \nFramework  Not subject to \nCapital \nRequirements \nor Subject to \nDeduction \nfrom Capital  \nAssets       \nCash and Cash Equivalents       \nBalances with Central Banks       \nPlacements with Banks       \nDerivative Financial Instruments       \nOther Financial Assets Held -For-\nTrading       \nFinancial Assets Designated at Fair \nValue through Profit or Loss       \nLoans and Receivables to Banks       \nLoans and Receivables to Other \nCustomers       \nFinancial Investments - Available -\nFor-Sale       \nFinancial Investments - Held -To-\nMaturity       \nInvestments in Subsidiaries       \nInvestments in Associates and Joint \nVentures       \nProperty, Plant and Equipment       \nInvestment Properties       \nGoodwill and Intangible Assets       \nDeferred Tax Assets       \nOther Assets       \nLiabilities       \nDue to Banks       \nDerivative Financial Instruments       \nOther Financial Liabilities Held -For-\nTrading       \nFinancial Liabilities Designated at \nFair Value Through Profit or Loss       \nDue to Other Customers       \nOther Borrowings       \nDebt Securities Issued       \nCurrent Tax Liabilities       \nDeferred Tax Liabilities", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 108, "year": 2016}, "type": "Document"}
{"page_content": "106 \n Item  Amount (LKR \u2018000) as at \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  \na b c d e \nCarrying \nValues as \nReported \nin \nPublished \nFinancial \nStatements  Carrying \nValues  \nunder \nScope of \nRegulatory \nReporting  Subject to \nCredit Risk \nFramework  Subject to \nMarket \nRisk \nFramework  Not subject to \nCapital \nRequirements \nor Subject to \nDeduction \nfrom Capital  \nOther Provisions       \nOther Liabilities       \nDue to Subsidiaries       \nSubordinated Term Debts       \nOff-Balance Sheet Liabilities       \nGuarantees       \nPerformance Bonds       \nLetters of Credit       \nOther Contingent Items       \nUndrawn Loan Commitments       \nOther Commitments       \nShareholders' Equity       \nEquity Capital (Stated \nCapital)/Assigned Capital       \nof which Amount Eligible for CET1       \nof which Amount Eligible for AT1       \nRetained Earnings       \nAccumulated Other Comprehensive \nIncome       \nOther Reserves       \nTotal Shareholders' Equity       \n \nNotes:  \nWhere a single item attracts capital charges according to more than one risk category, it should be reported in all \ncolumns that it attracts a capital charge. As a consequence, the sum of amounts in columns (c) to (e) may be greater \nthan the amount in colu mn (b). An explanation note must be provided for such reporting for reconciliation purpose.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 109, "year": 2016}, "type": "Document"}
{"page_content": "107 \n Template 12  \nExplanations of Differences between Accounting and Regulatory Exposure Amounts  \n \nProvide qualitative explanations on the differences observed between  accounting carrying value and \namounts considered for regulatory purposes:  \n(a) Explain the origins of any significant differences between the amounts in columns (a) and (b) in \nTemplate 11.  \n(b) Describe systems and controls to ensure that the valuation estimates ar e prudent and reliable:  \n\u2022 Valuation methodologies, including an explanation of how far mark -to-market methodologies \nare used.  \n\u2022 Description of the independent price verification process.  \n\u2022 Procedures for valuation adjustments or reserves, including a description  of the process and \nthe methodology for valuing trading positions by type of instrument.", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 110, "year": 2016}, "type": "Document"}
{"page_content": "108 \n Template 13  \n Bank Risk Management Approach  \n \nProvide a description of the bank\u2019s strategy and how the board of directors and senior management assess \nand manage risks, enabling users to gain a clear understanding of the bank\u2019s risk tolerance/appetite in \nrelation to its main activities and all significant risks.  \n(a) How the business model determines and interacts with the overall risk profile, how the business \nmodel tr anslates into key risk profiles (credit, market, operational, liquidity, interest rate risk in \nthe banking book etc.) and how the risk profile of the bank interacts with the risk tolerance \napproved by the board.  \n(b) Criteria and approach for risk management objectives, strategies, policies, risk appetites and \ntolerance limits for key types of risks.  \n(c) The risk governance structure (overall and by key types of risks): Responsibilities attributed \nthroughout the bank (e.g. oversight and delegation of authority, br eakdown of responsibilities, \nbusiness unit etc.), relationships between the structures involved in risk management processes \n(e.g. board of directors, integrated risk management committee, executive management, separate \nrisk committees, risk management str ucture, compliance function, internal audit function).  \n(d) Channels to communicate and enforce the risk culture within the bank (e.g. code of conduct, \nmanuals containing operating limits or procedures to treat violations or breaches of risk thresholds, \nprocedu res to raise and share risk issues between business lines and risk functions).  \n(e) The scope and main features of risk measurement systems for key risks (e.g.: methods, techniques, \nmeasuring frequencies, assumptions etc.).  \n(f) Process of risk information reporting  provided to the board and senior management, in particular \nthe scope and main content of reporting on risk exposure (overenroll and by key types of risks).", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 111, "year": 2016}, "type": "Document"}
{"page_content": "the scope and main content of reporting on risk exposure (overenroll and by key types of risks).  \n(g) Qualitative information on stress testing (e.g. portfolios and risks subject to stress testing, scenarios \nadopted and methodologies used and use of stress testing in risk management).  \n(h) The strategies and processes to manage, hedge and mitigate risks that arise from the bank\u2019s \nbusiness model and the processes for monitoring the continuing effectiveness  of hedges and \nmitigants, overenroll and by key types of risks, including the following:.  \n\u2022 Credit Risk Mitigation Techniques  \nPolicies and processes for collateral evaluation and management, policies and processes for and \nan indication of the extent to which  the bank makes use of on - and off -balance sheet netting, \nmain types of guarantor/credit derivative counterparty and their creditworthiness, information \nabout market or credit risk concentrations under the credit risk mitigation instruments used (i.e. \nby guarantor type, collateral type and credit derivative providers) and any other.  \n\u2022 Liquidity Risk Mitigation Techniques  \nDetails of liquidity contingency plans in place to bridge unforeseen liquidity difficulties and \nany other.  \n\u2022 Operational Risk Mitigation Techn iques  \nDescription of the use of insurance for the purpose of mitigating operational risk, details of \ncontingency plans in place to handle failure and situations, information technology and any other.  \n\u2022 Any Other", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 111, "year": 2016}, "type": "Document"}
{"page_content": "109 \n Template 14  \nRisk Management Related to Key  Risk Exposures  \ni) Credit Risk  \na) Breakdown of exposures subject to credit risk by major types, geographical areas, sectors and residual \nmaturity.  \nb) Description of policies, process, methods and key definitions on impairment/classification of exposures \nsubject to  credit risk.  \nc) Breakdown of exposures subject to credit risk (both on and off -balance sheet) in to impaired and non -\nimpaired (as per financial reporting) with related details on collateral/cash flows, impairment allowances, \nwrite -offs and net exposure, by t ype-wise and age analysis -wise.  \nd) Breakdown of exposures subject to credit risk (both on and off -balance sheet) in to performing and non -\nperforming (as per regulatory reporting) with related details on collateral value, specific provision, write -\noffs and net  exposure, by type -wise and age analysis -wise.  \ne) The extent of non -performing loans, that are not considered to be impaired and the reasons for this.  \nii) Market Risk  \na) Interest Rate Risk  - Interest rate sensitivity gap analysis for contractual and behavioural maturities (up to \n1 month, 1 - 3 months, 3 - 6 months, 6 - 12 months, 1 - 3 years, 3 - 5 years and over 5 years) to cover both \non and off -balance sheet interest rate sensitive assets  and liabilities by currency -wise (local and major \ncurrencies).  \nb) Equity Position Risk  - Type, carrying value, fair value, realised gains/(losses) and unrealised gains/(losses) \nfor the reporting period and amounts included in capital adequacy calculation.  \nc) Foreign Exchange Risk  - Foreign currency denominated assets and liabilities (both on and off -balance \nsheet) broken down by maturity bands (for up to 1 month, 1 - 3 months, 3 - 6 months, 6 - 12 months, 1 - 3 \nyears, 3 - 5 years and over 5 years), illustrating currency -wise maturity gaps, cumulative maturity gaps and \nnet open position.  \niii) Liquidity Risk", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 112, "year": 2016}, "type": "Document"}
{"page_content": "net open position.  \niii) Liquidity Risk  \na) Trend in key liquidity ratios including, SLAR, LCR, net loans to total assets, loans to customer deposits, \nliquid assets to short term liabilities, commitments to l iquid assets.  \nb) Currency -wise ( local and major currencies)  maturity gaps of assets and liabilities (contractual and \nbehavioural maturities for up to 1 month, 1 - 3 months, 3 - 6 months, 6 - 12 months, 1 - 3 years, 3 - 5 years \nand over 5 years) to cover both on and off -balance sheet assets and liabilities.  \nc) Measurement tools/metrics that assess the structure of balance sheet, as well as metrics that project cash \nflows and future liquidity positions, taking into account off -balance sheet risks which specific to the bank.  \nd) Key metrics that management monitors liquidity, including, but not limited to, concentration limits and \nsources of funding (both products and counterparties), liquidity exposures and funding needs at the level of \nindividual legal entities, forei gn branches and subsidiaries, taking into account legal, regulatory and \noperational limitations on the transferability of liquidity.  \niv) Operational Risk  \na) Major operational viz. system or human, failures and financial losses incurred by the bank due to such \nfailures during the reporting period.  \nb) Details of activities that have been outsourced together with parties and basis for payment for such services.  \nc) Details of due diligence tests of third party service providers.  \nv) Interest Rate risk in the Banking Book (IRRBB )  \nThe increase/(decrease) in earnings or economic value (or relevant measure used by management) for upward and \ndownward rate shocks according to management\u2019s method for measuring IRRBB, broken down by currencies (for \nmajor currencies) and maturity bands (for up to 1 month, 1 - 3 months, 3 - 6 months, 6 - 12 months, 1 - 3 years, 3 - \n5 years and over 5 years).", "metadata": {"source": "data\\CBSL\\2016\\Banking_Act_Directions_No_01_2016_capital_requirements_basel_III_e_0.pdf", "page": 112, "year": 2016}, "type": "Document"}
{"page_content": "@601516\u00ae\u00ae LD^IU 61115160CENTRAL BANK OF SRi LANKA01 September 2016CIRCULAR Ref: 02/17/800/0007/002BANK SUPERVISION DEPARTMENTTo: All Chief Executive Officers of Licensed Commercial Banks and LicensedSpecialised BanksSecondary Market Trading of Government Securities and Reporting by Licensed Commercial Banks and Licensed Specialised BanksIn order to promote the secondary market for government securities by enhancing transparency in dealings and price discovery, all licensed commercial banks and licensed specialised banks shall comply with the following commencing 15 September, 2016:2 Use the Bloomberg Trading Platform (Fixed Income Quotes - FIQ) available for Sri Lanka to:i) Conduct all outright trades with other banks and primary dealers; andii) Report yield rates and volumes of all outright trades carried out over-the-counter in excess of Rs.50 million, within 30 minutes of each such trade.3 In the case of trades carried out through brokers, selling-side banks shall report under 2(ii) above.Superintendent of Public DebtDirector of Bank Supervision\n6 \u00a9\u00a9 CM\u00ae 30, eDEto,ms . \u00a9\u00a9 . 590, \u00a9ODG\u00ae 01, @C 9411 2477100/6596 ^ih miri?, @60. 30 ^lu^l Q*T(tpLbi_] 1 Level 6, No. 30, Janadhipathi Mawatha, Colombo 1Qu. \u00ae60. 590, QsirQpihq 01, P.O.Box.590,Colombo 01, Sri Lanka.P 9411 2477711 B banksup@cbsl.lk www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2016\\BSD_Circular_Secondary_Market_Trading_e_0.pdf", "page": 0, "year": 2016}, "type": "Document"}
{"page_content": "'25 July 2016MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DETERMINATIONS No.01 of20l6\nANNUAL LICENCE FEE OF\nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nDetermination made by the Monetary Board of the Central Bank of Sri Lanka under\nSections 8 and 76D(6) of the Banking Act, No. 30 of 1988, as amended.\nIn terms of Sections 8(l) and 76D(6) of the Banking Act, the Monetary Board has determined\nthat every licensed commercial bank and licensed specialised bank shall pay the licence fee in\nrespect of the calendar year 2017 to the Central Bank of Sri Lanka on or before 31't day of\nJanuary of 2017, based on the total assets of such bank as at end of 2016 as set out in the\ntable below.\nTotal Assets\nas at the end of 2016 (Rs. Bn)Licence Fee\n(Rs. Mn)\nAbove 750 30.0\nAbove 500 to 750 2s.0\nAbove 200 to 500 22.0\nAbove 125 to 200 16.5\nAbove 75 to 725 1 1.0\n25 to 75 5.5\nLess than 25 2.2\n%x\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2016\\bsd_determination_01_2016_annual_licence_fee_e_0.pdf", "page": 0, "year": 2016}, "type": "Document"}
{"page_content": "01 February 2016@0233 \u00a9CDCENTRAL BANK OF SRJ LANKACIRCULARRef: 02/17/500/0012/001Bank Supervision DepartmentTo: The Chief Executive Officers of Licensed Commercial Banks andLicensed Specialised BanksDisplay of Interest Rates, Exchange Rates, Service Charges, Fees and CommissionsReference our previous Circular dated 06 June 2011 on the above subject.All licensed banks are required to display fees charged from customers, for fund transfers through LankaSettle System, Sri Lanka Inter Bank Payment System and Common Electronic Fund Transfer Switch in all branches and publish same in banks\u2019 web sites in the following suggested format, commencing 10 February 2016. These fees so disclosed shall be the fees determined and communicated by the Central Bank of Sri Lanka from time to time.\nMr A A M ThassimDirector of Bank SupervisionDescriptionFee (Rs.)Fund transfers through the LankaSettle systemFund transfers through the Sri Lanka Inter Bank Payment SystemCommon Electronic Fund Transfer Switch (CEFTS)Fund transfers through internet banking- Fund transfers through mobile bankingFund transfers through over-the-counterFund transfers through [Name. of the .Bank] ATMs- Fund transfers through ATMs of other CEFTs members\nG \u00a920 sto\u00ae, epota 30, tfanSoiS \u00a9JOCO, UK . \u00a9\u00a9. 590, \u00a9ewe\u00ae 01, \u00a7 @ota\u00bb\u00a9 \u00a3 94 11 2477100/6596 loin?, 30 ^snir^lu^i iD(Taj<5S\u00bbg> Q&ropibq 1Qu. @60.590, Qewrqpiiq 01, \u00ae6\u00bbIEI\u00abDSC 9411 2477711 banksup@cbsl.lkLevel 6, No. 30, Janacfiiipattii Mawatha, Colombo 1P. 0. Box. 590, Colombo 01, Sri Lanka.www.cbsl.gov.lk", "metadata": {"source": "data\\CBSL\\2016\\Display of Interest Rates, Exchange Rates, Service Charges, Fees and Commissions_0.pdf", "page": 0, "year": 2016}, "type": "Document"}
{"page_content": "$ goor Oo Orotg0\nSamimo lo*#rr arrdld\ncErrkfl ilrr{r( oFsnt lAffr(A\n}g January 2016 CIRCULAR Refz 02n7n50l0095/001\nBank Supervision Department\nTo: The Chief Executive Oflicers of Licensed Commercial Banks and\nLicensed Specialised Banks\nReporting on Cyber Security Events\nAll licensed banks are requested to submit the reports on Cyber Security Events (CSE) as\nfollows with immediate effect:\na. CSE-I as at Annex within one working day from the detection of any CSE.\nb. CSE-II as at Annex within 15 days from the end of each quarter.\nc. Details of all CSE detected by the bank from 01.01.2015 in same format as in (b.)\nabove, if not already submitted.\nThe above details shall be e-mailed to dbsd@cbsl.lk or delivered in confidential cover to the\nDirector of Bank Supervision.\nEncl:\n6 Oo oocr, qeo 80, dooa.rd @rOtD,\no..\u20accr.5go, elotgo Of, \u20ac \u20acplooo\nI $nzttttoorcss6 ggdr orr9, Oal. 30 sdrrrnugt mo$op Gatr(griq I\nE. Ou. eo.590, Oangiq 01, eendtoststrd 6, ilo, 30, tranadhlpafil tlaudu, Colombo I\nP.0.Box.590,Colombo 01, Sil lanl6.\n@ www.cbsl.gov.lk H gtu24rrt11 E banksup@cbsl.lk", "metadata": {"source": "data\\CBSL\\2016\\Reporting on Cyber Security Events_0.pdf", "page": 0, "year": 2016}, "type": "Document"}
{"page_content": "CSE-I\nTo: Director of Bank SuPervision\nRepoft on Cvber Securitv Evenls\nName of Bank:\nName and designation of authorised officer\n(!) Type ofincident: Inhusion/hacking, Malware, Malicious code, Virus, Phirhing, D\u20acoial ofsavice, social engineering, uuauthorized slsteut\nusage, Oth\u20acr (specin\n@) Please provide the amomt in case of finanoial impact and description in case of operational impaot'\n(c) To whoor the event has been internally escalated.\n[Email to dbsd@cbsl.lk or deliver in confidential cover to the Director of Bank Supervision.]Reporting time period:\nType of\nincident(u)Summary of\nincidentDate of\ndetectionPhysical location/\nbranch (if applicable)Estimated/actual\nimpact of the\nincident\n(Financial and\nbnerational)@)Internal reporting\nauthority(c)Law\nenforcement\nauthorities\ninvolved\n(if applicable)", "metadata": {"source": "data\\CBSL\\2016\\Reporting on Cyber Security Events_0.pdf", "page": 1, "year": 2016}, "type": "Document"}
{"page_content": "CSE.II\nTo: Director of Bank SuPervision\nName of Bank:Ouarterlv Report on Cvber Securitv Events\nReporting time Period:\nType of\nincident(\")Summary\nof incidentTime period\nof incidentDate of\ndetectionPhysical\nlocation/ branch\n(if applicable)Impact of the\nincident\n(Financial and\ndperational)(b)Internal reporting\nauthority(\")Involved law\nenforcement\nauthorities\n(if applicable)\nNrme rltd designsdotr of &uthorised qfffcer\n(8) Type ofinadene I rusiodhackilg, Malware, Malicious corle, virus, Phishing D\u20acrdal ofservice, social engineeritrg, uoauthorized system\nusage. Other (specifo)\n(b) Please povide the.amount in oase offi.oanqial impacl alld desoaiption in case ofoperationat impaot'\n(c) To whom the evsnt has beetr intemally escalated.\n[Email to dbsd@,cbs1.lk or deliver in confidential cover to the Director of Bank Supervision.]", "metadata": {"source": "data\\CBSL\\2016\\Reporting on Cyber Security Events_0.pdf", "page": 2, "year": 2016}, "type": "Document"}
{"page_content": "2.2. March 2017ffi\nMONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DETERMINATION No.01 of 2017\nAMENDMENT TO PAWNING CONDITIONS ISSUED TO\nLICENSED COMMERCIAL BANKS\nDetermination made by the Monetary Board of the Central Bank of Sri Lanka under\nSection 83A of the Banking Act, No' 30 of 1988, as amended.\nIn the exercise of the powers conferred by Section 83A of the Banking Act, No. 30 of 1988 (as\namended), the Monetary Board hereby issues the following Conditions amending the Pawning\nConditions issued to licensed commercial banks dated 07 September 1998.\n2. The following new Conditions shall be included immediately after Condition 15(8) of\nPawning Conditions issued to licensed commercial banks dated 07 September 1998.\nSale of Pledges 15. (9) A Pawnee shall report details of purchases of articles where\ntotal value is Rs.500,000 or above at auctions of pawned\narticles, each month to the Director of Bank Supervision on\nor before the 15ft day of the following month in the format\nset out in Schedule 8 annexed hereto.\n15. (10) A Pawnee shall report if there is reason to suspect that there\nis collusion between two or more parties with a view to\nbuying large quantities of go1d.\n15. (11) A Pawnee shall identify and report any purchases of\nsuspicious transactions arising from purchases of gold articles\nfrom auctions of pawned articles to the Director Financial\nIntelligence Unit (FIU) through the Compliance Officer of\nthe bank designated under the Financial Transactions\nReporting Act No. 6 of 2006. A suspicious transaction shall\n' have the same meaning as in Sections 6 and 7 of the Financial\nTransactions Reporting Act No. 6 of 2006 and the Circular\nI3ll2dated 22March20l2 issued by the Director of FIU.\nilo*,^,*-r,\n' Dr.IndrajitCoomaraswamy\nChairman of the Monetary Board and\nGovernor o.f the Central Bank of Sri Lankn", "metadata": {"source": "data\\CBSL\\2017\\BankingActDeterminationNo1of2017_0.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "FU\n'At\no't\nFg-rl\nUI\n\\0\n6\naf)\n(Da\n(DzD\nt!\nHi\n(D\nEE\nt9\nFD\n(!\no\ntt\no\nzp\n@\nG\nD\no\no\no\nFg\nrla\n!roor.lz\nozo\ngoEtt!U'a\nEEiD\n.)\no\no\n{o\noq\n$\n(!\nl{i\nF!\nf)o(D\naor!\nt!\no\nort\no\nt9rl-l\nJ(D\nd\n!D\n,fa\nFD\no\np\nd\no\nU)o\na.(D\no)\na\nlo'\nla)t5lr(lalc\nt15\nilSliilrlrlf,ot0t)\nJ\np\niJo\no)\nor-t\ndo*o'r-t\n(D\n(D\n(,,l\no\ntD\noF+)aiJ(D\n6',\n{\noa\nJpo5\niJt,\no\nzE\no\nD'\no\n(DO\n0e\noEi\n}r\noEt\n(ooo\no!-h\nt?(Drt", "metadata": {"source": "data\\CBSL\\2017\\BankingActDeterminationNo1of2017_0.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA13 January 2017 BANKING ACT DIRECTIONS No. 01 of 2017LOAN TO VALLE RATIOS FOR CREDIT FACILITIESIN RESPECT OF MOTOR VEHIC LESIssued under Sections 46( 1) and 76( J)(I) of the Banking Act. No. 30 of 1988. as amended.The Monetary Board issues Directions as follows for the implementation of loan to value (LTV) ratios in respect of credit facilities granted by licensed commercial banks (LCBs) and licensed specialised banks (LSBs) for the purpose of purchase or utilisation of motor vehicles.1. Empowerment under the Banking Act1.1 In terms of Sections 46(1) and 76(J)( 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 or any LCB and LSB. respectively, regarding the manner in which any aspect of the business of such banks is to be conducted.2. Maximum2.1 Commencing 16 January 2017. credit facilities granted by every licensedLTV Ratiobank for the purpose of purchase or utilisation of vehicles shall not exceed the follow ing percentages of the market value of such vehicles.(i) In respect of unregistered vehicles and registered vehicles which have been used in Sri Lanka for less than one year after the first registration;(a) 90 per cent for commercial vehicles (lorries and heavy- vehicles);(b) 50 per cent for motor cars, sports utility vehicles (SUVs) andvans;(c) 25 per cent for three wheelers; and(d) 70 per cent for any other vehicles.(ii) 70 per cent in respect of registered vehicles which have been used in Sri Lanka for not less than one year after the first registration.3. Exemptions from the Maximum3.1The limits in Direction 2 above will not be applicable to credit facilities granted to any company engaged in tourism and/or transportation forLTVpurchase of vehicle fleets to be utilized for their core business operations.1", "metadata": {"source": "data\\CBSL\\2017\\BankingActDirectionNo1of2017_0.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA13 January 2017 BANKING ACT DIRECTIONS No. 01 of 2017provided that such vehicles financed shall not be transferred to any person or entity within one year from the date of the first registration.3.2 Licensed banks shall have internal limits and adopt adequate risk management procedures in granting credit facilities for this category of vehicles.4. Other Credit 4.1 A licensed bank shall not grant credit facilities for the purpose of Facilities for . ...... ,. . . . .Vehicles purchase or utilisation ot motor vehicles, other than credit facilitiesgranted in accordance with Directions 2 and 3 above.5. Interpretations 5.1 In these Directions:(i) Credit facilities shall mean finance leases, hire purchase facilities andall other credit facilities granted for the purpose of purchase or utilisation of vehicles.(ii) The value of the vehicle shall be the market value obtained from aprofessional valuer at the time of granting credit facilities as per the prevailing practice.6. Revocation of 6.1 The following Directions arc hereby revoked:Directions W Banking Act Directions No. 02 of 2015 on Loan to Value Ratio forLoans and Advances in respect of Motor Vehicles.(ii) Banking Act Directions No. 03 of 2015 on Loan to Value Ratio for Loans and Advances in respect of Motor Vehicles.Dr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n2", "metadata": {"source": "data\\CBSL\\2017\\BankingActDirectionNo1of2017_0.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "15 February 2017MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.02 of20l7\nAMENDMENT TO DIRECTIONS ON THE LOAN TO VALUE RATIOS FOR\nCREDIT FACILITIES IN RESPECT OF MOTOR VEHICLES\nThe interpretations in Direction 5 of the Banking Act Directions No. 01 of 2017 are amended\nby replacing the following:\n5. Interpretations 5.1 Credit facilities shall mean finance leases, hire purchase facilities\nand all other credit facilities granted for the purpose of purchase or\nutilisation of vehicles.\nThe value of the vehicle shall be the market value. Licensed banks\nmay use the following for the purpose of valuing vehicles:\ni) Brand new vehicles - value given by authorized agents\nii) Reconditioned vehicles - valuation considered at customs or\ninvoice value given by the dealer\niii) Registered vehicles - value given by a professional valuer\nLicensed banks should ensure that the valuation is obtained at the\ntime of granting credit facilities and provides a true and fair value.\nThe vehicle classes provided by the Department of Motor Traffic\n(DMT) may be categorised for the pulpose of the Direction as in\nTable 1below:\nle Classes able I - Casation of DM'l'Vehic\nVehicle Category Vehicle Class of\nDMTLTV\nCommercial vehicles (Lorries\nand Heavy Vehicles)c1, c, cE, DE, G1,\nG,J90o/o\nMotor Cars, SUVs and Vans B, Dl, D 50%\nThree wheelers B1 25%\nAny other vehicle A1, A 70%\n5.5 Fleet of vehicles referred to in Direction 3.1 shall mean two or more\nvehicles.5.2\n5.3\n5.4", "metadata": {"source": "data\\CBSL\\2017\\BankingActDirectionNo2of2017_0.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "15 February 2017MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.02 of2017\n5.6 Company engaged in tourism referred to in Direction 3.1 shall mean\na company registered with the Sri Lanka Tourism Development\nAuthority or any other authority to provide services to tourism.\n5.7 A company engaged in transportation referred to in Direction\nshall mean any business entity registered at any state authority\nthe purpose ofbusiness oftransportation ofgoods or passengers.\n5.8 An LTV of 70Yo may be approved for credit in respect of all\nvehicles where applications for credit have been received or credit\nfacilities have been approved by a licensed bank on or before 16\nJanuary 2017.\ntt\"*\"Q w\\\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka3.1\nfor", "metadata": {"source": "data\\CBSL\\2017\\BankingActDirectionNo2of2017_0.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA22 March 2017 BANKING ACT DIRECTIONS No. 03 of 2017AMENDMENT TO REGIONAL DEVELOPMENT BANKS (PAWNING) DIRECTIONS 1998In the exercise of the powers conferred by Section 76J(1) of the Banking Act, No. 30 of 1988 (as amended), the Monetary Board hereby issues the following amendment to the Regional Development Banks (Pawning) Directions issued to Regional Development Banks (now amalgamated and established as Pradeshiya Sanwardana Bank) dated 07 September 1998.2. The following new Directions shall be included immediately after Direction 15(8) of the Regional Development Banks (Pawning) Directions dated 07 September 1998.Sale of Pledges 15. (9) A Pawnee shall report details of purchases of articles where total value is Rs.500,000 or above at auctions of pawned articles, each month to the Director of Bank Supervision on or before the 15th day of the following month in the format set out in Schedule 8 annexed hereto.15. (10) A Pawnee shall report if there is reason to suspect that there is collusion between two or more parties with a view to buying large quantities of gold.15.(11) A Pawnee shall identify and report any purchases of suspicious transactions arising from purchases of gold articles from auctions of pawned articles to the Director Financial Intelligence Unit (FIU) through the Compliance Officer of the bank designated under the Financial Transactions Reporting Act No. 6 of 2006. A suspicious transaction shall have the same meaning as in Sections 6 and 7 of the Financial Transactions Reporting Act No. 6 of 2006 and the Circular 03/12 dated 22 March 2012 issued by the Director of FIU.\u2014pDr. Indrajit CoomaraswamyChairman of the Monetary Board ahd Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2017\\BankingActDirectionNo3of2017_0.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA31 May 2017 BANKING ACT DIRECTIONS No. 04 of 2017AMENDMENT TO DIRECTIONS ON THE LOAN TO VALUE RATIOS FORCREDIT FACILITIES IN RESPECT OF MOTOR VEHICLESThe Directions 5.1 and 5.4 of the Banking Act Directions No. 02 of 2017 on Amendment to Directions on the Loan to Value Ratios for Credit Facilities in Respect of Motor Vehicles are amended by replacing the following:5. Interpretations 5.1 Credit facilities shall mean finance leases, hire purchase facilities and all other credit facilities granted for the purpose of purchase or utilisation of vehicles by end-users.5.4 The vehicle classes provided by the Department of Motor Traffic (DMT) may be categorised for the purpose of the Direction as in Table 1 below:Table 1 - Calegorisation of DMT Vehicle ClassesVehicle Category\u2019Vehicle Class of DMTLTVCommercial vehiclesC1,C, CE,D1,D, DE, Gl.G.J90%Motor Cars, SU Vs and VansB (other than light trucks & single cabs)50%Three wheelersBl25%Any other vehicleAl, A. light trucks & single cabs categorized under B70%Dr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2017\\BankingActDirectionNo4of2017_0.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "lf September 2017MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DETERMINATION No.02 of 2017\nANNUAL LICENCE FEE OF\nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nDetermination made by the Monetary Board of the Central Bank of Sri Lanka under\nSections 8 and 76D(6) of the Banking Act, No. 30 of 1988, as amended.\nIn terms of Sections 8(1) and 76D(6) of the Banking Act, the Monetary Board has determined\nthat every licensed commercial bank and licensed specialised bank shall pay the licence fee in\nrespect of the calendar year 2018 to the Central Bank of Sri Lanka on or before 31't day of\nJanuary of2018, based on the total assets ofsuch bank as at end of2017, as set out in the table\nbelow.\nTotal Assets\nas at the end of 2017 (Rs. Bn)Licence Fee\n(Rs. Mn)\nAbove 750 30.0\nAbove 500 to 750 25.0\nAbove 200 to 500 22.0\nAbove 125 to 200 16.5\nAbove 75 to 125 11.0\n25 to 75 5.5\nLess than 25 2.2\nParagraph No. 01 of the Banking Act Determination\nBanking Act on licence fee to be paid with effect fromissued with respect to Section 8 of the\n01.01.1989 is hereby revoked.\ntleJ\\^\"r--T\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Determination_No_2_of_2017.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS 16 October 2017 No.05 of20l7\nENHANCEMENT OF MINIMUM CAPITAL REQUIREMENT OF BANKS\nIn terms of Sections 46(l) and76J(l) read with Sections 19(3) and 76G, respectively, of the Banking\nAct, No. 30 of 1988, last amended by the Banking Act, No. 46 of 2006, the Monetary Board has\ndetermined with the concurrence of the Minister to increase the minimum capital requirements for\nlicensed commercial banks (LCBs) and licensed specialised banks (LSBs), respectively:\n1. Empowerment 1 . 1 In terms of Sections 46( I ) and 7 6J(1) of the Banking Act, in order to ensure\nunder the the soundness of the banking system, the Monetary Board is empowered to\nBanking Act \nissue Directions to all or any LCB or LSB, respectively, regarding the\nmanner in which any aspect of the business of such banks is to be conducted.\nMinimum\nCapital\nRequirements1.2 In terms of the provisions of Sections 19(3) and 76G of the Banking Act, the\nMonetary Board may vary the amounts specified as the minimum amount\nof capital required to be maintained by LCBs and LSBs, respectively, having\nregard to the assets, liabilities and the viability and stability of the banking\nsystem and the interest of the national economy.\n2.1 Commencing 31.12.2020, the minimum capital requirement of all existing\nLCBs and LSBs shall be as given in Table 1:\nTable 1: Minimum Capital Requirements for Banks\nType,rof Bank,\nLocally Incorporated LCBs 20.0\nBanks Incorporated Outside Sri Lanka\nwith assets over Rs.100 Bn\nwith assets upto Rs.100 Bn10.0\n5.0\nLocally Incorporated LSBs 7.5", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_5_of_2017_e.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "}b October 2017/^ffi.s&:,HWZ\nMONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.05 of20l7\n3. Interpretation\n4. Capital\nPlanning\nProcess\n5. Steps to\nSecure\nCompliance3.1 Capital for this purpose shall mean the sum of the following Web Based\nReturn Codes of Appendix I of Schedule I to the Banking Act Direction No.\n01 of 2016 dated 29 December 2016 on Capital Requirements under Basel\nIII for LCBs and LSBs.\nLCBs and LSBs shall, where necessary, include capital augmentation plans\nto meet the above capital requirements in the annual Intemal Capital\nAdequacy Assessment Process (ICAAP) and submit such ICAAP document\nto the Director of Bank Supervision.\nWhere an LCB or LSB has failed to comply with these Directions, such LCB\nor LSB shall not pay dividends or repatriate profits or adopt any other\nmeasure that will further deteriorate the capital of such LCB or LSB until\nsuch compliance is effected and confirmed by the Director of Bank\nSupervision.\nRestrictions in terms of asset growth and branch expansion will be imposed\n- on LCBs and LSBs which are non-compliant with the above Directions.\nt/.e $^^--7\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka4.1\n5.1\n5.2Equity capital or stated capital/assigned capital 20.2.t.t.t.1\nReserve fund 20.2.r.1.t.2\nPublished retained eamings/(Accumulated\nretained losses)20.2.t.t.1.3\nGeneral or other disclosed reserves 20.2.t.1.1.5\n20.2.t.1.1.6 Only unpublished current year's profit/(losses)\nincluded in this Web based retum code\n20.2.2.1.t.1 Qualifuing additional Tier I capital instruments", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_5_of_2017_e.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n 29 November  2017 BANKING ACT DIRECTIONS  No. 06 of 201 7 \n1 \n \nFINANCIAL DERIVATIVE TRANSACTIONS FOR  \nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS  \nThe Monetary Board issues the  following  Directions on Financial Derivative Transactions for Licensed \nCommercial Banks (LCBs) and Licensed Specialised Banks (LSBs).                                          \n1. Empowerment \nunder the \nBanking Act  1.1  In terms of Sections 46(1) and 76J(1) of the Banking Act, in order to ensure \nthe s oundness of the banking system, the Monetary Board is empowered to \nissue Directions to all or any LCB and LSB, respectively, regarding the \nmanner in which any aspect of the business of such banks is to be conducted.  \n2. Applicability  2.1  These Directions will cover derivative transactions in foreign currency of \nLCBs and LSBs which are authorised  to offer  such derivative transactions in \nterms of the Foreign Exchange  Act of Sri Lanka.  The LCBs and LSBs shall \nherein after be referred to as Eligible Banks (EBs).  \n2.2  These Directions shall be applicable to the Domestic Banking Units (DBUs) \nand Off -shore Banking Units (OBUs) of EBs.  \n3. Commencement  \nof derivative \ntransactions  3.1  \n LCBs which intend to engage in financial derivative transactions  shall notify \nits interest , prior to the commencement of the initial  transaction , to the \nDirector  of Bank Supervision (DBS) with a copy to the Director of \nInternational Operation s Department of the Central Bank of Sri Lanka  \n(CBSL) . \n3.2  LSBs shall obtain the written approval of DBS to engage in each deriv ative \nspecified in 5 .2. \n4. Board approved \npolicies and \nprocedures  4.1  \n EBs shall have in place B oard approved policies and procedures on \nderivative transactions and risk management framework to identify, quantify \nand evaluate the exposures, manage risk and monitor performances related to \nderivative transactions.", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "derivative transactions.  \n 4.2  EBs shall ensure that appropriate expertise and capacity building are in place \nto engage in financial derivative transactions.", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n 29 November  2017 BANKING ACT DIRECTIONS  No. 06 of 201 7 \n2 \n \n5. General Terms \nand  Conditions  5.1  \n Derivatives transactions may be entered into for the following purposes:  \na) End User (EU) Deals: Transactions for the purpose of hedging EBs own \nassets and liabilities (other than the assigned capital and retained \nearnings ) and managing their own risk profile as may be necessary from \ntime to time, however, not for speculative purposes.  \nb) Non Market Maker  (NMM) Deals: Transactions executed by EBs with \ntheir customers , i.e., any party other than an EB or with another EB with \nthe intention of making a spread. In these transactions an EB shall not \ntake any market risk into its own books and shall cover the transaction on \nthe same day on a back -to-back basis with another EB in Sri Lanka or \nwith a foreign counterparty.  \nc) Derivative Mar ket Maker (DMM) Deals: Transactions executed by \nEBs with their customers or with another EB while taking the market risk \ninto its own books.  \n5.2  Derivatives permitted under these Directions are as follows:  \na) Swaps  \nb) Options  \nc) Forward Rate Agreements  \nd) Forward Contracts  \ne) Swaptions  \nf) Such other instruments as may be specified by the Monetary Board from \ntime to time.  \n5.3  EBs shall ensure th e following :  \na) all derivatives offered to customers are based on valid underlying \ntransactions which include current account transactions and permitt ed \ncapital account transactions.  \nb) the use of permitted derivative s is only for the purpose of hedging or \nmanaging the risk arising from assets or liabilities of customers or valid \ntransactions and not for speculative purposes.", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n 29 November  2017 BANKING ACT DIRECTIONS  No. 06 of 201 7 \n3 \n \nc) the notional principal amount, including any leverage of the derivative \nshall not exceed the outstanding amount of the underlying \ntransaction/asset or liability or the underlying exposure.  \n5.4  EBs shall use products listed in 5.2 above to enter in to back to back \ntransactions with a foreign counterpart.  \n5.5  EBs are permitted to hedge contingent exposures or such risk s arising from \nbalance sheet exposures of their customers.  \n5.6  EBs may allow importers and exporters to hedge their exposure including a \ncontract based on estimated transaction value. The estimated transaction \nvalue shall be determined based on their audited financials or by averaging \nthe preceding three contract values or immediately preceding contract value, \nwhichever  is higher, subject to confirmation by an EB.   \n5.7  Parties may unwind/sell back a derivative partially or fully, if they consider \nsuch a derivative is no longer required , as follows:  \na) all derivative contracts once unwound are eligible to be rebooked, \nsubject to the terms specified in these Directions .  \nb) any customer who wishes to unwind a derivative contract before \nmaturity while the underlying transaction still exists may do so with the \nmarked-to-market loss charged to such customer.  \nc) a marked -to-market gain  (financial gain)  should not be paid to the \ncustomer.   \nd) the rate benefit , if any,  may be passed to the customer at the time of \nrebooking.  \n5.8  In case of insolvency, if the claim of the counterparty provides for the \nnetting of the mutual transaction between the insolvent party and the \ncreditor, the amount payable by one party shall be set off against the amount \npayable by the other party, and only the net balance shall be paid or \nreceived .", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 2, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n 29 November  2017 BANKING ACT DIRECTIONS  No. 06 of 201 7 \n4 \n \n5.9  The cost of a derivative transaction with non -residents shall be paid out of \nrepatriable funds and/or inward remittances through normal banking \nchannels.  \n5.10  All derivatives entered in to by an EB under Directions on Financial \nDerivative Products issued on 01 August 2009 (Ref: 33/03/001/0029/002) \nand Directions to Authorized Dealers on Forward Contracts in Foreign \nCurrencies issued on the 11 March 2010 (Ref: 06/04/02/2010) can be \ncontinued till the maturity of the underlying transactions, adhering to th e \npreviously issued Directions. The unwound derivative contracts entered \nunder previous Directions can be rebooked only under the terms of the new \nDirections.  \n5.11  \n \n Contracts may be entered into with customers whose underlying transactions \nare established with another authorised dealer provided documentary \nevidence is furnished by the said authorised dealer on each transaction.  \n6. Prohibited \nActivities  6.1  EBs shall not engage in facilitating derivative transactions on behalf of any \nforeign counterpart to resident customers unless the resident customer has \nobtained specific approval of the Head of the Department of Foreign \nExchange  of CBSL .  \n6.2  EBs shall not enter in to derivative transactions in respect of any foreign \ncurrency exposures or risks arising from  foreign currency  deposits or \nretained  earnings, held overseas.  \n6.3  Derivatives involving making of an upfront payment other than option \npremiums, in any currency by EB to the customer shall not be permitted.  \n7. International \nSwap and \nDerivative \nAssociation \n(ISDA)  7.1  EBs shall sign ISDA Master Agreement with the counterparty for \nderivatives, unless otherwise both parties agree to refrain from signing \nISDA .  \n7.2  EBs shall obtain a written consent from the counterparty where it was agreed \nto refrain from signing ISDA.", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 3, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n 29 November  2017 BANKING ACT DIRECTIONS  No. 06 of 201 7 \n5 \n \n7.3  EBs shall maintain transaction specific agreements and records.  \n8. Customer \nAwareness  8.1  EBs shall ensure that the customers clearly understand the risks of the \nderivative transactions and that the customers have established sufficient \nmeasures to monitor and manage the risks arising from the prospective \ntransactions entering into.  \n8.2  EBs shall provide adequate information on the transaction, especially with \nregard to the conditions and clauses to be incorporated into the product \nindicating the relevant benchmarks, fixing rates, strike prices and premium \nas the case may be, and a detailed risk scenario analysis to ensure the hi ghest \nlevel of transparency.  \n8.3  EBs shall obtain a written confirmation from the customer prior to entering \ninto a derivative transaction that the customer has understood the nature of \nthe products and their inherent risks.  \n8.4  EBs shall obtain an undertaking in writing from customers that their total \nvalue of the derivative transactions with all EBs do not exceed the exposure \nor the value of underlying transactions.  \n8.5  EBs shall also satisfy themselves on a professional analysis, of the \ninstitutional capacity and the overall suitability of the customer to engage in \nthe der ivative products offered by EB prior to entering into such contracts.  \n9. Eligible \nCurrencies  9.1  EBs shall conduct derivative transactions in designated currencies as per the \nrequest of the customer and in accordance with internal policies approved by \nits Board of Directors.  \n10. Tenure   10.1  EBs shall ensure that the date of maturity of the derivative contract shall \ncorrespond to the maturity date of the underlying transaction and  shall not, \nunder any circumstance, extend beyond the date of the underlying \ntransaction, and the  maximum maturity  period   of  a  derivative transaction", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 4, "year": 2017}, "type": "Document"}
{"page_content": "transaction, and the  maximum maturity  period   of  a  derivative transaction  \nshall  not  exceed  ten  (10)  years.", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 4, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n 29 November  2017 BANKING ACT DIRECTIONS  No. 06 of 201 7 \n6 \n \n11. Reference/ \nValuation \nBenchmark  11.1  The parties involved shall be free to use any benchmark with sufficient \ntransparency on mutual agreement for reference and valuation purposes.  \n12. Reporting  12.1  EBs shall submit to the International Operations Department of CBSL on a \nmonthly basis within 15 days from the end of the month, a statement of the \ntransactions undertaken within the month in the format attached in Annex I.  \n13. Definition  \n The following definitions shall be applicable for purposes of these Directions . \n13.1  Derivative  \nA derivative is a financi al instrument or a contract  as defined i n Sri Lanka \nAccounting Standards.  \n13.2  Foreign Counterpart  \nA foreign counterpart  shall mean:  \na) A bank outside Sri Lanka  \nb) An internationally recognised derivative exchange  \n 13.3  Permitted Derivative T ransactions  \na) Swaps  \nA swap is a bilateral agreement to exchange cash flows at specified \nintervals (payment dates) during the agreed -upon life of t he transaction \n(maturity or tenure ). Entering into a swap typically does not require the \npayment of a fee . Under this direction EBs are eligible to ente r into \ninterest rate, cross -currency and commodity swaps.  \nb) Options  \nAn option is an agreement that gives the buyer, who pays a fee \n(premium), the right but not the obligation to buy or sell a specified \namount of an underlying asset at an agreed upon price (strike or exercise \nprice) on or until the expiration of the contrac t (expiry). A call option is \nan option to buy the underlying  and a put option is an option to sell the \nunderlying. Under this Direction EBs are eligible to issue options based \non an underlying interest rate, currency and commodity .", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 5, "year": 2017}, "type": "Document"}
{"page_content": "Annex I  \nBanking Act Directions No. 06 of 2017  \nFinancial Derivative Transactions for Licensed Commercial Banks and Licensed Specialised Banks  \n \nBank - \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..    Month /Year\u2026\u2026\u2026/ \u2026\u2026\u2026\u2026 \n \nTable 01 - Monthly Derivative Product Transactions  \nProduct Type: Swaps  \nDeal  \nDate  Product  Counterparty/ \nCustomer  Notional Principal  Maturity  \nDate  Nature of  \nunderlying  \ntransaction  Details of  \nback to  \nback  \ntransaction  Uncovered  \nExposure  Reference  \nBenchmark  Remarks  \nCurrency  Amount  \n \n \n \n \n           \n \nTable 02 - Monthly Derivative Product Transactions  \nProduct Type: Forwards  \nDeal \nDate  Counterparty  \n/Customer  Buy/Sell  Maturity \nDate  Currency  Amount  Forward \nRate  Back \nto \nBack \nDeal \n(Y/N)  Back to Back \nCounterparty  Underlying \nTransaction  Remarks", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 7, "year": 2017}, "type": "Document"}
{"page_content": "Annex I  \nBanking Act Directions No. 06 of 2017  \nFinancial Derivative Transactions for Licensed Commercial Banks and Licensed Specialised Banks  \n \nTable 03  - Monthly Derivative Product Transactions  \nProduct Type: Currency Options  \nDeal  \nDate  Counterparty/ \nCustomer  Option \nExercise \nDate  Bank Call  Bank P ut Strike \nprice  Back to \nback Deal  \n(Y/N)  Back to back \ncounterparty  Nature of \nunderlying \ntransaction  Remarks  \nCCY * Amount  CCY * Amount  \n            \n*CCY - Currency  \nTable 04  - Monthly Derivative Product Transactions  \nProduct Type: Options  \nDeal  \nDate  Counterparty/ \nCustomer  Product  Maturity  \nDate  Currency  Amount  Deal  \nRate  Back to \nback Deal \n(Y/N)  Back to back  \ncounterparty  Underlying  \ntransaction  Remarks", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 8, "year": 2017}, "type": "Document"}
{"page_content": "Annex I  \nBanking Act Directions No. 06 of 2017  \nFinancial Derivative Transactions for Licensed Commercial Banks and Licensed Specialised Banks  \n \nTable 05 - Transaction Ca ncelled and Wound -up (Premature)  \n \n \nTo be reported within 15 days from the end of the month to the International Operations Department of the Central Bank of Sri Lanka through \ndfx@cbsl.lk .   Deal  \nDate  Product  \nas \nreported  \nto CBSL  Customer/  \nCounterparty  Notional  \nPrinciple  Reference to  \noriginal transaction  \nalready reported to  \nthe CBSL  Original \nDate of \nMaturity  Date of \ncancellation or  \nwinding up Details of  \nBack to  \nBack  \nTransaction  Reference/  \nBenchmark  Remarks/  \nReasons for  \ncancellation", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_6_of_2017_e.pdf", "page": 9, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n12 December  2017   BANKING ACT DIRECTIONS  No. 07 of 2017  \n1 \n \n FOREIGN CURRENCY BORROWINGS BY LICENSED BANKS   \nForeign currency borrowings are an  important source of funding for banks. However, \nexcessive and unregulated foreign capital flows are likely to cause unwarranted \nmacroeconomic and financial stability concerns in a country.  \nThe Monetary Board  introduces a policy framework for foreign currenc y borrowings of \nlicensed banks with the objecti ves of addressing  the high dependence  on foreign currency \nborrowings  and the resulting  exposure  of licensed banks  to foreign exchange risk and \nminimising  the pressure on  the reserves and exchange rate of the country arising  from large  \nborrowings in foreign  currency.  \nAccordingly, the Monetary Board  issues Directions to licensed commercial banks  (LCB)  and \nlicensed specialised banks  (LSB)  as follows:  \n1. Empowerment \nunder the \nBanking Act  1.1  In terms of Sections 46(1) and 76 J(1) of the Banking Act  No. 30 of \n1988 , in order to ensure the soundness of the banking system , the \nMonetary Board is empowered to issue Directions to all or any LCB \nand LSB, respectively, regarding the manner in which any aspect of \nthe business of such bank or banks is to be conducted.   \n2. Appl icability  2.1  These Directions shall be applicable to  all foreign currency \nborrowings  of LCBs and LSBs , hereinafter referred to as licensed \nbanks . \n3. Tenure  3.1  Foreign currency borrowings with a remaining maturity of:  \n(i) 3 years or less  will be considered as short -term borrowings; and  \n(ii) more than 3 years will be considered as long -term borrowings.  \n4. Limits on \nForeign \nCurrency \nBorrowings  4.1  The maximum outstanding amount of foreign currency borrowings \nobtained by a licensed bank shall be determined as a percentage of \ntotal assets as per the latest audited accounts.", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_7_of_2017_e.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n12 December  2017   BANKING ACT DIRECTIONS  No. 07 of 2017  \n2 \n \n4.2  The percentage of foreign currency borrowings of a licensed bank \nshall be based on the sum of scores assigned for each licensed bank \nbased on the external long term credit rating and the total capital \nratio of the bank as given in Tables 1 and 2 below:  \n Table 1 \u2013 Calculation of the Score  \nBank\u2019s Credit Rating  Bank\u2019s Total \nCapital Ratio  Score Assigned \nto Each Cell  \nAAA to AA - or equivalent  >14.0%  3 \nA+ to A - or equivalent  13.6%  - 14.0%  2 \nBBB+ to BBB - or equivalent  12.5% - 13.5%  1 \nBelow BBB -  <12.5%  0 \nTable 2 - Borrowing Limits  as a Percentage of Total Assets  \nSum of Score  Short -Term  Total  \n1 - 2 1.5%  5.0%  \n3 - 4 1.5%  7.5%  \n5 - 6 1.5%  10.0%  \n \n5. Approval of the \nMonetary \nBoard  5.1  Any foreign currency borrowings in excess of limits specified in \nDirection 4 above  shall be undertaken with the prior written approval \nof the Monetary Board, under exceptional circumstances of national \ninterest.   \n5.2  The Monetary Board may grant such approval to exceed the \napplicable limit of foreign currency borrowing s of a licensed bank by \n5% of assets, on a case -by-case basis, subject to terms and conditions \nit may deem fit, taking into consideration of the  macroprudential \naspects  and provisions in Directions 6, 7  and 8 below.  \n5.3  Borrowings  approved by the Monetary Board under the Direction 5.2 \nabove  shall be undertaken within 3  months from the date of the  \napproval of the Monetary Board .", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_7_of_2017_e.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n12 December  2017   BANKING ACT DIRECTIONS  No. 07 of 2017  \n3 \n \n6. General Terms \nand Conditions  6.1  All foreign currency borrowings of a licensed bank shall be approved \nby the Board of Directors  of the bank . \n6.2  Licensed banks shall comply with al l prudential requirements  at all \ntimes , including, but not limited to, minimum capital  under Basel III , \nStatutory Liquid Assets Ratio s, Liquidity Coverage Ratio  and Net \nOpen Position . \n6.3  Licensed banks shall hedge interest rate and  foreign exchange  risks  \nand manage the maturity mismatch arising from foreign currency \nborrowings .  \n6.4  Hedging with an i nternational counterparty is encouraged wher e the \nforeign currency borrowed  is converted to another foreign currency.  \n6.5  Foreign currency borrowings with a maturity of less than a year shall \nnot be utilised to grant credit facilities with a maturity of more than a \nyear. \n6.6  Licensed banks shall  prove  their ability to service repayments  of \nforeign currency borrowing in a timely manner.  \n7. Eligible \nForeign \nCurrency \nBorrowings  7.1  Lender should have a good track record as a stable financial \ninstitution. Possible lenders are:  \n(i) Multilateral Development Banks  \n(ii) Banks with international repute  \n(iii) Foreign Government owned or affiliated agencies  \n(iv) Head Office and branches of foreign banks  \n7.2  Interest rates (inclusive of all related costs) of the borrowing shall be \ncompetitive . \n7.3  Borrowings shall not be settled prior to the initial specified date of \nsettlement  and shall not carry call or put option features.", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_7_of_2017_e.pdf", "page": 2, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n12 December  2017   BANKING ACT DIRECTIONS  No. 07 of 2017  \n4 \n \n7.4  Bunching effect from repayments shall not arise.  \n7.5  Borrowings shall not result in excessive credit growth . \n8. Utilisation of \nForeign \nCurrency \nBorrowings  8.1  Long -term foreign  currency  borrowings shall be utilised for \nlending/investment purposes in the country to : \n(i) fund export s, import substitution, infrastructure , government \ndevelopment projects  and small and medium enterprises  \n(ii) settle or retire current foreign currency loans   \n(iii) invest in Sovereign Debt of the Government of Sri Lanka and \nactivities of national importance  \n9. Application to \nbe submitted  9.1  Licensed banks may submit a written request with following details  \nto obtain the Monetary Board approval under Direction 5 above:   \n(i) Profile of the Lender  \n(ii) Features of the Loan  \n(iii) Specific purpose/objectives with target s \n(iv) Performance status of existing foreign  currency l oans \n(v) Proposed risk management mechanism  \n10. Exclusion from \nthe maximum \nlimits  10.1  Foreign currency borrowings from the Head Office  or any branch  \noperating outside Sri Lanka of an LCB  incorporated outside Sri \nLanka will be exempted from th e limits specified in Direction  4 \nabove, provided the proceeds are used for the intended purpose the \nborrowing is obtained.  \n10.2  Borrowings utilised for investments in Development Bonds, \nSovereign Bond s and Treasury  Bonds  issued by the Government of \nSri Lanka,  held to maturity for more than 3 years . \n11. Interpretations  11.1  Total assets shall be  the amount as per the latest audited statements.  \n11.2  Foreign currency shall mean any designated foreign currency.", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_7_of_2017_e.pdf", "page": 3, "year": 2017}, "type": "Document"}
{"page_content": "l2Decemb er 2017MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.07 of20l7\n12.Implementation l2.I These Directions shall come into effect from 01 January 2018.\n13. Transitional\nArrangement\n14. Revocation13.1 Any licensed bank which has obtained foreign currency borrowings\nin excess of the maximum limit specified under Direction 4 above\nshall not be permitted to borrow further, until such time the\noutstanding amount of foreign cuffency borrowings falls below the\nmaximum limit.\n13.2 Approvals granted by the Monetary Board to a licensed bank\nexceed the maximum limits on foreign currency borrowings prior\nthese Directions will lapse by 3 1 March 20 1 8.\nl4.l The Circular No. BD/FX/196 dated 13 January 1997 issued by the\nChief Accountant is hereby revoked.\nfl\"**-\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lankato\nto", "metadata": {"source": "data\\CBSL\\2017\\Banking_Act_Directions_No_7_of_2017_e.pdf", "page": 4, "year": 2017}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\n0l February 2017 CIRCULAR No.01 of 2017\nIMPLEMENTATION OF BUDGET PROPOSALS 2017\nIN RESPECT OF BANKING SERVICES\nWe wish to draw your attention to the national policy approved in the Budget 2017 in respect\nof the following categories of banking service requirements of the country and request all\nlicensed banks to take appropriate measures to implement same.\nI Distribution 1.1\nof Credit to\nIdentified\nSectors\nEnhancing\nBanking\nServices\n3 Definition 3.12.1Credit granted by licensed banks may not be less than the following\npercentages of total loans:\n(D 10 per cent each for Small and Medium Enterprises (SMEs),\nExports and Tourism activities\n(ii) 10 per cent for Agriculture in line with the existing circulars\n(iii) 5 per cent each for Youth and Women for credit needs\nCredit granted by bank branches for business development in the\nrespective area may not be less than 15 percent of deposits mobilized\nby each branch within the same area.\nBanks may streamline existing processes to expedite the grant of\ncredit with a value of less than Rs. 5 million in less than 1 month.\nAt least one branch in each district may be opened on all 7 days of\nthe week excluding the religious holidays.\nEnterprises with an annual turnover not exceeding Rs. 750mn will be\nconsidered as SMEs for the purpose of this circular in line with the\ndefinition of SME adopted by the Department of Industry and\nCommerce in its National Policy Framework for SME Development.\nCredit granted to agriculture shall continue to be in terms\nCirculars on Mandatory Lending to Agriculture Sector issued\nDirector of Bank Supervision.2.2\n2.3\nof the\nby the3.2", "metadata": {"source": "data\\CBSL\\2017\\BSDCircularNo1of2017_0.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "0l Februarv 2017CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\nCIRCULAR No.01 of 2017\nJ.JWhen classifying credit to the above sectors for the purpose of\ncompliance with this circular, credit granted to certain borrowers in\nsectors in Item 1 above may fall within more than one sector in the\nevent such credit overlaps across identified sectors.\nCommencing 1 July 2017, all licensed banks shall report details of\nItem 1 above to the Director of Bank Supervision within 30 days\nfrom the end of each quarter in the attached format in order to\nmonitor the bank's compliance with the national policy.\nIA A M Thassim\nDirector of Bank Supervision4 Reporting 4.1\nW", "metadata": {"source": "data\\CBSL\\2017\\BSDCircularNo1of2017_0.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "Annex I\nDistribution of Credit Sector-wise under Budget Proposals 2017\nName of Bank\nPosition as at\nSeetor Credit Outstanding\n(Rs. Mn)As a 96 of Total\nCredit Granted\nIAgriculture\n2Small and Medium\nEnterprises\n1JExport\n4Tourism\n5Youth\n6Women\nNote l: Reference to Bank Supervision Department Circular No. 01 of 2017 dated 01't\nFebruary 2017.\nNote 2: The above details shall be e-mailed to banksup@cbsl.lk within 30 days from the end\nofeach quarter.\nDate:\nName and designation of authorised officer", "metadata": {"source": "data\\CBSL\\2017\\BSDCircularNo1of2017_0.pdf", "page": 2, "year": 2017}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\n?t.N4av 2017 CIRCULAR No.02 of20l7\nInterest Rates on Credit Products\nInstructions of the Monetary Board on interest rates on credit cards and other loans and\nadvances and penal interest rates charged on overdue loans and advances by licensed banks\nare hereby issued for implementation commencing 01 July 2017.\n1 InterestRates 1.1 Commencing 01 July 2017, licensed banks may offer or charge\ninterest rates on credit products as per their policies.\n2 Adequate\nDisclosures\nBasis of\nComputing\nthe Penal\nInterest2.1 Licensed banks shall publish:\n(i) Applicable interest rates per annum on credit products, in a\nlegible manner when promoting credit products in any media at\nall times.\n(ii) Applicable penal interest rates per annum , if any, and the basis\nof computation, at least in the bank's website for the information\nof the public and shall be updated regularly to reflect the current\nrates.\n2.2 Licensed banks shall inform the borrowing customers of:\n(i) Applicable interest rates on credit products prior to completion\nof credit documentation with respective borrowers.\n(ii) Any subsequent changes to the interest rates prior to effecting\nsuch revision to existing credit.\n(iii) Applicable penal interest rates, if any, and the basis\ncomputing such rates prior to charging of penal interest at\npoint ofsuch overdue credit.\ni. f Penal interest, if any, shall be charged only for the amount in arrears\nduring the overdue period.of\nthe", "metadata": {"source": "data\\CBSL\\2017\\bsd_circular_no_2_of_2017_e_0.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "2b NfLav 2017CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\nCIRCULAR No.02 of20l7\n4 Weekly\nReporting\n5 Revocation\nof previous\ncirculars4.1\n5.1Licensed banks shall report interest rates on all loans and advances\nand penal interest rates through the Web Based Off-Site Surveillance\nSystem retum BSD-V/F- 1 3-IR-Interest Rates.\nThe following circulars applicable to interest rates issued by the\nDirector of Bank Supervision are hereby revoked:\n(i) Circular Ref. No. 02117160010021001 dated 21 September 2010\non Reduction of Interest Rates.\n(ii) Circular Ref. No. 02117160010021001 dated 17 April 2012 on\nInterest Rates on Credit Cards and Housing Loans.\n(iii) Circular Ref. No. 02117160010021001 dated 07 June 2013 on\nInterest Rates on Credit Cards and Other Loans and Advances.\n(iv) Circular Ref. No.02117160010021001 dated 26 July 2013 on Cap\non Penal Interest Rates Charged by Licensed Banks on Loans\nand Advances.\n,l'l-\nA A M Thassrm\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2017\\bsd_circular_no_2_of_2017_e_0.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\n>1 Mav 2017 CIRCULAR No.03 of20l7\nConcessions in Respect of Credit Granted to Flood Affected Borrowers\nLicensed banks may grant the following concessions on a case-by-case basis to their\nborrowers who have been affected by the recent floods, adverse weather conditions and\nconnected circumstances in terms of the national policy adopted to facilitate rehabilitation of\nbusinesses and normal operations of such borrowers in the national interest.\nI Moratorium 1.1 Grant a moratorium of not exceeding 3 months with effect\nfrom today in respect of all performing credit facilities of\nborrowers as at 25 May,2017 which have been affected by\nfloods, adverse weather conditions and connected\ncircumstances.\n2 Penal lnterest 2.1Waive the penal interest on overdue loans of the borrowers\nunder the above moratorium and non-performing borrowers\nas affected above who are willing to settle their loans on\nrescheduled terms as agreed with banks in order for them to\nrecommence/restructure their business activities.\nLicensed banks shall maintain necessary documents to\nsubstantiate grant of such concessions.\nLicensed banks shall report details of such borrowers in the\nannexed format to the Director of Bank Supervision by 30\nIune 2017 .3 Reporting 3.1\n3.2\n\\hM,\"ry\nActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2017\\bsd_circular_no_3_of_2017_e_0.pdf", "page": 0, "year": 2017}, "type": "Document"}
{"page_content": "Annex\nCircular No 3 of 2017\nConcessions in Respect of Credit Granted to Flood Affected Borrowers\nDetails of Borrowers Affected by Recent Floods\nName of Bank:\nI certifu that the information submitted in the above return is to the best of rny knowledge and belief,\ncorrect.Serial\nNumberName of\nBorrowerName of\nBranchDivisional\nSecretariatPurpose of LoanAmount Outstanding\nRs.'000s\n(As at 25.05.2017)\nPlease e-mail to dbsd@cbsl.lk by 30 June 2017Name and Designation of Authorised Officer", "metadata": {"source": "data\\CBSL\\2017\\bsd_circular_no_3_of_2017_e_0.pdf", "page": 1, "year": 2017}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA18 October 2018 BANKING ACT DETERMINATION No. 01 of 2018ANNUAL LICENCE FEE OFLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKSDetermination 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 8(1) and 76D(6) of the Banking Act, the Monetary Board has determined that every licensed commercial bank and licensed specialised bank shall pay the licence fee in respect of the calendar years 2019 and 2020 to the Central Bank of Sri Lanka on or before 31st day of January of each year, based on the total assets of such bank as at the end of the previous year, as set out in the table below.Annual licence fee for years 2019 and 2020Total Assetsas at the end of the previous year (Rs. Bn)Licence Fee (Rs. Mn)Above 100033Above 750 to 100032Above 500 to 75026Above 200 to 50023Above 125 to 20017Above 75 to 12511.625 to 756Less than 253\nDr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Determination_No_1_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "6. Permitted\nAgent Banking\nBusiness30 November 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LAI{KA\nBANKING ACT DIRECTIONS No.10 of2018\nAMENDMENTS TO DIRECTIONS ON APPOINTMENT OF AGENTS\nOF LICENSED BANKS\nThe following new Direction shall replace Direction 6 of the Banking Act Directions No. 02 of\n2018 on appointment of agents of licensed banks dated 24May 2018.\n6.), The agent shall provide the following banking products/services only\nto the existing customers of the licensed bank:\n(i) deposit acceptance;\n(ii) deposit withdrawal;\n(iii) receiving loan repayments;\n(iv) receiving credit card payments;\n(v) facilitating utility bill payments;\n(vi) account balance request;\n(vii) fund transfer within the same licensed bank; and\n(viii) any other activity as approved by CBSL.\nCash delivery activities handled by a third party on behalf of the\nlicensed bank where such third party meets the customers of the\nlicensed bank to collect or deliver cash shall be treated under\nDirection 6.1(viii). Such activities shall be covered under a\ncomprehensive insurance policy and licensed bank shall be able to\nclaim insurance on any risk covering the entire process of cash\ncollection/delivery and storage at third party vault. Direction 9.1(vii)\ndoes not apply for such activities.\nThe agent may also provide the service of disbursement of inward\nremittances.\n,L\"=\"\" N ^.7\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka6.2\n6.3", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_10_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "30 November 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.11 of2018\nFOREIGN CURRENCY BORROWINGS BY LICENSED BANKS\nForeign currency borrowings are an important source of funding for banks. However,\nexcessive and unregulated foreign capital flows are likely to cause unwarranted\nmacroeconomic and financial stability concerns in a country.\nThe Monetary Board introduces a policy framework for foreign curency borrowings of\nlicensed banks with the objectives of addressing the high dependence on foreign cumency\nborrowings and the resulting exposure of licensed banks to foreign exchange risk and\nminimising the pressure on the reserves and exchange rate of the country arising from large\nborrowings in foreign currency.\nAccordingly, the Monetary Board issues Directions to licensed commercial banks (LCBs)\nand licensed specialised banks (LSBs) as follows:\n1. Empowerment\nunder the\nBanking Act\n2. Applicability 2.1\n3. Tenure\n4. Limits on\nForeign\nCurrency\nBorrowings1.1In terms of Sections 46(1) and 76J(l) of the Banking Act No. 30 of\n1988, in order to ensure the soundness of the banking system, the\nMonetary Board is empowered to issue Directions to all or any LCB\nand LSB, respectively, regarding the manner in which any aspect of\nthe business ofsuch bank or banks is to be conducted.\nThese Directions shall be applicable to all foreign cuffency\nborrowings made from local and foreign sources by LCBs and\nLSBs, hereinafter referred to as licensed banks, covering Domestic\nBanking Units and Off-Shore Banking Units.\nForeign cumency borrowings with a remaining maturity of:\n(i) 1 year or less will be considered as short-term borrowings; and\n(ii) more than 1 year will be considered as long-term borrowings.\nThe maximum outstanding amount of foreign cuffency borrowings\nobtained by a licensed bank shall be determined as a percentage of\ntotal assets as per the latest annual audited accounts or interim\naccounts certified by the Extemal Auditor of the licensed bank.3.1\n4.1", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_11_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "30 November 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 11 of2018\n5.1 5.\n5.2Approval of the\nMonetary\nBoard4.2 The percentage of foreign currency borrowings of a licensed bank\nshall be based on the sum of scores assigned for each licensed bank\nbased on the external long-term credit rating and the total capital\nadequacy ratio of the bank as given in Tables I and2 below:\nTable 1 - Calculation of the Score\nBank's Credit Rating Bank's Total\nCapital\nAdequacy\nRatioScore\nAssigned to\nEach Cell\nAAA to AA- or equivalent >14.jYoaJ\nA+ to A- or equivalent 13.6% - t4.0% 2\nBBB+ to BBB- or equivalent r2.5% - 13.s%\nBelow BBB- <12.5Yo 0\nTable 2 - Borrowing Limits as a Percentage of Total Assets\nSum of Score Short-Term Total\nt-2 t5% 5.0%\n3-4 2.0% 7.5%\n5-6 25% t0.0%\nAny foreign currency bonowings in excess of limits specified in\nDirection 4 above shall be undertaken with the prior written\napproval of the Monetary Board, under exceptional circumstances of\nnational interest.\nThe Monetary Board may grant such approval to exceed the\napplicable limits of foreign cuffency bonowings of a licensed bank\nby 5% of assets, on a case-by-case basis, subject to terms and\nconditions it may deem fit, taking into consideration of the\nmacroprudential aspects.\n5.3 Borrowings approved by the Monetary Board under the Direction\n5.2 above shall be undertaken within 3 months from the date of the\napproval of the Monetary Board.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_11_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "30 November 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.11 of2018\n6. General Terms 6.1\nand Conditions\n7. Eligible\nForeign\nCurrency\nBorrowings6.2\n6.3\n6.4\n6.5\n6.6(i) All foreign currency borrowings of a licensed bank shall be\napproved by the Board of Directors of the licensed bank or the\nregional monitoring office or the management committee\noperating under delegated authority of the Board of Directors of\nforeign banks.\n(ii) The Board of Directors or the relevant authority as specified\nabove, may establish a pre-approved limit for foreign currency\nborrowings as an altemative to approving each borrowing.\nLicensed banks shall comply with all prudential requirements at all\ntimes, including, but not limited to, minimum capital adequacy ratio\nunder Basel III, Statutory Liquid Assets Ratio, Liquidity Coverage\nRatio, Net Stable Funding Ratio, and Net Open Position.\nLicensed banks shall hedge interest rate and foreign exchange risks\nand manage the maturity mismatch arising from foreign currency\nborrowings.\nHedging with an international counterparty is encouraged where the\nforeign cuffency borrowed is converted to another foreign currency.\nLicensed banks shall put in place intemal policies and procedures\napproved by the Board of Directors for management of foreign\ncrurency assets and liabilities along with appropriate foreign\ncurrency maturity mismatch limits.\nLicensed banks shall prove their ability to service repayments of\nforeign currency borrowing in a timely manner.\n7.1 Lender should have a good track record as a stable financial\ninstitution. Possible lenders are:\n(i) Multilateraldevelopmentbanks,\n(ii) Lending institutions with intemational repute,\n(iii) Foreign Govemment owned or affiliated agencies,\n(iv) Head Office and branches of foreign banks,\n(v) Licensed banks in Sri Lanka.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_11_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "30 November 2018CENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 11 of2018\n8. Utilisation of\nlong-term\nForeign\nCurrency\nBorrowings\n9. Application to\nbe submitted\nl0.Exclusion from\nthe maximum\nlimits7 .2 Interest rates (inclusive of all related costs) of the borrowing shall be\ncompetitive.\n7.3 Borrowings shall not be settled prior to the initial specified date of\nsettlement unless the loan agreement provides for an accelerated\nprepayment mechanism.\n7.4 Licensed banks shall mitigate the impact of bunching effect.\n7.5 Borrowings shall not result in excessive credit growth.\n8.1 Long-term foreign currency borrowings shall be utilised for\nlending/investment purposes to :\n(D fund exports, import substitution, infrastructure, govemment\ndevelopment projects and small and medium enterprises;\n(ii) settle or retire current foreign currency loans;\n(iii) invest in Sovereign Debt of the Government of Sri Lanka and\nfund the Government of Sri Lanka for activities of national\nimportance;\n(iv) fund viable overseas business expansions of local corporates;\nand\n(v) fund viable projects or businesses of overseas entities in Sri\nLanka or overseas.\n9.1 Licensed banks may submit a written request with the following\ndetails to obtain the Monetary Board approval under Direction 5\nabove:\n(i) Profile of the Lender,\n(ii) Features of the Loan,\n(iii) Specifi c purpose/objectives with targets,\n(iv) Performance status of existing foreign currency loans,\n(v) Proposed risk management mechanism.\n10.1 Foreign curency borrowings from the Head Office or its branches\noperating outside Sri Lanka of an LCB incorporated outside Sri\nLanka will be exempted from the limits specified in Direction $\nabove, provided the proceeds are used for the intended purpose the", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_11_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": "30 November 2018MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. I1 of2018\nI 1. Interpretations\nl2.Implementation\nl3.Transitional\nArrangement\nl4.Revocationborrowing is obtained.\n10.2 Bonowings utilised for investments\nGovernment of Sri Lanka.\n1 1.1 Total assets shall be the amount as\naccounts or interim accounts certified\nlicensed baxk.in Securities issued by the\nper the latest annual audited\nby the External Auditor of the\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka1 1.2 Foreign currency shall mean any designated foreign currency.\n12.1 These Directions shall come into effect from the date of issue of\nthese Directions.\n13.1 Any licensed bank which has obtained foreign currency borrowings\nin excess of the maximum limit specified under Direction 4 above\nshall not be permitted to borrow further, until such time the\noutstanding amount of foreign currency borrowings falls below the\nmaximum limit.\n14.1 The following Direction and Circular are hereby revoked.\n(i) Banking Act Direction No. 7 of 2017 on Foreign Currency\nBorrowings by Licensed Banks.\n(ii) The Circular No. BD/FX1196 dated 13 January 1997 issued by\nthe Chief Accountant.\n*Ltg*tv\"'(", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_11_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "28 December 2018ffi\nMONETARY BOARI)\nCENTRAL BANK OF SRI LA}IKA\nBAI\\KING ACT DIRECTIONS No. 12 of2018\nLEVERAGE RATIO IJI\\IDER BASEL III\nFOR LICENSED COMMERCIAL BANKS Ah[D LICENSED\nSPECIALISED BAIIKS\nIn terms of the powers conferred by Sections 46(1) and 76(J)(l) of the Banking Act No. 30 of\n1988, as amended, the Monetary Board issues these Directions for the implementation of\nLeverage Ratio under Basel III for licensed commercial banks and licensed specialised banks\n(hereinafter referred to as licensed banks) in accordance with \"Basel III: Finalising post-crisis\nreforms\" issued by the Basel Committee on Banking Supervision in December 2017. The aim\nof these Directions is to introduce a framework with a simple, transparent, non-risk based\nLeverage Ratio to act as a credible supplementary measure to the risk based capital requirement\nin order to restrict the build-up of leverage in the banking sector, helping to avoid any\ndestabilising deleveraging processes which can damage the broader financial system and the\neconomy, and reinforce the risk-based requirements with a simple, non-risk based'obackstop\"\nmeasure.\nl. Empowerment l.l In terms of Sections 46(l) and 76J(l) of the Banking Act, in\norder to ensure the soundness of the banking system, the\nMonetary Board is empowered to issue Directions to all or any\nlicensed bank, regarding the manner in which any aspect of the\nbusiness ofsuch bank or banks is to be conducted.\n2. Scope of\nApplication\n3. Leverage Ratio\nComputation2.1These Directions shall be applicable to every licensed bank:\n(a) incorporated in Sri Lanka on a solo and consolidated\nbasis; and\n(b) branches ofbanks incorporated or established outside Sri\nLanka on a standalone basis.\nCommencing I January 2019, the minimum Leverage Ratio\nfor licensed banks shall be 3 per cent.\nLeverage Ratio shall be computed as prescribed below:\nLeverage Ratio:\nICapital Measure3.1\n3.2\nExposure Measure", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "28 December 2018,,@.,=#taffiH\\qE:g\nMONETARY BOARI)\nCENTRAL BANK OF SRI LAI\\KA\nBAI\\KING ACT DIRECTIONS No. 12 of2018\n4. Capital Measure 4.1\n5. Exposure Measure 5.1\n6. Steps to Secure\nCompliance3.3 The Leverage Ratio to be calculated on a quarterly basis.\nLicensed banks shall use Tier 1 capital (after deductions) as\nspecified in the Banking Act Directions No. 01 of 2016 on\nCapital Requirements under Basel III as Capital measure for\nLeverage Ratio computation.\nThe exposure measure is computed as follows:\nExposure Measure : On balance sheet exposures (excluding\non-balance sheet derivative and Securities Financing\nTransaction exposures) * Derivative exposures * Securities\nFinancing Transactions exposures + Off balance Sheet\nexposures\nLicensed banks shall not take account ofphysical or financial\ncollateral, guarantees or other credit risk mitigation techniques\nin calculating the exposure measure.\nTo ensure consistency, any item deducted from Tier 1 capital\naccording to the Basel III framework and regulatory\nadjustments other than those related to liabilities shall be\ndeducted from the exposure measure.\nGuidance on calculation of exposure measure is in Schedule I\nhereto.\nWhere a licensed bank has failed to comply with the minimum\nLeverage Ratio, such bank shall not pay dividends or repatriate\nprofits or adopt any other measure that will further deteriorate\nthe regulatory capital position of the licensed bank until such\ncompliance is effected and confirmed by the Director of Bank\nSupervision5.2\n5.3\n5.4\n6.t", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "28 December 2018MONETARY BOARI)\nCENTRAL BAIIK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 12 of2018\n7. Disclosure\nRequirements\n8. Regulatory\nReporting8.17.1 The disclosure requirements prescribed in the Banking Act\nDirections No. 01 of 2016 on Capital Requirements under\nBasel III shall be applicable in respect of Leverage Ratio.\nEvery licensed bank shall report the Leverage Ratio as at the\nlast calendar day of each quarter through the web-based off-\nsite surveillance system via the quarterly return (BSD-QF-36-\nLR and BSD-QF-36-EM) within one month after the end of\neach quarter.\nilbc*t*^\"-1\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "Banking Act Directions No.12 of 2018\nLeverege Ratio under Basel III\nfor Licensed CommercialBanks and Licensed Specialised Banla\nSCHEDULE I", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": "Calculation of Exposure Measure of Leverage Ratio under Basel III\n1 On-Balance Sheet Exposures\n1.1 The on-balance sheet values included in the exposure measure must be in line with the\nreported values under the regulatory reporting balance sheet except for derivative assets\nand securities financing transactions (SFT).\n1.2 The on-balance sheet assets deducted from Tier 1 capital should be deducted from the\nexposure measure, which ensures that Tier 1 capital and the leverage ratio exposure\nmeasure are treated consistently and therefore, avoids double-counting.\n1.3 Netting of loans and deposits are not allowed.\n1.4 The basis for leverage ratio exposure measure for cash pooling arrangements should be the\nsingle account balance and not the individual participating customer accounts. Cash\npooling refers to arrangements involving treasury products whereby a bank combines the\ncredit andlor debit balances ofa several accounts ofan individual or a group into a single\naccount balance to facilitate cash and/or liquidity management.\n2 Derivative Exposures\n2.1 Licensed banks shall calculate the amount to be included in the exposure measure for each\nderivative transaction separately as follows:\nDerivative Exposure : s x (RC + PFE)\n0 Alpha is set at 1.4\nRC Replacement Cost\nPFE Potential Future Exposure over the remaining life of the contract\n2.2 Replacement Cost (RC)\nRC of a transaction is the positive mark to market value of the contract:\nRC : max {(V- CVMr ) + CVMp;O}\nV Market value of the individual derivative transaction or of the\nderivative transactions in a netting set\nCVMr Cash Variation Margin (CVM) received by the bank\nCVMp CVM provided by the bank", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "2.3Potential Future Exposure Gf'B)\n(a) PFE represents an 'Add-On' arising from the potential exposure over the\nremaining life of the contract.\nPFE: Mukiplier x Add on Aggregate\n(b) Multiplier is fixed at one.\n(c) Add-on Aggregate is calculated by multiplying the notional principal amount of\nthe contract from potential add on factor given in Table 1.\n(d) The following Add-on factors will apply to financial derivative contracts based\non the residual maturity.\nTable 1 - Add on Factors for Financial Derivatives\n(e) For contracts with multiple exchanges of notional principal, the notional principal\namounts are to be multiplied by the number of remaining payments in the\ncontract.\n(0 No PFE shall be calculated for single currency floating swaps I floating interest\nrate swaps.\n(g) For exchange rate and interest rate hybrid products, e PFE must be calculated by\nadding the applicable two respective Add-on factors.\n3\n3.1Securities Financing Transaction\nSFTs are transactions such as repurchase\nsecurity lending and borrowing and margin\ntransactions depends on market valuations.\nExposure Measure for SFT are calculated as\n(a) When a bank acts as a principalagreements, reverse repurchase agreements,\nlending transactions, where the value of the\nfollows: 3.2One year or less\nOver one year to five years\nSFT Exposure: Gross SFT Assets * max {0, [>(Ei) ->(Ci)]]", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 5, "year": 2018}, "type": "Document"}
{"page_content": "(b) When a bank acts as an agent\nSFT Exposure : max {0, [r(Ei) - >(Ci)]]\nEi : total fair value of securities and cash lent to a counterparty for all transactions\nincluded\nCi : total fair value of cash and securities received from the counterparty for all\ntransactions\n3.3 The gross SFT assets must be adjusted as follows:\n(a) Exclude the value of any securities received under a SFT, where the bank has\nrecognised the securities as an asset on the balance sheet, and\n(b) Cash payables and cash receivables in SFTs with the same counterparty may be\nmeasured net if all the following criteria are met:\n(i) Transactions have the same explicit final settlement date.\n(ii) The right to set off the amount owed to the counterparty with the amount\nowed by the counterparty is legally enforceable both in the normal course\nof business and in the event of default, insolvency and bankruptcy.\n(iiD The counterparties intend to settle net, settle simultaneously, or the\ntransactions are subject to a settlement mechanism that results in the\nfunctional equivalent of net settlement.\n3.4 Bilateral Netting for SFTs (Applicable to counterparty exposurel)\n(a) With respect to a netting set of SFTs subject to a valid bilateral netting agreement\nreferred in item 6 below, the current exposure for the netting set is calculated as\nthe greater of the current market value of securities and cash provided to a\ncounterparty under the SFTs less the current market value of securities and cash\nreceived from the counterparty under the SFTs and zero.\n(b) For purpose ofthe current exposure calculation for SFTs, only the effects ofa\nvalid bilateral netting agreement will be recognized. Where no valid bilateral\nnetting agreement is in place, each individual SFT must be treated individually.\n3.5 SFT Exposure:\n(a) If a bank acts as an agent in respect ofan SFT (or a portfolio of SFTs) entered\ninto by a customer of the bank and the bank provides an indemnity or guarantee\n1 max {0, [x(Ei) - x(Ci)]]", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 6, "year": 2018}, "type": "Document"}
{"page_content": "to the customer for any difference between the value of the security or cash\nprovided by the customer under the SFT and the value of security or cash\nreceived by the customer, the bank will only be required to calculate its current\nexposure using the given formula, as in paragraph 3.2 (b).\n(b) [f, however, a bank's exposure in respect of SFT goes beyond an indemnity or a\nguarantee for the difference in value between the assets provided and received\nand includes exposure to the underlying cash or securities in the SFT, the bank\nwill need to calculate its SFT exposure as the bank is acting as principal. This\nwould be the case where a bank manages collateral received in connection with\nan SFT for its own account rather than for the customer's account.\n4 Off Balance Sheet Exposures (OBS)\n4.1 OBS exposures considered shall be the value after applying Credit Conversion Factors\n(CCF) specified under the Banking Act Directions No. 01 of 2016 on Capital Requirements\nunder Basel III excluding any items considered as derivative exposures or SFT.\n4.2 ln calculating OBS exposures, any provisions in respect of OBS, if any, shall be deducted\nfrom OBS exposures after the application of the relevant CCF.\n5\n5.1Conditions for Eligible Cash Variation Margins\nIn calculating derivative exposure measure, the cash portion of variation margin exchanged\nbetween counterparties may be viewed as a form of pre-settlement payment, if the\nfollowing conditions are met:\n(a) Cash variation margin (CVM) would satisfy the non-segregation criterion if the\nrecipient counterparty has no restrictions by law, regulation, or any agreement\nwith the counterparty on the ability to use the cash received.\n(b) Variation margin is calculated and exchanged at least daily, based on mark-to-\nmarket valuation of derivative positions. The cash variation margin is received\nin the same cuffency as the currency of sefflement of the derivative contract.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "in the same cuffency as the currency of sefflement of the derivative contract.\n(c) Variation margin exchanged is the full amount that would be necessary to fully\nextinguish the mark to market exposure ofthe derivative subject to the threshold\nand minimum transfer amounts applicable to the counterparty.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "5.2(d) Derivative transactions and variation margins are covered by a single master\nnetting agreement (MNA) between the legal entities that are the counterparties\nin the derivatives transaction. The MNA must explicitly stipulate that the\ncounterparties agree to seffle net of any payment obligations covered by such a\nnetting agreement, taking into account of any variation margin received or\nprovided if a credit event occurs involving either counterparty.\nIf the conditions in paragraph 5.1 above are met following adjustments shall be carried out.\n(a) In the case of CVMr, the receiving bank may reduce the RC (but not the PFE\ncomponent) of the exposure amount of the derivative by the amount of cash\nreceived if the positive mark-to-market value of the derivative conffact(s) has\nnot already been reduced by the same amount of CVMr under the reporting\nrequirements.\n(b) In the case of CVMp, the posting bank may deduct the resulting receivable from\nits Leverage Ratio exposure measure and instead include the CVMp in the\ncalculation of the derivative RC.\n6 Bilateral Netting\n6.I For purposes of the Leverage Ratio, a bilateral netting agreement is considered valid if the\nfollowing criteria are met:\na) The agreement is in writing.\nb) The agreement creates a single legal obligation for all individual contracts covered\nby the agreement and the bank would have a single claim or obligation to receive\nor pay only the net amount of the sum of the positive and negative mark-to-market\nvalues of the individual contracts covered by the agreement in the event that a\ncounterparty to the agreement, or a counterparty to whom the agreement has been\nvalidly assigned, fails to comply with any obligation under the agreement due to\ndefault, insolvency, bankruptcy, or similar circumstance.\nc) The licensed bank has been given independent legal advice in writing to the effect\nthat in the event of a challenge in a court of law, including a challenge resulting", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "that in the event of a challenge in a court of law, including a challenge resulting\nfrom default, insolvency, bankruptcy, or similar circumstance, the relevant court or\nadministrative authority would find the banks' exposure to be the net amount under:", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "(i) The law of the jurisdiction in which the counterparty is incorporated or the\nequivalent location in the case ofnon-corporate entities, and ifa branch of\nthe counterparty is involved, then also under the law of the jurisdiction in\nwhich the branch is located.\n(ii) The law which governs the individual contracts covered by the agreement.\n(iii) The law which governs the agreement.\nd) The bank manages the transactions covered by the agreement on a net basis.\ne) The bank maintains documentation adequate to support the netting of the contracts\ncovered by the agreement.\n0 The agreement is not subject to a provision that permits the non-defaulting\ncounterparty to make only limited payment or no payment at all, to the defaulter or\nthe state of the defaulter, regardless of whether or not the defaulter is a net creditor\nunder the agreement.\nL0", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 9, "year": 2018}, "type": "Document"}
{"page_content": "Reporting Formats for Leverage Ratio\nPart I - Computation of Leverage Ratio\nPart II - Ctation of E Measu - uom re re\n362.1.0.0.0 Exposure Measure\n36.2.1.1.0.0 On Balance Sheet Exposures\n36.2.1.1.1.0 On-balance sheet Assets (excluding\nderivatives and SFTs)\n36.2.1.1.2.0 Assot amounts adjusted in deternrining Basel\nIII Tier I capital\n36.2.1.2.0.0 Derivative Exposures\n362.1.2.1.0 Replacement cost associated with all\nderivatives transactions\n362.1.2.2.0 Add.on amounts for PFE associated with all\nderivatives transactions\n36.2.1.2.3,0 Alpha 1.4 1.4\n36.2.1.3.0.0 Securities Financing Transaction (SfT)\nExposures\n36.2.1.3.1.0 Gross SFT assets\n3,6.2.1.3.2.0 Counterparty credit risk exposure for SFT\nassets where a bank aots as a principal\n36.2.1.3.3.0 Agerrt transaction exposures\n36.2.1.4.4.0 Other Off.Balance Sheet Exposures\n36.2.1.4.1.0 Exposures with a 20%CCF\n36.2.1.4.2.0 Exposures with a 50% CCF\n36.2.1.4.3.0 Exposures wi& a 100% CCF\nL1", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_12_of_2018.pdf", "page": 10, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\n-$ February 2018 BANKING ACT DIRECTIONS\nLOAN TO VALUE RATIOS FOR CREDIT FACILITIES GRANTED\nIN RESPECT OF MOTOR VEHICLES\nIssued under Sections 46(1) and 76(JX1) of the Banking Act, No. 30 of 1988, as amended.\nThe Monetary Board issues Directions as follows for the implementation of loan to value (LTV)\nratios in respect of credit facilities granted by licensed commercial banks (LCBs) and licensed\nspecialised banks (LSBs) for the purpose of purchase or utilisation of motor vehicles.\n1. Empowerment 1.1 In terms of Sections 46(1) and 76(JX1) of the Banking Act, in order\nunder the\nBanking Act to ensure the soundness of the banking system, the Monetary Board\nis empowered to issue Directions to all or any LCB and LSB,\nrespectively, regarding the manner in which any aspect of the\nbusiness ofsuch banks is to be conducted.No.01 of2018\n2. Maximum\nLTV Ratio2.1 Commencing 01 January 2018, credit facilities granted by every\nlicensed bank for the purpose of purchase or utilisation of vehicles\nshall not exceed the following percentages of the market value of\nsuch vehicles.\n(i) In respect of unregistered vehicles and registered vehicles which\nhave been used in Sri Lanka for less than one year after the first\nregistration;\nTable I - Loan to Value Ratio\nVehicle Category Vehicle Class of\nDepartment of Motor\nTrafficElectric\nVehiclesOther\nCommercial\nvehiclesC1, C, CE, D1, D, DE,\nGl, G, J90% 90%\nMotor Cars, SUVs\nand VansB (other than light\ntrucks & single cabs)90% s0%\nThree wheelers B1 900 250\nAny other vehicle A1, A, light trucks &\nsingle cabs categorized\nunder B900 7004\nHybrid Motor Cars,\nSUVs and VansB (other than light\nlrucks & single cabs)70%", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_1_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\n8 Feb.uary 2018 BANKING ACT DIRECTIONS - No. 01 of 2018\n(ii) 70 per cent in respect of registered vehicles which have been used\nin Sri Lanka for more than one year after the first registration.\n3.1 The limits in Direction 2 above will not be applicable to credit\nfacilities granted to any company engaged in tourism and/or\ntransportation for purchase of vehicle fleets to be utilized for their\ncore business operations, provided that such vehicles financed shall\nnot be transferred to any person or entity within one year from the\ndate of the first registration.\n3.2 Licensed banks shall have internal limits and adopt adequate risk\nmanagement procedures in granting credit facilities for this category\nof vehicles.3. Exemptions\nfrom the\nMaximum\nLTV\n4. Other Credit\nFacilities for\nVehicles\n5. Interpretations 5.1\n5.24.1 A licensed bank shall not grant credit facilities for the purpose of\npurchase or utilisation of motor vehicles, other than credit facilities\ngranted in accordance with Directions 2 and 3 above.\nCredit facilities shall mean finance leases, hire purchase facilities and\nall other credit facilities granted for the purpose of purchase or\nutilisation of vehicles by end-users.\nThe value of the vehicle shall be the market value. Licensed banks\nmay use the following for the purpose of valuing vehicles:\nD Brand new vehicles - value given by authorized agents\nii) Reconditioned vehicles - valuation considered at customs or\ninvoice value given by the dealer\niii) Registered vehicles - value given by a professional valuer\nLicensed banks should ensure that the valuation is obtained at the\ntime of granting credit facilities and provides a true and fair value.\nFleet of vehicles referred to in Direction 3.1 shall mean two or more\nvehicles.5.3\n5.4", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_1_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nB February 2018 BANKING ACT DIRECTIONS _ No.01 of 2018\n5.5 Company engaged in tourism referred to in Direction 3.1 shall mean\na company registered with the Sri Lanka Tourism Development\nAuthority or any other authority to provide services to tourism.\n5.6A company engaged in transportation referred to in Direction 3.1\nshall mean any business entity registered at any state authority for the\npurpose of business of transportation of goods or passengers.\nThe following Directions are hereby revoked:\n(i) Banking Act Directions No. 01 of 2017 on Loan to Value Ratios\nfor Credit Facilities in respect of Motor Vehicles.\n(ii) Banking Act Directions No. 02 and No. 04 of 2017 on\nAmendment to Directions on the Loan to Value Ratios for Credit\nFacilities in Respect of Motor Vehicles.\nfu-fur^,''.-l\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka6.Revocation of 6.1\nprevious\nDirections", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_1_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "Ltr NIay 2018MONETARY BOARD\nCENTRAL BANK OF SRI LANIKA\nBANKING ACT DIRECTIONS No.02 of 2018\nAPPOINTMENT OF AGENTS OF LICENSED BANKS\nIn terms of the powers conferred by Sections 46(l) and 76(J)(1) of the Banking Act No. 30 of\n1988, as amended, the Monetary Board has implemented the following Directions for the\nappointment of agents of licensed commercial banks (LCBs) and licensed specialised banks\n(LSBs) with the objectives of ensuring effective agent oversight, risk management and consumer\nprotection.\n1. Empowerment In terms of Sections 46(l) and 76J(l) of the Banking Act,\nin order to ensure the soundness of the banking system,\nthe Monetary Board is empowered to issue Directions to\nall or any LCB and LSB, respectively, regarding the\nmanner in which any aspect of the business of such bank\nor banks is to be conducted.\nInterms of Sections 12(l)(a) and 76(D)(4) ofthe Banking\nAct and Directions issued under Section 76J(l), the\nMonetary Board approval is required for an LCB and an\nLSB to open/close an agency or to effect a change in the\nlocation of any existing place of business.\nAn LCB or an LSB will hereinafter be referred to as a\nlicensed bank.\nAgent/sub-agent is an entity selected by a licensed bank\naccording to its internal policies and approved by the\nCentral Bank of Sri Lanka (CBSL) to provide limited\nbanking business on behalf of the licensed blnk as\npermitted under these Directions.\nAgent/sub-agent banking business is limited banking\nbusiness as permitted under Direction 6 of these\nDirections, carried out by an agent/sub-agent on behalf of\na licensed bank.\nAgent/sub-agent is referred to as'oagent\" and agenVsub-2. Definitions1.1\nt.2\n2.1\n2.2\n2.3\n2.4", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "24 May 2018MONETARY BOARI)\nCENTRAL BAIIK OF SRI LANKA\nBANKING ACT DIRECTIONS No.02 of 2018\n3. Approval of CBSLagent banking business is referred to as \"agent banking\nbusiness\" unless otherwise specifically stated.\n3.1 Before implementing agent banking business, a licensed\nbank shall submit its request including the following\ninformation to CBSL for evaluating the request for\napproval.\n(i) Approval of the Board of Directors of the licensed\nbank for the implementation of agent banking\nbusiness.\n(iD A confirmation from the Board of Directors of the\nlicensed bank that the following policies/procedures\non agent banking business are in place\n(a) Board approved agent selection policy and\nrisk management framework;\n(b) consumerprotectionmechanism;\n(c) agent management, control and monitoring\nmechanism; and\n(d) operating procedures and manuals.\n(iii) Certifications by the Chief Executive Officer that\nthe appointment of agents is in accordance with the\nlicensed bank's Board approved agent selection\npolicy and financial viability of the selected agents.\n(iv) The details of agents (shall include at a minimum):\n(a) rurme of the agent;\n(b) proposed agent banking business;\n(c) business registration number;\n(d) registered address and contact details\n(including postal address if different from the\nregistered address);\n(e) core business activity;", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nZrt May 2018 BANKING ACT DIRECTIONS No.02 of 2018(0 other business activities;\n(g) limits per agent/per customerlper day;\n(h) details of the Board of\nDirectors/partners/owners of the agent\nincluding names and National Identity Card\nnumbers (not applicable for sub agent); and\n(D any other information as requested by CBSL.\nThe licensed bank is required to obtain prior approval of\nCBSL for (i) any new appointment of agents (ii) any\ndiscontinuation of approved agents (iii) additions to the\noutlets of approved agents (iv) change of location of\napproved agents (v) any amendments to approved agent\nbanking business. In exceptional circumstances based on\njustifiable reasons, a licensed bank may temporarily\nsuspend any of its agents after applying for approval to\nCBSL until such time the approval of CBSL is granted\nfor discontinuation.\nA licensed bank shall submit its request for approval on\nappointment of agents within the first ten working days\nof a quarter.\nThe Board of Directors of a licensed bank shall:\n(i) ensure the adherence to these Directions on both\nagent/sub-agent banking business.\n(ii) ensure necessary provisions are available'in the\nagreement entered into with an agent by the licensed\nbank and the agreement entered into with a sub-\nagent by an agent for compliance with these\nDirections.\n(iii) formulate policies, procedures and guidelines on\nconducting agent banking business;i.z\n-r --,\n4. Responsibilities of the 4.1\nLicensed Bank", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "2h May 2018MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.02 of 2018\n(iv) ensure the agents have adequate resources and\nexpertise to perform the agent banking business;\n(v) ensure that all risks associated with agent banking\nbusiness are identified, documented, mitigated,\nmanaged and reviewed regularly;\n(vi) establish systems for consumer protection and\ncomplaint measures and relief mechanism for agent\nbanking business;\n(vii) monitor the activities carried out by agents and\naccepting the responsibility for all actions and\nomissions of the licensed bank's agents while\nperforming duties on behalf of the licensed bank;\nand\n(viii) ensure adherence to Know Your Customer (KYC)\nand Customer Due Diligence (CDD) rules, rules on\ncombatting money laundering and terrorist\nfinancing activities and licensed bank's internal\nrules, policies and procedures in this respect.\n4.2 In addition, a licensed bank shall:\n(i) make an explicit, informed and documented\ndecision on the use of agents for the provision of\nagent banking business to its customers;\n(ii) assess agents biannually on their viability and make\ninformed decisions on the continuation of agents;\n(iii) provide agents with operational manuals as needed\nand ensure proper provision of agent banking\nbusiness to customers; and\n(iv) maintain an updated list of agents/database of agents\nappointed with all relevant details including the\n4", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARD\nCENTRAL BANK OT'SRI LANKA\n2rt May 2018 BANKING ACT DIRECTIONS No.02 of 2018\n5. Risk Managementbelow at a minimal and publish the same in the web-\nsite of the licensed bank:\n(a) name of the agent;\n(b) business registration number;\n(c) physical location/address ofthe agent;\n(d) contact number of the agent; and\n(e) agent banking business offered on behalfofthe\nlicensed bank.\nlicensed bank shall:\nmanage all relevant risks including credit risk,\noperational risk, legal risk, liquidity risk, reputation\nrisk, technology risk and compliance risk;\nhave in place intemal controls, systems and\npersonnel to adequately monitor and control agent\nbanking business on an ongoing basis and adequate\noversight to address instances of non-compliance by\nagents with the stipulated obligations;\nassess the adequacy of controls by conducting\ninternal audits and through extemal audits;\nensure that agents have proper security control\npolicies to safeguard the information from both\ninternal and extemal threats;\nensure any sensitive data pertaining to customers is\nnot stored in any server/system/premises, other than\nlicensed bank's server/system/premises; sensitive\ndata includes but is not limited to customer name,\naccount details, credit/debit card details and all\nother confidential data;\nobtain CBSL approval in an exceptional\ncircumstance (applicable only for agents and not for(ii)5.1 The\n(i)\n(iii)\n(iv)\n(v)\n(vi)", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "24 May 2018MONETARY BOARD\nCENTRAL BAIIK OF SRI LANKA\nBANKING ACT DIRECTIONS No.02 of20l8\nPermitted Agent\nBanking Business6.1sub-agents) with justifiable reasons for not ensuring\n(v) above with a certification from a CBSL\napproved auditor on Information Security\nManagement of the agent related to agent banking\nbusiness; further, obtain permission from the\ncustomer before proceeding with the transaction\ngiving authority to save sensitive dataatthe selected\nparty;\n(vii) undertake due assessment of credit worthiness of\nagents and set limit structures (day limits, customer\nlimits, agent limits) for agent banking business\ncommensurate with this assessment; and\n(viii) develop a business continuity plan to ensure\nunintemrpted agent banking business to the\ncustomers.\nThe agent shall provide the following banking\nproducts/services only to the existing customers of the\nlicensed bank:\n(i) deposit acceptance;\n(ii) deposit withdrawal;\n(iii) receiving loan repayments;\n(iv) receiving credit card payments;\n(v) facilitating utility bill payments;\n(vi) account balance request;\n(vii) fund transfer within the same licensed bank;\n(viii) disbursement of inward remittances (Direction\n9.1(vii) does not apply); and\n(ix) any other activity as approved by CBSL.\nCash delivery activities handled by a third party on behalf\nof the licensed bank where such third party meets the6.2", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 5, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\n7. Selection of Agents 7.1customers of the licensed bank to collect or deliver cash\nshall be treated under Direction 6.1(ix). Such activities\nshall be covered under a comprehensive insurance policy\nand licensed bank shall be able to claim insurance on any\nrisk covering the entire process of cash\ncollectior/delivery and storage at third party vault.\nDirection 9.1(vii) does not apply for such activities.\nThe licensed bank shall be responsible for determining\nthe suitability of agents prior to contracting agents, and\nshall as a minimum consider the selection criteria in\nDirection7.2.\nThe licensed bank shall conduct an assessment and due\ndiligence (Know-Your-Agent) including the following:\n(i) demonstrate integrity and professional standards in\nits business conduct;\n(ii) possess adequate resources to support effective\nimplementation of anti-money laundering and\ncombating financing of terrorism measures, record\nkeeping, internal controls and consumer protection\nmeasures;\n(iii) ensure that the agents have not been involved in any\nille gallunethical activities ;\n(iv) possess knowledge and competency to conduct high\nquality agent banking business; and\n(v) demonstrate the ability to control all risks related to\nagent banking business.\nThe licensed bank shall select agents that have a business\nregistration, permanent business premises and an\nestablished core business.\nAgents may provide agent banking business to multiple7.2\n7.3\n7.4", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 6, "year": 2018}, "type": "Document"}
{"page_content": "2.4 May 2018MONETARY BOARI)\nCENTRAL BANK OF'SRI LAIIKA\nBANKING ACT DIRECTIONS No.02 of2018\n7.5licensed banks and have separate contracts with each\nlicensed bank provided that the agents have the capacity\nto manage transactions for different banks.\nThe licensed bank seeking to contract agents which have\nalready been contracted by another licensed bank to carry\nout agent banking business shall assess the capacity of\nagents to manage transactions for different banks. CBSL\nmay assess the concentration risk ofthe selected agents at\nthe time of approval.\nThe agreement with the agents shall specifically prohibit\nthem from charging any fee from customers for agent\nbanking business rendered by them on behalf of the\nlicensed bank.\nCBSL will monitor compliance by the licensed bank with\nthese Directions and may:\n(i) request for any information relevant to any agent\nfrom the licensed bank at any time as may be\ndeemed necessary;\n(ii) carry out inspection of the books and premises of\nagents, if required;\n(iiD direct the termination of the agent contract if\ndeemed necessulry;\n(iv) direct the licensed bank to take any action or\nmeasure against or on behalf of the agents as\nappropriate; anilor\n(v) direct the licensed bank to take any remedial action\narising from the conduct of agents as it may deem\nfit.8. Oversight7.6\n8.1", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARI)\nCENTRAL BANK OF SRI LAIIKA\n9. Consumer Protection 9.1 The licensed bank shall ensure the following:\n(i) preservation of the confidentialrty of customer\ninformation by the agent;\n(ii) mechanisms zre in place for its customers to\nappropriately identiff current list of agents and the\nagent banking business provided through such\nagents;\n(iii) educating the public on product features and its\nterms and conditions;\n(iv) provision of agent banking business in a language\npreferred by the customer out of three languages,\nviz., Sinhala, Tamil and English;\n(v) validation of customer data with the core banking\nsystem data prior to execution of the transaction\nwhere applicable;\n(vi) customers are not unduly induced to buy products/\nservices of agents;\n(vii) displaying the following at the premises of the\nagent:\n(a) the name of the licensed bank it represents and\nthe bank logo;\n(b) a list of banking business offered by the agent;\n(c) the dedicated telephone line through which\ncustomers can contact the respbnsible\ncomplaint handling officer at the licensed\nbank; and\n(d) the name, telephone numbers and location of\nthe licensed bank branch to which the agent\nreports its agent banking business;\n(viii) all transactions involving receipt and payment of", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "zh May 2018MONETARY BOARD\nCENTRAL BANK OF' SRI LAIIKA\nBANKING ACT DIRECTIONS No.02 of 2018\n10. Complaint Measures\nand Relief Mechanismcash to or from an account are encouraged to be on\nreal time; the customer shall be informed of the\ntime lag in case of off-line transactions;\n(ix) issuance of a printed/digital receipt/short message\nservice for all transactions undertaken through\nagents; and\n(x) compliance with Direction 5 of Banking Act\nDirections No. 08 of 2011 on Customer Charter of\nlicensed banks (Annex I).\n10.1 The licensed bank shall establish a complaint measures\nand relief mechanism in terms of Direction 6 of Banking\nAct Directions No. 08 of 2011 on Customer Charter of\nlicensed banks (Annex II) and shall ensure proper\ncommunication of this mechanism to customers.\n10.2 Complaints should only be reported to and maintained at\nthe licensed bank and agents are not permitted to handle\nany complaints on behalf of the licensed bank.\n10.3 The licensed bank shall provide dedicated telephone lines\nfor their customers to lodge complaints. Customers can\nalso use this telephone line to veriff with the licensed\nbank, the authenticity and identity of an agent, its\nphysical location and the validity of its agent banking\nbusiness.\n10.4 The licensed bank shall ensure safeguarding the interest\nof the customer, in executing agent banking business via\nagents, to the extent of facilitating a reversal of an\nexecuted transaction, if necessary, under reasonable\ngrounds.\n1 1.1 The licensed bank shall prepare a report on agent banking\nbusiness quarterly as in Annex III.I l. CBSL Reporting\n10", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 9, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\n2tt Mav 2018 BANKING ACT DIRECTIONS No.02 of 2018\nll.2 Such details shall be available to be reported to CBSL on\n12. Compliance with the\nDirectionrequest at any time.\nl2.l The licensed bank shall commence agent banking\nbusiness via CBSL approved agents within 6 months\nfrom the date of approval. No agents are permitted to\ncommence agent banking business after 6 months from\nthe date of approval.\n12.2 All licensed banks are required to comply with these\nDirections on Appointment of Agents. Agents already\napproved by CBSL shall comply within 6 months from\nthe implementation of these Directions and notify CBSL\non compliance.\n12.3 Licensed banks currently engaged in cash delivery\narangements specified in Direction 6.2 above shall\nobtain approval of CBSL under these Directions within 6\nmonths. These cash delivery arrangements will not be\ncovered under outsourcing of business operations.\n12.4 Licensed banks which appoint its group companies as\nagents shall ensure adherence to these Directions by its\ngroup companies.\nfr|\"^*t\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lankn\n1l", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 10, "year": 2018}, "type": "Document"}
{"page_content": "Annex I\nExtract from Banking Act Directions No. 08 of 2011 on Customer Charter of Licensed Banks\nProtection from Agents\n\"Agents shall refrain from doing any of the following.\n(a) Harassingcustomers.\n(b) Using abusive debt collection practices.\n(c) Disclosing customer infornation to others.\n(d) Giving false or misleading information about productVservices.\n(e) . Unduly influence customers or the general public to buy or get involved ifr the bank's\nproducts/services.\n(D Engage in getting any security documents signed butside the bank.\"\nt2", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 11, "year": 2018}, "type": "Document"}
{"page_content": "Annex II\nExtract from Banking Act Directions No. 08 of 20ll on Customer Charter of Licensed Banks\nComplaint Measures and Relief\n\"The customers have the right to resolve their complaints with transparency and effectively. In this\nregard, licensed banks should:\n(a) implement a quick and effective resolution mechanism on disputes between customers and\nbanks by rectifying disputes quickly, handling complaints within a short period, directing to\ntake the complaints forward if the customer is still not satisfied and reversing any charges\nthat applied due to a mistake;\n(b) have in place a written procedure for receiving complaints and steps to be taken to resolve\nsuch complaints;\n(c) acknowledge the receipt of any complaint in writing within a reasonably short period of time\nand inform the complainants of the procedure that will be followed by the bank for the\nresolution of the complaint and the contact details of the officer/officers handling the\ncomplaint;\n(d) facilitate receiving complaints verbally or in writing and the banks shall not insist that\ncomplaints be necessarily made only in writing;\n(e) establish a management information system regarding complaints and process of resolution\nas part of the duties of risk management committee relating to operational risks; and\n(g) advise the customers to seek affordable and efficient recourse through the Financial\nOmbudsman or in Courts in the event the complaint is not resolved to their satisfaction.\"\nt3", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 12, "year": 2018}, "type": "Document"}
{"page_content": "Annex III\nJ.\n4.Report on Agent Banking Business carried out by a Licensed Bank\nName of the bank:\nDetails on operating agents/sub-agents as at the quarter endo Name\no Business registration number\no Physicallocation/address\no Contact number\no Agent banking business offered\nPerformance ReviewNo. of agents commenced agent\nbanking business within 6 months\nof the date of CBSL\nNo. of agents failed to commence\nagent banking business within 6\nmonths of the date of CBSL\nNo. of agents remaining to be\ncommenced agent banking business\nbefore CBSL aooroval\nType Transactions (durine the quarter)\nNo. of transactions Value (Rs.)\n(Deoosit acceotance\n() Deposit withdrawal\n(i) Received loan repayments(iv) Received credit card payments\n(v) Utilitv bill oavments(vi) Account balance inouiries(vii) Fund transfers (within same bank)\n(viii) Disbursement of inward remittances\n(ix) Other\n- Cash delivery activities\n- Any other (soecifu)\n(Bank shall maintain performance review for each agent/sub-agent)\n5. Problems encountered:\nO Number of problems and specify the issues\n(ii) Reason for the problem\n(iii) Actions taken (specifu)\nt4", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_2_of_2018.pdf", "page": 13, "year": 2018}, "type": "Document"}
{"page_content": "05 June 2018+\nMONETARY BOARI)\nCENTRAL BANK OT SRI LANKA\nBANKING ACT DIRECTIONS No.03 of2018\nAMENDMENTS TO DIRECTIONS ON LOAN TO VALUE RATIOS FOR\nCREDIT FACILITIES GRANTED IN RESPECT OF MOTOR YEHICLES\nBanking Act Directions No. 1 of 2018 on Loan to Value ratios for credit facilities granted in\nrespect of motor vehicles are amended by replacing the following Directions.\n3. Exemptions\nfrom LTV ratio3.1 The limits in Direction 2 above shall not be applicable to credit\nfacilities granted:\n(i) to any company engaged in tourism and/or transportation for\npurchase of vehicle fleets to be utilized for their core business\noperations, provided that such vehicles financed shall not be\ntransferred to any person or entity within one year from the date\nof the first registration; and\n(ii) for procurement of vehicles for Govemment Agencies under the\nfinance leasing method specified by the Ministry of Finance and\nMass Media.\n3.2 Licensed banks shall have internal limits and adopt adequate risk\nmanagement procedures in granting such credit facilities.\nqlrfr\"ou'A*-1 ,\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bonk of Sri Lanka", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_3_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "2lAugust 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.04 of2018\nFINANCIAL DERIVATIVE TRANSACTIONS FOR\nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nThe Monetary Board issues the following Directions on Financial Derivative Transactions for Licensed\nCommercial Banks (LCBs) and Licensed Specialised Banks (LSBs).\n1. Empowerment\nunder the\nBanking Actl.l\n2. Applicability 2.1\n3. Commencement\nof derivative\ntransactions\n4. Board approved\npolicies and\nprocedures2.2\n3.1\n3.2\n4.1In terms of Sections 46(1) and 76J(1) of the Banking Act, in order to ensure\nthe soundness of the banking system, the Monetary Board is empowered to\nissue Directions to all or any LCB and LSB, respectively, regarding the\nmanner in which any aspect of the business of such banks is to be conducted.\nThese Directions will cover derivative transactions in foreign currency of\nLCBs and LSBs which are authorised to offer such derivative transactions in\nterms of the Foreign Exchange Act of Sri Lanka. The LCBs and LSBs shall\nhereinafter be referred to as Eligible Banks (EBs).\nThese Directions shall be applicable to the Domestic Banking Units (DBUs)\nand Off-shore Banking Units (OBUs) of EBs.\nLCBs which intend to engage in financial derivative transactions shall notify\nits interest, prior to the commencement of the initial transaction, to the\nDirector of Bank Supervision (DBS) with a copy to the Director of\nIntemational Operations Department of the Central Bank of Sri Lanka\n(cBSL).\nLSBs shall obtain the written approval of DBS to engage in each derivative\nspecified rn 5.2.\nEBs shall have in place Board approved policies and procedures on\nderivative transactions and risk management framework to identify, quantify\nand evaluate the exposures, manage risk and monitor performances related to\nderivative transactions.\nEBs shall ensure that appropriate expertise and capacity building are in place\nto engage in financial derivative transactions.4.2", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "2l August 20L8MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.04 of2018\n5. General Terms\nand Conditions5.1Derivatives transactions may be entered into for the following purposes:\na) End User (EU) Deals: Transactions for the purpose of hedging EBs own\nassets and liabilities (other than the assigned capital and retained\nearnings) and managing their own risk profile as may be necessary from\ntime to time, however, not for speculative purposes.\nb) Non Market Maker (NMM) Deals: Transactions executed by EBs with\ntheir customers, i.e., any party other than an EB or with another EB with\nthe intention of making a spread. In these transactions an EB shall not\ntake any market risk into its own books and shall cover the transaction on\nthe same day on a back-to-back basis with another EB in Sri Lanka or\nwith a foreign counterparty.\nc) Derivative Market Maker (DMM) Deals: Transactions executed by\nEBs with their customers or with another EB while taking the market risk\ninto its own books.\nDerivatives permitted under these Directions are as follows:\na) Swaps\nb) Options\nc) Forward Rate Agreements\nd) Forward Contracts\ne) Swaptions\n0 Such other instruments as may be specified by the Monetary Board from\ntime to time.\nEBs shall ensure the following:\na) all derivatives offered to customers are based on valid underlying\ntransactions which include current account transactions and permitted\ncapital account transactions ;\nb) the notional principal amount, including any leverage of the derivative\nshall not exceed the outstanding amount of the underlying\ntransactiorvasset or liability or the underlying exposure;5.2\n5.3", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": ")-I August 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRTCTIONS No.04 of2018\n5.4\n5.5\n5.6c) Directions 5.3 (a) and (b) above shall not be applicable for interbank\nderivative transactions.\nEBs shall use products listed in 5.2 above to enter in to back to back\ntransactions with a foreign counterpart.\nEBs are permitted to hedge contingent exposures or such risks arising from\nbalance sheet exposures of their customers.\nEBs may allow importers and exporters to hedge their exposure including a\ncontract based on estimated transaction value. The estimated transaction\nvalue shall be determined based on their audited financials or by averaging\nthe preceding three contract values or immediately preceding contract value,\nwhichever is higher, subject to confirmation by an EB.\nParties may unwind/sell back a derivative partially or fully, if they consider\nsuch a derivative is no longer required, as follows:\na) all derivative contracts once unwound are eligible to be rebooked,\nsubject to the terms specified in these Directions;\nb) any customer who wishes to unwind a derivative contract before\nmaturity while the underlying transaction still exists may do so with the\nmarked-to-market loss charged to such customer;\nc) a marked-to-market gain (financial gain) should not be paid to the\ncustomer;\nd) the rate benefit, if any, may be passed to the customer at the time of\nrebooking.\nThe cost of a derivative transaction with non-residents shall be paid out of\nrepatriable funds and/or inward remittances through normal banking\nchannels.5.7\n5.8", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": ">l August 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 04 of 2018\n6. Prohibited\nActivities\n7. International\nSwap and\nDerivative\nAssociation\n(rsDA)5.9 A11 derivatives entered in to by an EB under Directions on Financial\nDerivative Products issued on 01 August 2009 (Ref: 331031001100291002)\nand Directions to Authorized Dealers on Forward Contracts in Foreign\nCurrencies issued on the 11 March 2010 (Ref: 0610410212010) can be\ncontinued till the maturity of the underlying transactions, adhering to the\npreviously issued Directions. The unwound derivative contracts entered\nunder previous Directions can be rebooked only under the terms of the new\nDirections.\n5.10 Contracts may be entered into with customers whose underlying transactions\nare established with another authorised dealer provided documentary\nevidence is furnished by the said authorised dealer on each transaction.\n6.1 EBs shall not engage in facilitating derivative transactions on behalf of any\nforeign counterpart with resident customers unless the resident customer has\nobtained specific approval of the Head of the Department of Foreign\nExchange ofCBSL.\n6.2 EBs shall not enter in to derivative transactions in respect of any foreign\ncurrency exposures or risks arising from foreign currency deposits or\nretained eamings, held overseas.\n6.3 Derivatives involving making of an upfront payment other than option\npremiums, in any currency by EB to the customer shall not be permitted.\nEBs shall sign ISDA Master Agreement with the counterparty for\nderivatives, unless otherwise both parties agree to refrain from signing\nISDA.\nEBs shall obtain a written consent from the counterparty where it was agreed\nto refrain from signing ISDA. It will not be necessary for EBs to obtain a\nwritten consent for inter-bank foreign exchange Forwards and Swaps\ntransactions with a contractual maturity of one year or less.\nEBs shall maintain transaction specific agreements and records.7.t\n7.2\n7.3", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": ")_ I August 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.04 of 2018\n8. Customer\nAwareness\n9. Eligible\nCurrencies8.1\n8.2\n8.3\n8.4\n8.5\n8.6EBs shall ensure that the customers clearly understand the risks of the\nderivative transactions and that the customers have established sufficient\nmeasures to monitor and manage the risks arising from the prospective\ntransactions entering into.\nEBs shall provide adequate information on the transaction, especially with\nregard to the conditions and clauses to be incorporated into the product\nindicating the relevant benchmarks, fixing rates, strike prices and premium\nas the case may be, and a detailed risk scenario analysis to ensure the highest\nlevel of transparency.\nEBs shall obtain a written confirmation from the customer prior to entering\ninto a derivative transaction that the customer has understood the nature of\nthe products and their inherent risks.\nEBs shall obtain an undertaking in writing from customers that their total\nvalue of the derivative transactions with all EBs do not exceed the exposure\nor the value of underlying transactions.\nEBs shall also satisfy themselves on a professional analysis, of the\ninstitutional capacity and the overall suitability of the customer to engage in\nthe derivative products offered by EB prior to entering into such contracts.\nIn the case of small value foreign exchange Forwards and Swap transactions\nwith a contractual maturity of one year or less, EBs shall, at a minimum,\nprovide basic information and conditions pertaining to the transaction to the\ncustomers. For this pu{pose, EBs shall intemally determine a threshold for\nsmall value foreign exchange forwards and swap transactions considering\nthe risk appetite and trading volume of EBs.\nEBs shall conduct derivative transactions in designated currenciesl as per the\nrequest of the customer and in accordance with internal policies approved by\nits Board of Directors.9.1\nl- Designated currencies determined under the", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "its Board of Directors.9.1\nl- Designated currencies determined under the\nOrders issued in terms of the Banking Act,\nDirection.\n5Banking Business Scheme)\nwill be applicable for thisBanking (Off-shore\nfrom time to time,", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "2 / August 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.04 of2018\n10. Tenure\n11. Reference/\nValuation\nBenchmark\n12. Reporting\n13. Definition10.1 EBs shall ensure that the date of maturity of the derivative contract shall\ncorrespond to the maturity date of the underlying transaction and shall not,\nunder any circumstance, extend beyond the date of the underlying\ntransaction, and the maximum maturity period of a derivative transaction\nshall not exceed ten (10) years.\n11.1 The parties involved shall be free to use any benchmark with sufficient\ntransparency on mutual agreement for reference and valuation purposes.\nl2.l EBs shall submit to the Intemational Operations Department of CBSL on a\nmonthly basis within 15 days from the end of the month, a statement of the\ntransactions undertaken within the month in the format attached in Annex I.\n12.2 The above requirement shall not be applicable for foreign exchange\nForwards and Swap transactions with a contractual maturity of one year or\nless. However, EBs shall maintain records relating to such transactions with\ncustomers.\nThe following definitions shall be applicable for purposes of these Directions.\n13.1 Derivative\nA derivative is a financial instrument or a contract as defined in Sri Lanka\nAccounting Standards.\n13.2 Foreign Counterpart\nA foreign counterpart shall mean:\na) A bank outside Sri Lanka\nb) An intemationally recognised derivative exchange\n13.3 Permitted Derivative Transactions\na) Swaps\nA swap is a bilateral agreement to exchange cash flows at specified\nintervals (payment dates) during the agreed-upon life of the transaction\n(maturity or tenure). Entering into a swap typically does not require the", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 5, "year": 2018}, "type": "Document"}
{"page_content": "MONETARY BOARI)\n2-l August 2018CENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.04 of2018\nb)payment of a fee. Under this direction EBs are eligible to enter into\ninterest rate, cross-currency and commodity swaps.\nOptions\nAn option is an agreement that gives the buyer, who pays a fee\n(premium), the right but not the obligation to buy or sell a specified\namount of an underlying asset at an agreed upon price (strike or exercise\nprice) on or until the expiration of the contract (expiry). A call option is\nan option to buy the underlying and a put option is an option to sell the\nunderlying. Under this Direction EBs are eligible to issue options based\non an underlying interest rate, currency and commodity.\nForward Rate Agreements (FRA)\nA forward rate agreement is an interest rate contract between two parties\nthat allows an entity to position itself in the interest rate market. An FRA\nis a contract that calls for one party to make a fixed interest payment and\nthe other party to make an interest payment at arate to be determined at\nthe contract expiration based on a notional principal amount. On the\nexpiration date, the payments are net settled.\nForward Contract\nIn forward contracts, the contract holders are obligated to buy or sell the\ncurrency/commodity at a specified price, at a specified quantity and on a\nspecified future date.\nSwaptions\nThe option to enter into a swap. In exchange for an option premium, the\nbuyer gains the right but not the obligation to enter into a specified swap\nagreement with the issuer on a specified future date. Under this direction\nEBs are eligible to issue swaptions based on an underlying transaction\nsuch as interest rate, cuffency and commodity.\nFX Swaps\nFX swap is a simultaneous purchase and sale or vice versa of identicalc)\nd)\ne)\n0", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 6, "year": 2018}, "type": "Document"}
{"page_content": "LI August 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 04 of 2018\n14. Revocation\n15. Implementationamounts of one currency for another with two different value dates.\n14.l The following Directions are hereby revoked:\na) Direction No. 06 of 2017 dated 29 November 2017 on Financial\nDerivative Transactions for Licensed Commercial Banks and Licensed\nSpecialised Banks;\nb) Directions on Financial Derivative Products issued on 01 August 2009,\nRef: 33/03/001100291002by the Controller of Exchange and the Director\nof Intemational Operations; and\nc) Directions to Authorized Dealers on Forward Sales and Purchases of\nForeign Exchange issued on 02 January 2013, Ref: 06/0410412013 by the\nController of Exchange.\n15.1 These Directions shall be effective from the date of the Directions.\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "uh\n()\nbtEtr.:\nEcot2\np3\nli>oE\nmI\nv 4----E',EAE\nhI\no\nU\n-CE\n=A\noa\nL::\n:q\nQ\noc!q\no\no\"-\nxc)\nYa\n=x\nUvua'.9 1,\n=-y,e=6LrCE;\n--6-^x.Q dl-t L\nf\nE.H.E\ntr -bEEo?\nEEE\nLgP'E\ncE I-lraa\nC'\nz>.O\n()\n(,\n6i;\nU\no\n= s,la\nah\n:a\n9G\n9Er\ni- 0)\n,E:\ne\nI\n(\\T\no0\n(.)\n.a\n=2!=iao\nG\n6J()A=\nI\nC)\nF\nIXo\na\nq)q)\nCJ\n6,)\na\nq)a\n6)c)\nFl\n\u20acG\nl- u)\n6t=\n.:.e6\nA\u20acJ\nEU\n=6Ita\no9\ng0 l-t\nl{i\ne\nU)\nq)\no\nq)", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "a\nL\no\no!E\n>.:rr 63Q)a\n.ll >>UF\n.v:\nva7.\nCJ Ur\\d,;a.^=v\no(q\n()\nq)\nU\n-Ctr\nr<a\nq)\n-6)XE\nra\nQ\n=0)ocqA)\nq)\nL AlEu.=.=o >;\niQ2EEs\nl>.cJ:\n!:\nreu\nwAZ\nCJ W r-sEC\n9ar\na*\nrt(\n()(,\nQ\n+\nU\nQ\nr,go':\"1 o\nQ-q,A\nL l^r:E\nQ\noctah\nU)\nLa\nOa\nd-\n,-F\ne):\nti=\nz\nIt+\no\na-0\ntn\n$u)\neq\n=A\n-.o!, tr\nta)\nZ^t\nlrl\no\nL\nU\nI\nUUxq)\na\nc)a\n(Jo\na\n()a\noo\ntl\n\u20accl\n-!0t\\t =\nx\nz60tr\nUU\nLl u)\nuq)\\.=\na! tl\nJ{:\nI\nU)\nq)\nc)\n(.)", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 9, "year": 2018}, "type": "Document"}
{"page_content": "50\nL\nJ\n!a(ts\nu.l\nL\noO\no\n(ts\nC)\nE1i\no.()\n!\nU)\no\nL(.)o-o\nLo\n0)\no\n(ts\no\nE,,\na\n()\n=61L!lot3G-)\n^ .xlFbl()\nG)\nI\n()\nc)cl\nU\n(.)\na\nF\nI\nin\nC)\n3q?d.Y-:.-l?cs\n=07,t+.o=-a( u\n\\5or-q)d=-otr\n.o (.)\ndx\n-Loo.=a!lE\n=5 u ddUEU)!n c!co trqa't\n^H,i .rl-l\n*==o.: aD\nG=E\n'i\" !.) =\nv2\nOEE\nl\nE ? 42\n= cc url*tE.:EUE= >.9:.rt--,y.= x-F h.0c)\nOcJ\nzE\nOEtr-\nU\n- 9rJI 6.);;4!va5 a LC6v - A;lAV\nAq)o\n=9o.lxo\na\noa\nC)\nc)\na\n0)\nua)\no()\nF]\nOO CE\n6r=\n:.v6\nOPz6\ntsutrE\nl-l u)\naql\nE!*\niid\n()\na\n3\no\nq)\n()", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_4_of_2018.pdf", "page": 10, "year": 2018}, "type": "Document"}
{"page_content": "l3August 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LAI\\KA\nBANKING ACT DIRECTIONS No.05 of2018\nAMENDMENTS TO DIRECTIONS ON LOAN TO VALUE RATIOS FOR\nCREDIT FACILITIES GRANTED IN RESPECT OF MOTOR YEHICLES\nBanking Act Directions No. 3 of 2018 on Loan to Value ratios for credit facilities granted in\nrespect of motor vehicles are amended by replacing the following Directions.\n3. Exemptions\nfrom LTV ratio3.1 The limits in Direction 2 above shall not be applicable to credit\nfacilities granted:\n(i) to any company engaged in tourism and/or transportation for\npurchase of vehicle fleets to be utilized for their core business\noperations, provided that such vehicles financed shall not be\ntransferred to any person or entity within one year from the date\nof the first registration;\n(ii) for procurement of vehicles for Government Agencies under the\nfinance leasing method specified by the Ministry of Finance and\nMass Media; and\n(iii) for credit facilities granted for purchase of motorcycles by field\nofficers in the public service and teachers servicing in difficult\nareas under the proposed concessionary leasing facility provided\nby the Govemment.\n3.2 Licensed banks shall have internal limits and adopt adequate risk\nmanagement procedures in granting such credit facilities.\nflhs>\"J\\^!'\\^-,\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanko", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_5_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "28 September2018,ffi\nCENTRAL BAITK OF SRI LAI\\KA\nBAI\\IK ST'PERVISION DEPARTMENT\nBAI\\IKING ACT DIRECTIONS No.06 of2018\nMEASURES TO CURTAIL IMPORT OF MOTOR YEHICLES\nIssued under Sections a6(l) and 76(J) (1) of the Banking Act, No. 30 of 1988, as amended.\nThe Central Bank of Sri Lanka with a view to curtailing imports and the resultant adverse impact\non the exchange rate requires licensed commercial banks and licensed specialised banks to adopt\nthe following measures with effect from 0l October 2018.\n1. The following will replace Directions 2.1 of the Banking Act Directions No. 0l of 2018 on\nLoan to Value Ratios for Credit Facilities Granted in respect of Motor Vehicles.\nCredit facilities granted by every licensed bank for the purpose of pruchase or utilisation of\nmotor vehicles shall not exceed the following percentages of the market value of such\nvehicles until further notice.\n(i) In respect of unregistered vehicles which have been used in Sri La$ka for less than\none yeax after the first regisfration;\nTable I - Loan to Value Ratio\nCommercial vehiclescl, c, cE, Dl, D, DE, Gl, G,\nJ9oo/o 90%\nMotor Cars, SUVs and VansB (other than light trucks &\nsinsle cabs)90% 50o/o\nThree wheelers B1 90o/o 25o/o\nAny other vehicleA1, A,lighttrucks & single\ncabs categorized under B90o/o 70o/o\nHybrid Motor Cars, Vans and\nSUVsB (other than light uucks &\nsinsle cabs)50%\n(ii) 70 per cent in respect of registered vehicles which have been used in Sri Lanka for\nmore than one year after the fust registration.\n2. Refrain from opening of letters of credit for importation of motor vehicles under the scheme\nfor issuance of motor vehicle permits on concessionary terms issued by the Govemment of\nN-.---=\nChief Executive Oficer/Senior Deptty Governor\nof the Central Bank of Sri Lanka,Sri Lanka until further notice.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_6_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "Schedule -A  \nExclusion List of Motor Vehicles      \nHS    \nHdg    HS Code     Description     \n   \n87.01      Tractors (other than tractors of heading 87.09) (+)  \n  8701.10.00  Single axle tractors :  \n  8701.10.10  More than ten years old  \n  8701.10.90  Other  \n  8701.20.00  Road tractors for semi -trailers:  \n  8701.20.10  Not more than five years old  \n  8701.20.20  More than five years old  \n  8701.30.00  Track -laying tractors :  \n  8701.30.10  Not more than five years old  \n  8701.30.20  \n  More than five years old  \n   Other, of an engine power:  \n  8701.91  Not exceeding 18kW :  \n  8701.91.10  Agricultural tractors, not more than ten years old  \n  8701.91.20  Agricultural tractors, more than ten years old  \n  8701.91.30  Other, not more than ten years old  \n  8701.91.40  Other, more than ten years \nold  \n  8701.92.00  Exceeding 18 kW but not exceeding 37 kW :  \n  8701.92.10  Agricultural tractors, not more than ten years old  \n  8701.92.20  Agricultural tractors, more than ten years old  \n  8701.92.30  Other, not more than ten years old  \n  8701.92.40  Other, more than ten years old  \n  8701.93.00  Exceeding 37 kW but not exceeding 75 kW :  \n  8701.93.10  Agricultural tractors, not more than ten years old  \n  8701.93.20  Agricultural tractors, more than ten years old  \n  8701.93.30  Other, not more than ten years old  \n  8701.93.40  Other, more than ten years old  \n  8701.94.00  Exceeding 75 kW but not exceeding 130 kW :  \n  8701.94.10  Agricultural tractors, not more than ten years old  \n  8701.94.20  Agricultural tractors, more than ten years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "8701.94.30  Other, not more than ten years old  \n  8701.94.40  Other, more than ten years old  \n  8701.95.00  Exceeding 130 kW :  \n  8701.95.10  Agricultural tractors, not more than ten years old  \n  8701.95.20  Agricultural tractors, more than ten years old  \n  8701.95.30  Other, not more than ten years old  \n  8701.95.40  \n  Other, more than ten years old   \n    \n87.02  \n   Motor vehicles for the transport of ten or more \npersons, including the driver  \n  8702.10.00  \n  With only compression - ignition internal combustion \npiston engine (diesel or semi - diesel) :  \n   Motor vehicles for the transport of less than 13 persons \n(adults) including the driver, not more than three and a \nhalf years old:  \n  8702.10.12  Modified Vehicles of heading 87.03, not more than two \nyears old  \n  8702.10.13  Modified Vehicles of heading  87.03, more than two \nyears old  \n  8702.10.19  \n  Other  \n   Motor vehicles for the transport of less than 13 persons \n(adults) including the driver, more than three and a half \nyears old:  \n  8702.10.21  Modified Vehicles of heading 87.03  \n  8702.10.29  \n  Other  \n   Motor vehicles for the transport of 13 or more persons \n(adults) but less than 25 persons (adults) including the \ndriver, not more than five years old :  \n  8702.10.32  Modified Vehicles of heading 87.03, not more than two \nyears old  \n  8702.10.33  Modified Vehicles of heading 87.03, more than two \nyears old  \n  8702.10.39  \n  Other", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "Motor vehicles for the transport of 13 or more persons \n(adults) but less than 25 persons (adults) including the \ndriver, more than five years old :  \n  8702.10.41  Modified Vehicles of heading 87.03  \n 8702.10.49  Other  \n  \n   Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, not more than ten years old :  \n  8702.10.53  Modified Vehicles of heading 87.03, not more than two \nyears old  \n  8702.10.54  Modified Vehicles of heading 87.03, more than two \nyears old  \n  8702.10.55  Other, not  more than five years old  \n  8702.10.59  \n  Other  \n   Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, more than ten years old :  \n  8702.10.61  Modified Vehicles of heading 87.03  \n  8702.10.69  \n  Other  \n   Other, not  more than ten years old :  \n  8702.10.73  Modified Vehicles of heading 87.03, not more than  two \nyears old  \n  8702.10.74  Modified Vehicles of heading 87.03, more than  two  \nyears old  \n  8702.10.75  Other, not more than five years old  \n  8702.10.79  \n  Other  \n   Other, more than ten years old :  \n  8702.10.81  Modified Vehicles of heading 87.03  \n  8702.10.89  Other  \n  8702.20.00  \n  With both compression - ignition internal combustion \npiston engine (diesel or semi - diesel) and electric motor \nas motors for propulsion   \n   Motor vehicles for the transport of less than 13 persons \n(adults) including the driver, not more than three and a \nhalf years old:", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": "8702.20.11  Modified Vehicles of heading 87.03, not more than two \nyears old  \n  8702.20.12  Modified Vehicles of heading 87.03, more than two \nyears old  \n  8702.20.19  \n  Other  \n  Motor vehicles for the transport of less than 13 persons \n(adults) including the driver, more than three and a half \nyears old:  \n  8702.20.21  Modified vehicles of heading 87.03  \n  8702.20.29  \n  Other  \n   Motor vehicles for the transport of 13 or more persons \n(adults) but less than 25 persons (adults) including the \ndriver, not more than five years old :  \n  8702.20.31  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.20.32  Modified vehicles of heading 87.03, more than two \nyears old  \n  8702.20.39  \n  Other  \n   Motor vehicles for the transport of 13 or more persons \n(adults) but less than 25 persons (adults) including the \ndriver, more than five years old :  \n  8702.20.41  Modified vehicles of heading 87.03  \n  8702.20.49  \n  Other  \n   Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, not more than ten years old :  \n  8702.20.51  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.20.52  Modified vehicles of heading 87.03, more than two \nyears old  \n  8702.20.53  Other, not more than five years old  \n  8702.20.59  \n  Other", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, more than ten years old :  \n  8702.20.61  Modified vehicles of heading 87.03  \n  8702.20.69  \n  Other  \n   Other, not more than ten years old :  \n  8702.20.71  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.20.72  Modified vehicles of heading 87.03,  more than two \nyears old  \n  8702.20.73  Other, not more than five years old  \n 8702.20.79  Other  \n  \n   Other, more than ten years old :  \n  8702.20.81  Modified vehicles of heading 87.03  \n  8702.20.89  Other  \n  8702.30.00  \n  With both spark -ignition internal combustion \nreciprocating piston engine and electric motor as \nmotors for propulsion:  \n   Motor vehicles for the transport of less than 13 persons \n(adults) including the driver, not more than three and a \nhalf years old:  \n  8702.30.11  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.30.12  Modified vehicles of heading 87.03, more than two \nyears old  \n  8702.30.19  \n  Other  \n   Motor vehicles for the transport of less than 13 persons \n(adults) including the driver, more than three and a half \nyears old:  \n  8702.30.21  Modified vehicles of heading 87.03  \n  8702.30.29  \n  Other  \n   Motor vehicles for the transport of 13 or more persons \n(adults) but less than 25 persons (adults) including the \ndriver, not more than five years old :", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 5, "year": 2018}, "type": "Document"}
{"page_content": "8702.30.31  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.30.32  Modified vehicles of heading 87.03, more than two \nyears old  \n  8702.30.39  \n  Other  \n   Motor vehicles for the transport of 13 or more persons \n(adults) but less than 25 persons (adults) including the \ndriver, more than five years old :  \n  8702.30.41  Modified vehicles of heading 87.03  \n  8702.30.49  \n  Other  \n  Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, not more than ten years old :  \n  8702.30.51  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.30.52  Modified vehicles of heading 87.03, more than two \nyears old  \n  8702.30.53  Other, not more than five years old  \n  8702.30.59  \n  Other  \n   Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, more than ten years old :  \n  8702.30.61  Modified vehicles of heading 87.03  \n  8702.30.69  \n  Other  \n   Other, not more than ten years old :  \n  8702.30.71  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.30.72  Modified vehicles of heading 87.03, more than two \nyears old  \n  8702.30.73  Other, not more than five years old  \n  8702.30.79  \n  Other  \n   Other, more than ten years old :  \n  8702.30.81  Modified vehicles of heading 87.03", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 6, "year": 2018}, "type": "Document"}
{"page_content": "8702.30.89  Other  \n  8702.40.00  \n  With only electric motor for propulsion :  \n   Motor vehicles for the transport of less than 13 persons \n(adults) including the driver, not more than three and a \nhalf years old:  \n  8702.40.11  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.40.12  Modified vehicles of heading 8 7.03, more than two \nyears old  \n  8702.40.19  \n  Other  \n   Motor vehicles for the transport of less than 13 persons \n(adults) including the driver, more than three and a half \nyears old :  \n  8702.40.21  Modified vehicles of heading 87.03  \n  8702.40.29  \n  Other  \n  Motor vehicles for the transport of 13 or more persons \n(adults) but less than 25 persons (adults) including the \ndriver, not more than five years old :  \n  8702.40.31  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.40.32  Modified vehicles of heading 87.03, more than two \nyears old  \n  8702.40.39  \n  Other  \n   Motor vehicles for the transport of 13 or more persons \n(adults) but less than 25 persons (adults) including the \ndriver, more than five years old :  \n  8702.40.41  Modified vehicles of heading 87.03  \n  8702.40.49  \n  Other  \n   Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, not more than ten years old :  \n  8702.40.51  Modified Vehicles of heading 87.03, not more than two \nyears old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "8702.40.52  Modified Vehicles of heading 87.03, more than two \nyears old  \n  8702.40.53  Other, not more than five years old  \n  8702.40.59  \n  Other  \n   Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, more than ten years old :  \n  8702.40.61  Modified vehicles of heading 87.03  \n  8702.40.69  \n  Other  \n   Other, not more than ten years old:  \n  8702.40.71  Modified vehicles of heading 87.03, not more than two \nyears old  \n  8702.40.72  Modified vehicles of heading 87.03, more than two \nyears old  \n  8702.40.73  Other, not more than five years old  \n  8702.40.79  \n  Other  \n   Other, more than ten years old:  \n  8702.40.81  Modified vehicles of heading 87.03  \n  8702.40.89  Other  \n 8702.90.00  Other :  \n  \n   Motor vehicles for the transport of less than 13 \npersons (adults) including the driver, not more than \nthree and a half years old :  \n  8702.90.12  Modified Vehicles of heading 87.03, not more than \ntwo years old  \n  8702.90.13  Modified Vehicles of heading 87.03, more than two \nyears old  \n  8702.90.19  \n  Other  \n   Motor vehicles for the transport of less than 13 \npersons (adults) including the driver, more than \nthree and a half years old :  \n  8702.90.21  Modified Vehicles of heading 87.03  \n  8702.90.29  \n  Other", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "Motor vehicles for the transport of 13 or more \npersons (adults) but less than 25 persons (adults) \nincluding the driver, not more than five years old :  \n  8702.90.32  Modified Vehicles of heading 87.03, not more than \ntwo years old  \n  8702.90.33  Modified Vehicles of heading 87.03, more than two \nyears old  \n  8702.90.39  \n  Other  \n   Motor vehicles for the transport of 13 or more \npersons (adults) but less than 25 persons (adults) \nincluding the driver, more than five years old :  \n  8702.90.41  Modified Vehicles of heading 87.03  \n  8702.90.49  \n  Other  \n   Motor vehicles for the transport of 25 or more \npersons (adults) but less than 35 persons (adults) \nincluding the driver, not more than ten years old :  \n  8702.90.53  Modified Vehicles of heading 87.03, not more than  \ntwo years old  \n  8702.90.54  Modified Vehicles of heading 87.03, more than two \nyears old  \n  8702.90.55  Other, not more than five years old  \n 8702.90.59  Other  \n  \n   Motor vehicles for the transport of 25 or more persons \n(adults) but less than 35 persons (adults) including the \ndriver, more than ten years old :  \n  8702.90.61  Modified Vehicles of heading 87.03  \n  8702.90.69     Other  \n   Other, not more than ten years old :  \n  8702.90.73  Modified Vehicles of heading 87.03, not more than  two \nyears old  \n  8702.90.74  Modified Vehicles of heading 87.03, more than two \nyears old  \n  8702.90.75  Other, not  more than five years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 9, "year": 2018}, "type": "Document"}
{"page_content": "8702.90.79  \n  Other  \n   Other, more than ten years old :  \n  8702.90.81  Modified Vehicles of heading 87.03  \n  8702.90.89  \n  Other   \n    \n87.03  \n    Motor cars and other motor vehicles principally \ndesigned for the transport of persons (other than \nthose of heading 87.02), including station wagons \nand racing cars.   \n   Other vehicles, with only spark -ignition internal \ncombustion reciprocating piston engine :  \n  8703.21.10  Ambulances and prison vans not more than three years \nold  \n  8703.21.20  Ambulances and prison vans more than three years old  \n  8703.21.30  Hearses not more than three years old  \n  8703.21.40  Hearses more than three years old  \n  8703.22.00  Of a cylinder capacity exceeding 1,000 cc but not \nexceeding 1,500 cc:  \n  8703.22.10  Ambulances and prison vans, not more than three years \nold  \n  8703.22.20  Ambulances and prison vans, more than three years old  \n  8703.22.30  Hearses not more than three years old  \n  8703.22.40  \n  Hearses more than three years old  \n   Of a cylinder capacity exceeding 1,500 cc but not \nexceeding 3,000 cc :  \n 8703.23.10  Ambulances and prison vans not more than three years \nold  \n  8703.23.20  Ambulances and prison vans more than three years old  \n  8703.23.30  Hearses not more than three years old  \n  8703.23.40  Hearses more than three years old  \n  8703.24.00  Of a cylinder capacity exceeding 3,000 cc :  \n  8703.24.10  Ambulances and prison vans not more than three years \nold  \n  8703.24.20  Ambulances and prison vans more than three years old  \n  8703.24.30  Hearses not more than three years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 10, "year": 2018}, "type": "Document"}
{"page_content": "8703.24.40  Hearses more than three years old  \n  8703.31.00  Of a cylinder capacity not exceeding 1,500 cc :  \n  8703.31.10  Ambulances and prison vans not more than three years \nold  \n  8703.31.20  Ambulances and prison vans more than three years old  \n  8703.31.30  Hearses not more than three years old  \n  8703.31.40  Hearses more than three years old  \n  8703.32.00  Of a cylinder capacity exceeding 1,500 cc but not \nexceeding 2,500 cc :  \n  8703.32.10  Ambulances and prison vans not more than three years \nold  \n  8703.32.20  Ambulances and prison vans more than three years old  \n  8703.32.30  Hearses not more than three years old  \n  8703.32.40  Hearses more than three years old  \n  8703.33.00  Of a cylinder capacity exceeding 2,500 cc :  \n  8703.33.10  Ambulances and prison vans not more than three years \nold  \n  8703.33.20  Ambulances and prison vans more than three years old  \n  8703.33.30  Hearses not more than three years old  \n  8703.33.40  Hearses more than three years old  \n    \n  Other vehicles, with both spark -ignition internal \ncombustion reciprocating piston engine and electric \nmotor as motors for propulsion, other than those capable \nof being charged by plugging to external source of \nelectric power :  \n   Vehicles other than moto r cars including station \nwagons and racing cars, of a cylinder capacity not \nexceeding 1,000 cc :  \n  8703.40.11  Ambulances and prison vans not more than three years \nold  \n 8703.40.12  Ambulances and prison vans more than three years  \n  8703.40.13  Hearses not more than three years old  \n  8703.40.14  \n  Hearses more than three years old  \n   Of a cylinder capacity exceeding 1,000 cc but not \nexceeding 1,500 cc:  \n  8703.40.31  Ambulances and prison vans, not more than three years \nold", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 11, "year": 2018}, "type": "Document"}
{"page_content": "8703.40.32  Ambulances and prison vans, more than three years old  \n  8703.40.33  Hearses not more than three years old  \n  8703.40.34  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station wagons \nand racing cars of a cylinder capacity exceeding 1,500 \ncc but not exceeding 2,000 cc :  \n  8703.40.41  Ambulances and prison vans not more than three years \nold  \n  8703.40.42  Ambulances and prison vans more than three years old  \n  8703.40.43  Hearses not more than three years old  \n  8703.40.44  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station wagons \nand racing cars of a cylinder capaci ty exceeding 2,000 \ncc but not exceeding 3000cc :  \n  8703.40.61  Ambulances and prison vans not more than three years \nold  \n  8703.40.62  Ambulances and prison vans more than three years old  \n  8703.40.63  Hearses not more than three years old  \n  8703.40.64  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station wagons \nand racing cars of a cylinder capacity exceeding 3000cc \n:  \n  8703.40.81  Ambulances and prison vans not more than three years \nold  \n  8703.40.82  Ambulances and prison vans more than three years old  \n  8703.40.83  Hearses not more than three years old  \n  8703.40.84  Hearses more than three years old  \n   Other vehicles, with both compression -ignition internal \ncombustion piston engine (diesel or semi -diesel) and \nelectric motor as motors for propulsion, other than those \ncapable of being charged by plugging to external source \nof electric power :  \n  \n   Vehicl es other than motor cars including station \nwagons and racing cars ,of cylinder capacity not \nexceeding 1,000 cc :", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 12, "year": 2018}, "type": "Document"}
{"page_content": "8703.50.11  Ambulances and prison vans not more than three years \nold  \n  8703.50.12  Ambulances and prison vans more than three years  \n  8703.50.13  Hearses not more than three years old  \n  8703.50.14  \n  Hearses more than three years old  \n   Of a cylinder capacity exceeding 1,000 cc but not \nexceeding 1,500 cc:  \n  8703.50.31  Ambulances and prison vans, not more than three years \nold  \n  8703.50.32  Ambulances and prison vans, more than three years old  \n  8703.50.33  Hearses not more than three years old  \n  8703.50.34  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capacity \nexceeding 1,500 cc but not exceeding 2,000 cc :  \n  8703.50.41  Ambulances and prison vans not more than three years \nold  \n  8703.50.42  Ambulances and prison vans more than three years old  \n  8703.50.43  Hearses not more than three years old  \n  8703.50.44  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capacity \nexceeding 2,000 cc but not exceeding 3000cc :  \n  8703.50.61  Ambulances and prison vans not more than three years \nold  \n  8703.50.62  Ambulances and prison vans more than three years old  \n  8703.50.63  Hearses not more than three years old  \n  8703.50.64  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capaci ty \nexceeding 3000cc :  \n  8703.50.81  Ambulances and prison vans not more than three years \nold  \n  8703.50.82  Ambulances and prison vans more than three years old  \n  8703.50.83  Hearses not more than three years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 13, "year": 2018}, "type": "Document"}
{"page_content": "8703.50.84  Hearses more than three years old  \n  \n   Vehicles other than motor cars including station \nwagons and racing cars ,Of cylinder capacity not \nexceeding 1,000 cc :  \n  8703.60.11  Ambulances and prison vans not more than three years \nold  \n  8703.60.12  Ambulances and prison vans more than three years  \n  8703.60.13  Hearses not more than three years old  \n  8703.60.14  \n  Hearses more than three years old  \n   Of a cylinder capacity exceeding 1,000 cc but not \nexceeding 1,500 cc:  \n  8703.60.31  Ambulances and prison vans, not more than three years \nold  \n  8703.60.32  Ambulances and prison vans, more than three years old  \n  8703.60.33  Hearses not more than three years old  \n  8703.60.34  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capacity \nexceeding 1,500 cc but not exceeding 2,000 cc :  \n  8703.60.41  Ambulances and prison vans not more than three years \nold  \n  8703.60.42  Ambulances and prison vans more than three years old  \n  8703.60.43  Hearses not more than three years old  \n  8703.60.44  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capacity \nexceeding 2,000 cc but not exceeding 3000cc :  \n  8703.60.61  Ambulances and prison vans not more than three years \nold  \n  8703.60.62  Ambulances and prison vans more than three years old  \n  8703.60.63  Hearses not more than three years old  \n  8703.60.64  \n  Hearses more than three years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 14, "year": 2018}, "type": "Document"}
{"page_content": "Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capacity \nexceeding 3000cc :  \n  8703.60.81  Ambulances and prison vans not more than three years \nold  \n  8703.60.82  Ambulances and prison vans more than three years old  \n  8703.60.83  Hearses not more than three years old  \n 8703.60.84  Hearses more than three years old  \n  8703.70.11  Ambulances and prison vans not more than three years \nold  \n  8703.70.12  Ambulances and prison vans more than three years  \n  8703.70.13  Hearses not more than three years old  \n  8703.70.14  \n  Hearses more than three years old  \n   Of a cylinder capacity exceeding 1,000 cc but not \nexceeding 1,500 cc:  \n  8703.70.31  Ambulances and prison vans, not more than three years \nold  \n  8703.70.32  Ambulances and prison vans, more than three years old  \n  8703.70.33  Hearses not more than three years old  \n  8703.70.34  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capacity \nexceeding 1,500 cc but not exceeding 2,000 cc :  \n  8703.70.41  Ambulances and prison vans not more than three years \nold  \n  8703.70.42  Ambulances and prison vans more than three years old  \n  8703.70.43  Hearses not more than three years old  \n  8703.70.44  \n  Hearses more than three years old  \n   Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capaci ty \nexceeding 2,000 cc but not exceeding 3000cc :  \n  8703.70.61  Ambulances and prison vans not more than three years \nold  \n  8703.70.62  Ambulances and prison vans more than three years old  \n  8703.70.63  Hearses not more than three years old  \n  8703.70.64  Hearses more than three years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 15, "year": 2018}, "type": "Document"}
{"page_content": "Vehicles other than motor cars including station \nwagons and racing cars of a cylinder capacity \nexceeding 3000cc :  \n  8703.70.81  Ambulances and prison vans not more than three years \nold  \n  8703.70.82  Ambulances and prison vans more than three years old  \n  8703.70.83  Hearses not more than three years old  \n  8703.70.84  \n  Hearses more than three years old   \n    \n87.04     Motor vehicles for the transport of goods.  \n 8704.10.00  Dumpers designed for off - highway use   \n  \n   Other, with compression - ignition internal combustion \npiston engine (diesel or semi - diesel) :  \n  8704.21.00  \n  g.v.w. not exceeding 5 tonnes \n:  \n   Special purpose tankers/bowsers  and trucks:  \n  8704.21.11  Tankers / bowsers with stainless steel tanks for \ntransport of milk, not more than five years old  \n  8704.21.12  Tankers / bowsers with stainless steel tanks for \ntransport of milk,more than five years old  \n  8704.21.13  Garbage trucks equipped with waste compacting \nmechanism, not more than five years old  \n  8704.21.14  \n  Garbage trucks equipped with waste compacting \nmechanism, more than five years old  \n   Auto -trishaws :  \n  8704.21.21  Not more than four  years old  \n  8704.21.22  \n  More than four years old  \n   Chassis fitted with engines and \ncabs  \n  8704.21.31  for vehicles of national subdivision 8704.21.43, not \nmore than four  years old  \n  8704.21.32  for vehicles of national subdivision 8704.21.44, more \nthan four years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 16, "year": 2018}, "type": "Document"}
{"page_content": "8704.21.33  for vehicles of national subdivision 8704.21.51, not \nmore than four years old  \n  8704.21.34  for vehicles of national subdivision 8704.21.52, more \nthan four years old  \n  8704.21.35  for vehicles of national subdivision 8704.21.63,not \nmore than four years old  \n  8704.21.36  for vehicles of national subdivision 8704.21.64, more \nthan four years old  \n  8704.21.37  for vehicles of national subdivision 8704.21.67, not \nmore than four years old  \n 8704.21.38  for vehicles of national subdivision 8704.21.68, more \nthan four years old   \n  \n   Vehicles with separate bodies for cabin and for cargo \narea, the cabin been designed for 3 persons (adults) or \nless, including the driver, with no additional space in \nthe cabin  that can be converted for other uses, and \ncargo carrying capacity of less than 2000 kg, but \nexcluding those vehicles with an engine compartment \ntotally protruding to the front of the vehicle from the \ndriving cab :  \n  8704.21.41  Cargo carrying capacity o f less than 800kg, not more \nthan four years old  \n  8704.21.42  Cargo carrying capacity of less than 800kg , more than \nfour  years old  \n  8704.21.43  Cargo carrying capacity of 800kg or more, not more \nthan four years old  \n  8704.21.44  \n  Cargo carrying capacity of  \n800kg or more, more than four years old  \n   Vehicles with separate bodies for cabin and cargo area, \nthe cabin been designed for 3 persons (adults) or less, \nincluding the driver, with no additional space in the \ncabin that can be  converted for other uses, and cargo \ncarrying capacity of  2000 kg or more :  \n  8704.21.51  Not more than four years old  \n  8704.21.52  \n  More than four years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 17, "year": 2018}, "type": "Document"}
{"page_content": "Vehicles with separate bodies for cabin and for cargo \narea, the cabin been designed for 3 persons (adults) or \nless, including the driver, with no additional space in \nthe cabin that can be converted for other uses, and \ncargo carrying capacity of less than 2000 kg :  \n  8704.21.61  Vehicles fitted with front  leaf sprigs and Cargo carrying \ncapacity of less than 800kg, not more than four years \nold  \n  8704.21.62  Vehicles fitted with front leaf sprigs and Cargo carrying \ncapacity of less than 800kg , more than four  years old  \n  8704.21.63  Vehicles  fitted with front leaf sprigs and Cargo \ncarrying capacity of 800kg or more, not more than four \nyears old  \n \n8704.21.64  Vehicles  fitted with front leaf sprigs and Cargo \ncarrying capacity of 800kg or more, more than four \nyears old  \n  8704.21.65  Other Vehicles, Cargo carrying capacity of less than \n800kg, not more than four years old  \n  8704.21.66  Other Vehicles, Cargo carrying capacity of less than \n800kg, more than four  years old  \n  8704.21.67  Other Vehicles, Cargo carrying capacity of 800kg or \nmore, not more than four years old  \n  8704.21.68  \n  Other Vehicles, Cargo carrying capacity of 800kg or \nmore, more than four years old  \n   Other vehicles with separate bodies for cabin and cargo \narea, cabin been designed for six persons (adults) or less \nincluding the driver, with no additional space in the \ncabin that can be converted for other use, and a cargo \ncarrying capacity of 800 kg or more, but excluding \nthose vehicles with an engine compartment t otally \nprotruding to the front of the vehicle from the driving \ncab :  \n  8704.21.71  Not more than four  years old  \n  8704.21.72  \n  More than four  years old  \n   Other :  \n  8704.22.00  \n  g.v.w. exceeding 5 tonnes but not exceeding 20 tonnes :", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 18, "year": 2018}, "type": "Document"}
{"page_content": "Tankers and bowsers with stainless steel tanks for \ntransport of milk and refrigerated trucks :  \n  8704.22.41  Not more than five years old  \n  8704.22.42  More than five years old but less than ten years old  \n  8704.22.43  \n  More than ten years old  \n   Garbage trucks equipped with waste compacting \nmechanism. :  \n  8704.22.51  Not more than five years old  \n  8704.22.52  \n  More than five years old  \n   Other :  \n  8704.22.61  Not more than five years old  \n  8704.22.62  More than five years old but less than ten years old  \n  8704.22.63  \n  More than ten years old   \n    \n  8704.23.00   \n  g.v.w. exceeding 20 tonnes :  \n  \n     \n  Tankers and bowsers with stainless steel tanks for \ntransport of milk and refrigerated trucks :  \n  8704.23.51  Not more than five years old  \n  8704.23.52  More than five years old but less than ten years old  \n  8704.23.53  \n  More than ten years old  \n   Garbage trucks equipped with waste compacting \nmechanism:  \n  8704.23.61  Not more than five years old  \n  8704.23.62  \n  More than five years old  \n   Other :  \n  8704.23.71  Not more than five years old  \n  8704.23.72  More than five years old but less than ten years old  \n  8704.23.73  \n  More than ten years old  \n   Other, with spark -ignition internal combustion piston \nengine :  \n  8704.31.00  g.v.w. not exceeding 5 tonnes :", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 19, "year": 2018}, "type": "Document"}
{"page_content": "Special purpose tankers/bowsers  and trucks:  \n  8704.31.11  Tankers / bowsers with stainless steel tanks for transport \nof milk, not more than five years old  \n  8704.31.12  Tankers / bowsers with stainless steel tanks for transport \nof milk,more than five years old  \n  8704.31.13  Garbage trucks equipped with waste compacting \nmechanism, not more than five years old  \n  8704.31.14  \n  Garbage trucks equipped with waste compacting \nmechanism, more than five years old  \n   Auto -trishaws :  \n  8704.31.21  With two -stroke petrol engine  \n  8704.31.22  Other, not more than four years \nold  \n  8704.31.23  \n  Other, more than four  years old  \n   Chassis fitted with engines and cabs :  \n  8704.31.31  for vehicles of national subdivision 8704.31.43, not \nmore than four years old  \n  8704.31.32  for vehicles of national subdivision 8704.31.44, more \nthan four years old  \n  8704.31.33  for vehicles of national subdivision 8704.31.51, not \nmore than four  years old  \n 8704.31.34  for vehicles of national subdivision 8704.31.52, more \nthan four years ol d  \n  8704.31.35  for vehicles of national subdivision 8704.31.63, not \nmore than four years old  \n  8704.31.36  for vehicles of national subdivision 8704.31.64, more \nthan four years old  \n  8704.31.37  for vehicles of national subdivision 8704.31.67, not \nmore than four years old  \n  8704.31.38  \n  for vehicles of national subdivision 8704.31.68, more \nthan four years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 20, "year": 2018}, "type": "Document"}
{"page_content": "Vehicles with separate bodies for cabin and for cargo \narea, the cabin been designed for 3 persons (adults) or \nless, including the driver, with no additional space in \nthe cabin that can be converted for other uses, and \ncargo carrying capacity of less than 2000 kg, but \nexcluding those vehicles with an engine compartment \ntotally pro truding to the front of the vehicle from the \ndriving cab :  \n  8704.31.41  Cargo carrying capacity of less than 800kg, not more \nthan four years old  \n  8704.31.42  Cargo carrying capacity of less than 800kg , more than \nfour  years old  \n  8704.31.43  Cargo carrying capacity of 800kg or more, not more \nthan four years old  \n  8704.31.44  \n  Cargo carrying capacity of 800kg or more, more than \nfour  years old  \n   Vehicles with separate bodies for cabin and cargo area, \ncabin been designed for three persons (adults) or less, \nincluding the driver with no additional space in the \ncabin that can be converted for other uses and cargo \ncarrying capacity of 2000 kg or more:  \n  8704.31.51  Not more than four years old  \n  8704.31.52  \n  More than four  years old  \n   Vehicles with separate bodies for cabin and for cargo \narea, the cabin been designed for 3 persons (adults) or \nless, including the driver, with no additional space  in \nthe cabin that can be converted for other uses, and cargo \ncarrying capacity of less than 2000 kg :  \n \n8704.31.61  Vehicles fitted with front leaf sprigs and Cargo carrying \ncapacity of less than 800kg, not more than four years \nold  \n  8704.31.62  Vehicles   fitted with front leaf sprigs and Cargo \ncarrying capacity of less than 800kg , more than four \nyears old  \n  8704.31.63  Vehicles  fitted with front leaf sprigs and Cargo carrying \ncapacity of 800kg or more, not more than four years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 21, "year": 2018}, "type": "Document"}
{"page_content": "8704.31.64  Vehicles fitted with front  leaf sprigs and Cargo carrying \ncapacity of 800kg or more, more than four years old  \n  8704.31.65  Other Vehicles, Cargo carrying capacity of less than \n800kg, not more than four years old  \n  8704.31.66  Other Vehicles, Cargo carrying capacity of less than \n800kg, more than four years old  \n  8704.31.67  Other Vehicles, Cargo carrying capacity of 800kg or \nmore, not more than four years old  \n  8704.31.68  \n  Other Vehicles, Cargo carrying capacity of 800kg o r \nmore, more than four years old  \n   Other vehicles with separate bodies for cabin and cargo \narea, cabin been designed for six persons (adults) or less \nincluding the driver, with no additional space in the \ncabin that can be converted for other use, and a cargo \ncarrying capacity of 800 kg or more, but excluding \nthose vehicles with an engine compartment totally \nprotruding to the front of the vehicle from the driving \ncab :  \n  8704.31.71  Not more than four years old  \n  8704.31.72  \n  More than four  years old  \n   Other :  \n  8704.31.93  Other not more than four years old  \n  8704.31.99  Other more than four  years old  \n  8704.32.00  \n  g.v.w. exceeding 5 tonnes :  \n   Tankers and bowsers with stainless steel tanks for \ntransport of milk  and refrigerated trucks :  \n  8704.32.41  Not more than five years old  \n  8704.32.42  More than five years old but not more than  ten years \nold  \n  8704.32.43  \n  More than ten years old  \n   Garbage trucks equipped with waste compacting \nmechanism:  \n 8704.32.51  Not more than five years old  \n  8704.32.52  \n  More than five years old  \n   Other :", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 22, "year": 2018}, "type": "Document"}
{"page_content": "8704.32.61  Not more than five years old  \n  8704.32.62  More than five years old but not more than ten years old  \n  8704.32.63  More than ten years old  \n  8704.90.00  Other :  \n  8704.90.10   Electric auto -trishaws not more than five years old  \n  8704.90.20  Electric auto -trishaws more than five years old  \n  8704.90.30  Other electric, not more than five years old  \n  8704.90.40  Other electric, more than five years old  \n  8704.90.50  Other, not more than five years old  \n  8704.90.60  Other, more than five years old   \n    \n87.05  \n Special purpose motor vehicles, other than those \nprincipally designed for the transport of persons or \ngoods (for example, breakdown lorries, crane \nlorries, fire fighting vehicles, concrete -mixer lorries, \nroad sweeper lorries, spraying lorries, mobile \nworkshops, mobile rad iological units)  \n    \n  8705.10.00  Crane lorries :  \n  8705.10.10  Not more than ten years old  \n  8705.10.20  More than ten years old  \n  8705.20.00  Mobile drilling derricks :  \n  8705.20.10  Not more than seven years old  \n  8705.20.20  More than seven years old   \n    \n  8705.30.00  Fire fighting vehicles :  \n  8705.30.10  Not more than seven years old  \n  8705.30.20  More than seven years old  \n  8705.40.00  Concrete -mixer lorries :  \n  8705.40.10  Not more than ten years old  \n  8705.40.20  More than ten years old  \n  8705.90.00  Other :  \n   Mobile workshops  \n 8705.90.11  Not more than seven years old  \n  8705.90.12  \n  More than seven years old", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 23, "year": 2018}, "type": "Document"}
{"page_content": "Gully bowzers  equipped with suction pumps for \nextracting sewage water /wastes:  \n  8705.90.21  Not more than seven years old  \n  8705.90.22  \n  More than seven years old  \n   Concrete pump trucks :  \n  8705.90.31  Not more than ten years old  \n  8705.90.32  \n  More than ten years old  \n   Other :  \n  8705.90.91  g. v. w. not exceeding 4 tonnes , not more than seven \nyears old  \n  8705.90.92  g. v. w. not exceeding 4 tonnes , more than seven years \nold  \n  8705.90.93  g. v. w. exceeding 4 tonnes , not more than seven years \nold  \n  8705.90.94  \n  g. v. w. exceeding 4 tonnes , more than seven years old  \n  \n   \n87.06  \n  8706.00.00  \n  Chassis fitted with engines, for the motor vehicles of \nheading 87.01 to 87.05.  \n  \n    \n  8706.00.10  New chassis fitted with engines for motor vehicles of \nheading 87.02, for the transport of twenty eight or more \npassengers including the driver  \n  8706.00.20  New chassis fitted with engines for other motor vehicles \nof heading 87.02  \n  8706.00.30  New chassis fitted with engines for motor vehicles of \nheading 8704.21, 8704.22, 8704.23, 8704.31 and \n8704.32 with a g.v.w. of 3,000 kg or more  \n  8706.00.40  Other new chassis fitted with engines for other motor \nvehicles  \n 8706.00.50     Used chassis fitted with engines  \n87.07  \n   Bodies (including cabs), for the motor vehicles of \nheadings 87.01 to 87.05.   \n  8707.10.00  For the vehicles of heading 87.03 :  \n  8707.10.10  Used vehicle  bodies fully equipped with fittings and \naccessories", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 24, "year": 2018}, "type": "Document"}
{"page_content": "8707.10.20  Other vehicle bodies fully equipped with fittings and \naccessories  \n  8707.10.30  Used vehicle bodies fully equipped with fittings and \naccessories excluding seats and upholstery  \n  8707.10.40  Other vehicle bodies fully equipped with fittings and \naccessories excluding seats and upholstery  \n  8707.10.50  Rough coated ,bare body frame with /without doors , \nbonnet and boot lid  \n  8707.10.60  Used bare body frame with /without doors , bonnet and \nboot lid  \n  8707.10.90  Other  \n  8707.90.00  Other :  \n  8707.90.10  Bodies and cabs incorporating attachments left over in \nthe process of separating same from the main vehicle by \ncutting, but not meriting classification elsewhere by \nvirtue of those left over attachments  \n  8707.90.20  Other, for the motor vehicles of head ing 87.02, for the \ntransport of 25 or more persons including the driver  \n  8707.90.30  \n  Other, for the vehicles of sub - heading 8701.20 and the \nvehicles of heading 87.04, of a G.V.W. exceeding \n3,000kg  \n   Other, bodies for the vehicles of 10 or more persons but \nless than 25 of heading 87.02 including the driver :  \n  8707.90.41  Used  bodies fully equipped with fittings and \naccessories  \n  8707.90.42  Other vehicle bodies fully equipped with fittings and \naccessories  \n  8707.90.43  Used vehicle bodies fully equipped with fittings and \naccessories excluding seats and upholstery  \n  8707.90.44  Other vehicle bodies fully equipped with fittings and \naccessor ies excluding seats and upholstery  \n  8707.90.48  Rough coated ,bare body frame with /without doors, \nbonnet and boot lid  \n  8707.90.49  Used bare body frame with /without doors , bonnet and \nboot lid  \n 8707.90.90     Other  \n87.08  \n   Parts and accessories of the motor vehicles of \nheadings 87.01 to 87.05.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 25, "year": 2018}, "type": "Document"}
{"page_content": "8708.10.00  \n  Bumpers and parts thereof  \n   Other parts and accessories of bodies (including cabs) :  \n 8708.21.00  Safety seat belts  \n  8708.29.00  Other :  \n  8708.29.10  \"Cut-portions\" of bodies and cabs  \n  8708.29.90  Other  \n  8708.30.00  Brakes and servo -brakes; parts thereof  \n  8708.40.00  Gear boxes and parts thereof  \n  8708.50.00  Drive -axles with differential, whether or not provided \nwith other transmission components, and non -driving \naxles; parts thereof  \n  8708.70.00  Road wheels and parts and accessories thereof :  \n  8708.70.10  Rims fitted with tyres, showing signs of wear  \n  8708.70.20  Other, rims fitted with tyres  \n  8708.70.90  Other  \n  8708.80.00  \n  Suspension systems and parts thereof (including shock - \nabsorbers)  \n   Other parts and accessories :  \n  8708.91.00  Radiators and parts thereof :  \n  8708.91.10  Radiators and parts thereof  \n  8708.91.20  Parts  \n  8708.92.00  Silencers (mufflers) and exhaust pipes; parts thereof  \n  8708.93.00  Clutches and parts thereof  \n  8708.94.00  Steering wheels, steering columns and steering boxes; \nparts thereof  \n  8708.95.00  Safety airbags with inflater system; parts thereof  \n  8708.99.00  Other :  \n  8708.99.10  New chassis not fitted with engines, but with or without \nfittings for motor vehicles of heading 87.02 and 87.04 \nwith a g.v.w. of 3,000 kg or more  \n  8708.99.20  Other new chassis not fitted with engines, but with or \nwithout fittings  \n  8708.99.30  Other used chassis not fitted with engines, but with or \nwithout fittings  \n  8708.99.40  \"Cut-portions\" of motor vehicles", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 26, "year": 2018}, "type": "Document"}
{"page_content": "8708.99.90  Other  \n  \n87.09  \n    Works trucks, self - propelled, not fitted with lifting \nor handling equipment, of the type used in factories, \nwarehouses, dock areas or airports, for short \ndistance transport of goods; tractors of the type \nused on railway station platforms; parts of the \nforegoing vehicles.  \n  \n     \n   Vehicles :  \n  8709.11.00  Electrical  \n  8709.19.00  Other  \n  8709.90.00  \n  Parts   \n   \n87.10  \n  8710.00.00  \n  Tanks and other armoured fighting vehicles, \nmotorised, whether or not fitted with weapons, and \nparts of such vehicles.   \n  \n    \n87.13  \n    Carriages for disabled persons, whether or not \nmotorised or otherwise mechanically propelled.   \n  \n    \n  8713.10.00  Not mechanically propelled  \n 8713.90.00     Other  \n87.14  \n    Parts and accessories of vehicles of headings 87.11 to \n87.13.   \n  \n    \n  8714.10.00  Of motorcycles (including mopeds):  \n  8714.10.10  Frames, with or without frount folk  \n  8714.10.90  Other  \n  8714.20.00  \n  Of carriages for disabled \npersons  \n   Other :", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 27, "year": 2018}, "type": "Document"}
{"page_content": "8714.91.00  Frames and forks, and parts \nthereof :  \n  8714.91.10  Bicycle frames  \n  8714.91.20  Front forks  \n 8714.91.90  Other  \n  \n  8714.92.00  Wheel rims and spokes :  \n  8714.92.10  Wheel rims  \n  8714.92.90  Other  \n  8714.93.00  Hubs, other than coaster braking hubs and hub brakes, \nand free -wheel sprocket - wheels  \n  8714.94.00  Brakes, including coaster braking hubs and hub brakes, \nand parts thereof  \n  8714.95.00  Saddles  \n  8714.96.00  Pedals and crank -gear, and \nparts thereof  \n  8714.99.00  Other :  \n  8714.99.10  Mudguards  \n  8714.99.20  Chain stays  \n  8714.99.30  \n  Seat stays  \n   Other:  \n  8714.99.91  Bicycle rims fitted with new \ntyres  \n  8714.99.92  Bicycle rims fitted with tyres showing signs of wear  \n  8714.99.99  \n  Other   \n      \n   \n87.15  \n  8715.00.00  \n  Baby carriages and parts thereof.   \n  \n    \n87.16  \n    Trailers and semi -trailers; other vehicles, not \nmechanically propelled; parts thereof.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 28, "year": 2018}, "type": "Document"}
{"page_content": "8716.10.00  Trailers and semi -trailers of the caravan type, for \nhousing or camping :  \n  8716.10.10  Not more than five years old  \n  8716.10.20  More than five years old  \n  8716.20.00  Self-loading or self -unloading trailers and semi -trailers \nfor agricultural purposes :  \n  8716.20.10  Not more than five years old  \n  8716.20.20  \n  More than five years old  \n  Other trailers and semi - trailers for the transport of \ngoods :  \n  \n  8716.31.00  Tanker trailers and tanker semi -trailers :  \n  8716.31.10  Not more than five years old  \n  8716.31.20  More than five years old  \n  8716.39.00  Other :  \n  8716.39.10  Not more than five years old  \n  8716.39.20  More than five years old  \n  8716.40.00  Other trailers and semi - trailers \n:  \n  8716.40.10  Not more than five years old  \n  8716.40.20  More than five years old  \n  8716.80.00  Other vehicles :  \n  8716.80.20  Wheelbarrows  \n  8716.80.30  Other not more than five years \nold  \n  8716.80.40  Other more than five years old  \n  8716.90.00  Parts:  \n  8716.90.10  For wheelbarrows  \n 8716.90.90  Others", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 29, "year": 2018}, "type": "Document"}
{"page_content": "Schedule -B  \nNon-Essential Consumer Goods   \nHS Hdg   HS Code   Description   \n33.03  3303.00.00  Perfumes and toilet waters  \n  3303.00.10  Perfumes  \n  \n    Toilet waters  \n 3303.00.21  Baby cologne conforming to SLS 589 and containing alcohol not less than \n55% and not more than 65% by v/v  \n  3303.00.22  Other colognes containing alcohol not less than 50%  and not more than 90% \nby v/v  \n  3303.00.29  \n  Other  \n33.07   Pre-shave, shaving or after -shave preparations, personal deodorants, \nbath preparations, depilatories  and other perfumery, cosmetic or toilet \npreparations not elsewhere specified or included; prepared room \ndeodorisers, whether or not perfumed or having dis infectant properties  \n  3307.10.00  Pre-shave, shaving or after -shave preparations  \n  3307.20.00  Personal deodorants and antiperspirants  \n  \n  3307.30.00  \n  Perfumed bath salts and other bath preparations  \n   Preparations for perfuming or deodorizing rooms, including odoriferous \npreparations used during religious rites :  \n 3307.41.00  \"Agarbatti\" and other odoriferous preparations which operate by burning  \n  3307.49.00  Other  \n  3307.90.00  Other :  \n  3307.90.10  Contact lens solutions  \n  3307.90.90  Other  \n40.11    New pneumatic tyres, of rubber  (+)  \n  4011.10.00  Of a kind used on motor cars (including station wagons and racing cars)  \n  4011.20.00  Of a kind used on buses or lorries :  \n    Having a rim size 20 inches and above :  \n  4011.20.11  Tyre casing without markings", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 30, "year": 2018}, "type": "Document"}
{"page_content": "4011.20.19  Other  \n  4011.20.90  Other  \n  4011.30.00  Of a kind used on aircraft  \n  4011.40.00  Of a kind used on motorcycles  \n  4011.50.00  Of a kind used on bicycles  \n  4011.70.00  Of a kind used on agricultural or forestry vehicles and \nmachines  \n  4011.80.00  Of a kind used on construction, mining or  industrial handling vehicles and \nmachines :  \n  4011.80.10  Having a rim size not exceeding 61 cm  \n  4011.80.90  Having a rim size exceeding 61 cm  \n  4011.90.00  Other:  \n  \n  4011.90.10  Of a kind used on  auto trishaws  \n 4011.90.90  \n  Other  \n64.02   Other footwear with outer soles and uppers of rubber or plastics  \n     Sports footwear :  \n 6402.12.00  Ski-boots,  cross -country ski footwear and snowboard boots  \n  6402.19.00  Other:  \n   6402.19.10  Football shoes and rugby shoes  \n  6402.19.19  Other  \n 6402.20.00  Footwear with upper straps or thongs assembled to the sole by means of plugs  \n     Other footwear :  \n  6402.91.00  Covering the ankle  \n 6402.99.00  \n  Other  \n64.03   Footwear with outer soles of rubber, plastics, leather or composition \nleather and uppers of leather  \n     Sports footwear :  \n 6403.12.00  Ski-boots, cross -country ski footwear and snowboard boots  \n  6403.19.00  Other :  \n   6403.19.10  Football shoes, rugby shoes  \n  6403.19.19  Other  \n  6403.20.00  Footwear with outer soles of leather, and uppers which consist of leather \nstraps across the instep and around the big toe  \n 6403.40.00  Other footwear, incorporating a protective metal toe -cap", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 31, "year": 2018}, "type": "Document"}
{"page_content": "Other footwear with outer soles of leather :  \n  6403.51.00  Covering the ankle  \n 6403.59.00  Other  \n    Other footwear :  \n  \n  6403.91.00  Covering the ankle  \n 6403.99.00  \n  Other  \n64.04   Footwear with outer soles of rubber, plastics, leather or composition \nleather and uppers of textile materials  \n  \n    Footwear with outer soles of rubber or plastics :  \n  6404.11.00  Sports footwear;  tennis shoes, basketball shoes, gym shoes, training shoes and \nthe like  \n  6404.19.00  Other  \n 6404.20.00  Footwear with outer soles of leather or composition leather  \n64.05  \n    Other footwear  \n  6405.10.00  With uppers of leather or composition leather  \n  6405.20.00  With uppers of textile materials  \n 6405.90.00  \n  Other  \n84.15   Air conditioning machines, comprising a motor driven fan and elements \nfor changing the temperature and humidity, including those machines in \nwhich the humidity cannot be separately regulated(+)  \n  8415.10.00  Of a kind designed to be fixed to a window, wall, ceiling or floor, self -\ncontained or \"split system\" :  \n  8415.10.10  Used / reconditioned  \n     \"Split system\" :  \n  8415.10.21  Of a capacity not exceeding 9,000 BTU  \n  8415.10.22  Of a capacity exceeding 9,000 BTU and not exceeding 12,000 BTU  \n  8415.10.23  Of a capacity exceeding 12,000 BTU and not exceeding 18,000 BTU  \n  8415.10.24  Of a capacity exceeding 18,000 BTU and not exceeding 24,000 BTU  \n 8415.10.25  Of a capacity exceeding 24,000 BTU and not exceeding 30,000 BTU  \n  8415.10.29  Other  \n     Self-contained :", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 32, "year": 2018}, "type": "Document"}
{"page_content": "8415.10.31  Of a capacity not exceeding 9,000 BTU  \n  8415.10.32  Of a capacity exceeding 9,000 BTU and not exceeding 12,000 BTU  \n  8415.10.33  Of a capacity exceeding 12,000 BTU and not exceeding 18,000 BTU  \n  8415.10.34  Of a capacity exceeding 18,000 BTU and not exceeding 24,000 BTU  \n 8415.10.35  Of a capacity exceeding 24,000 BTU and not exceeding 30,000 BTU  \n  8415.10.39  Other  \n  8415.20.00  Of a kind used for persons, in motor vehicles :  \n  8415.20.10  Used / reconditioned  \n  8415.20.90  Other  \n    Other :  \n  8415.81.00  Incorporating a refrigerating unit and a valve for reversal of the cooling/heat \ncycle (reversible heat pumps) :  \n  8415.81.10  Used / reconditioned  \n  8415.81.90  Other  \n  8415.82.00  Other, incorporating a refrigerating unit :  \n  8415.82.10  Used / reconditioned  \n  8415.82.90  Other  \n  8415.83.00  Not incorporating a refrigerating unit :  \n  8415.83.10  Used / reconditioned  \n  8415.83.90  Other  \n  8415.90.00  Parts:  \n  \n  8415.90.10  Outdoor units of split type air conditioning machines:  \n  8415.90.11  Used / reconditioned  \n 8415.90.19  Other  \n  \n  8415.90.20  Indoor units of split type air conditioning machines:  \n  8415.90.21  Used / reconditioned  \n 8415.90.29  Other  \n  8415.90.90  \n  Other  \n84.18   Refrigerators, freezers and other refrigerating or freezing equipment, \nelectric or other; heat pumps other than air conditioning machines of \nheading 84.15  \n  8418.10.00  Combined refrigerator -freezers, fitted with separate external doors :", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 33, "year": 2018}, "type": "Document"}
{"page_content": "8418.10.10  Used / reconditioned  \n  8418.10.90  Other  \n    Refrigerators, household type :  \n  8418.21.00  Compression -type :  \n  8418.21.10  Used / reconditioned  \n  8418.21.90  Other  \n  8418.29.00  Other :  \n  8418.29.10  Used / reconditioned absorption -type, electrical  \n  8418.29.20  Other absorption -type, electrical  \n  8418.29.30  Other used / reconditioned  \n  8418.29.90  Other  \n  8418.30.00  Freezers of the chest type, not exceeding 800 l capacity :  \n  8418.30.10  Not exceeding 566 l used / reconditioned  \n  8418.30.20  Other, not exceeding 566 l  \n  8418.30.30  Other, used / reconditioned  \n  8418.30.90  Other  \n  8418.40.00  Freezers of the upright type, not exceeding 900 l capacity :  \n  8418.40.10  Not exceeding 566 l used / reconditioned  \n  8418.40.20  Other, not exceeding 566 l  \n  8418.40.30  Other, used / reconditioned  \n   8418.40.90  Other  \n 8418.50.00  Other furniture (chests, cabinets, display counters, show -cases and the like) for \nstorage and display, incorporating refrigerating or freezing equipment :  \n  8418.50.10  Used / reconditioned  \n  8418.50.90  Other  \n    Other refrigerating or freezing equipment; heat pumps :  \n  8418.61.00  Heat pumps other than air conditioning machines of heading 84.15  \n  8418.69.00  Other :  \n  8418.69.10  Cabinet and chest type refrigerators exceeding 566 l and below 850 l used/ \nreconditioned  \n  8418.69.20  Other, cabinet and chest type refrigerators exceeding 566 l and below 850 l  \n  8418.69.30  Blast -freezers for preserving poultry meat used/ reconditioned  \n  8418.69.40  Other, blast -freezers for preserving poultry meat  \n  8418.69.50  Milk chilling tanks used/ reconditioned  \n  8418.69.60  Other, milk chilling tanks", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 34, "year": 2018}, "type": "Document"}
{"page_content": "8418.69.70  Other, used/ re -conditioned  \n  8418.69.90  Other  \n    Parts :  \n  8418.91.00  Furniture designed to receive refrigerating or freezing equipment :  \n  8418.91.10  Cabinets for refrigerators  \n  8418.91.20  Other cabinets  \n  8418.91.90  Other  \n  8418.99.00  Other  \n  \n85.17   Telephone sets, including telephones for cellular networks or for other \nwireless networks; other apparatus for the transmission or reception of \nvoice, images or other data, including apparatus for communication in a \nwired or w ireless network  (such as a local or wide area network), other \nthan transmission or reception apparatus of heading  \n84.43, 85.25, 85.27 or  \n85.28  \n    Telephone sets, including telephones for cellular networks or for other \nwireless networks :  \n  8517.11.00  Line telephone sets with cordless handsets  \n  8517.12.00  Telephones for cellular networks or for other wireless networks :  \n  8517.12.10  Used / reconditioned cellular mobile telephones  \n  8517.12.20  Other, cellular mobile telephones  \n  8517.12.90  Other  \n   8517.18.00  \n  Other  \n  Other apparatus for transmission or reception of voice, images or other data, \nincluding apparatus for communication in a wired or wireless network (such \nas a local or wide area network) :  \n   8517.61.00  Base stations  \n 8517.62.00  Machines for the reception, conversion and transmission or regeneration of \nvoice, images or other data, including switching and routing apparatus :  \n  8517.62.10  Transmission apparatus with or without reception apparatus  \n  8517.62.90  Other  \n  8517.69.00  Other  \n  8517.70.00  \n  Parts", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 35, "year": 2018}, "type": "Document"}
{"page_content": "85.28   Monitors and projectors, not incorporating television reception \napparatus; reception apparatus for television, whether or not \nincorporating radio -broadcast receivers or sound or video recording or \nreproducing apparatus  \n     Cathode -ray tube monitors :  \n 8528.42.00  Capable of directly connecting to and designed for use  with an automatic data \nprocessing machine of heading 84.71  \n  8528.49.00  Other :  \n  8528.49.10  Used / reconditioned  \n  8528.49.90  Other  \n    Other monitors :  \n  \n 8528.52.00  Capable of directly connecting to designed for use  with an automatic data \nprocessing machine of heading 84.71  \n  8528.59.00  Other :  \n  8528.59.10  Used / reconditioned  \n  8528.59.90  Other  \n     Projectors :  \n 8528.62.00  Capable of directly connecting to designed for use  with an automatic data \nprocessing machine of heading 84.71  \n   8528.69.00  \n  Other  \n  Reception apparatus for television, whether or not incorporating radio - \nbroadcast receivers or sound or video recording or reproducing apparatus :  \n  8528.71.00  Not designed to incorporate a video display or screen :  \n  8528.71.10  Used / reconditioned  \n  8528.71.20  Other, colour  \n  8528.71.90  Other  \n  8528.72.00  Other, colour :  \n  8528.72.10  Unassembled in completely knocked - down form  \n  8528.72.20  Used / reconditioned  \n     Other, with cathode ray tube :  \n  8528.72.31  Having a screen of less than 14 inches  \n  8528.72.32  Having a screen of 14 inches and not exceeding 15 inches  \n  8528.72.33  Having a screen of exceeding 15 inches and not exceeding 21 inches", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 36, "year": 2018}, "type": "Document"}
{"page_content": "8528.72.34  Having a screen of exceeding 21 inches and not exceeding 25 inches  \n  8528.72.35  Having a screen of exceeding 25 inches and not exceeding 29 inches  \n 8528.72.36  Having a screen of exceeding 29 inches and not exceeding 34 inches  \n  8528.72.39  Other  \n    Other, with LCD :  \n  8528.72.41  Having a screen of not exceeding 32 inches  \n  8528.72.49  Other  \n    Other :  \n  8528.72.91  Having a screen of not exceeding 32 inches  \n  8528.72.99  Other  \n  8528.73.00  Other, monochrome :  \n  8528.73.10  Used / reconditioned and completely knocked -down with or without cathode \nray tube  \n  8528.73.20  Other, completely knocked -down with or without cathode ray tube  \n  8528.73.30  Other, used / reconditioned  \n  8528.73.90  Other  \n84.50    Household or laundry -type washing machines, including machines which \nboth wash and dry(+)  \n    Machines, each of a dry linen capacity not exceeding 10 kg :  \n  8450.11.00  Fully -automatic machines :  \n  8450.11.10  Unassembled in completely knocked -down form  \n  8450.11.20  Used / reconditioned  \n     Other, top loading :  \n  8450.11.31  Of a dry linen capacity less than 4 kg  \n  8450.11.32  Of a dry linen capacity exceeding 4 kg and not exceeding 5.5 kg  \n  8450.11.33  Of a dry linen capacity exceeding 5.5 kg and not exceeding  \n7.5 kg  \n 8450.11.34  Of a dry linen capacity exceeding 7.5 kg and not exceeding  \n9.5 kg  \n  8450.11.39  Other  \n     Other, front loading :  \n  8450.11.41  Of a dry linen capacity less than 4 kg  \n  8450.11.42  Of a dry linen capacity exceeding 4 kg and not exceeding 5.5 kg", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 37, "year": 2018}, "type": "Document"}
{"page_content": "8450.11.43  Of a dry linen capacity exceeding 5.5 kg and not exceeding  \n7.5 kg  \n 8450.11.44  Of a dry linen capacity exceeding 7.5 kg and not exceeding  \n9.5 kg  \n  8450.11.49  Other  \n  8450.12.00  Other machines, with built -in centrifugal drier :  \n  8450.12.10  Unassembled in completely knocked -down form  \n  8450.12.20  Used / reconditioned  \n     Other :  \n  8450.12.31  Of a dry linen capacity less than 4 kg  \n  8450.12.32  Of a dry linen capacity exceeding 4 kg and not exceeding 5.5 kg  \n 8450.12.33  Of a dry linen capacity exceeding 5.5 kg and not exceeding  \n7.5 kg  \n  \n 8450.12.34  Of a dry linen capacity exceeding 7.5 kg and not exceeding  \n9.5 kg  \n  8450.12.39  Other  \n  8450.19.00  Other :  \n  8450.19.10  Unassembled in completely knocked -down form  \n  8450.19.20  Used / reconditioned  \n     Other :  \n  8450.19.31  Of a dry linen capacity less than 4 kg  \n  8450.19.32  Of a dry linen capacity exceeding 4 kg and not exceeding 5.5 kg  \n  8450.19.33  Of a dry linen capacity exceeding 5.5 kg and not exceeding  \n7.5 kg  \n 8450.19.34  Of a dry linen capacity exceeding 7.5 kg and not exceeding  \n9.5 kg  \n  8450.19.39  Other  \n  8450.20.00  Machines, each of a dry linen capacity exceeding 10 kg  \n  8450.90.00  Parts", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_7_of_2018.pdf", "page": 38, "year": 2018}, "type": "Document"}
{"page_content": "Banking Act Directions No. 08 of 2018  \nNet Stable Funding Ratio under Basel III Liquidity Standards   \nfor Licensed Commercial Banks  and Licensed Specialised  Banks  \n3 \n \n \n \n \n \nSCHEDULE I", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "4 \n  BASEL III - NET STABLE FUNDING RATIO  \n \n1.0 Implementation of Net Stable Funding Ratio  \n1.1 Basel Committee on Banking Supervision (BCBS) publication in December 2010 on \nliquidity, \u201cBasel III: International framework for liquidity risk measurement, standards \nand monitoring\u201d introduced two minimum standards namely Liquidity Coverage Ratio \n(LCR) and Net Stable Funding Ratio (NSFR) . \n1.2 In March 2015 , the Central Bank of Sri Lanka (CBSL) issued Banking Act Direction s \nNo. 01 of 2015, Liquidity Coverage Ratio under  Basel III Liquidity Standards for \nlicensed banks (LBs) . \n1.3 The second liquidity standard under Basel III, viz., Net Stable Funding Ratio  shall be \neffective from 01 January  2019. \n1.4 The objective of NSFR is to reduce funding risk over a longer time horizon by requiring \nLBs to fund their activities with sufficiently stable sources of funding .  \n \n2.0 Net Stable Funding Ratio   \n2.1 NSFR is defined as the amount of available stable funding relative to the amount of \nrequired stable funding. The amount  of available and required stable funding are \ncalibrated to reflect the presumed degre e of stability of liabilities and liquidity of assets.  \nThe computation of NSFR shall be based on the following formula.    \n \n \n \n2.2 Available  Stable Funding  \nAvailable Stable Funding  (ASF) is defined as the portion of capital and liabilities \nexpected to be reliable over the time horizon of one year.  ASF factors such as  100%, \n90%, 50% and 0% are assigned according to presumed degree of stability of funding.  \n2.3 Required  Stable Funding  \nRequired  Stable Funding (RSF) is a function of  liquidity characteristics and residual \nmaturities of various assets held and those of its off -balance sheet (OBS) exposures.  \nRSF factors such as  0%, 5%, 10%, 15%, 50%, 65%, 85% , and 100% are assigned to \ndiffer ent asset categories accordingly.  \n \n NSFR = available amount of stable  funding *100  \n   required amount of stable funding", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": "5 \n 2.4 Off-balance Sheet Exposure s \nMany potential  OBS exposures do not require  immediate funding but can lead to \nsignificant liquidity drain over a lon ger time horizon. NSFR assigns RSF factor s to \nvarious OBS exposures in order to ensure that banks  hold stable funding for the portion \nof OBS exposures that may be expected to require funding within any one -year horizon.  \n2.5 Definitions on various components including High  Quality Liquid Assets of Leve l 1, \nLevel 2A and Level 2B assets  of NSFR mirror those outlined in the Banking Act \nDirection s No. 01 of 2015, on Liquidity Coverage Ratio , unless otherwise specified.  \n2.6 Unencumbered  assets under NSFR have the mean ing of  free of legal, regulatory, \ncontractual or other restrictions on the ability of the bank to liquidate, sell, transfer or \nassign the asset.  \n2.7 Encumbered  Assets  \n(a) Assets on the balance sheet that are encumbered for one year or more receive a \n100% RSF factor.  \n(b) Assets encumbered for a period of between six months and less than one year that \nwould, if unencumbered, receive an RSF factor lower than or equal to 50% \nreceive a 50% RSF factor.  \n(c) Assets encumbered for a period of between six months and less than one year that \nwould, if unencumbered, receive an RSF factor higher than 50% retain that higher \nRSF factor.  \n(d) Where assets have less than six months remaining in the encumbrance period, \nthose assets may receive the same RSF factor as an equivalent asset that is \nunenc umbered.  \n \n3.0 Reporting Formats  \n3.1 The reporting formats and instruction guidelines for computation of Net Stable Funding \nRatio are given as follows:  \nAppendix I: Reporting Formats for Net Stable Funding Ratio  \nAppendix II: Guidelines for computation  of Net Stable Funding Ratio", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "6 \n Appendix  I \nREPORTING FORMATS FOR THE NET STABLE FUNDING RATIO   \n \nPart I: Computation  of NSFR   \nWeb -based \nReturn Code  Item  Amount  \nRs. \u2018000  \n32.1.1.0.0.0  Total Available Stable Funding   \n32.1.2.0.0.0  Required Stable Funding \u2013 On Balance Sheet Assets   \n32.1.3.0.0.0  Required Stable Funding \u2013 Off -balance Sheet Items   \n32.1.4.0.0.0  Total Required Stable Funding   \n32.1.5.0.0.0  NSFR", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 5, "year": 2018}, "type": "Document"}
{"page_content": "7 \n Part II: Total Available Stable Funding     \nWeb -based \nReturn Code  Item  Unweighted  \nAmount  ASF \nFactor  Weighted \nAmount  \n32.2.0.0.0.0  Total Available Stable Funding       \n32.2.1.0.0.0  Liabilities and capital assigned a 100% \nASF factor       \n32.2.1.1.0.0  Total regulatory capital before capital \ndeductions (excluding Tier 2 instruments \nwith residual maturity of less than one \nyear)    100%   \n32.2.1.2.0.0  Any other capital instrument with \neffective residual maturity of one year or \nmore    100%   \n32.2.1.3.0.0  Secured and unsecured borrowings and \nliabilities with effective residual \nmaturities of one year or more       \n32.2.1.3.1.0  Net d eferred tax liabilities    100%   \n32.2.1.3.2.0  Minority interest    100%   \n32.2.1.3.3.0  Other l iabilities    100%   \n32.2.2.0.0.0  Liabilities assigned a 90% ASF factor       \n32.2.2.1.0.0  Non-maturity deposits and term deposits \nwith residual maturity of less than one \nyear provided by retail customers and \nSmall and Medium Enterprises (SME)     90%  \n32.2.3.0.0.0  Liabilities assigned a 50% ASF factor       \n32.2.3.1.0.0  Funding with residual maturity of less \nthan one year provided by non -financial \ncorporate customers    50%  \n32.2.3.2.0.0  Operational deposits    50%  \n32.2.3.3.0.0  Funding with residual maturity of less \nthan one year from sovereigns, Public \nSector Entiti es (PSEs), and Multilateral \nDevelopment B anks (MDBs)    50%  \n32.2.3.4.0.0  Other funding with residual maturity \nbetween six months and less than one year \nnot included in the above categories, \nincluding funding provided by central \nbanks and financial institutions       \n32.2.3.4.1.0  Net d eferred tax liabilities    50%  \n32.2.3.4.2.0  Minority i nterest    50%  \n32.2.3.4.3.0  Other l iabilities    50%", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 6, "year": 2018}, "type": "Document"}
{"page_content": "8 \n 32.2.4.0.0.0  Liabilities assigned a 0% ASF factor       \n32.2.4.1.0.0  All other liabilities and equity not included \nin the above categories including other \nfunding with residual maturity of less than \nsix months from central banks  and financial \ninstitutions    0%  \n32.2.4.2.0.0  Other liabilities without a stated maturity       \n32.2.4.2.1.0  Net d eferred tax liabilities    0%  \n32.2.4.2.2.0  Minority i nterest    0%  \n32.2.4.2.3.0  Other liabilities    0%  \n32.2.4.3.0.0  NSFR derivative liabilities net of  NSFR  \nderivative assets (if NSFR derivative \nliabilities are greater than NSFR derivative \nassets)    0%  \n32.2.4.4.0.0  \u201cTrade date\u201d payables arising from \npurchases of financial instruments, foreign \ncurrencies and commodities    0%", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "9 \n Part III (a): Required Stable  Funding \u2013 On Balance Sheet Assets    \nWeb -based \nReturn \nCode  Item  Unweighted \nAmount  RSF \nFactor  Weighted \nAmount  \n32.3.0.0.0.0  Required Stable Funding \u2013 On Balance \nSheet Assets       \n32.3.1.0.0.0  Assets assigned a 0% RSF factor       \n32.3.1.1.0.0  Cash in hand    0%  \n32.3.1.2.0.0  Central bank reserves (Statutory Reserve \nRatio (SRR) including excess SRR)    0%  \n32.3.1.3.0.0  All claims on central banks  with residual \nmaturities of less than six months    0%  \n32.3.1.4.0.0  \"Trade date\u201d receivables arising  from sales of \nfinancial instruments, foreign currencies and \ncommodities    0%  \n32.3.2.0.0.0  Assets assigned a 5% RSF factor       \n32.3.2.1.0.0  Unencumbered Level 1 assets       \n32.3.2.1.1.0  Qualifying marketable securities       \n32.3.2.1.1.1  Issued by sovereigns    5%  \n32.3.2.1.1.2  Guaranteed by sovereigns    5%  \n32.3.2.1.1.3  Issued or guaranteed by central banks    5%  \n32.3.2.1.1.4  Issued or guaranteed by BIS, IMF, ECB and \nEC or eligible MDBs    5%  \n32.3.2.2.0.0 20% of derivative liabilities   5%  \n32.3.3.0.0.0  Assets assigned a 10% RSF factor       \n32.3.3.1.0.0  Unencumbered loans to financial institutions \nwith residual maturities of less than six \nmonths    10%  \n32.3.4.0.0.0  Assets assigned a 15% RSF factor       \n32.3.4.1.0.0  Unencumbered Level 2A assets       \n32.3.4.1.1.0  Qualifying marketable securities       \n32.3.4.1.1.1  Issued or guaranteed by sovereigns    15%  \n32.3.4.1.1.2  Issued or guaranteed by central bank s   15%  \n32.3.4.1.1.3  Issued or guaranteed by PSEs    15%  \n32.3.4.1.1.4  Issued or guaranteed by MDBs    15%  \n32.3.4.1.2.0  Qualifying non -financial c orporate debt \nsecurities (including commercial paper and \npromissory notes)  and covered bonds    15%  \n32.3.4.1.3.0  Qualifying investments in gilt unit trust \nbacked by Government of Sri Lanka (GOSL) \nsecurities    15%", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "10 \n 32.3.4.2.0.0  All other unencumbered loans to financial \ninstitutions with residual maturities of less \nthan six months    15%  \n32.3.5.0.0.0  Assets assigned a 50% RSF factor       \n32.3.5.1.0.0  Unencumbered Level 2B assets       \n32.3.5.1.1.0  Qualifying non -financial corporate debt \nsecurities (including commercial paper and \npromissory not es)   50%  \n32.3.5.1.2.0  Qualifying non -financial common equity \nshares    50%  \n32.3.5.1.3.0  Residential mortgage backed securities \n(RMBS) with a credit rating of at least AA    50%  \n32.3.5.2.0.0  HQLA encumbered for a period of six \nmonths or more and less than one year    50%  \n32.3.5.3.0.0  Unencumbered loans to financial institutions \nand central banks  with residual maturity \nbetween six months and less than one year    50%  \n32.3.5.4.0.0  Deposits held at other financial institutions \nfor operational purposes    50%  \n32.3.5.5.0.0  All other non HQLA not included in the \nabove categories with residual  maturity of \nless than one year    50%  \n32.3.6.0.0.0  Assets assigned a 65% RSF factor       \n32.3.6.1 .0.0 Qualifying u nencumbered residential \nmortgages with a residual maturity of one \nyear or more   65%  \n32.3.6.2 .0.0 Other qualifying unencumbered loans not \nincluded in the above categories, excluding \nloans to financial institutions, with a residual \nmaturity of one year or more    65%  \n32.3.7.0.0.0  Assets assigned a n 85% RSF factor       \n32.3.7.1.0.0  Cash, securities or other assets posted as \ninitial margin for derivative contracts    85%  \n32.3.7.2.0.0 Other unencumbered performing loans    85%  \n32.3.7.3 .0.0 Unencumbered securities that are not in \ndefault and do not qualify as HQLA    85%  \n32.3.7.4 .0.0 Physical traded commodities, including gold    85%  \n32.3.8.0.0.0  Assets assigned a 100% RSF factor       \n32.3.8.1.0.0  All assets that are encumbered for a period of \none year or more    100%", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 9, "year": 2018}, "type": "Document"}
{"page_content": "11 \n 32.3.8.2.0.0  NSFR derivative assets net of NSFR \nderivative liabilities if NSFR derivative \nassets are greater than NSFR derivative \nliabilities    100%   \n32.3.8.3.0.0  All other assets not included in above    100%   \n \nPart III (b): Required Stable Funding \u2013 Off Balance Sheet Items  \n     \nWeb -based \nReturn \nCode  Item  Unweighted \nAmount  RSF \nFactor  Weighted \nAmount  \n32.4.0.0.0.0  Required Stable Funding \u2013 Off Balance \nSheet Items       \n32.4.1.0.0.0  Irrevocable and conditionally revocable \ncredit and liquidity facilities to any client    5%  \n32.4.2.0.0.0  Other contingent funding obligations \nincluding products and instruments       \n32.4.2.1.0.0  Unconditionally revocable credit and \nliquidity facilities    0%  \n32.4.2.2.0.0  Trade finance related obligations including \nguarantees and letters of credit    5%  \n32.4.2.3.0.0  Guarantees unrelated to trade finance \nobligations    0%  \n32.4.3.0.0.0  Non-contractual obligations       \n32.4.3.1.0.0 Potential requests for debt repurchases of the \nbank\u2019s own debt or that of related conduits, \nsecurities investment vehicles and other such \nfinancing facilities   5%  \n32.4.3.2.0.0 Structured products where customers \nanticipate ready marketability, such as \nadjustable rate notes and vari able rate \ndemand notes (VRDNs)   5%  \n32.4.3.3.0.0 Managed funds that are marketed with the \nobjective of maintaining a stable value    5%  \n32.4.4.0.0.0  Any other  obligations   5%", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 10, "year": 2018}, "type": "Document"}
{"page_content": "Appendix  II \n12 \n Guidelines for Computation of NSFR Return  \nWeb -based \nReturn Code  Item  \n32.2.0.0.0.0  Total Available Stable Funding  \n32.2.1.0.0.0  Liabilities and capital assigned a 100% ASF factor  \n32.2.1.1.0.0  Total regulatory capital before capital deductions (excluding Tier 2 \ninstruments with residual maturity of less than one year)  \nTotal amount of regulatory capital, before the application of capital deductions, \nas defin ed in the Banking Act Direction s No. 01 of 2016 on Capital \nRequirements under Basel III excluding the value of Tier 2 instruments with \nresidual maturity of less than one year . \n32.2.1.2.0.0  Any other capital instrument with effective residual maturity of one year \nor more  \nTotal amount of any capital instrument not included above that has an effective \nresidual maturity of one year or more, but excluding any instruments with \nexplicit or embedded options that, if exercised, would reduce the expected \nmaturity to less than one year . Value of Tier 2 instruments , with effective \nresidual maturity of one year or more , that is not captured under 32.2.1.1.0.0 is \neligible under this.  \n32.2.1.3.0.0  Secured and unsecured borrowings and liabilities with effective residual \nmaturities of one year or more  \nTotal amount of secured and unsecured borrowings and liabilities (including \nterm deposits) with effective residual maturities of one year or more. Cash \nflows falling below the one -year horizon but arising from liabilities with a final \nmaturity grea ter than one year do not qualify for the 100% ASF factor. If a \nbank allows a depositor to withdraw a term deposit without applying a \nsignificant penalty that is materially greater than the loss of interest, or despite \na clause that says depositor has no le gal right to withdraw, the entire category \nshould be treated as demand deposits regardless of the remaining maturity.   \nNet deferred tax liabilities  (if deferred tax liabilities are greater than deferred", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 11, "year": 2018}, "type": "Document"}
{"page_content": "Net deferred tax liabilities  (if deferred tax liabilities are greater than deferred \ntax assets)  should be treated according to the nearest possible date on which", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 11, "year": 2018}, "type": "Document"}
{"page_content": "13 \n such liabilities could be realised; and minority interest, should be treated \naccording to the term of the instrument, usually in perpetuity.  Based on that \nthese liabilities are assigned ei ther a 100% ASF factor if the effective maturity \nis one year or greater  under 32.2.1.3.0.0 , 50% if the effective maturity is \nbetween six months and less than one year under 32.2.3.4.0.0 or 0% otherwise  \nunder 32.2.4.2.0.0 . \n32.2.2.0.0.0  Liabilities assigned  a 90% ASF factor  \n32.2.2.1.0.0  Non-maturity deposits and term deposits with residual maturity of less \nthan one year provided by retail customers and SME   \nNon-maturity deposits and /or term deposits with residual maturity of less than \none year provided by retail customers and SME . In the case of SME, t he total \namount of deposits placed with the bank by an SME s hall not exceed Rs. 250 \nmillion . \n Qualifying criteria to be classified as an SME are as follows:  \n(i) The annual turnover of the SME shall not exceed Rs.750 million at the \ntime of obtaining the deposit/granting the facility;  \n(ii) The annual turnover should be based on latest available audited \nfinancial statements or certified by a Chartered  Accountant or an \nApproved Accountant acceptable to the Department of Inland \nRevenue. In the case of draft financial statements, the turnover certified \nby a Chartered Accountant or an Approved Accountant shou ld be \nobtained within the year;  \n(iii) The criterion (i i) above shall be applicable if the total amount of \ndeposits placed with the bank by the SME or the total exposure \n(including off -balance sheet exposure) to the SME is greater than or \nequal to Rs. 50 million. Otherwise banks may adopt their own internal \nmechanism to verify the  annual turnover of the SME.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 12, "year": 2018}, "type": "Document"}
{"page_content": "14 \n 32.2.3.0.0.0  Liabilities assigned a 50% ASF factor  \n32.2.3.1.0.0  Funding with residual maturity of less than one year provided by non -\nfinancial corporate customers  \nBoth secured and unsecured funding with a residual maturity of less than one \nyear provided by non -financial corporate customers . \n32.2.3.2.0.0  Operational deposits  \nFinancial and non -financial customer deposits placed with a bank, in order to \nfacilitate their access and ability to use paymen t and settlement system s or \nmake payments (e.g.  Vostro a ccounts and collection accounts) . \n32.2.3.3.0.0  Funding with residual maturity of less than one year from sov ereigns, \nPSEs, and MDBs   \nFunding with residual maturity of less than one year provided by sovereigns, \nPSEs, and MDBs . \n32.2.3.4.0.0  Other funding with residual maturity between six months and less than \none year not included in the above categories, including funding provided \nby central banks and financial institutions  \nSecured and unsecured  other funding with residual maturity between six \nmonths and less than one year not included in the above categories, including \nfunding provided by central banks and financial institutions. Refer Banking Act \nDirection s No. 1 of 2016 of Capital Requirements under Basel III for indicative \nlist of financial institutions. Net deferred tax liabilities and minority interest \nshall  be treated as instructed in 32.2.1.3.0.0.  \n32.2.4.0.0.0  Liabilities assigned a 0% ASF factor  \n32.2.4.1.0.0  All other liabilities and equity not included in the above categories \nincluding other funding with residual maturity of less than six months \nfrom central banks and financial institutions  \nLiabilities and equity categories not included in the above categories, including \nother funding  with residual maturity of less than six months provided by  central \nbanks and financial institutions.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 13, "year": 2018}, "type": "Document"}
{"page_content": "15 \n 32.2.4.2.0.0  Other liabilities without a stated maturity  \nThis category may include short positions and open maturity positions. Net \ndeferred tax liabili ties and minority interest sh all be treated as instructed in \n32.2.1.3.0.0.  \n32.2.4.3.0.0  NSFR derivative liabilities net of NSFR derivative assets (if NSFR \nderivative liabilities are greater than NSFR derivative assets)  \nNSFR derivative liabilities net of NSFR derivative assets, if NSFR derivative \nliabilities are greater than NSFR derivative assets.  i.e. ASF = 0% * MAX \n((NSFR derivative liabilities - NSFR derivative assets), 0).  \n**Derivative liabilities are calculated based on the replacement cost for \nderivative contracts (obtained by ma rking to market), where the contract has a \nnegative value. When an eligible  bilateral netting (refer consultation paper on \nleverage ratio for eligibility criteria until final Direction s on leverage ratio is \nissued) contract is in place , the replacement cost for the set of derivative \nexposures covered by the contract will be the net replacement cost.  In \ncalculating NSFR derivative liabilities, collateral posted in the form of \nvariation margin in connection with derivative cont racts must be deducted from \nthe negative replacement cost.  \nNSFR derivative liabilities = (derivative labilities ) \u2013 (total collateral posted as \nvariation margin on derivative liabilities).  \n32.2.4.4.0.0  \u201cTrade date\u201d payables arising from purchases of financial instruments, \nforeign currencies and commodities  \n\u201cTrade date\u201d payables arising from purchases of financial instruments, foreign \ncurrencies and commodities that (i) are expected to settle within the standard \nsettlement cycle or period that is custo mary for the relevant exchange or type \nof transaction, or (ii) have failed  to, but are still expected to settle.  \n32.3.0.0.0.0  Required Stable Funding \u2013 On Balance Sheet Assets  \n32.3.1.0.0.0  Assets assigned a 0% RSF factor  \n32.3.1.1.0.0  Cash in hand", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 14, "year": 2018}, "type": "Document"}
{"page_content": "32.3.1.0.0.0  Assets assigned a 0% RSF factor  \n32.3.1.1.0.0  Cash in hand  \nAll cash (coins and bank notes) held by the bank that is immediately available \nto meet obligations.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 14, "year": 2018}, "type": "Document"}
{"page_content": "16 \n 32.3.1.2.0.0  Central bank reserves (SRR including excess)  \nCentral b ank balances and reserves in cluding  excess of SRR. The balance held \nat central bank which represents part of the capital held in foreign currency \nshould not be included, since it is part of capital.  \n32.3.1.3.0.0  All claims on central banks with residual maturities of less than six months  \nAll claims on central banks with residual maturities of less than six months.  \n32.3.1.4.0.0  \"Trade date\" receivables arising from sales of financial instruments, \nforeign currencies and commodities  \nTrade date receivables arising from sales of financial instruments, foreign \ncurrencies and commodities that (i) are  expected to settle within the standard \nsettlement cycle or period that is customary for the relevant exchange or type \nof transaction, or (ii) have failed to, but are still expected to, settle.  \n32.3.2.0.0.0  Assets assigned a 5% RSF factor  \n32.3.2.1.0.0  Unencumbered Level 1 assets  \n32.3.2.1.1.0  \n \n \n \n(i) \n \n(ii) \n \n(iii) \n(iv) Qualifying marketable securities  \nMarketable securities with a 0% risk weight under the Banking Act Direction s \nNo. 01 of 2016 on Capital Requirements under Basel III and  that shall satisfy \nthe following:  \nTraded in large, deep and active repo or cash markets characteri sed by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale) even during stressed market conditi ons; \nNot an obligation of a financial institution or any of its affiliated entities;  \nAt the mark to market value.  \n32.3.2.1.1.1  Issued by sovereigns  \nGovernment of Sri Lanka - all rupee claims. Foreign Sovereigns - where the \nsovereign attracts an External C redit Rating between AAA to AA -. Refer \nBanking Act Direction s No. 01 of 2016 on Capital Requirements under Basel \nIII for mapping of notations of the credit rating agencies in Sri Lanka.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 15, "year": 2018}, "type": "Document"}
{"page_content": "17 \n 32.3.2.1.1.2  Guaranteed by sovereigns  \nGovernment of Sri Lanka - all rupee claims. Foreign Sovereigns - where the \nsovereign attracts an External Credit Rating between AAA to AA -. \n32.3.2.1.1.3  Issued or guaranteed by central banks  \nCentral Bank of Sri Lanka - all claims. Foreign Central Banks - where the \nsovereign attracts an  External Credit Rating between AAA to AA -. \n32.3.2.1.1.4  \n \n \n \n* \n \n \n* \n* \n* \n* \n* \n* \n* \n* \n* \n* \n* Issued or guaranteed by BIS, IMF, ECB and EC or MDBs  \nIssued or guaranteed by Bank for International Settlements (BIS), the \nInternational Monetary Fund (IMF), the European Central Bank (ECB), \nEuropean Community (EC) and the following eligible MDBs:  \nThe World Bank Group comprising of the International Bank for \nReconstruction and Development (IBRD) and the International Finance \nCorporation (IFC)  \nThe Asian Development Bank (ADB)  \nThe African Development Bank (AFDB)  \nThe European Bank for Reconstruction and Development (EBRD)  \nThe Inter -American Development Bank (IADB)  \nThe European Investment Bank (EIB)  \nThe European Investment Fund (EIF)  \nThe Nordic Investment Bank (NIB)  \nThe Caribbean Development Bank (CDB)  \nThe Islamic Development Bank (IDB)  \nThe Council of Europe Development Bank (CEDB)  \nThe International Finance Facility for Immunization (IFFIm)  \n32.3.2.2.0.0  20% of derivative liabilities  \n20% of derivative liabilities (i.e. negative replacement cost amounts before \ndeducting variation margin posted).", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 16, "year": 2018}, "type": "Document"}
{"page_content": "18 \n 32.3.3.0.0.0  Assets assigned a 10% RSF factor  \n32.3.3.1.0.0  Unencumbered loans to financial institutions with residual maturities of \nless than six months  \nUnencumbered loans to financial institutions with residual maturities of less \nthan six months, where the loan is secured against Level 1 assets and where the \nbank has the ability to freely rehypothecate the received collateral for the life \nof the loan.  \n32.3.4.0.0.0  Assets a ssigned a 15% RSF factor  \n32.3.4.1.0.0  Unencumbered Level 2A assets  \n32.3.4.1.1.0  \n \n \n \n(i) \n \n(ii) \n \n \n \n(iii) \n(iv) Qualifying marketable securities  \nMarketable securities with a 20% risk weight under the Banking Act Direction s \nNo. 01 of 2016 on Capital Requirements under Basel III and that shall satisfy \nthe following conditions:  \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liqui dity in the markets (repo or \nsale) even during stressed market conditions (i.e. A maximum decline of price \nor increase in haircut not exceeding 10% over a 30 -day period of significant \nliquidity stress);  \nNot an obligation of a financial institution or any o f its affiliated entities;  \nAt the mark to market value.  \n32.3.4.1.1.1  Issued or guaranteed by sovereigns  \nGovernment of Sri Lanka \u2013 all foreign claims  \nForeign Sovereigns - where the sovereign attracts an External Credit Rating \nbetween A+ to A -. \n32.3.4.1.1.2  Issued or guaranteed by central banks  \nForeign Central Banks - where the sovereign attracts an External Credit Rating \nbetween A+ to A -. \n32.3.4.1.1.3  Issued or guaranteed by PSEs  \nDomestic and foreign PSEs - where PSE attracts an External Credit  Rating \nbetween AAA to AA -.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 17, "year": 2018}, "type": "Document"}
{"page_content": "19 \n 32.3.4.1.1.4  Issued or guaranteed by MDBs  \nMDBs other than MDBs listed above in 32.3.2.1.1.4 where MDBs attracts an \nExternal Credit Rating between AAA to AA -. \n32.3.4.1.2.0  \n \n \n(i) \n(ii) \n(iii) \n \n(iv) \n \n \n \n(v) \n \n(i) \n(ii) \n \n \n(iii) Qualifying non -financial corporate debt securities (including commercial \npaper and promissory notes) and covered bonds  \nShall satisfy the following conditions:  \nNot issued by a financial institution or any of its affiliated entities;  \nWith an External Credit Rating of at least AA -; \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale) even during stressed market conditions (i.e. A maximum decline of price \nor increase in haircut not exceeding 10% over a 30 -day period of significant \nliquidity stress);  \nAt mark to market value.  \nIn case of commercial paper and promissory notes:  \nThe issuer should be a non -financial institution.  \nAll existing facilities obtained by the issuer from the investee bank should be \n\"performing\" in terms of the Banking Act Direction s on Classification of Loans \nand Advances, Income Recognition and Provisioning.  \nCommercial Paper/Promissory Notes should be backed  by an approved standby \ncredit line supporting the issue to the full redemption value from another \nlicensed bank.  \n32.3.4.1.3.0  \n \n(i) \n(ii) Qualifying investments in Gilt Unit Trust (GUT) backed by GOSL \nsecurities, subject to:  \nGUTs should be open ended mutual funds  \nUnderlying investment portfolio of GUTs should always be Sri Lanka \nGovernment Securities", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 18, "year": 2018}, "type": "Document"}
{"page_content": "20 \n 32.3.4.2.0.0  All other unencumbered loans to financial institutions with residual \nmaturities of less than six months  \nAll other unencumbered loans to financial institutions with residual maturities \nof less than six months not included above in 32.3.3.1.0.0.  \n32.3.5.0.0.0  Assets assigned a 50% RSF factor  \n32.3.5.1.0.0  Unencumbered Level 2B assets  \n32.3.5.1.1.0  \n \n \n(i) \n(ii) \n(iii) \n \n(iv) \n \n \n \n(v) \n \n(i) \n(ii) \n \n \n(iii) Qualifying non -financial corporate debt securities (including commercial \npaper and promissory notes)  \nShall satisfy the following conditions:  \nNot issued by a financial institution or any of its affiliated entities;  \nWith an External Credit Rating between A+ and BBB -; \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale) even during stressed market conditions (i.e. A ma ximum decline of price \nor increase in haircut not exceeding 20% over a 30 -day period of significant \nliquidity stress);  \nAt mark to market value.  \nIn case of commercial paper and promissory notes:  \nThe issuer should be a non -financial institution;  \nAll existing  facilities obtained by the issuer from the investee bank should be \n\"performing\" in terms of the Banking Act Direction s on Classification of Loans \nand Advances, Income Recognition and Provisioning;  \nCommercial Paper/Promissory Notes should be backed by an a pproved standby \ncredit line, supporting the issue to the full redemption value from another \nlicensed bank.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 19, "year": 2018}, "type": "Document"}
{"page_content": "21 \n 32.3.5.1.2.0  \n \n(i) \n(ii) \n(iii) \n \n(iv) \n Qualifying non -financial common equity shares  \nShall satisfy the following conditions:  \nNot issued by a financial  institution or any of its affiliated entities;  \nTraded at recognis ed stock exchange and centrally cleared;  \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liq uidity in the markets (repo or \nsale) even during stressed market conditions (i.e., maximum decline of share \nprice or increase in haircut not exceeding 40% over a 30 -day period of \nsignificant liquidity stress).  \n32.3.5.1.3.0  Residential mortgage backed secu rities (RMBS) with a credit rating of at \nleast AA  \n \n(i) \n \n(ii) \n(iii) \n Shall satisfy the following conditions:  \nNot issued by  and the underlying assets have n ot been originated by the bank \nor any of its affiliated entities;  \nAn External Credit Rating of AA or higher;  \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \n(iv) \n \n \n \n(v) \n \n \n \n Have a proven record as a reliable source of liquidity in the markets (repo or \nsale) even during stressed market conditions (i.e. , A maximum decline of price \nor increase in haircut not exceeding 20% over a 30 -day period of significant \nliquidity stress);  \nThe underlying asset pool is restricted to residential mortgages and cannot \ncontain structured products; the underlying mortgages ar e \u201cfull recourse\u2019\u2019 loans \n(i.e. in the case of foreclosure the mortgage owner remains liable for any \nshortfall in sales proceeds from the property) and have a maximum loan -to-\nvalue ratio (LTV) of 80% on average at issuance.  \n32.3.5.2.0.0  HQLA encumbered for  a period of six months or more and less than one \nyear  \nAny HQLA that are encumbered for a period of between six months and less \nthan one year.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 20, "year": 2018}, "type": "Document"}
{"page_content": "22 \n 32.3.5.3.0.0  Unencumbered  loans to financial institutions and central banks with \nresidual maturity between six months and less than one year  \nUnencumbered  loans to financial institutions and central banks with residual \nmaturities between six months and less than one year.  \n32.3.5.4.0.0  Deposits held at other financial institutions for operational purposes  \nDeposits placed in order to facilitate their access and ability to use payment and \nsettlement systems or make payments (e.g. Nostro Accounts and collection \naccounts).  \n32.3.5.5.0.0  All other non HQLA not included in the above categories with residual \nmaturity of less than one year  \nOther non HQLA not included in the above categories that have a residual \nmaturity of less than one year, including loans to non -financial corp orate \nclients, loans to retail customers and SME, and loans to sovereigns and PSEs.   \nIn the case of an SME, the maximum exposure (including off balance sheet  \nexposure ) of the lending bank to the SME shall not exceed Rs. 250 million . \n32.3.6.0.0.0  Assets as signed a 65% RSF factor  \n32.3.6.1.0.0  Qualifying unencumbered residential mortgages with a residual maturity \nof one year or more  \nUnencumbered residential mortgages with a residual maturity of one year or \nmore that would qualify for a 50% or lower risk weight according to the \nBanking Act Direction s No. 01 of 2016 on Capital Requirements under Basel \nIII. \n32.3.6.2.0.0  Other qualifying unencumbered loans not included in the above \ncategories, excluding loans to financial institutions, with a residual \nmaturi ty of one year or more  \nOther unencumbered loans not included in the above categories, excluding \nloans to financial institutions, with a residual maturity of one year or more that \nwould qualify for a risk weight lower than 50% according to the Banking Act \nDirection s No. 01 of 2016 on Capital Requirements under Basel III .", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 21, "year": 2018}, "type": "Document"}
{"page_content": "23 \n 32.3.7.0.0.0  Assets assigned a n 85% RSF factor  \n32.3.7.1.0.0  Cash, securities or other assets posted as initial margin for derivative \ncontracts  \nCash, securities or other assets posted as  initial margin for derivative contracts \nand cash or other assets provided to contribute to the default fund of a central \ncounterparty (CCP).  \n32.3.7.2.0.0  Other unencumbered performing loans  \nOther unencumbered performing loans with risk weight equal or g reater than \nto 50% according to the Banking Act Direction s No. 01 of 2016 on Capital \nRequirements under Basel III and having residual maturities of one year or \nmore, excluding loans to financial institutions.  \n32.3.7.3.0.0  Unencumbered securities that are not in default and do not qualify as \nHQLA  \nUnencumbered securities that are not in default and do not qualify as HQLA \nwith a remaining maturity of one year or more and exchange -traded equities.  \n32.3.7.4.0.0  Physical traded commodities, including gold  \nPhys ical traded commodities, including gold.  \n32.3.8.0.0.0  Assets assigned a 100% RSF factor  \n32.3.8.1.0.0  All assets that are encumbered for a period of one year or more  \nAll assets that are encumbered for a period of one year or more.  \n32.3.8.2.0.0  NSFR derivative assets net of NSFR derivative liabilities, if NSFR \nderivative assets are greater than NSFR derivative liabilities  \nNSFR derivative assets net of NSFR derivative liabilities, if NSFR derivative \nassets are greater than NSFR derivative liabilities.  \n**Derivative assets are calculated first based on the replacement cost for \nderivative contracts (obtained by marking to market) where the contract has a \npositive value. When an eligible bilateral netting (refer consultation paper on \nleverage ratio for eli gibility criteria until final Direction s on leverage ratio is \nissued) contract is in place, the replacement cost for the set of derivative \nexposures covered by the contract will be the net replacement cost. In", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 22, "year": 2018}, "type": "Document"}
{"page_content": "exposures covered by the contract will be the net replacement cost. In \ncalculating NSFR derivative assets, collateral  received in connection with", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 22, "year": 2018}, "type": "Document"}
{"page_content": "24 \n derivative contracts may not offset the positive replacement cost amount, \nregardless of whether or not netting is permitted, unless it is received in the \nform of cash variation margin and meets the conditions as specified . (ref er \nconsultation paper on leverage ratio for conditions on cash variation margin \nuntil final Direction s on leverage ratio is issued) . \n32.3.8.3.0.0  All other assets not included in above  \nAll other assets not included in the above categories, including non-performing \nloans, loans to financial institutions with a residual maturity of one year or \nmore, non -exchange -traded equities, fixed assets, items deducted from \nregulatory capital, retained interest, insurance assets, subsidiary interests and \ndefaulted securities.  \n32.4.0.0.0.0  Required Stable Funding \u2013 Off Balance Sheet Items  \n32.4.1.0.0.0  Irrevocable and conditionally revocable credit and liquidity facilities to \nany client  \nBalances of undrawn credit and liquidity facilities that are contractually \nirrevocable (committed) or conditionally revocable agreements to extend funds \nin future.  \n32.4.2.0.0.0  Other contingent funding obligations, including products and instruments \nbelow  \n32.4.2.1.0.0  Unconditionally revocable credit and liquidity facilities  \nBalances of undrawn credit and liquidity facilities where the bank has the right \nto unconditionally revoke the undrawn portion of these facilities (e.g., overdraft \nand credit card undrawn portion).  \n32.4.2.2.0.0  Trade finance -related obligations (including  guarantees and letters of \ncredit)  \nTrade finance instruments consist of trade -related (import - export related) \nobligations directly underpinned by the movement of goods or the provision of \nservices. Report up to uncovered exposure if such facilities are b acked by \nmargin deposits.  \n32.4.2.3.0.0  Guarantees unrelated to trade finance obligations  \nThe outstanding amount of guarantees unrelated to trade finance obligations.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 23, "year": 2018}, "type": "Document"}
{"page_content": "25 \n 32.4.3.0.0.0  Non-contractual obligations  \n32.4.3.1.0.0  Potential requests for debt repurchases of the bank\u2019s own debt or that of related \nconduits, securities investment vehicles and other such financing facilities.  \n32.4.3.2.0.0  Structured products where customers anticipate ready marketability, such as \nadjustable rate notes and variable  rate demand notes (VRDNs).  \n32.4.3.3.0.0  Managed funds that are marketed with the objective of maintaining a stable \nvalue.  \n32.4.4.0.0.0  Any other obligations  \nOther off -balance sheet exposures not covered above.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_8_of_2018.pdf", "page": 24, "year": 2018}, "type": "Document"}
{"page_content": "2\\ November 2018MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.09 of2018\nAMENDMENTS TO DIRECTIONS ON LIQTIIDITY COVERAGE RATIO\nUNDER BASEL III LIQUIDITY STANDARDS\nF'OR LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nThe Appendix I and Appendix II to Annex I referred to in Direction 4 of the Banking Act\nDirections No. 0l of 2015 on Liquidity Coverage Ratio under Basel III Liquidity Standards are\namended as follows:\n1. Amendments 1.1 The web-based return codes of 19.3.1 .1.2.0,\n19.3.4.1.1.0 and 19.4.3.1.0.0 of Appendix I are\namended as in Appendix I hereto.\n1.2 The web-based return codes of 19.2.1.1.3.1,\n19.2.t.1.3.2, 19.2.2.1.1. 1, 1 9.3. I .1.2.0, t9.3.4.1.1.0,\n19.4.3.1.0.0 and 19.3.2.0.0.0 of Appendix II are\namended as in Appendix II hereto.\nal,l\n/{r\"}h,\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_9_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "Appendix I\nReporting Formats for Rlpee Liquidity Requirement (BSD-MF-19-RR)\nReporting Formats for All-Currency I .iquidify Requirement (BSD-MF-19:AR)\nMonthly Financial Return (LKR'000)\nPart III - Calculation of Total Cash Outllows\nPart fV - Calculation of Total Cash InflowsSmall and medium enterprises 19.3.1.1.2.0\nUndrawn committed credit & liquidity facilities to\nretail and small and medium19.3.4.1.1.0", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_9_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "Appendix II\nGuidelines for Calculation of Liquidity Coverage Ratio\nWeb-based\nReturn\nCodeItem\nt9 \"2\"1.t \"3.1Issued by sovereigns\nGovernment of Sri Lanka - rupee claims. Foreign Sovereigns - where the sovereign\nattracts an External Credit Rating between AJAA to AA-.\nt9.2.r.1.3.2 Guaranteed by sovereigns\nGovernment of Sri Lanka - rupee claims. Foreign Sovereigns - where the sovereign\nattracts an External Credit Rating between A.rA.A to A.r{-.\nt9.2.2.1.1\"1 Issued or guaranteed by sovereigns\nGovernment of Sri Lanka - foreign claims. Foreign Sovereigns - where the sovereign\nattracts an External Credit Rating between A+ to A-.\nt9.3 \"t \"1.2.0Small and medium enterprises\nDeposits placed with a bank by small and medium enterprises (SME). The total\namount of deposits placed with the bank by an SME shall not exceed Rs. 250 million.\nQualifuing criteria to be classified as an SME are as follows:\n(i) The annual turnover of the SME shall not exceed Rs.750 million at the time\n(iii)of obtaining the deposit/granting the facility;\nThe annual turnover should be based on latest available audited financial\nstatements or certified by a Chartered Accountant or an Approved\nAccountant acceptable to the Department of Inland Revenue. In the case of\ndraft financial statements, the turnover certified by a Chartered Accountant or\nan Approved Accountant should be obtained within the year;\nThe criterion (ii) above shall be applicable if the total amount of deposits\nplaced with the bank by the SME or the total exposure (including off-balance\nsheet exposure) to the SME is greater than or equal to Rs. 50 million.\nOtherwise banks may adopt their own internal mechanism to verifr the\nannual turnover of the SME.(ii)\n19.3.4.1.1.0 Undrawn committed credit & liquidity facilities to retail and small and medium\nenterprises\nIn the case of an SME, the maximum exposure (including off-balance sheet exposure)\nof the lending bank to the SME shall not exceed Rs. 250 million.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_9_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "of the lending bank to the SME shall not exceed Rs. 250 million.\n19.4.3.1.0.0 Retail and small and medium enterprises\nAll payments (including interest payments and instalments) from retail customers and\nsmall and medium enterprises on performing facilities that is contractually due within\nthe 30-day horizon. In the case of an SME, the maximum exposure (including off-\nbalance sheet exposure) of the lending bank to the SME shall not exceed Rs. 250\nmi[lion.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_9_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "F\nAppendix II \\\n19.3.2.0.0.0 Unsecured wholesale funding\nWholesale deposits and other general obligations that are raised from legal entities\n(incorporated companies excluding SI/G). Wholesale deposits also include dormant\ndeposits, collateralised customer deposits against lending, margin deposits and insur,pd\ndeposits under the Sri Lanka Deposit lnsurance and Liquidity Support Scheme. ln\ncase of other general obligations, they shall not be collateralised by legal rights to\nspecifically designated assets owned by the borrowing institution in the case of\nbankruptcy, insolvency, liquidation or resolution. Obligations related to derivative\ncontracts are explicitly excluded from this definition.", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Direction_No_9_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": "1ft March20l8MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT ORDER No.01 of2018\nBANKING (OFF.SHORE BANKING BUSINESS SCHEME) ORDER\nOrder made by the Monetary Board of the Central Bank of Sri Lanka with the approval of the\nMinister, under Sections 23,25 and26 of the Banking Act, No. 30 of 1988 as amended.\n1. Citation\n2. Amendment to\nClause 5 in the'\nBanking (Off-\nShore Banking\nBusiness)\nOrder,2000\nissued on 7ft\nApril2000.The following\nShore Banking\nPermitted\ntransactions\nin an account\nof a non-\nresidentThis Order may be cited as the Banking Act, Order No. 01 of 2018.\nnew Clause, replaces the Clause 5 of the Banking (Off-\nBusiness Scheme) Order, 2000, dated 7n April2000\n5. An account maintained by a non-resident in an off-\nshore unit shall be:\n(a) credited with inward remittances, and\n(b) credited or debited, as the case may be, with\ntransactions that are permitted under the\nprovisions of the Foreign Exchange Act,\nNo. 12 of 2017,\nin any designated foreign currency.\n3. Revocations The following are hereby revoked:\n(i) Banking Act, Order No. 1 of 2009 Banking (Off-Shore Banking\nBusiness Scheme) Order.\n(ii) Banking Act, Order No. 2 of 2011 Banking (Off-Shore Banking\nBusiness Scheme) Order.\nilr*^\\ r\"*1\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bankof Sri Lanka", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Order_No_1_of_2018_e.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "30 November 2018MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT ORDER No.02 of2018\nBANKING (OFF.SHORE BANKING BUSINESS SCHEME) ORDER\nOrder made by the Monetary Board of the Central Bank of Sri Lanka with the approval of the\nMinister, under Sections 23,25 and26 of the Banking Act, No. 30 of 1988 as amended.\n1 . This Order may be cited as the Banking Act, Order No. 02 of 20 1 8 .\n2. The following Clauses are inserted immediately after Clauses 2(2) and 4(3) of the\nBanking (Off-Shore Banking Scheme) Order, 2000, dated 7 Apr1l2000 and shall have\neffect as Clauses 2(3) and 4(4), respectively.\n2.1 Authorised\nBusiness\n2.2 Authorised\nBusiness with\nResidents2(3) Foreign currency borrowings made under Section 25(b)\nof the Banking Act shall be undertaken subject to terms\nand conditions in Banking Act Directions No. 11 of\n2018 dated 30 November 2018 on foreign curency\nborrowings by licensed banks.\naU) An off-shore unit shall engage in borrowings with a\nresident specified in paragraph 4(1) subject to terms and\nconditions in Banking Act Directions No. 11 of 2018\ndated 30 November 2018 on foreign curency\nborrowings by licensed banks.\nfukl,-*,-\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2018\\Banking_Act_Order_No_2_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\n11 October 2018 CIRCULAR No.02 of 2018\nMARGIN REQUIREMENTS AGAINST\nIMPORTS ON DOCUMENTS AGAINST ACCEPTANCE (DA) TERMS\nThe Central Bank of Sri Lanka with a view to curtailing imports and the adverse impact on\nthe exchange rate requires licensed commercial banks to adopt the following measures on\nimports under DA terms with immediate effect.\n1. A 100 per cent cash margin on the invoiced value of the imports under DA terms for\nitems specified in Annex I, shall be placed by the importer at the bank that releases\ndocuments, at the time of acceptance of documents by the importer.\n2. The 100 per cent cash margin requirement shall be on the total value of the invoice,\nregardless that the same invoice includes items which are not subject to the margin\nrequirement.\n3. Licensed commercial banks shall endorse the invoice to the effect that the margin\ndeposit has been obtained.\n4. The margin deposit shall be released on the production of documentary evidence\npayments through the banking channels in Sri Lanka and customs documents\nclearance of impofis.\n5. Licensed commercial banks shall not grant any loan facilities to enable importers to\nplace the margin deposits in respect of these imports.\nil,\n;A A M Thassim\nDirector of Bank Supervisionor\nof", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "Annex I\nNon-Essential Consumer Goods\nHS Hdg\n33.03HS Code\n3303.00.00Description\nPerfumes and toilet waters\n3303.00.10 Perfumes\nToilet waters\n3303.00.21 Baby cologne conforming to SLS 589 and containing alcohol\nnot less than 55o/o and not more than 650/o bv vlv\n3303.00.22 Other colognes containing alcohol not less than 50o/o and not\nmore than 9Uo/oby vlv\n3303.00.29 Other\n33.07 Pre-shave, shaving or after-shave preparations, personal\ndeodorants, bath preparations, depilatories and other\nperfumery, cosmetic or toilet preparations not elsewhere\nspecified or included; prepared room deodorisers,\nwhether or not perfumed or having disinfectant\nproperties\n3307.10.00 Pre-shave, shaving or after-shave preparations\n3307.20.00 Personal deodorants and antiperspirants\n3307.30.00 Perfumed bath salts and other bath preparations\nPreparations for perfuming or deodorizing rooms, including\nodoriferous preparations used during religious rites :\n3307.41.00 \"Agarbatti\" and other odoriferous preparations which operate\nby buming\n3307.49.00 Other\n3307.90.00 Other:\n3307.90.10 Contact lens solutions\n3307.90.90 Other\n40.11 New pneumatic tyres, of rubber\n(+)\n4011.10.00 Of a kind used on motor cars (including station wagons and\nracing cars)\n401 1.20.00 Of a kind used on buses or lorries :\nHaving a rim size 20 inches and above :\n4011.20.11 Tyre casing without markings", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "4011.20.19 Other\n4011.20.90 Other\n4011.30.00 Of a kind used on aircraft\n401 1.40.00 Of a kind used on motorcycles\n401 1.50.00 Of a kind used on bicycles\n401 1.70.00 Of a kind used on agricultural or forestry\nvehicles and machines\n4011.80.00 Of a kind used on construction, mining or industrial handling\nvehicles and machines :\n401 1.80.10 Having a rim size not exceeding 6l cm\n401 1.80.90 Having a rim size exceeding 61 cm\n401 1.90.00 Other:\n4011.90.10 Of a kind used on auto trishaws\n401 1.90.90 Other\nOther footwear with outer soles and uppers of rubber or\nplastics64.02\nSports footwear\n6402.12.00 Ski-boots, cross-country ski footwear and snowboardboots\n6402.t9.00 Other:\n6402.t9.t0 Football shoes and rugby shoes\n6402.t9.19 Other\n6402.20.00 Footwear with upper straps or thongs assembled to the sole\nby means of plugs\nOther footwear\n6402.91.00 Covering the ankle\n64.036402.99.00 Other\nFootwear with outer soles of rubber, plastics, leather or\ncomposition leather and uppers of leather\nSporls footwear:\n6403.12.00 Ski-boots, cross-country ski footwear and snowboard boots\n6403.19.00 Other:\n6403.1 9.1 0Football shoes, rugby shoes\n6403.t9.t9 Other\n6403.20.00 Footwear with outer soles of leather, and uppers which\nconsist ofleather straps across the instep and around the big\ntoe", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "6403.40.00 Other footwear, incorporating a protective metal toe-cap\nOther footwear with outer soles of leather :\n6403.51.00 Covering the ankle\n6403.59.00 Other\nOther footwear :\n6403.91.00 Covering the ankle\n64.046403.99.00 Other\nFootwear with outer soles of rubber, plasticso leather or\ncomposition leather and uppers of textile materials\nFootwear with outer soles of rubber or plastics :\n6404.1t.00 Sports footwear; tennis shoes, basketball shoes, gym shoes,\ntraining shoes and the like\n6404.t9.00 Other\n64.056404.20.00 Footwear with outer soles of leather or composition leather\nOther footwear\n640s. 1 0.00With uppers of leather or composition leather\n6405.20.00 With uppers of textile materials\n6405.90.00 Other\n84.15Air Conditioningl machirresr, pBmprisifrg a ,motor,4riv lfran\niand etrements f,or,:changipg thertemp,4iature and'hurnidity,\nincfuding thoseitrhc[iines in which the humidtff ea$p.e\nseparately regulated(+) ', r,. \"r'i';' i ' ;\n841s.10.00 Of a kind designed to be fixed to a window, wall, ceiling or\nfloor, self-contained or \"split systetn\" :\n8415.10.10 Used i reconditioned\n\"Split systern\"\n8415.10.21 Of a capacity not exceeding 9,000 BTU\n84ts.t0.22 Of a capacity exceeding 9,000 BTU and not exceeding 12,000\nBTU\n8415.10.23 Of a capacity exceeding 12,000 BTU and not exceeding\n18,000 BTU\n8415.t0.24 Of a capacity exceeding 18,000 BTU and not exceeding\n24,000 BTU\n841 5. 10.25Of a capacity exceeding 24,000 BTU and not exceeding\n30,000 BTU", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": "8415.10.29 Other\nSelf-contained:\n8415.10.31 Of a capacity not exceeding 9,000 BTU\n8415.t0.32 Of a capacity exceeding 9,000 BTU and not exceeding 12p00\nBTU\n841 5. 10.33Of a capacity exceeding 12,000 BTU and not exceeding\n18,000 BTU\n8415.10.34 Of a capacity exceeding 18,000 BTU and not exceeding\n24,000 BTU\n8415.10.35 Of a capacity exceeding 24,000 BTU and not e*ceeding\n30,000 BTU\n8415.10.39 Other\n8415.20.00 Of a kind used for persons, in motor vehicles :\n84 1 5.20. 10Used / reconditioned\n8415.20.90 Other\nOther:\n8415.81.00 Incorporating a refrigerating unit and a valve for r\"rersal of\nthe cooling/heat cycle (reversible heat pumps) :\n841s.81.r0 Used / reconditioned\n8415.81.90 Other\n8415.82.00 Other, incorporating a refrigerating unit\n8415.82.10 Used / reconditioned\n841s.82.90 Other\n8415.83.00 Not incorporating a refrigerating unit\n8415.83.10 Used / reconditioned\n841s.83.90 Other\n8415.90.00 Parts:\n8415.90.10 Outdoor units of split type air conditioning machines:\n8415.90.1 IUsed / reconditioned\n8415.90.19 Other\n8415.90.20 Indoor units of split type air conditioning machines:\n8415.90.21 Used / reconditioned\n8415.90.29 Other\n8415.90.90 Other", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "84.18Refrigerators, freezers and other refrigerating or freezing\nequipment, electric or otherl heat pumps other than air\nconditioning machines of heading 84.15I t;,, l .', ,r,' ,r t li'r,i\n8418.10.00 Combined refrigerator-freezers, fitted with separate external\ndoors :\n84 1 8.1 0.1 0Used / reconditioned\n841 8.10.90 Other\nRefrigerators, household type :\n841 8.21.00 Compression-type :\n8418.21.10 Used / reconditioned\n8418.21.90 Other\n8418.29.00 Other:\n8418.29.10 Used / reconditioned absorption-type, electrical\n8418.29.20 Other absorption-type, electrical\n8418.29.30 Other used / reconditioned\n8418.29.90 C)ther\n8418.30.00 Freezers ofthe chest type, not exceeding 800 I capacity :\n8418.30.10 Not exceeding 566 I used / reconditioned\n8418.30.20 Other, not exceeding 566 I\n8418.30.30 Other, used / reconditioned\n8418.30.90 Other\n8418.40.00 Freezers ofthe upright type, not exceeding 900 1 capacity :\n8418.40.10 Not exceedin g 566 1 used / reconditioned\n8418.40.20 Other, not exceeding 566 I\n8418.40.30 Other, used / reconditioned\n8418.40.90 Other\n8418.s0.00 Other furrriture (chests, cabinets, display counters, show-cases\nand the like) for storage and display, incorporating\nrefrigerating or freezing equipment :\n8418.50.10 Used / reconditioned\n8418.50.90 Other\nOther refrigerating or freezing equipment; heat pumps :\n841 8.61 .00Heat pumps other than air conditioning machines of heading\n84.1 5\n8418.69.00 Other:\n8418.69.10 Cabinet and chest type refrigerators exceeding 566 I and\nbelow 850 1 used/ reconditioned", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 5, "year": 2018}, "type": "Document"}
{"page_content": "8418.69.20 Other, cabinet and chest type refrigerators exceeding 566 I and\nbelow 850 I\n8418.69.30 Blast-freezers for preserving poultry meat used/ reconditioned\n8418.69.40 Other, blast-freezers for preserving poultry meat\n8418.69.50 Milk chilling tanks used/ reconditioned\n8418.69.60 Other, milk chilling tanks\n8418.69.70 Other, used/ re-conditioned\n8418.69.90 Other\nParts :\n8418.91.00 Fumiture designed to receive refrigerating or freezing\nequipment:\n8418.91.10 Cabinets for refri gerators\n8418.91.20 Other cabinets\n8418.91.90 Other\n8418.99.00 OtheI\n85.17\nTelephone sets, including telephones for cellular networks or\nfor other wireless networks :\n8517.1 1.00Line telephone sets with cordless handsets\n8517.12.00 Telephones for cellular networks or for other wireless networks\n85 I 7.1 2.10Used / reconditioned cellular mobile telephones\n8517.t2.20 Other, cellular mobile telephones\n8517.t2.90 Other\n8517.18.00 Other\nOther apparatus for transmission or reception of voice,\nimages or other data, including apparatus for communication\nin a wired or wireless network (such as a local or wide area\nnetwork) :\n8517.61.00 Base stations", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 6, "year": 2018}, "type": "Document"}
{"page_content": "8517.62.00 Machines for the reception, conversion and transmission or\nregeneration ofvoice, images or other data, including\nswitching and routing apparatus :\n8st7.62.10 Transmission apparatus with or without reception\napparatus\n85t7.62.90 Other\n8517.69.00 Other\n8517.70.00 Parls\nMonitors and projecto,rs, not incorporltilg teffiion;, ',\nrecrcption appar:atus; reception rpparatus for teleVisiOn; I\nwhether or not incorporating ra.{io roadcast receivels or\nsbund or,video recordihg or reproducing:appaiatusr, i r;'r;85.28\nCathode-ray tube monitors :\n8528.42.00 Capable of directly connecting to and designed for use with\nan automatic data processing machine of heading 84.71\n8s28.49.00 Other:\n8528.49.10 Used / reconditioned\n8s28.49.90 Other\nOther monitors :\n8s28.s2.00 Capable of directly connecting to designed for use with an\nautomatic data processing machine of heading 84.71\n8s28.s9.00 Other:\n8528.59.10 Used / reconditioned\n8s28.59.90 Other\nProjectors :\n8528.62.00 Capable of directly connecting to designed for use with an\nautomatic data processing machine of heading 84.71\n8528.69.00 Other\nReception apparatus for television, whether or not\nincorporating radio- broadcast receivers or sound or video\nrecording or reproducing apparatus :\n8528.71.00 Not designed to incorporate a video display\nor screen :\n8528.71 .10Used / reconditioned\n8528.71.20 Other, colour\n8528.71 .90C)ther\n8528.72.00 Other. colour", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "8528.72.10 Unassembled in completely knocked- down\nform\n8s28.72.20 Used / reconditioned\nOther, with cathode ray tube :\n8528.72.31 Having a screen of less tban 14 inches\n8528.72.32 Having a screen of 14 inches and not exceeding 15 inches\n8528.72.33 Having a screen ofexceeding 15 inches and not exceeding 2l\ninches\n8528.72.34 Having a screen of exceeding 2l inches and not exceeding 25\ninches\n8s28.72.35 Having a screen ofexceeding 25 inches and not exceeding 29\ninches\n8528.72.36 Having a screen ofexceeding 29 inches and not exceeding 34\ninches\n8528.72.39 Other\nOther, with LCD :\n8528.72.41 Having a screen ofnot exceeding 32 inches\n8s28.72.49 Other\nOther :\n8528.72.91 Having a screen ofnot exceeding 32 inches\n8528.72.99 Other\n8s28.73.00 Other, monochrome :\n8528.73.10 Used / reconditioned and completely knocked-down with or\nwithout cathode ray tube\n8s28.73.20 Other, completely knocked-down with or without cathode ray\ntube\n8s28.73.30 Other, used / reconditioned\n8s28.73.90 Other\nMachines, each of a dry linen capacity not exceeding 10 kg :\n84s0.1 1.00Fully-automatic machines :\n8450.1 r.10Unassembled in completely knocked-down form\n8450.1 1.20Used / reconditioned\nOther, top loading:\n84s0.1 1.31Of a dry linen capacity less than 4 kg\n84s0.11.32 Of a dry linen capacity exceeding 4 kg and not exceeding 5.5\nkg", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "8450.1 1.33Of a dry linen capacity exceeding 5.5 kg and not exceeding\n7.5 kg\n8450.1 1.34Of a dry linen capacity exceeding 7.5 kg and not exceeding\n9.5 kg\n84s0.1 1.39Other\nOther, front loading :\n8450.1 l.4lOf a dry linen capacity less than 4 kg\n8450.tl.42 Of a dry linen capacity exceeding 4 kg and not exceeding 5.5\nkg\n84s0.1 1.43Of a dry linen capacity exceeding 5.5 kg and not exceeding\n7.5 kg\n8450.11.44 Of a dry linen capacity exceeding 7.5 kg and not exceeding\n9.5 kg\n8450.fi.49 Other\n8450.12.00 Other rrachines, with built-in centrifugal drier :\n8450.1 2. I 0Unassembled in completely knocked-down form\n84s0.12.20 Used / reconditioned\nOther:\n84s0.t2.31 Of a dry linen capacity less than 4 kg\n8450.12.32 Of a dry linen capacity exceeding 4 kg and not exceeding 5.5\nkg\n84s0.12.33 Of a dry linen capacity exceeding 5.5 kg and not exceeding\n7.5 kg\n84s0.12.34 Of a dry linen capacity exceeding 7.5 kg and not exceeding\n9.5 kg\n8450.12.39 Other\n84s0.19.00 Other:\n8450.19.10 Unassembled in completely knocked-down form\n84s0.19.20 Used / reconditioned\nOther\n84s0.19.31 Of a dry linen capacity less than 4 kg\n8450.19.32 Of a dry linen capacity exceeding 4 kg and not exceeding 5.5\nkg\n8450.19.33 Ofa dry linen capacity exceeding 5.5 kg and not exceeding\n7.5 kg\n8450.t9.34 Of a dry linen capacity exceeding 7.5 kg and not exceeding\n9.5 kg\n8450.19.39 Other\n8450.20.00 Machines, each of a dry linen capacity exceeding l0 kg\n8450.90.00 Parts", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_02_of_2018.pdf", "page": 9, "year": 2018}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT28 December 2018CIRCULARNo. 03 of 2018To - Chief Executive Officer of National Savings BankCOMPUTATION OF LEVERAGE RATIO UNDER BASEL III FOR NATIONAL SAVINGS BANKWe refer to Banking Act Directions No. 12 of 2018 on \u201cLeverage Ratio under Basel III for Licensed Commercial Banks and Licensed Specialised Banks\u201d and inform you the following:1 Computation of Leverage Ratio Exposure Measure1.1 The Central Bank of Sri Lanka has decided to permit National Savings Bank to exclude investments in government securities representing sixty per cent of money deposited in savings and deposit accounts of the bank from the exposure measure when calculating the Leverage Ratio.1.2 The amount mentioned in 1.1 shall be deducted from web based return code 36.2.1.1.1.0 in the quarterly return of BSD-QF-36- EM.A A M ThassimDirector of Bank Supervision\n1", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_03_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "Bank Supervision Department  \nCentral Bank of Sri Lanka  \n31 Decem ber 2018  \n Guidelines to Licensed Banks on the Adoption of  \n Sri Lanka Accounting Standard \u2013 SLFRS 9:  \nFinancial Instruments", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "This page has been left blank intentionally", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 2, "year": 2018}, "type": "Document"}
{"page_content": "1 \n Table of Contents  \n1. Introduction  ................................ ................................ ................................ ................................ ...2 \n2 Objectives of Issuing Guidelines on Adoption of SLFRS 9  ................................ ......................... 2 \n3. Classification and Measurement of Financial Assets and Financial Liabilities  ........................... 3 \n4. Principles for Sound Credit Risk Management  ................................ ................................ ............ 5 \n5. Impairment of Financial Assets  ................................ ................................ ................................ ....6 \n6. Collateral Valuation  ................................ ................................ ................................ ...................... 9 \n7. Role of Internal Audit  ................................ ................................ ................................ ................... 9 \n8. Regulatory Requirements ................................ ................................ ................................ ............ 10 \n9. Regulatory Reporting and Disclosures  ................................ ................................ ....................... 10 \nAnnex I  - Additional Guidance on  Impairment of Financial Instruments\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026...  12", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 3, "year": 2018}, "type": "Document"}
{"page_content": "2 \n Guidelines to Licensed Banks on the Adoption of Sri Lanka Accounting  \nStandard  - SLFRS 9: Financial Instruments  \n1. Introduction  \n \n1.1 The new Sri Lanka Accounting Standard, \u2018SLFRS 9: Financial Instruments\u2019  shall be \napplicable for financial reporting periods be ginning on or after 01.01.2018 and the adoption of \nSLFRS 9 has a significant impact towards banks and other financial institutions.  \n1.2 While the responsibility of preparation, presentation and disclosure of financial statements in \nline with the applicable Sr i Lanka Accounting Standards is vested with the Board of Directors \n(BoD) and the senior management of licensed banks, the Central Bank of Sri Lanka (CBSL) \npromotes consistent and prudent application of SLFRS 9 in the banking sector.  \n1.3 In this respect, di scussions were held  with the Institute of Chartered Accountants of S ri Lanka , \nthe Panel of Auditors  and the banking sector  to understand the concerns of licensed  banks in \nthe adoption of SLFRS 9 . \n1.4 These guideline s are prepared  based on the \u2018Guidance on Credit Risk and Accounting for \nExpected Credit Losses\u2019 issued by the Basel Committee on Banking Supervision in December \n2015 , the best practices and guidelines issued by the monetary a uthorities/regulators on \nimplementation of International Financial Reporting Stan dards 9: Financial Instruments and \ntaking into consideration the comments received from CA Sri Lanka, Panel  of Auditors and \nlicensed banks in this regard.  \n1.5 These Guidelines should be adopted within the requirements of SLFRS 9.  \n \n2 Objec tives of Issuing Guidelines on Adoption of SLFRS 9  \n \n2.1 CBSL  expects to establish consistent and prudent pract ices on adoption of SLFRS 9 by \nlicensed banks in Sri Lanka.  \n2.2 Accordingly, licensed banks are required to adhere to the following Guidelines  (in addition to \nthe existing  applicable  regulations)  as a minimum ; on classification and measurement of", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "the existing  applicable  regulations)  as a minimum ; on classification and measurement of \nfinancial assets and financial liabilities, management of credit risk, impairment of financial \nassets, valuation of collateral s, role of the internal a udit, regulatory and reporting requirements ; \nwhen preparing, presenting and publishing  financial statements .", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 4, "year": 2018}, "type": "Document"}
{"page_content": "3 \n 3. Classification and Measurement of Financial Assets and Financial Liabilities  \n3.1 Classification and measurement of  Financial Assets  \n(a) Business models approved by BoD (overseei ng authority in respect of banks incorporated \noutside Sri Lanka) shall be in place to facilitate classification of financial assets . For this \npurpose,  sufficient  documentation on objectives, definitions, characteristics , criteria  and \noperating policies along with adequate procedures  and systems for assessing the  busin ess \nmodels on an on -going basis shall be in place.  \n(b) Such  operating  policies shall include , at a minimum,  the decision -making  authorities for \nbusiness  model decisions, level of sales to be considered as infrequent and insignificant, \ntime period for near term selling to be considered for trading purposes, election of fair \nvalue option for instruments through profit or loss and through other compr ehensive \nincome.  \n(c) In terms of SLFRS 9,  debt instruments shall pass the  SPPI test (contractual cash flows  to \nmeet  Solely Payments of Principal and Interest ) and if so  such instruments  shall be \nclassif ied as \u2018financial assets at amortised cost (AC) \u2019 or \u2018financial assets at fair value \nthrough other comprehensive income (FVOCI) \u2019 based on the outcome of the business \nmodel test .  \n(d) Licensed banks are required to maintain standardised processes, detailed checklists and \ndecision trees in order to assess and ident ify SPPI features of their products and contracts.  \n(e) Accordingly, broad classification and subsequent measurement of financial assets are \ngiven in Table 1  below . \nTable 1 - Classification and Measurement of Financial  Assets  \nBusiness Model  Key Characteristics  Classification & \nSubsequent Measurement  \nDebt Instruments1 \nHeld -to-collect  - Hold assets to collect contractual \ncash flows  \n- Meet SPPI test  \n- Infrequent and insignificant sales  Amortised Cost", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 5, "year": 2018}, "type": "Document"}
{"page_content": "cash flows  \n- Meet SPPI test  \n- Infrequent and insignificant sales  Amortised Cost  \n                                                           \n1 In addition to these key characteristics other features of the product, management compensation, risk management \naspects , frequency and significance of sales, etc.  must also be considered.", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 5, "year": 2018}, "type": "Document"}
{"page_content": "4 \n Both held to collect and \nfor sale  - Both collecting contractual cash  \nflows and sales  \n- More frequent and significant \nsales  Fair value through other \ncomprehensive income  \nOther business models, \nincluding;  \n- Trading  \n- Managing assets on a \nfair value basis  \n- Maximis ing cash \nflows through sale  - Neither \u2018held-to-collect \u2019 nor \u2018held \nto collect and for sale \u2019 \n- Collection of contractual cash \nflows is incidental  Fair value through profit or \nloss  \nEquity and Derivative Instruments  \nEquity Instruments  - Held for trading  Fair value through profit or \nloss \n- Not for trading and not elected \nthe irrevocable OCI option  Fair value through profit or \nloss \n- Not for trading and elected the \nirrevocable OCI option  Fair value through other \ncomprehensive income  \nDerivative Instruments  Fair value through profit or \nloss \n \n3.2 Classification and measurement of Financial Liabilities  \n(a) Broad classification and m easurement  of financial liabilities are given in Table 2 below.  \nTable 2 - Classification and Subsequent Measurement of Financial Liabilities  \nClassification of Financial \nLiabilities  Subsequent \nMeasurement  Accounting for Fair Value Gain  \nFinancial liabilities held for \ntrading  Fair value  Through profit or loss  \nFinancial liabilities \ndesignated at fair value  Fair value  The amount of change in fair value \nattribut able t o changes in credit risk in \nliability presented in other comprehensive", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 6, "year": 2018}, "type": "Document"}
{"page_content": "5 \n income  2 and remaining amount shall be \npresented in income statement.  \nOther financial liabilities at \namortised cost  Amortised  Cost - \n \n(b) If a licensed bank is accounting for its financial liabilities as designated through profit or \nloss, changes in value of  such liabilities due to changes in own credit risk are required to \nbe assessed and accounted through other comprehensive income  as stated above . Licensed \nbanks are  requested to  formulate internal  guidelines and criteria for this purpose  \n \n3.3 Reclassification  \n(a) If the objective of the business model of the licensed bank f or its financial assets  changes \nand its previous model a ssessment would no longer apply, reclassification is required \nbetween financial assets under the provisions of SLFRS 9.  \n(b) In line with the requirements of SLFRS 9, such  changes in business models and  \nreclassifications shall be approved by  the BoD  and shall  be notified to the Director of Bank \nSupervision wit hin 7 working days of the date of such approval.   \n3.4 Measurement at Fair Value  \nWhen financial instruments are subse quently measured at fair value, licensed banks shall  \ncomply with the requirements given in \u2018Sri Lanka Accounting Standard  - SLFRS  13: Fair \nValue Measurement \u2019 and are required to:  \n(a) Use an appropriate valuation  technique  for which sufficient data is available ; \n(b) Apply the selected valuation technique consistently ;  \n(c) Maximis e the use of relevant observable inputs . In exceptional circumstances, \nunobservable inputs  may be used; and  \n(d) If inputs under level 3 hierarchy  are used in the respective valuation technique, the Chief \nRisk Officer  or most senior officer overseeing the risk management function shall confirm \nthe appropriateness and reliability  of such inputs.  \n4. Principles for Sound Credit Risk Management  \n4.1 BoD  and the senior management are responsible for ensuring that the licensed bank s have", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "4.1 BoD  and the senior management are responsible for ensuring that the licensed bank s have  \nappropriate credit risk practices, including an effective system of internal control , to \nconsistently determine adequate impairment allowances in accordance with the policies and \n                                                           \n2 If that treatment creates or enlarge s an accounting mismatch in profit or loss, an entity shall present all gains or losses \non that liability (including the effects of changes in the credit risk of that liability) in profit or loss.", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 7, "year": 2018}, "type": "Document"}
{"page_content": "6 \n procedures  of licensed  banks , the applicable Sri Lanka Accounting Standards  and relevant \nsupervisory guidance.  \n4.2 Licensed b anks shall  document and adhere to sound methodologies that address policies, \nprocedures and controls for assessing and measuring credit risk on all financial assets . The \nmeasurement of impairment allowances should build upon those robust methodologies and \nresult in the appropriate and timely recognition of expected credit losses in accordance with \nthe applicable Sri Lanka Accounting Standards . \n4.3 The aggregate amount of impairment allowances  of licensed banks , regardless of whether \nallowance components are determined on  a collective or an individual basis, should be \nadequate and consistent with the objectives of the applicable Sri Lanka Accounting Standards.  \n4.4 Licensed b anks shall  have policies and procedures in place to validate models used to assess \nand measure expected credit losses.  \n4.5 Licensed banks shall  use experienced credit judgment, especially in the robust consideration \nof reasonable and supportable forward -looking information, including macro -economic \nfactors, to measure the expected credit losses.  \n4.6 Licensed b anks should have a sound credit risk assessment and measurement process with the \nsupport of adequate  systems, tools and data to assess credit risk and to account for expected \ncredit losses.  \n4.7 Licensed b ank\u2019s public disclosures should promote transparency and com parability by \nproviding timely, relevant and useful information.  \n5. Impairment of Financial Assets  \n5.1 Calculation of Expected Credit Loss es   \nLicensed banks are required to calculate expected credit losses for the following:  \n(a) Financial assets measured at AC \n(b) Financial assets mandatorily measured at FVOCI  \n(c) Loan commitments  when there is an obligation to extend credit (except those  measured at  \nFair Value through Profit or Loss )", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "Fair Value through Profit or Loss ) \n(d) Financial guarantee contracts (except those measured at Fair Value through Profit or Loss) \n(e) Lease receivables within the scope of LKAS 17: Leases  \n(f) Contract assets within the scope of SLFRS 15: Revenue from Contracts with Customers  \n5.2 Life-time Expected Credit Losses and 12 Month Expected Credit Losses  \n(a) At each reporting date, licensed banks shall measure the loss allowance for financial \ninstruments at an amount equal to life -time expected losses , if the credit risk of a financial", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 8, "year": 2018}, "type": "Document"}
{"page_content": "7 \n instrument has increased significantly since initial recognition  (except for the purchased \nor originated credit -impaired financial assets ).  \n(b) For purchased or originated credit impaired financial assets , life time expected credit \nlosses shall be measured.  \n(c) In principle , life time expected credit losses  and credit impaired loans are  provided on an \nindividual basis . However , due to lack of borrower -specific information , licensed banks \nmay perform  the assessment on appropriate groups or portfolios on a collec tive basis.  \n(d) At the reporting date, if the credit risk o f a financial instrument has not increased \nsignificantly  since  the initial  recognition , licensed banks shall measure the loss allowance \nfor that financial instrument at an amount equal to  12 month expected credit loss . \n5.3 Economic Factor Adjustment  \n(a) Licensed banks shall use the forecasts and projections  published by CBSL , International \nMonetary Fund and/or World Bank in  all instances where such projections are available  \nwhen adjusting credit provisioning models to reflect the economic conditions and \nforecasts . \n(b) If the required inf ormation is  not available through above sources , licensed banks shall  \nuse credible alternative sources and  shall  maintain documentary evidence .  \n(c) BoD  approved policies shall  be available to specify the sources to b e used and licensed \nbanks shall  not cherry pick sources in their favour. \n5.4 Significant Increas e in Credit Risk  \nFor the purpose of calculating life -time expected losses, as a minimum, if one or more of the \nfollowing  factors/ conditions are met, it s hall be considered as a significant increase in credit \nrisk: \n(a) When contractual payments of a customer are more than 30 days past due 3 (subject to  \nthe rebuttable presumption in the  SLFRS 9 ); \n(b) When the risk rating of a customer or an instr ument has been downgraded to B + by an", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 9, "year": 2018}, "type": "Document"}
{"page_content": "(b) When the risk rating of a customer or an instr ument has been downgraded to B + by an \nexternal credit rating agency  and/or when there is a two-notch  downgrade in the banks \ninternal rating system . In the event no  external credit rating is available, licensed banks \nare required to map their internal credit risk ratings with the ratings issued by the External \nCredit Assessment Institutions (ECAI). For this purpose, licensed banks are required to \nrefer the mapping of external credit ratings given in Direction No. 1 of 2016 on Capital \n                                                           \n3 Days p ast due shall be  calculated from contractual  due date  of the payment .", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 9, "year": 2018}, "type": "Document"}
{"page_content": "8 \n Requirements under Basel III for Licensed Commercial Banks and Licensed  Specialised \nBanks;  \n(c) When reasonable and supportable forecasts of future economic conditions directly affect \nthe performance of a customer/group of custom ers, portfolios or instruments;  \n(d) When there is a significant change in the geographical locations or nat ural catastrophes \nthat directly impact the performance of a customer/grou p of customers or an instrument;  \n(e) When the value of collateral is significantly reduced  and/or realisibility of collateral is \ndoubtful . Limits shall be set and documented  by licensed b anks; \n(f) When a customer is subject to litigation , that significantly  affect s the performance  of the \ncredit facility ; \n(g) Frequent changes in the senior management of an institutional customer ; \n(h) Delay in the commencement of business operations/projects by more than two years from \nthe original ly agreed date ; \n(i) Modification of terms resulting in concessions, including extensions, deferment of \npayments, waiver of covenants etc. ; \n(j) When the  customer is deceased/insolvent;  \n(k) When the bank is unable to contact or find the customer ; \n(l) A fall of 50% or more in the turnover and/or profit before tax of the customer when \ncompared  to the previous year; and  \n(m) Erosion in net -worth by more than 25% when compared  to the previous year.  \n5.5 Models for Calculation of Expected Credit Losses  \n(a) Licensed banks shall consider all available and relevant internal and external data when \nestimating expected credit losses, ensuring that the estimates are robust, unbiased and  \nreflective of current exposures.  \n(b) Licensed banks shall  develop robust models to determine expected credit losses under \nSLFRS 9. Such models shall be tailored to reflect the bank\u2019s risk profile.  \n(c) Licensed banks shall ensure that the relevant officers are well trained and competent on \nunderstand ing the models  adopted by them  for this purpose.", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 10, "year": 2018}, "type": "Document"}
{"page_content": "understand ing the models  adopted by them  for this purpose.  \n(d) When obtaining support from external vendors/consultants in respect of model \ndevelopment, rigorous governance and internal control processes shall be adhered.  \n(e) If diff erent models are used for different portfolios and instruments, licensed banks are \nrequired to document the reasons why the selected model is appropriate  and all credit \nmodels must be review ed at least  annually .", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 10, "year": 2018}, "type": "Document"}
{"page_content": "9 \n (f) An effective model validation process shall be established to ensure that the credit risk \nassessment and measurement methods are able to generate accurate, consistent and \nunbiased predictive estimates on an ongoing basis.  \n(g) Licensed banks are required to de sist from making changes in the parameters, inputs and \nassumptions used for the purpose of profit smoothening. The rationale and justification \nfor any changes in the expected loss model s shall be documented and justified by the \nChief Risk Officer and ap proved by the BoD . \n(h) Assumptions concerning the impact of changes in general economic developments on \nborrower\u2019s repayment capacity, shall be made with sufficient prudence.  \n(i) In cases where banks incorporated outside Sri Lanka use models developed by head \noffice or regional offices, to ensure appropriateness of the credit models to the Sri Lankan \ncontext, the local implementation team should carry out appropriate validation \nprocedures . \n5.6 Further,  in respect of impairment of financial instruments , licensed banks shal l follow the \nguidance given in Annex I.  \n5.7 These guidelines are expected to be reviewed in future, looking at the market developments, \ndata quality, model development and capacity within the banking sector.  \n6. Collateral Valuation  \n6.1 Expected cash  flows from collateral realization  shall be based on latest observed reliable \nmarket valuations and shall appropriately reflect the inherent uncertainty associated with \ndistressed property liquidation  (including the time taken for such realisation) .  \n6.2 Any increase  in valuations shall be substantiated  by solid evidence that such increases are \nsustainable.  \n7. Role of Internal Audit   \n7.1 The Internal Audit function shall  independently evaluate the effectiveness of the credit  risk \nassessment, measurement systems and processes  of licensed banks and shall  ensure the \nacceptability of credit judgments .", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 11, "year": 2018}, "type": "Document"}
{"page_content": "acceptability of credit judgments . \n7.2 Internal Audit function shall  validate and evaluate all credit risk assessment models , inputs  and \nassumptions  used along with data smoothening, if any.  \n7.3 Internal audit funct ion shall  provide assurance over the adequacy and effectiveness of back \ntesting, i n order to ensure that the key drivers have been captured and calibrated accurately.", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 11, "year": 2018}, "type": "Document"}
{"page_content": "10 \n 8. Regulatory Requirements  \n8.1 In line with the international best practices, CBSL  is of the view  that the existing prudential \nregulations  pertaining to assets  classification, measurement and provisioning  should be in \nforce.  \n8.2 Accordingly, licensed banks shall  submit all periodical information including web based \nstatutory returns to CBSL  in accordance with the existing Orders, Determinations, Directions, \nGuidelines, Circulars and Instructions issued.  \n8.3 Licensed banks shall  maintain adequate data/records  and systems  separately  to identify , \nreconcile and report requirements under the Sri Lanka Accounting Standards and  under the \nexisting regulatory framework.  \n8.4 Impact on expected  credit loss provisioning is required to be captured when preparing c apital \nplanning and stress testing  processes of licensed banks.  \n8.5 In order to avoid stress on capital and  in line with the guidance given by the Basel Com mittee \non Banking Supervision, l icensed banks shall  stagger audited additional credit loss provisions \narising from SLFRS 09 when  compared with credit loss provisions under  LKAS 39  as at first \nday of adoption of SLFRS 9 , net of any other adjustment on first day impact to retained earnings \nand net of tax effects,  throughout a transitional period of four years as given below  for the \npurpose of calculati ng the Capital Adequacy Ratio  (CAR) under  Banking Act Directions No. \n01 of 2016 on Capital Requirements under Basel III.   \nTable 3 - Staggering of First Day Impact for Capital Adequacy  Ratio Computation  \n \n \n \n9. Regulatory Reporting and Disclosures  \n9.1 Licensed banks shall disclose the total amount of first day impact arising from the adoption of \nSLFRS 9 and its impact to CAR as specified in 8.5 above throughout the transitional period  in \nthe financial statements . \n9.2 However, the first day impact shall be fully adjusted in the financial statements on the first day \nof adoption of SLFRS 9.", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 12, "year": 2018}, "type": "Document"}
{"page_content": "of adoption of SLFRS 9.  \n9.3 Licensed banks are required to report the information set out in Tables 4 and 5 below to the \nBank Supervision Department through bsddb@cbsl.lk within 30 days after the end of each \nquarter, commencing 31.12.2018.  \n Cumulative Percentage of Absorption of First Day Impact  \n01.01.2018  31.12.2018  31.12.2019  31.12.2020  31.12.2021  \n12.5 25 50 75 100", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 12, "year": 2018}, "type": "Document"}
{"page_content": "11 \n Table 4 \u2013 Probability of Defaults  (PD)  and Loss Given Defaults  (LGD)  \non Collective Impairment as at \u2026..\u2026.  \nBusiness Segment/Product / \nCategory or any Other \nBasis  PD LGD  \nStage 1  Stage 2  Stage 3  Stage 1  Stage 2  Stage 3  \n       \n       \n       \n       \n \nTable 5 - Upgrading of  Credit Facilities/ Exposures  for the Computation of  \nExpected Credit Losses for the Quarter Ended as at \u2026\u2026\u2026.  \nNumber of Facilities upgraded  \nFrom stage 2 to stage 1  \nFrom stage 3 to stage 1  \nFrom stage 3 to stage 2   \nValue of Total Facilities Upgraded  \nFrom stage 2 to stage 1 (Rs.mn)  \nFrom stage 3 to stage 1 (Rs.mn)  \nFrom stage 3 to stage 2 (Rs.mn)    \nTotal of interest income re-recognised to the income \nstatement on upgrading to Stage s 2 and 1. (Rs.mn)", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 13, "year": 2018}, "type": "Document"}
{"page_content": "12 \n Annex I  \nAdditional Guidance on Impairment of Financial Instruments  \nThe following  guidance  is provided with a view  to improv ing and maintain ing the \nconsistent application  and comparability within the  banking  sector  when calculating expected \ncredit losses un der SLFRS 9 . \n \n1. Guidance on Minimum Criteria to be met by all licensed banks for categorisation \nof credit facilities/exposures into stages for computation of expected credit losses is \nas follows : \n \n1.1 Stage 1   \nAll credit facilities,  which are not categori sed under Stages 2 or 3 below.  \n1.2 Stage 2  \n(a) Credit facilities, where contractual payments of a customer are more than 30 days \npast due , other than the credit facilities categori sed under  Stage 3  below, subject  to \nthe rebuttable presumption as stated in SLFRS 9 .  \n(b) All r estructured1 loans, which are restructured up to  two times, other than credit \nfacilities/exposures mentioned in 3.2 below.  \n(c) Under -perform ing credit facilities/ exposures as identified in paragraph 5.4 of the \n\u201cGuidelines to Licensed Banks on the Adoption of S LFRS 9: Financial \nInstruments\u201d.  \n1.3 Stage 3  \n(a) Credit facilities where contractual paymen ts of a customer are more than 9 0 days \npast due , subject to the rebuttable presumption as stated in  SLFRS 9.  \n(b) All restructured loans, which are restructured more than twice , other than credit \nfacilities/exposures mentioned in 3.2 below.  \n(c) All rescheduled2 loans, other than credit facilities/exposures mentioned in 3.2 \nbelow . \n(d) All credit facilities/customers  classified as non-performing as per CBSL Directions.  \n(e) Non-performing credit  facilities/customers as identified in the paragraph 5.4 of the \n\u201cGuidelines to Licensed Banks on the Adoption of SLFRS 9: Financial \nInstruments\u201d.  \n \n                                                           \n1 Restructured facilities are where the original repayment terms have been amended due to a deterioration in", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 14, "year": 2018}, "type": "Document"}
{"page_content": "credit quality, while the respec tive credit facility remained as  Performing  loans and advances as per CBSL  \nDirections . \n2 Rescheduled facilities are where the original repayment terms have been amended , while the respective credit \nfacility remained as Non-performi ng loans and advances as per CBSL Directions .", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 14, "year": 2018}, "type": "Document"}
{"page_content": "13 \n 2. Guidance for  comput ation of  the Probability of Default (PD)  and Loss Given \nDefault (LGD)  to be used as a mini mum for the calcula tion of expected credit \nlosses  is as follows . \n2.1 Licensed banks shall use at least five-year data when calculating PDs and any \nsmoothing of data or inputs must be validated by the Risk Management Department .  \n2.2 Licensed banks sh all not use pr oxies to compute PDs and LGDs , unless the bank is a \nnewly incorporated bank with inadequate credit history  of less than 5 years . \n2.3 When  the licensed bank  is unable  to compute LGDs due to lack of data or inputs , such \nbank  is required to use a minimum LGD of 4 5 per cent for such exposures.   \n2.4 Licensed banks shall use of an LGD of 0 per cent for same currency  denominated c ash \nbacked loans  with a  haircut of over 10 per cent and subject to meeting the conditions in \nsection 4(2) of  Banking Act Direction No. 3 and 4  of 2008 Classification of Loans and \nAdvances, Incom e Recognition and Provisioning . \n2.5 With respect to exposures denominated in foreign currencies issued by  the sovereigns, \nfollowing shall be considered:  \n(a) Licensed banks shall compute PDs by using a sovereign PD w hich is linked to the \nexternal credit rating scale . \n(b) A 20 per cent LGD  shall be applied as a minimum  when computing expected \nlosses. \n2.6 When calculating LGD for exposures guaranteed by the Government  of Sri Lanka : \n(a) An LGD of zero can be applied to exposures wit h the guarantee of the Government \nprovided that the guarantee is  fully covered with the interest and reported a s \nliabilities of the Government .  \n(b) LGD for any other form of assurance other than in item 2.6 (a) above shall be \ncomput ed instead of using a zero LGD.  \n(c) A minimum LGD of 20 per cent shall  be applied for Government  guarantee s \ndenominated  in foreign currency .  \n \n \n3. Other Guidance  \n3.1 Off-balance sheet exposures: when converting o ff-balance sheet exposures  for", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 15, "year": 2018}, "type": "Document"}
{"page_content": "3.1 Off-balance sheet exposures: when converting o ff-balance sheet exposures  for \nexpected credit loss calculations , licensed banks m ay use the value s as per the credit \nconversion factor s specified in the Banking Act Direction No. 01 of 2016 on Capital \nRequirements under Basel III , if historical data is not available .", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 15, "year": 2018}, "type": "Document"}
{"page_content": "14 \n 3.2 Upgrading of credit facilities : when upgrading credit facilities  from a higher stage to a \nlower stage  (e.g., from stage 3 to stage 2)  \n(a) The upgrading of credit facilities shall only be carried out by Risk Management \nDepartment  and be independent from the loan review mechanism.  \n(b) Such upgrading shall be supported with a BoD  approved policy , rationale and \nwith adequate documentation.   \n(c) When upgrading restructured facilities, satisfactory performing period of a \nminimum 90 days must be considered subsequent to the due date of the 1st   \ncapital and/or interest installment post -restructure. With respect to upgrading \nrescheduled facilities, licensed banks must comply with Banking Act Directions \nNo.3/4 of 2008 on Classification of Loans and Advances, Income Recognition and \nProvisioning . \n3.3 Internal Rating  Based (IRB) credit rating : A license d bank  shall not  use IRB credit \ninformation  for expected  credit  loss calculations  without  compl ying with the following:  \n(a) Pricing mechanism shall be mapped with IRB  information ; \n(b) Shall have at least five-year IRB based historical data subject to 3.3 (a) ; and \n(c) BoD approved policies shall be in place and IRB inputs and models needs to be  \nreviewed independently by th e Risk Management Department .", "metadata": {"source": "data\\CBSL\\2018\\bsd_circular_no_04_of_2018.pdf", "page": 16, "year": 2018}, "type": "Document"}
{"page_content": "El eoor @o OcoaBO\n@on&ora to6du ornidl\nCEMRAT BAI{K OFSRI I.ANIG\nOro4 q6ma6 oqorttoo@dcBp o'urdrdl Grogunrtenorp pilorarord;oond Bank Supervlslon Department\nOur Ref.: 02/ 17 I 500/0590/00 1\ng(January 2018\nCEOs of Licensed Commercial Banks and Licensed Specialised Banks\nDear Sir\nImplementation of Budget Proposal on Usance Letter of Credit Facilities\nWe write to bring to your attention that the Department of Trade and Investment Policy of\nthe Ministry of Finance and Mass Media has informed the Central Bank of Sri Lanka that\nall financial institutions should refrain from issuance of Usance Letter of Credit facility for\nimportation of motor vehicles effective from 01.01.2018, as approved by the Parliament\nunder Budget for 2018.\nYou\nDir-ector of Bank Supervision\nCC:\nl. Director General, Department of Trade and Investment Policy, Ministry of\nFinance and Mass Media\n2. Controller General, Department of Imports and Exports Control\n3. Director General, Departments of Customs\n4. Commissioner General, Department of Motor Traffic\n6 OeD O.De, Eo@ BO, daoa(,d OrOtD,\noE. s\u20ac, . 5OO, ooreo Of, \u20ac Cpiaro\nI g+u zqnlr,orcsg6 q66 Dnq, 6rD. 30 Eorrgtlup'l Dtr6uEoE 06r(g6r{ 1\nE. Ou. Oa).590, Oen1glir.g 01, e.)d.r6Leysl 6, ilo, 3q Janadhlpafil Mawatta, Cotombo 1\nP . 0. Bu,590, Colombo 01, Srl Lanl\u20ac.\n@ www.cbsl.gov.lk lJ s+lrz4tt7it ( banksup@cbsl.lt", "metadata": {"source": "data\\CBSL\\2018\\Circular_No_1_of_2018.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "I fldgi : (I) fPoh \u2013 Y%S ,xld m%cd;dka;%sl iudcjd\u00a7 ckrcfha w;s \u00fafYI .ei\u00dc m;%h  \u2013 2018'01'09\nPART I: S EC. (I) \u2013 GAZETTE EXTRAORDINARY OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA \u2013 09.01.20181A\nY%S ,xld m%cd;dka;%sl iudcjd\u00a7 ckrcfha .ei\u00dc m;%h\nThe Gazette of the Democratic Socialist Republic of Sri Lanka\nw;s \u00fafYI EXTRAORDINARY\n(Published by Authority)\nPART I: SECTION (I) \u2013 GENERAL\nCentral Bank of Sri Lanka Noticeswxl 2053$16 \u2013 2018 ckjd\u00df ui 09 jeks w\u00d5yrejdod \u2013 2018'01'09\nNo. 2053/16 \u2013 TUESDAY, JANUARY 09, 2018\nTHE MONETARY LAW ACT\nREGULATIONS made by the Monetary Board under Section 32E of the Monetary Law Act, (Chapter 422).\nDr. I NDRAJIT  COOMARASWAMY ,\nChairman,\nMonetary Board.\nColombo,\n05th January, 2018.\nSri Lanka Deposit Insurance and Liquidity Support Scheme Regulations\n Amendment to the Sri Lanka Deposit Insurance Scheme Regulations, No. 1 of 2010\n1.Citation 1.1 These Regulations shall be cited as Sri Lanka Deposit Insurance and Liquidity Support\nScheme Regulations, No. 1 of 2018.\n2.Amendment to the 2.1 Sri Lanka Deposit Insurance Scheme Regulations, No. 1 of 2010 published in Gazette\nprincipal regulation Extraordinary  No. 1673/11 of 28th September, 2010 is hereby amended as follows:\u2013\nSubstitution for 2.2 In Regulation 5 thereof by the repeal of paragraph 5.1 of that regulation and the substitution\nRegulation 5.1 of the following paragraph:\n\u201c5.1 Deposits to be insured shall include demand, time and savings deposit liabilities of\nmember institutions, value of the shares of shareholders who were initially depositholders, whose deposits were converted into equity under the directions of theMonetary Board in 2010 and 2011 as part of the Business restructuring plansimplemented prior to 01.01.2012 and exclude all borrowing instruments.\u201d\nThis Gazette Extraordinary can be downloaded from www.documents.gov.lk", "metadata": {"source": "data\\CBSL\\2018\\RED_gazette_regulation_no_01_of_2018_amendments_to_sri_lanka_deposit_insurance_scheme_e.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "1A \u2013 G26913 \u2013 27 (2018/01)", "metadata": {"source": "data\\CBSL\\2018\\RED_gazette_regulation_no_01_of_2018_amendments_to_sri_lanka_deposit_insurance_scheme_e.pdf", "page": 0, "year": 2018}, "type": "Document"}
{"page_content": "2A I fldgi : (I) fPoh \u2013 Y%S ,xld m%cd;dka;%sl iudcjd\u00a7 ckrcfha w;s \u00fafYI .ei\u00dc m;%h  \u2013 2018'01'09\nPART I: S EC. (I) \u2013 GAZETTE EXTRAORDINARY OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA \u2013 09.01.2018\nFor this purpose, the value of shares of shareholders whose deposits were converted\ninto equity, shall be the value of deposit/s that had been convered into shares.\nSubstitution for 2.3 In Regulation 9 thereof by the repeal of paragraph 9.6 of that regulation and the substitution\nRegulation 9.6 of the following paragraph:\n\u201c9.6 The amount of compensation payable to a depositor shall be limited to the total\ninsured deposits computed as above, subject to a maximum of Rs. 600,000 orits equivalent in the case of foreign currency deposits, if such amount exceedsRs. 600,000.\u201d\nSubstitution for 2.4 In Regulation 10 thereof by the repeal of paragraph 10.1 of that regulation and the\nRegulation 10.1 substitution of the following paragraph:\n\u201c10.1 There shall be an established Deposit Insurance Unit in the Resolution and\nEnforcement Department which shall be responsible for the operational and\nmanagement arrangements, under the insturctions and supervision of the Directorof Resolution and Enforcement in terms of Directions/Regulations and policies asapproved by the Monetary Board from time to time.\u201d\n4.Effective date 3.1 These amendments shall come into effect from 01st January, 2018.\n01 \u2013 632\nPRINTED AT THE DEPARTMENT OF GOVERNMENT PRINTING, SRI LANKA", "metadata": {"source": "data\\CBSL\\2018\\RED_gazette_regulation_no_01_of_2018_amendments_to_sri_lanka_deposit_insurance_scheme_e.pdf", "page": 1, "year": 2018}, "type": "Document"}
{"page_content": "iaDecember 2019MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 10 of 2019\nFRAMEWORK FOR DEALING WITH DOMESTIC SYSTEMICALLY\nIMPORTANT BANKS\nIn terms of the powers conferred by Sections 19(7)(a) and76G(7) of the Banking Act No. 30 of\n1988, as amended, the Monetary Board has determined a framework for dealing with Domestic\nSystemically Important Banks (D-SIBs) and Higher Loss Absorbency iiequirements (HLA) as\ncapital surcharge on D-SIBs having regard to the guidelines issued by the Basel Committee on\nBanking Supervision.\nThis framework attempts to identify the banks whose failure has a larger impact on the financial\nsystem due to size, interconnectedness, lack of substitutability and complexity and requires\nmaintaining HLA by such banks.\n1. Empowerment 1.1\nScope of\nApplication\n3. Capital Surcharge\non D-SIBst.2\n2.1\n3.1In terms of Section 102 of the Monetary Law Act, the Monetary\nBoard may from time to time by Order prescribe the minimum\ncapital ratios which the capital of licensed banks shall bear to the\ntotal volume of their assets or to any specified category of such\nassets.\nIn terms of Sections 46(l) and76J(l) of the Banking Act, in order\nto ensure the soundness of the banking system, the Monetary\nBoard is empowered to issue Directions to all or any licensed\nbank, regarding the manner in which any aspect of the business of\nsuch bank or banks is to be conducted.\nThese Directions shall be applicable to every licensed bank:\n(i) incorporated in Sri Lanka on a solo and consolidatedbasis; and\n(ii) branches of banks incorporated or established outside Sri\nLanka, on a standalone basis.\nD-SIBs shall maintain, at all times, the minimum capital surcharge\nas prescribed in 3.2 below.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "J0 December 2019,oy*h.:ds\n'i1ffi6iiz*.U,r*f_,_fj\nMONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 10 of 2019\n4. Framework\n5. Disclosure\nRequirementJ.J\n4.7\n5.13.2 The minimum capital surcharge on D-sIBs are in Table 1 below:\nTable 1: Minimum Capital Surcharge on D-SIBs\nBucket HLA Requirement\n(CETI as a oh of risk-weighted assets)\n-) 2.0\n2 1.5\nI 1.0\nThe capital surcharge on D-SIBs shall be met with Common\nEquity Tier 1 (CETI) as defined in Banking Act Directions No. 01\nof 2016 of Capital Requirements under Basel III.\nFramework for Dealing with Domestic systemically rmportant\nBanks is in Schedule I.\nFor each financial year-end, licensed banks with a Leverage Ratio\nexposure measure, that exceeds Rs. 400 billion shall comply with\nthe disclosure requirements in Schedule I.\nfl*|, ^-T\nDr. Indrajit Coomaraswamy\nChairmqn of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "Banking  Act Directions No. 10  of 2019  \nFramework for Dealing with Systemically Important Banks  \n \n \n \n \n \n \n \n \nSCHEDULE I", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "2 \n FRAMEWORK FOR DEALING WITH DOMESTIC  SYSTEM ICALLY \nIMPORTANT BANKS  \n \n1. Introduction  \n1.1 The Basel Committee on Banking Supervision (BCBS) issued an assessment \nmethodology for global systemically important banks (G -SIBs) and prescribed higher  \ncapital surcharge  in November 2011. Later in July 2013 and July 2018 the assessment \nmethodology was reviewed and amended.  \n1.2 Similar to the case of  G-SIBs, failure of a large interconnecte d financial institution that \nis not significant from an international perspective, may severely impact  the domestic \nfinancial market and the real economy. Therefore, BCBS issued an extension  of the G -\nSIB assessment  methodology to domestic systemically important banks (D -SIBs) in \nOctober 2012.  \n1.3 Primary objective of the implementation of the D -SIBs framework is D-SIBs  to hold \nhigher capital buffers and to provide incentives to reduce their systemic importance  on \nthe do mestic economy . \n \n2. The D -SIBs  Framework  \n2.1 The D-SIBs  framework is based on the 12 principles of BCBS and appropriate national \ndiscretion is exercised in selection of indicators to accommodate structural \ncharacteristics of the domestic financial system.  \n2.2 Scope of assessment: all locally incorporated domestic banks, subsidiaries bank \nbranches of foreign banks are included in the assessment based on the criteria specified \nin 2.4 below.  \n2.3 D-SIB framework assesses locally incorporated banks on consolidated basi s and \nforeign bank branches will be on a standalone basis.  \n2.4 Sample  of banks : Basel specified criteria on G -SIBs are considered when selecting the \nsample for D -SIBs as below:  \n(i) 10 largest banks based on Basel III leverage ratio exposure measure;  \n(ii) Banks that were previously designated as D -SIBs in the previous year, if \nnecessary; and  \n(iii) Banks added based on supervisory judgement, if necessary.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "3 \n 2.5 The impact  of a D -SIB\u2019s failure on the domestic economy in principle is to be assessed \nhaving regard to bank -specific fa ctors as below:  \n(i) Size  \n(ii) Interconnectedness  \n(iii) Substitutability/ financial institution infrastructure  \n(iv) Complexity  \n2.6 Details  of bank specific factors, individual indicator s under each factor and their \nweights are as follows:  \nTable 01  - Factors Considered in Assessment of D -SIBs  \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2.7 The indicators  are briefly described below . \n(i) Size \n(a) The larger the bank, the more difficult it is for its activities to be quickly \nreplaced by other banks and therefore the greater the chance that its distress \nor failure would cause disruption to the financial markets in which it \noperates.  \n(b) The distress or failure of a large bank is also more likely to damage \nconfidence of the depositor and the financial system as a whole.  \n(c) The indicator used to measure size  is the measure of total exposures used in \nthe Basel III leverage ratio . Category  Individual Indicator  Category  \nWeighting  \nSize Total exposure  40% \nInterconnectedness  Intra -financial system assets  20% \nIntra -financial system liabilities  \nSecurities outstanding  \nSubstitutability  / financial \ninstitution infrastructure  Assets under custody  20% \nTrading volume  \nPayments activity  \nComplexity  Notional amount of derivatives  20% \n Level 2 assets  as reported under \nLiquidity Coverage Ratio  \nCross jurisdictional liabilities  \nCross jurisdictional claims  \nTrading and available for sale (AFS) \nsecurities", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "4 \n (d) Larger the size of a bank, th e greater its market share  of critical financial \nservices, greater the cross jurisdictional activities,  more interconnected it is \nto the banking sector and the d omestic economy, and therefore it is  more \ndifficult to substitute.  \n(e) Considering the systemic im portance placed in the \u201csize\u201d indicator and the \nimpact its having on other four indicators, the highest weight of 40% is \nallocated.  \n(ii) Interconnectedness  \n(a) Financial distress at one bank can materially increase the likelihood of \ndistress at another bank given the network of contractual obligations in \nwhich these banks operate.  \n(b) A bank\u2019s systemic impact is likely to be positively related to its \ninterconnectedness vis -\u00e0-vis other financial institutions.  \n(c) Three indicators are used to measure interconnectedness: (i ) intra -financial \nsystem assets; (ii) intra -financial system liabilities; and (iii) securities \noutstanding.  \n(d) Each indicator is allocated an equal weight of 6.66% and the overall \ncategory is weighted at 20% . \n(iii) Substitutability  \n(a) The systemic impact of a bank\u2019s distress or failure is expected to be \nnegatively related to its degree of substitutability as both a market \nparticipant  and a client service provider.  \n(b) Three  indicators are used to measure substitutability: (i) assets under \ncustody; (ii) payments activity; (iii) trading volume.  \n(c) Underwritten transactions in debt and equity market were not considered \nsince banks do not have an exposure in underwriting based on the data \nsubmitted by banks. This indicator will be considered at the next review of \nthe framework wh ich will be performed once in 3 years.  \n(d) Each indicator is allocated an equal weight of 6.66% and the overall \ncategory is weighted at 20%.  \n(e) Substitutability is capped at 500 basis points.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 5, "year": 2019}, "type": "Document"}
{"page_content": "5 \n (iv) Complexity  \n(a) The systemic impact of a bank\u2019s distress is expected to be  positively related \nto its overall complexity including its business, structural and operational \ncomplexity.  \n(b) The international impact of a bank\u2019s distress or failure would vary in line \nwith its share of cross -jurisdictional assets and liabilities. The gre ater a \nbank\u2019s global reach, the more difficult it is to coordinate its resolution and \nthe more widespread the spillover effects from its failure.  Therefore, cross -\njurisdictional activity is included into the complexity.  \n(c) The more complex a bank is, the greater the costs and time needed to \nresolve .  \n(d) Five indicators are used to measure complexity: (i) notional amount of Over \nthe Counter ( OTC ) derivatives; (ii) level 2 assets; (iii) trading and available \nfor sale securities; (iv) cross -jurisdictional claims ; and (v) cross -\njurisdictional liabilities.  \n(e) Each indicator is allocated an equal weight of 4% and the overall category \nis weighted at 20%.  \n2.8 Ancillary Indicators  \nAncillary indicators are considered relating to specific aspect of the systemic \nimportance of th e bank that may not be captured by the indicator based measurement \napproach alone.  These indicators are used to support the judgement overlay.  \n2.9 Score Calculation  \n(i) Sample of banks are  selected for the computation of systemic importance based on \nthe size reported in the exposure measure of the Basel III Leverage Ratio  as in 2.4 \nabove . \n(ii) Data in Annex I is collected from the sample  of banks.  \n(iii) To calculate the score for a given indicator, th e bank\u2019s reported value for that \nindicator is divided by the corresponding sample total, and the resulting value is \nthen expressed in basis points by multiplying by 10000. The maximum score for \nsubstitutability is capped at 500 basis points.  \n(iv) To calculate t he scores for the four bank specific factors, the scores for the", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 6, "year": 2019}, "type": "Document"}
{"page_content": "(iv) To calculate t he scores for the four bank specific factors, the scores for the \nindicators that fall within each specific factor are averaged.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 6, "year": 2019}, "type": "Document"}
{"page_content": "6 \n (v) The final score is produced by averaging the four bank specific factor scores and \nthen rounding  to the nearest whole basis point . \n2.10 Supervisory Judgment  \n(i) Bank\u2019s score may be adjusted based on supervisory judgment.  Supervisory \njudgment is used to override the indicator -based measurement approach in \nexceptional cases .  \n(ii) In these exceptional cases, the published bucket does not align with the calculated \nscore. The decision to exercise supervisory judgment generally reflect s a variety \nof quantitative or qualitative factors not captured in the indicators.  \n2.11 Bucketing Approach  \n(i) Banks t hat have a score exceeding the r egulator determined  cut-off level are \nclassified as D -SIBs.  \n(ii) D-SIBs are allocated into 3 buckets with varying HLA requirements in the range \nof 1.0% to 2.0% as shown in the Table 02 below.  \n(iii) Based on the annual assessment, if necessary, D -SIBs will be allocated  into \ndiffe rent buckets based on the score and the supervisory judgment. In future, if \nbucket 3 becomes populated, a new bucket will be added.  \n                             Table 02  - D-SIBs Bucketing Approach  \nBucket  HLA Requirement  \n(CET1 as a % of risk -weighted assets)  \n3 2.0 \n2 1.5 \n1 1.0 \n \n2.12 Interaction  with Capital Buffers and Consequences of Breaching the Capital \nSurcharge on D -SIBs  \n(i) If a D-SIB breaches HLA requirement, it is required to agree on a capital \nremediation plan to return to compliance over a defined time frame. Until returned \nto compliance, it is subject to restrictions on discretionary distributions of \ndividend payout and other restrictions as required by the Regulator.  \n(ii) For a newly ide ntified D -SIB and for a D -SIB that progresses to a bucket \nrequiring a higher HLA requirem ent, a time frame of 12 months will  be permitted", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 7, "year": 2019}, "type": "Document"}
{"page_content": "7 \n to meet the additional requirement. In the event, the bank does not meet the HLA \nrequirement within the time period sa me restrictions above will be applied.  \n(iii) If on the other hand when D -SIB score falls resulting in a lower HLA \nrequirement, CBSL based on supervisory judgement may decide on a timeline for \nsuch bank to be released from its previous HLA requirement.  \n2.13 Disclosure  Requirements  \n(i) For each financial year -end, all banks with a leverage ratio exposure measure, that \nexceeds Rs. 400 billion are required to publicly disclose 10 high level indicators \nused in the assessment methodology in their Annual Reports and/or websites as \nper the format in Annex I.  \n(ii) Banks below this threshold that have been added to the sample owing to \nsupervisory judgment or as a result of being classified as a D -SIB in the previous \nyear would also be required to comply with the disclosure requirements.  \n(iii) Banks should also publicly disclose in their websites if the data used to calculate \nthe D -SIB scores differ from the figures previously disclosed. Banks should \ndisclose the accurate figures in the financial quarter immediately following the \nfinalisation o f the D -SIB score calculation . \n2.14 Operational  Timeline  \n(i) The framework is to be effective immediately and going forward the D -SIBs \nassessment will be conducted based on below timelines:  \nTable 03 \u2013 Timeline for implementation  \nTime  Task  \nApril  Collect data as in  Annex I  from the selected banks  \nAugust  Assess collected data  and identify the list of D -SIBs   \nOctober  Publish the list of D -SIBs that are subject to HLA requirement \nwith the approval of the Monetary Board  \n \n \n(ii) The timeline given above will be adhered and practiced annually to decide on \nthe D -SIBs.  \n(iii) The framework of D -SIB assessment will be reviewed once in three years to \nincorporate any revisions or amendments in accordance with BCBS reviews.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 8, "year": 2019}, "type": "Document"}
{"page_content": "Annex I\nD-SIBs Assessment Exercise\n(a) Report data as at 31 December each year, unless otheryise specified.\n(b) Lmally incorporated banks - report consolidated basis.\n(c ) Foreign bank branches - solo basis.\n(d) Financial Institution definition is in accordmce with Direction No. 0l of2016 ofCapital Requirernent under Basel lll", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 9, "year": 2019}, "type": "Document"}
{"page_content": "Guide to Fill the Required Information\nSection Guide\nReport the total exposure measure used for the leverage ratio.\n2aReport all funds deposited with or lent to other flnancial institutions (other financial institutions through out this\nreturn are financial institutions outside o1'the consolidated reporting group). Deposits include placements. Lending\nshould include all forms ofterm/revolving lending. overdraft and other extensions ofcredit to flnancial institutions.\n2bReport all holdings olsecurities issued by other financial institutions. This includes debentures. trust ceftificates.\ntrading and non-trading shares.\n2cThis item should include the following:\n(a) Net positive reverse repurchase agreement exposure, rvhere the value ofthe cash provided exceeds the lair value\nof the securities received:\n(b) Net positive repurchase agreement exposure. where the fair value ofthe securities provided exceeds the value of\nthe cash received;\n(c) Net positive securities lending exposure. where the fair value ofsecurities lent exceeds the value ofcash\ncollateral received (or the fair value ofnon-cash collateral received); and\n(d) Net positive securities borrowing exposure. where the value ofcash collateral provided (or the fair value ofnon-\ncash collateral provided) exceeds the fair value ofsecurities borrowed.\n2dReport the sum of \"net positive fair value\" and \"the potential future exposure\" fbr OTC derivatives rvith other\nfinancial institutions that have a net positive mark to market value. Netting is valid if the criteria in the Direction\nNo. l2of20l8onLeverageRatiounderBasel Illismet.Onlynettingsetsrvithapositivevalueshouldbe reported\nhere. Netting sets where the net result is negative should be repofted in item 3c below.\n3aReport an1'funds deposited by or borrowed f'rom other flnancial institutions that are accounted fbr as payables. Do\nnot include any liability arising fiom 4 below.\nlbThis item should include the following:", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 10, "year": 2019}, "type": "Document"}
{"page_content": "not include any liability arising fiom 4 below.\nlbThis item should include the following:\n(a) Net negative reverse repurchase agreement exposure. where the fair value ofsecurities received exceeds the\nvalue ofthe cash provided.\n(b) Net negative repurchase agreement exposure. where the value ofthe cash received exceeds the f-air value ofthe\nsecurities provided.\n(c) Net negative securities lending exposure. where the value ofcash collateral received (or the fair value ofnon-\ncash collateral received) exceeds the fair value ofsecurities lent.\n(d) Net negative securities borrowing exposure. where the l'air value of securities borror.ved exceeds the value of\ncash collateral provided (or the fair value ofnon-cash collateral provided).\n3cReport the sum of\"net negative fair value\" and \"the potential future exposure\" fbr OTC derivatives u'ith other\nfinancial institutions that have a net negative mark to market value. Netting is valid if the criteria in the Direction\nNo. l2of20l8onLeverageRatiounderBasellllismet.Onlynettingsetswithanegativevalueshouldbereported\nhere. Netting sets u'here the net result is positive should be repofted in item 2d above.\n4Report the value ofall outstanding securities that were issued by. or on behalfof. the reporting entity. Accordingly.\nsecurities should be repoded regardless ofwhether or not they are held by other tlnancial institutions. Exclude the\nshares issued.\n5Payments should be reported regardless of purpose. location. or settlement method done during the repofting period\n. This includes RTGS gross payments. ATM withdrawals. credit/debit card payments. cheque payments. internet\nbanking and mobile banking payments. Only include outgoing payments (i.e. exclude payments received). Do not\ninclude intragroup transactions.\n6Report the value ofall assets\" including cross-border assets that the reporting group holds as a custodian on behall\nof customers. including other financial institutions.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 10, "year": 2019}, "type": "Document"}
{"page_content": "of customers. including other financial institutions.\n7Include all underwriting (public and private) over the reporting year rvhere the bank rvas obligated to purchase\nunsold securities. Exclude intragroup and self-led transactions.\n8Number ofshares or contracts ofa security traded by the bank during the reportins year,\n9Reporl the notional amount outstandinp. ot-OTC derivative oositions.\nl0Report Level 2 assets unweighted amount reported in Liquidity Coverage Ratio.\nllReport financial assets which are recognised under f-air value through other comprehensive income and f'air value\nthrough profit or loss. This includes but not limited to debt instruments. equity instruments and derivative\ninstruments.\nt2Report the sum ofcross-jurisdictional liabilities. Do not include local liabilities in fbreign currenc)'. Exclude\nderivatives and intragroup liabilities.\n13R.eport the sum of cross-jurisdictional claims. Do not include local claims in fbreign currency. Exclude derivatives\nand intragroup liabilities.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_10_of_2019.pdf", "page": 10, "year": 2019}, "type": "Document"}
{"page_content": "20 December 2019MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.11 of20l9\nAMENDMENTS TO DIRECTIONS ON CAPITAL REQUIREMENTS UNDER BASEL\nIII FOR LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nBanking Act Directions No. I of 2016 on Capital Requirements under Basel III for licensed\ncommercial banks and licensed specialised banks hereinafter referred to as licensed banks are\namended by replacing the following Directions.\n3. Minimum\nCapital\nRequirements3.1 Every licensed bank shall maintain, at all times, the minimum capital\nratios prescribed below in Table 01 and shall ensure compliance with\nSchedule I annexed to Banking Act Directions No. 1 of 2016 on\nCapital Requirements under Basel III for licensed banks.\nTable 01 - Capital Requirements for Licensed Banks\nComponents of CapitalCapital Adequacy Ratio\nto be Maintained\nCommon Equity Tier 1\nincluding Capital Conservation\nBuffer7.0 %\nTotal Tier I including\nCapital Conservation Buffer8.s %\nTotal Capital Ratio including\nCapital Conservation Buffert2.5 %\nLicensed banks which are determined as Domestic Systemically\nImportant Banks (D-SIBs), from time to time shall maintain\nadditional Higher Loss Absorbency (HLA) requirements as specified\nby the Monetary Board in the form of Common Equity Tier 1.\nTable 02 - Capital Requirements for D-SIBs\nComponents of CapitalCapital Adequacy Ratio to be\nMaintained\nCommon Equity Tier 1\nincluding Capital Conservation\nBuffer7.0 % + HLA\nTotal Tier I including\nCapital Conservation Buffer8.5 % + HLA\nTotal Capital Ratio including\nCapital Conservation Buffer12.5 % + HLA3.2", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_11_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "J0 December 2019MONETARY BOARI)\nCENTRAL BANK OF SRI IANI(A\nBANKING ACT DIRECTIONS No. 11 of 2019\n3.3 Sections relating to D-SIBs refer-red tq in Schedule I of Banking Act\nDitections No. 1 of 2016 on Capital Requirernents under Basel III for\nlicensed banks is amended in line with Direction3.2 above.\ntlgt*\nDr. Indrajit Coomaraswamy\nChairmnn of the Monetary Board and\nGove.rnor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_11_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nJ0 December2019 BANKINGACT DIRECTIONS No. 12 of 2019\nDOMESTIC SYSTEMICALLY IMPORTANT BANKS\nIn terms of the powers conferred by Sections 19(7)(a) and 7 6G(7) of the Banking Act No. 30 of\n1988, as amended, the Monetary Board has determined the following licensed banks as Domestic\nSystemically Important Banks (D-SIBs) and the applicable Higher Loss Absorbency Requirements\n(HLA) with immediate effect.\nTable 01- Licensed Banks Determined as D-SIBs\nBucket Licensed Banks HLA Requirement\n(CETI as aoh of Risk-Weighted Assets)\nJ 2.0\n2Bank of Ceylon\nCommercial Bank of Ceylon PLC1.5\n1People's Bank\nHatton National Bank PLC1.0\nfkuu.-\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_12_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT18 April 2019BANKING ACT DIRECTIONSNo. 02 of 2019MEASURES TO CURTAIL IMPORTS OF MOTOR VEHICLES1. Licensed commercial banks and licensed specialised banks are hereby informed that the Direction No. 2 of the Banking Act Directions No. 06 of 2018 dated 28.09.2018 on Measures to Curtail imports of Motor Vehicles is withdrawn with effect from the date of this Directions.2. Licensed commercial banks and licensed specialised banks shall adhere to the requirements stipulated under Circular No. 05 of 2019 on Removal of restrictions on opening of letters of credit (LCs) for importation of motor vehicles under permits on concessionary terms.H A KarunaratneActing Senior Deputy Governor/ Chief Executive Officer of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_2_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "April 2019MONETARY BOARD CENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSNo. 03 of 2019SMALL AND MEDIUM ENTERPRISES REFERRED UNDER BASEL III REGULATORY FRAMEWORK ON CAPITAL AND LIQUIDITY STANDARDSThe Banking Act Directions No. 01 of 2016 on Capital Requirements, the Banking Act Directions No. 09 of 2018 on Liquidity Coverage Ratio and the Banking Act Directions No. 08 of 2018 on Net Stable Funding Ratio issued under Basel III capital and liquidity standards are amended as follows:1. Amendments 1.1 Capital RequirementsThe qualifying criteria for SME exposures given in the web-based return code of 20.3.1.8.1.0 (d)(i) of Part III(A) of Appendix IV of Schedule I of Banking Act Directions No. 01 of 2016 on Capital Requirements is amended as in Part I of Annex I hereto.1.2 Liquidity Coverage RatioThe web-based return code of 19.3.1.1.2.0 of Appendix II of Banking Act Directions No. 09 of 2018 on Liquidity Coverage Ratio is amended as in Part II of Annex I hereto.1.3 Net Stable Funding RatioThe web-based return code of 32.2.2.1.0.0 of Appendix II of Schedule I of Banking Act Directions No. 08 of 2018 on Net Stable Funding Ratio is amended as in Part III of Annex I hereto.Dr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka1", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_3_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "Part I; Capital RequirementsAnnex IWeb-basedReturn CodeItem20.3.1.8.1.0(d) (i) SME ExposuresI. The maximum credit exposure of the lending bank to an SME shall not exceed Rs. 250 million.II. The annual turnover of the SME shall not exceed Rs.750 million at the time of granting a facility.III. Banks shall adopt an internal mechanism approved by the Board to verify the annual turnover of the SME. The Board approved internal mechanism shall be included in to the credit policy of the bank.Part II: Liquidity Coverage RatioWeb-basedReturn CodeItem19.3.1.1.2.0Small and medium enterprisesDeposits placed with a bank by small and medium enterprises (SME). The total amount of deposits placed with the bank by an SME shall not exceed Rs. 250 million.Qualifying criteria to be classified as an SME are as follows:(i) The annual turnover of the SME shall not exceed Rs.750 million at the time of obtaining a deposit/granting a facility.(ii) Banks shall adopt an internal mechanism approved by the Board to verify the annual turnover of the SME.Part III: Net Stable Funding RatioWeb-basedReturn CodeItem32.2.2.1.0.0Non-maturity deposits and term deposits with residual maturity of less than one year provided by retail customers and SMEsNon-maturity deposits and/or term deposits with residual maturity of less than one year provided by retail customers and SMEs. In the case of SMEs, the total amount of deposits placed with the bank by an SME shall not exceed Rs. 250 million.Qualifying criteria to be classified as an SME are as follows:(i) The annual turnover of the SME shall not exceed Rs.750 million at the time of obtaining a deposit/granting a facility;(ii) Banks shall adopt an internal mechanism approved by the Board to verify the annual turnover of the SME.2", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_3_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENTMay 2019BANKING ACT DIRECTIONSNo. 04 of 2019LOAN TO VALUE RATIOS FOR CREDIT FACILITIES GRANTEDIN RESPECT OF MOTOR VEHICLESIssued under Sections 46(1) and 76(J)(1) of the Banking Act, No. 30 of 1988, as amended.The Central Bank of Sri Lanka issues Directions as follows for implementation of loan to value ratios in respect of credit facilities granted by licensed commercial banks (LCBs) and licensed specialised banks (LSBs), hereinafter referred to as licensed banks, for the purpose of purchase or utilisation of motor vehicles.1. The following will replace Directions 2.1 of the Banking Act Directions No. 01 of 2018 on Loan to Value Ratios for Credit Facilities Granted in respect of Motor Vehicles.(i) Credit facilities granted by licensed banks for the purpose of purchase or utilisation of motor vehicles shall not exceed the following percentages of the market value of such vehicles until further notice.(a) In respect of unregistered vehicles and registered vehicles which have been used in Sri Lanka for less than one year after the first registration;Table 1 - Loan to Value RatioVehicle CategoryVehicle Class of Department of Motor TrafficElectric VehiclesOtherCommercial vehiclesC1,C, CE,D1,D, DE, G1,G, J90%90%Motor Cars, SUVs and VansB (other than light trucks & single cabs)90%50%Three wheelersBl90%25%Light trucksB90%90%Any other vehicleAl, A and single cabs categorized under B90%70%Hybrid Motor Cars, Vans and SUVsB (other than light trucks & single cabs)50%(b) 70 per cent in respect of registered vehicles which have been used in Sri Lanka for more than one year after the first registration.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_4_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT31 May 2019BANKING ACT DIRECTIONSNo. 04 of 20192. Loan to Value Ratio for credit facilities granted for importation or purchase of motor vehicles under permits on concessionary terms shall be computed based on the proforma invoice value, instead of the market value of the motor vehicle.3. The Banking Act Directions No. 06 of 2018 dated 28.09.2018 on Measures to Curtail imports of Motor Vehicles are withdrawn with effect from the date of this Directions.Dr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_4_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENTJune 2019 BANKING ACT DIRECTIONS No. 05 of 2019AMENDMENTS TO DIRECTIONS ON LOAN TO VALUE RATIOS FOR CREDITFACILITIES GRANTED IN RESPECT OF MOTOR VEHICLESBanking Act Directions No. 04 of 2019 on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles are amended as follows:1. The following Direction is inserted immediately after Direction l(i)(b) of the Banking Act Directions No. 04 of 2019 on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles and shall have effect as Direction 1 (i)(c).l(i)(c) 80 per cent in respect of unregistered non-electric motors cars (Class B) which are purchased under the \u2018Mini Taxi\u2019 concessionary loan scheme of the \u2018Enterprise Sri Lanka\u2019 programme.Dr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_5_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKAAugust 2019 BANKING ACT DIRECTIONS No. 06 of 2019MARKET CONDUCT AND PRACTICES FOR TREASURY OPERATIONS OFLICENSED BANKS IN SRI LANKAIn the exercise of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act, No. 30 of 1988, as amended, the Monetary Board hereby issues the following Directions on Market Conduct and Practices for Treasury Operations of licensed commercial banks and licensed specialised banks, hereinafter referred to as licensed banks. The purpose of these Directions is to further improve the market conduct and practices for treasury operations and to strengthen market risk management systems in licensed banks to increase their soundness, thereby strengthening financial system stability.1. Scope and 1.1 These Directions shall be applicable to:Applicability (i) All licensed banks engaged in market dealer functions in Rupeesand designated foreign currencies including, without limiting to, foreign exchange, debt securities, money market instruments including repo and reverse repo transactions, fixed income securities, equity instruments, derivative products and any other financial market instruments.(ii) Authorized Persons who are:(a) engaged in transacting business under 1.1 (i) above. This shall include officers engaged in front office, middle-office and back-office functions of the treasury operations of licensed banks, and(b) performing executive functions relating to businesses referred under 1.1 (i) above. Officers Performing Executive Functions are determined under the Banking Act, time to time.1.2 These Directions shall be read in conjunction with Direction No. 07 of 2011 on Integrated Risk Management Framework.1", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "iQ August 20192. Policy FrameworkMONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONS No. 06 of 20192.1 Licensed banks shall establish internal policies and procedures covering the entire treasury operations including dealing practices, financial markets and instruments referred to in 1.1 above.2.2 Licensed banks shall formulate a Board approved code of conduct for treasury operations.2.3 Licensed banks shall put in place Board approved prudent market risk management policies and connected procedures and oversee the implementation of the same.2.4 Licensed banks shall ensure controls and limits are established with the approval of the Board of Directors to identify, measure, monitor and control market risk.2.5 Licensed banks shall ensure that appropriate measures are in place to enforce the Customer Due Diligence and Know Your Customer principles in trading activities to ensure that transactions are not used to facilitate money laundering, fraud or other criminal activities.2.6 Licensed banks shall establish policies and procedures on the conduct of treasury and derivative transactions with counterparts, especially high-risk or highly leveraged counterparts, paying particular attention to evaluation and approvals.2.7 The policies and procedures at a minimum, shall cover the following:(i) ethical market conduct,(ii) handling confidential information,(iii) clear guidelines on whether Dealers are allowed to trade for their own account in any of the instruments and products that the licensed bank is dealing in,(iv) clear guidelines on use of non-public price sensitive information to ensure the best interest of the counterpart and the market in general,(v) practices of acceptance of entertainment, gifts or favours including a threshold value for gifts and entertainment, frequency and requirements to disclose such entertainment,2", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA23 August 2019 BANKING ACT DIRECTIONS No. 06 of 2019gifts or favours, etc.,(vi) to restrict the usage of mobile phones, chatting applications and video conferencing for dealing conversations as these could be used to circumvent telephone recording and compromise confidentiality. However, official mobile phones with recording facility, group chatting through dealing platform or monitored platforms and video conferencing with recording facility may be permitted,(vii) appropriate data and call recording requirements in line with international best practices,(viii) procedure for retention of call records, listening to call records and destruction of outdated call records. The destruction policy shall include effective communication channels and approval authority for destruction so that routine destruction of certain records may be suspended, if necessary. For example, due to litigations against certain transactions,(ix) maintaining confidentiality of recorded dealing conversations, (x) procedure for valuation of exchange rate. Preferably, day end closing mid-market rates should be used. These rates should be obtained, by staff other than authorized dealing personnel, or, as a minimum, independently verified,(xi) introduction of new treasury products, services and activities.2.8 Policies shall be approved by the Board of Directors and shall be reviewed on a regular basis. In the case of foreign banks, Board of Directors shall mean the Head Office/ Regional Monitoring Office.2.9 Policies shall be circulated among staff members of all relevant departments and units.3", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "August 20193. Ethics andStandards ofConductMONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONS No. 06 of 20193.1 Market conduct3.1.1 Authorised Persons shall:(i) abide by the code of conduct formulated by their respective licensed banks so as to conduct themselves with integrity and uphold the highest standard of professionalism,(ii) sign a code of conduct issued by their respective licensed banks in line with these Directions and international best practices, so as to conduct themselves with integrity and uphold the highest standard of professionalism,(iii) demonstrate a high standard of personal and professional integrity in their conduct,(iv) exercise skill, care and diligence and act in good faith in the best interest of the bank,(v) exercise extreme care when in possession of non-public, market sensitive information,(vi) immediately report to the Director of Bank Supervision, any undue influence from the members of the Board, senior management or a shareholder to execute a transaction based on the non-public market sensitive information available with such parties.3.1.2 Authorised Persons shall not:(i) engage in manipulative or deceptive conduct or any form of conduct which would give other participants of the market or the regulator a false or misleading impression on prevailing market conditions, including but not limited to price, yield, rate, supply or demand,(ii) collude with other Authorised persons in the same licensed bank or in other licensed banks to artificially alter market prices, other market conditions or engage in large transactions with the intention of artificially altering market price and conditions,4", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKAgq August 2019 BANKING ACT DIRECTIONS No. 06 of 2019(iii) enter into any transaction which may conflict with the interest owed to a customer, corporate, bank or potential customers (hereinafter referred to as counterpart). In particular, where Authorized Persons are handling counterpart orders, these orders shall be handled appropriately and with due regard to the best interests of the counterpart,(iv) willfully spread rumors or disseminate false or misleading information or shall not misuse or manipulate the price discovery mechanism. In addition, care must be exercised when handling unsubstantiated market information,(v) pressurise any other licensed bank or Authorized Persons by duress, inducement, threat or promise, for information or action.3.1.3 Licensed banks and Authorized Persons shall ensure that customer assets are kept separate from its own assets, adequately safeguarded and are properly accounted.3.1.4 Licensed banks and Authorized Persons shall not provide any information on market developments to media without the consent of the Board of Directors and should disclose their identity with the statement.3.1.5 Licensed banks and/or Authorized Persons shall not undertake any transaction for the purpose of concealing trading positions or transferring profits and losses, as such \u201cpoints\u201d parking or \u201cposition\u201d parking, that undermines the integrity of the market.3.1.6 Licensed banks shall penalize the Authorized Persons who have not complied with these Directions or internal policy requirements, during the performance evaluation process and related payments and fringe benefits.3.1.7 Licensed banks shall ensure all remuneration payments to Authorized Persons are based on documented policy and market rates, and that such compensation levels are designed so as to avoid5", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "No. 06 of 2019MONETARY BOARD CENTRAL BANK OF SRI LANKAAugust 2019BANKING ACT DIRECTIONSproviding incentives for excessive risk taking or recklessness.3.1.8 Licensed banks shall also establish claw-back arrangements for pay-outs of performance linked remunerations of Authorized Persons.3.2 Confidentiality3.2.1 Authorized Persons shall:(i) preserve, and aid in preserving, confidentiality in all matters including information of dealing counterparts,(ii) share an equal responsibility for preserving the integrity of the market through the proper maintenance of confidentiality.3.2.2 Authorized Persons shall not:(i) use non-public market sensitive information of counterparts for the benefit of the Authorized Persons, or for the benefit of their representative or known party, or induce another party to perform on the basis of such non-public information,(ii) discuss the affairs of the bank or counterparty in public places including through mobile phones or social media,(iii) leave in public places, any documents, electronic media or computers, which contain confidential information,(iv) pressure anyone by inducement, threat or promise, for information, which would be improper for the latter to divulge. Authorized Persons shall similarly reject any request from counterparty or others in the bank to divulge confidential information and shall immediately report any such incidents to their management.3.2.3 Licensed bank and/or Authorized Persons shall not disclose transactions related information except in accordance with provisions under the Banking Act.3.2.4 Licensed banks shall train their staff to identify and handle non- public market sensitive information.6", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 5, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA3/| August 2019 BANKING ACT DIRECTIONS No. 06 of 20193.3 Dealing for Personal (own) Account3.3.1 Licensed banks shall ensure that adequate safeguards and controls are established to prevent actual and potential conflict of interest, insider trading and front running in any form, if dealing for personal accounts are permitted.3.3.2 Licensed banks shall ensure that the interests of the bank and its counterparty are adequately protected at all times without being distracted by the personal financial concerns of Authorized Persons.3.3.3 The internal guidelines shall require the Dealers to disclose such dealing to the Board of Directors through the compliance department on a periodic basis.3.4 Entertainment, Gifts and Favours3.4.1 Authorized Persons shall:(i) immediately notify the relevant authority, if any unusual favours are offered to them by the counterparty or any other party.3.4.2 Authorized Persons shall not:(i) solicit gifts or favours of any kind, in monetary or other terms, from counterparts in connection with business transactions,(ii) solicit any undue favours from counterparty for their family, relatives or any known party, if such favours conflict with customary standards of fairness and integrity,(iii) accept without due permission from the relevant authority as specified in the internal policy, any complements of a significant value given to them by dealing counterparty. However, in cases where the complements are offered as general recognition or as general complements, acceptance of such recognition or complements may be permitted,(iv) distribute among dealers, any commission offered to a dealer on behalf of the bank with regard to any deals but will be7", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 6, "year": 2019}, "type": "Document"}
{"page_content": "No. 06 of 201929 August 2019\n4. General Dealing PrinciplesMONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONS recognized as income of the bank.3.5 Bets and Gambling3.5.1 Authorized Persons shall not make or arrange bets or gambling, especially on market movements with other market participants.4.1 Recording of Deal Conversations4.1.1 Licensed banks shall put in place an appropriate system for data and call recording in the dealing room, in line with the international best practices, to facilitate investigations and to resolve disputes.4.1.2 The call recording system of the licensed bank shall be capable of recording and storing deal conversations in serially numbered order or based on unique identification number along with the phone number, date and time of the deal conversation.4.1.3 Licensed banks shall ensure that call records are stored independently from the treasury operations and access to call records whether in use or in store, is strictly controlled so that they cannot be tampered with.4.1.4 Licensed banks shall ensure the call recording system is tested by an independent party on a periodic basis to ensure that the recording system is in order.4.1.5 Licensed banks shall retain the call recording of deal conversations for at least six years or for a longer period as deemed necessary.4.2 Record Keeping4.2.1 Licensed banks shall establish a mechanism to ensure raising of a deal ticket, electronically or otherwise, for each and every deal conversation, including cancelled deals, with date and time stamp.4.2.2 Licensed banks shall maintain and preserve documentary evidences, electronically or otherwise, with regard to transactions with counterparties for a period of at least six years or for a longer period as deemed necessary and forward such documents to the regulator as8", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 7, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKAAugust 2019 BANKING ACT DIRECTIONS No. 06 of 2019and when required.4.3 Dealings Outside Normal Working Hours and Off-premises4.3.1 Licensed banks shall discourage dealings outside normal working hours and/or off-premises and shall permit dealings outside normal working hours and/or off-premises only in exceptional cases with the prior permission of the relevant authority as specified in the internal policy. For this purpose, normal working hours for USD/LKR trades shall be 8.00 am to 5.00 pm and normal working hours for domestic money market trades shall be 7.30 am to 5.00 pm Sri Lanka time on bank working days.4.3.2 Licensed banks shall establish clear guidelines on the extent of such dealings including, type of transactions, names of persons authorized to deal, transaction limits, and so on.4.3.3 Licensed banks shall also institute a control system to enable prompt recording and confirmation of all dealing transactions outside normal working hours and off-premises, at the earliest.4.4 Price or Rate Quotations4.4.1 Authorised Persons shall:(i) make it clear whether the prices or rates they are quoting are firm or merely indicative.4.4.2 Authorised Persons shall not:(i) make frivolous quotes for which they have no intention of honouring and are designed merely to mislead market participants,(ii) engage in practices, which may realize immediate gain (or avoid loss) compromising the ethical standards relating to trading practices.4.4.3 Licensed banks shall not permit Off-market rate dealings and promptly report to the Bank Supervision Department whenever they 9", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 8, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA3-9 August 2019 BANKING ACT DIRECTIONS No. 06 of 2019spot Authorized Persons of other licensed banks quoting prices/rates in a way that jeopardizes the interest or reputation of the treasury market.4.5 Error Trades4.5.1 Licensed banks shall not adjust or cancel an executed trade arbitrarily, and shall preserve the integrity of the market. Accordingly, under normal circumstances, a trade shall only be cancelled on the basis that the price/rate traded is not representative of the prevailing market prices/rates or genuine errors. Such cancellations shall be reviewed and approved immediately by a higher authority. Further, cancellation of a trade shall be carried out only where all parties to the trade agree to such cancellation.4.5.2 Licensed banks shall keep records with full details of such cancelled transaction for verifications.4.6 Foreign Exchange Trading Activities4.6.1 Licensed banks shall undertake end user foreign exchange trading activities only based on underlying transactions. For this purpose, an underlying transaction shall mean a current account transaction or a permitted capital account transaction, in terms of the Foreign Exchange Act, No. 12 of 2017, effected on the following basis:(i) purchase of foreign currency from non-commercial bank customers such as exporters, foreign currency account holders, and persons sending inward foreign currency remittances,(ii) sale of foreign currency to non-commercial bank customers such as importers and persons who are permitted by law to make outward remittances in foreign exchange for approved purposes.4.6.2 Licensed banks shall purchase and/or sell foreign currency subject to the respective net open position limit.10", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 9, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA2^ August 2019 BANKING ACT DIRECTIONS No. 06 of 20194.6.3 Licensed banks shall adhere to the net open position limit at the end of each day, and also be within the intra-day net open position limit specified from time to time by the Director of International Operations Department.4.6.4 Licensed banks shall have systems in place to independently value their foreign currency positions on a regular basis. In this regard, the following practices shall be adopted:(i) Net Open Position arising from customer and other trading activities shall be calculated on an ongoing basis. In the calculation of Net Open Position the following should be noted:(a) all unsettled spot transactions should be included,(b) all outstanding forward transactions should also be included,(c) net foreign exchange position in other foreign exchange contracts, such as currency options, futures etc. should also be included separately,(d) exposure indicated against each currency should be considered ignoring signs to arrive at gross exposure.(ii) Account for revaluation profit and loss on their foreign exchange position on a regular basis or at least on a monthly basis,(iii) Revalue forward transactions at the prevailing day end closing mid-market rate or any other globally accepted method for the outstanding period to settlement,(iv) Revalue other appropriate foreign exchange related contracts through the Middle Office/Back Office on a \u201cmark to market\u201d basis,(v) Not depend upon valuations provided by their counterparties.11", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 10, "year": 2019}, "type": "Document"}
{"page_content": "29 August 2019\n5. RiskManagementPrinciplesMONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONS No. 06 of 20194,6.5 Licensed banks shall adopt the following process in settlement of foreign exchange transactions:(i) use the Society for World-wide Inter-bank Financial Telecommunications (SWIFT) System or any other system approved by the Central Bank of Sri Lanka,(ii) ensure the minimizing of operational errors while preventing any gridlock in the Real Time Gross Settlement (RTGS),(iii) effect all such transactions through NOSTRO Accounts only.4.6.6 Licensed banks and Authorized Persons shall update interbank foreign exchange transactions in the on-line system of the Central Bank of Sri Lanka, within the time prescribed by the Director of International Operations Department.4.6.7 Licensed banks shall disclose separately in the audited financial statements, the profit generated through all interbank foreign exchange transactions including end user transaction where one leg is in the inter-bank market.4.7 Financial Derivative Transactions4.7.1 Licensed banks shall adhere to the Directions issued under Banking Act Directions No. 4 of 2018 on Financial Derivative Transactions for Licensed Banks, with regard to financial derivative transactions.5.1 Responsibilities of the Board and Senior Management and all other staff involved5.1.1 The Board/senior management shall take measures to strengthen the market risk management through the following:(i) ensure documentation of related internal control procedures in the form of procedure manuals,(ii) establish an Asset and Liability Management Committee (ALCO) and ensure the establishment of appropriate risk parameters for the ALCO and/or senior management12", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 11, "year": 2019}, "type": "Document"}
{"page_content": "No. 06 of 20192^ August 2019MONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONScommittee involved in management of market risk,(iii) review the periodic stress test results to assess the potential impact of various shocks and evaluate the bank\u2019s capacity to withstand stressed situations in terms of profitability, liquidity and capital adequacy,(iv) formulate an efficient Management Information System for reporting treasury related activities, with facilities to escalate all exceptional transactions to the Board or the senior management as the case may be,(v) ensure that the Board and senior management fully understand the risks involved,(vi) formulate procedures to seek and obtain separate independent professional advice where necessary, in order to assist the Board of Directors to discharge its duties in this regard,(vii) approve the introduction of all new products, services and activities.5.1.2 Licensed banks shall adhere to Directions Nos. 11 and 12 of 2007 onCorporate Governance for Licensed Banks in Sri Lanka, with regard to the responsibilities of the Board and senior management.5.2 Risk Monitoring and Control5.2.1 Licensed banks shall:(i) document the procedures and internal controls to be performed by Front Office, Middle Office and Back Office,(ii) establish a system to monitor market risks on an ongoing basis,(iii) report such risks on an ongoing basis to ALCO,(iv) ensure the effective segregation of duties and responsibilities on trading, risk management, measurement, monitoring, settlement and accounting functions through:(a) physical and functional segregation of front, middle and back offices of the treasury functions,13", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 12, "year": 2019}, "type": "Document"}
{"page_content": "5-9 August 2019MONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONS No. 06 of 2019(b) establishment of a clear understanding of responsibilities and reporting obligations to the operating staff,(c) restriction of access to the trading room and each of the identified functional areas to authorized personnel only, and(d) prevention of the application of undue influence by the Front Office on the Middle/ Back Office operations.(v) approve a list of acceptable instruments, approved brokers, authorized counterparties and their limits,(vi) establish a procedure for delegating authority to dealers based on their experience and expertise,(vii) ensure that the approval of the Board of Directors/senior management is obtained for transactions in excess of delegated limits immediately after such transactions,(viii) ensure the maintenance of deal blotters and regular independent reconciliation of positions of Traders/Front Office with the General Ledger,(ix) ensure that the Back Office confirms all dealing transactions prior to issuance of settlement instructions to the counterparties,(x) monitor, on a real time basis, the foreign exchange and other dealing transactions and positions independent of dealing and trading negotiations and implement a mechanism for timely reporting of all exceptions, violation of limits to the Board/senior management,(xi) ensure that all transactions are executed at current market rates and that off-market or historical rate rollover transactions are not permitted,(xii) ensure that any irregularities in transactions, such as a large number of offsetting transactions, long outstanding suspense balances, as identified by an independent risk monitoring14", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 13, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKAAugust 2019 BANKING ACT DIRECTIONS No. 06 of 2019division, are reported promptly to the Board/senior management,(xiii) regularly marking-to-market of foreign exchange and other trading positions through a division independent of Front Office and also independently verify revaluation rates and yield curves,(xiv) strictly enforce an uninterrupted leave policy and ensure that traders on leave are prohibited from engaging in any trading or having remote access during this period,(xv) establish a suitable succession plan.5.3 Framework of Limits5.3.1 Licensed banks shall establish a comprehensive framework of market risk related limits, including institution, dealer and transactions level to effectively manage market risk exposures, at different levels of seniority.5.3.2 These limits shall be:(i) properly documented and approved by the Board of Directors,(ii) reasonable, and be based on the need after considering the funding, scale of business, risk tolerance policy, the degree of market proficiency and the experience and position of the dealer,(iii) reviewed at least annually or more frequently as appropriate, considering the overall risk tolerance levels, relative excess volatility in foreign currencies, counterparty risk rating or market conditions.5.3.3 The respective limits structure specifically recommended for foreign exchange operations shall include the following:(i) open position limits on the aggregate of all currencies, both intra-day and overnight,(ii) open position limits for individual currencies to which banks15", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 14, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKAgq August 2019 BANKING ACT DIRECTIONS No. 06 of 2019have material exposures, both intra-day and overnight,(iii) limits for personnel involved in foreign exchange dealings, based on their experience and expertise,(iv) limits for all counterparties covering the settlement and credit risks,(v) stop loss and/or management action trigger limits,(vi) country limits,(vii) forward foreign exchange mismatch limits,(viii) maturity mismatch gap limits, under different time buckets, against all major currencies.5.3.4 Licensed banks shall also establish a comprehensive limit framework for other market risk related instruments.5.4 Risk Measurement and Reporting5.4.1 Licensed banks shall ensure the following with respect to the measurement and reporting of market risk:(i) regular reporting to Board/senior management/group or parent companies, where necessary,(ii) ensuring senior management\u2019s active involvement and responsibility for market risk reporting,(iii) linking the market risk reporting system to the bank\u2019s core systems and ensuring the reconciliation thereafter with the core data,(iv) ensuring that reports are clear and unambiguous, highlight key information and in particular set out breaches or exceptions.5.4.2 Licensed banks shall ensure that the risk measurement and reporting systems have the ability to:(i) independently assess and evaluate all market risk by maturity, on both gross and net basis, arising from all assets and liabilities and off-balance sheet positions, including derivative transactions, preferably by the Middle Office,16", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 15, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA2-9 August 2019 BANKING ACT DIRECTIONS No. 06 of 2019(ii) apply generally accepted financial models or methods for measuring risks and the conduct of regular stress testing and scenario analysis,(iii) maintain accurate and timely data on current positions,(iv) monitor the foreign exchange counterparty credit risk and settlement risk on a real-time basis to ensure that limits are not exceeded,(v) document the assumptions, parameters and limitations on which the measurement systems are based, with any material changes to the assumptions being documented, well supported and approved by Board/senior management,(vi) maintain an accurate, reliable, informative and timely Management Information System which includes indicators on market risk as well as operational risks arising from treasury operations.5.5 Stress Testing5.5.1 Licensed banks shall measure their vulnerability to losses arising from treasury operations by conducting regular stress tests. Banks shall evaluate their capacity to withstand market or bank specific stressed situations in terms of profitability, liquidity and capital adequacy.5.5.2 The stress tests shall cover market dealer functions to which the bank is exposed to and take into account the effect of any possible significant exchange rate, interest rate and equity/gold price movements.5.5.3 The stress tests shall be commensurate with the nature of the bank\u2019s portfolio and risks involved.5.6 Money Laundering, Fraud and Other Criminal Activities5.6.1 Licensed banks shall ensure that the money laundering and suspicious transactions filtering and monitoring systems are in place17", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 16, "year": 2019}, "type": "Document"}
{"page_content": "No. 06 of 2019MONETARY BOARD CENTRAL BANK OF SRI LANKA29 August 2019 BANKING ACT DIRECTIONSand all Authorized Persons are trained to identify and report suspicious transactions to the relevant authority in the bank, which is responsible to report such incidents to the Financial Intelligence Unit ofCBSL.5.7 Introduction of New Products, Services and Activities5.7.1 Licensed banks shall ensure that all new products/services/activities are recommended by the ALCO and approved by the Board.5.7.2 Licensed banks shall identify the trading process, evaluate the inherent risks and returns, and review the legal implications with regard to all new products/services/activities.5.7.3 Licensed banks shall ensure that all review notes to the Board seeking approval for new products/services/activities are duly signed by officers involved in the product development process.5.7.4 Licensed banks shall ensure new products/services/activities are compatible with the bank\u2019s IT system, core activities, risk profile and expertise.5.8 Transactions with Customers5.8.1 Licensed banks and Authorized Persons shall ensure that the counterparties, especially non-institutional retail customers, fully understand the nature and potential risks of the product offered to them, especially derivatives, before transactions are carried out.5.9 Electronic trading activities5.9.1 All other provisions of these Directions equally apply to transactions and businesses conducted via electronic trading platforms.5.10 Internal Audit Function5.10.1 Licensed banks shall ensure that their Internal Audit function conducts periodic reviews on internal controls and risk management processes relating to treasury business in order to ensure their integrity, accuracy and compliance with the prescribed processes.18", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 17, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA2-3 August 2019BANKING ACT DIRECTIONS No. 06 of 20195.10.2The reviews shall ensure effective control over treasury operations, including the accuracy and completeness of recording of transactions, effective segregation of duties, accurate reporting of exceptions, payments of performance linked remuneration, daily backup procedures, and all relevant internal controls and established procedures.5.10.3The internal audit shall be carried out on a risk based approach. All high-risk areas shall be audited by the internal auditors on a regular basis. The internal audit shall ensure that the operating procedures are adequate to minimize risks.5.10.4The internal audit shall ensure the adequacy and accuracy of management information reports regarding the market risk management activities.5.10.5 Internal audit and other risk control units shall be adequately staffed or assisted by the Head office internal audit team, in the case of foreign banks.5.10.6Internal audit shall possess sufficient expertise and authority for reviewing the treasury business.5.10.7Licensed banks shall respond promptly to any findings relating to violations of established procedures and ensure that recommendations by the internal or external auditors are effectively implemented.6. Professionalism 6.1Professionalism and level of Knowledgeand Knowledge 6.1.1LevelAuthorized Persons shall:(i) maintain a consistently high level of awareness and understanding of market practices and conduct so as to strengthen the overall professional standards of the market,(ii) use clear and unambiguous language when dealing or negotiating transactions,(iii) maintain a high level of awareness and understanding of the19", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 18, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKAAugust 2019BANKING ACT DIRECTIONS No. 06 of 2019local and international markets and regulatory developments and systematically update and upgrade their professional knowledge through structured training and development.6.1.2 Authorized persons shall not:(i) have been found guilty by any regulatory authority or supervisory authority, professional association, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or abroad, to the effect that such person has committed or been connected with the commission of, any act which involves fraud, deceit, dishonesty or any other improper conduct.6.1.3 Licensed banks shall ensure that Authorized Persons are aware of their responsibility to act professionally and are familiar with market terminology and conventions.6.1.4 Licensed banks shall ensure the availability of job descriptions duly signed and accepted by each dealer and his superior.6.2 Required Qualifications6.2.1 An Authorized Person referred in Direction l.l(ii)(a) above shall possess the following professional qualification/s:(i) the Dealing Certificate or the Operations Certificate offered by the Financial Market Association (Association Cambiste Internationale - ACI), or(ii) a Certificate in Treasury and Foreign Exchange Operations offered by the Center for Banking Studies of the Central Bank of Sri Lanka, or(iii) the Diploma in Treasury and Risk Management offered by the Institute of Bankers of Sri Lanka, or(iv) Membership in the Institute of Chartered Financial Analyst.(v) any other relevant professional qualification acceptable to the Monetary Board. The Monetary Board may grant such20", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 19, "year": 2019}, "type": "Document"}
{"page_content": "\u25a1 August 2019\n7. Declarations to be Furnished by Licensed Banks and Authorized Persons", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 20, "year": 2019}, "type": "Document"}
{"page_content": "8. Sanctions on Nnon- compliance with these DirectionsMONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONS No. 06 of 2019approval on a case-by-case basis.6.2.2 Authorized Persons referred under l.l(ii)(a) above, who are currently engaged in transacting business under 1.1 (i) above, shall obtain the relevant qualifications as specified in 6.2.1 above, within one year from the date of these Directions.6.2.3 Any new appointment of Authorized Persons referred under 1 .l(ii)(a) above to engage in transacting business under 1.1 (i) above, shall be approved by the Board of Directors of the licensed banks, if such Authorized Persons do not have the relevant qualifications as specified in 6.2.1 above, at the time of such appointments.6.2.4 Further, Authorized Persons referred in 6.2.3 above shall obtain the relevant qualifications as specified in 6.2.1 above, within one year from the date of such appointment.7.1 Authorized Persons referred in Direction under l.l(ii)(a) above shall submit a Declaration to the Director of Bank Supervision, through the Chief Executive Officer of the respective licensed bank, as per the format set out in Annex I.7.2 Licensed banks shall submit to the Director of Bank Supervision, the particulars of Authorized Persons, referred under 1 .l(ii)(a) above, as at the date of these Directions, as per the attached format in Annex II. Any changes in personnel or in the particulars provided shall be informed to the Director of Bank Supervision within a period not exceeding two weeks from such change.8.1 In the event any licensed bank and/or Authorized Person fails to comply with these Directions, the Monetary Board may, after conducting an investigation, take any one or more of the following actions as it may consider necessary:(i) direct the licensed bank to suspend or remove any Authorized Person, who has been in non-compliance with these Directions, from performing any function in relation to treasury operations in the respective licensed", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 20, "year": 2019}, "type": "Document"}
{"page_content": "from performing any function in relation to treasury operations in the respective licensed bank,21", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 20, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKAAugust 2019BANKING ACT DIRECTIONS No. 06 of 2019(ii) assesse the officers performing executive functions as not fit and proper to continue in the capacity of an officer performing executive functions,(iii) suspend the Authorized dealership, Primary dealership or any other dealership licence/approval granted by the Central Bank of Sri Lanka,(iv) reduce the Net Open Position limits and/or other trading limits of the non-compliant licensed bank,(v) cancel the Authorized dealership, Primary dealership or any other dealership license/approval granted by the Central Bank of Sri Lanka,(vi) reprimand any Authorized Person who has been in non- compliance with these Directions, and(vii) any other regulatory sanctions as deemed fit by the Monetary Board.9. Revocation of9.1 The following Directions/Circulars are hereby revokedDirections(i) No. 03 of 2009 on Risk Management Relating to Foreign Exchange Business of Licensed Commercial Banks.(ii) No. 01 of 2012 on Foreign Exchange Trading Activities of Licensed Commercial Banks in Sri Lanka.(iii) Circular No. 02/17/600/0014/003 on Declaration to be Submitted by Persons Engaged in Foreign Exchange Business.Dr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka22", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 21, "year": 2019}, "type": "Document"}
{"page_content": "Annex ITo: Director of Bank SupervisionName of Bank:.....................................................................................................................Declaration to be submitted by the Persons engaged in transacting business in terms of the Banking Act Directions No. 06 of 2019 on Market Conduct and Practices for Treasury Operations of Licensed Banks in Sri LankaI, ..........................................................................................................................................(full name)holder of National Identity Card No. I Passport No.........................................................................of....................................................................................................................................................... ............................. (address)being a (Buddhist / Hindu do hereby solemnly, sincerely and truly declare and affirm / Christian / Catholic / Muslim make oath and state) as follows:1. 1 am the..............................................................................................................(designation)of..................................................................(name of bank) which is a licensed commercialbank under the Banking Act, No. 30 of 1988.2. I possess the following academic and/or professional qualification / s in terms of Directions 6.2.1 of the Banking Act Direction No. 06 of 2019 on Market Conduct and Practices for Treasury Operations of Licensed Banks in Sri Lanka: / [I engaged in transacting business under 1.1 (i) of above Directions as at.................... and will obtainthe relevant qualifications as specified in 6.2.1 of the aforementioned Banking Act, Direction on or before..........................]3. I am in possession of the following qualification /s in addition to (2) above:4. The effective experience that I possess in banking, finance, business or administration or of any other relevant discipline is as follows:5. I", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 22, "year": 2019}, "type": "Document"}
{"page_content": "banking, finance, business or administration or of any other relevant discipline is as follows:5. I shall undergo continuous training through participation in training programs that are appropriate and sufficient for the functions or activities 1 am involved in / expected to be involved in, and conducted by appropriate professional, academic or educational institutions.6. I have not been found guilty by any regulatory or supervisory authority, professional association, any Commission of Inquiry, tribunal or other body established by law in Sri Lanka or abroad, to the effect that I have committed or have been connected with the 23", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 22, "year": 2019}, "type": "Document"}
{"page_content": "commission of, any act which involves fraud, deceit, dishonesty or any other improper conduct.7. 1 have not been found guilty, after being subject to an investigation or inquiry consequent upon being served with notice of a charge involving fraud, deceit, dishonesty or other similar criminal activity or improper conduct, by any regulatory authority, supervisory authority, professional association, any Commission of Inquiry, tribunal or other body established by law, in Sri Lanka or abroad.8. 1 have not been convicted by any Court in Sri Lanka or abroad in respect of a crime committed in connection with financial management or of any offence involving moral turpitude.9. I am not an undischarged insolvent nor have I been declared a bankrupt in Sri Lanka or abroad.10. I have not failed, to satisfy any judgment or order of any Court whether in Sri Lanka or abroad, or to repay a debt.11. I have not been declared to be of unsound mind by a Court of competent jurisdiction in Sri Lanka or abroad.12. 1 have not been removed or suspended by an order of a regulatory or supervisory authority from serving in a licensed bank or any other financial institution in Sri Lanka or abroad.Declaration to be filled by the Person engaged in transacting business in terms of the Banking Act Directions No. 06 of 2019 on Market Conduct and Practices for Treasury Operations of Licensed Banks in Sri LankaI am the [affirmant / deponent] above named and 1 confirm that the information contained herein are to the best of my knowledge and belief, true and complete and also 1 undertake to inform of any change of any of the above information, within a period not exceeding one week from such change.Date :.........................  ...................................................................................................................SignatureName :TO BE FILLED BY THE CHIEF EXECUTIVE OFFICERAny other explanation / information in regard to the information furnished above and other information", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 23, "year": 2019}, "type": "Document"}
{"page_content": "other explanation / information in regard to the information furnished above and other information considered relevant for assessing the suitability of the person engaged in the foreign exchange business.Date :Signature of Chief Executive OfficerName :24", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 23, "year": 2019}, "type": "Document"}
{"page_content": "Annex IIPersons engaged in transacting business in terms of the Banking Act Directions No. 06 of 2019 on Market Conduct and Practices for Treasury Operations of Licensed Banks in Sri LankaName Date ofBirthAcademic/ Educational QualificationsProfessionalQualificationsDate of Joining the BankExperience in transacting business under 1.1 (i) of the above Directions\n25", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_6_of_2019_0.pdf", "page": 24, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKINGACT DIRECTIONS tQ December 2019 No.07 of 2019\nAMENDMENTS TO REGULATORY FRAMEWORI( ON VALUATION OF\nIMMOVABLE PROPERTIES OF LICENSED COMMERCIAL BANKS AND LICENSED\nSPECIALISED BAIIKS\nIn the exercise of the powers conferred by Sections a6(1) and 76(J)(1) of the Banking Act, No. 30\nof 1988, the Monetary Board hereby issues the following amendments to Banking Act Directions\nNo. 01 of 2014 on the Regulatory Framework on Valuation of Immovable Property of Licensed\nCommercial Banks and Licensed Specialised Banks, hereinafter referred to as licensed banks.\nAccordingly, the following Directions of the Banking Act Directions No. 01 of 2014 on the\nRegulatory Framework on Valuation of Immovable Property of licensed banks shall be replaced\nas follows:\n5. Eligibility\nCriteria for\nValuers5.1 Every licensed bank shall ensure that:\na) eligibility criteria for valuers are set out as follows:\nA. A member of the Institute of Valuers of Sri Lanka (IVSL)\nwho shall be:\ni. A Fellow Member; or\nii. A Professional Associate Member with 5 years of\nexperience in such grade of membership.\nFor the pu{pose of determining number of years of\nexperience in the grade of Professional Associate\nMembership, the transitional provisions stated in Section\n24 of the IVSL amendment Act. No. 9 of 2019, shall be\napplicable.\nB. A member of the Royal Institution of Chartered Surveyors of\nthe United Kingdom (RICS) who shall be:\ni. A Fellow Member of RICS and a member of IVSL; or\nii. Other members of RICS who have passed the final\nexamination of RICS in the General Practice Division\nwith 05 years of experience in such grade of membership\nand a member of IVSL.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_7_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "6.1 6.Threshold for\ninternal and\nexternal\nvaluation\nreports\n7. Frequency of\nvaluationb) valuers selected for the panel of valuers of the licensed banks as\nper the qualifications set out in Direction 5.1 a) above shall acquire\nContinuous Professional Development as approved/ recommended\nby the respective professional body and\nc) internal valuation of immovable property is undertaken by valuers\nwho satisfy the eligibility criteria set out in Direction 5.1 a) above.\nIn respect of immovable property obtained/to be obtained as collaterals\nagainst all performing loans and advances, banks shall establish an\nappropriate threshold for intemal and extemal valuation as per the\nbank's policy.\nIn respect of non-performing loans, where the capital outstanding\namount is less than Rs. 10,000,000 or 0.lo/o of the bank's capital base,\nwhichever is less, an internal valuation report may be obtained.\nLicensed banks shall obtain an extemal valuation report in the case of\nobtaining valuation for a foreclosed property where the capital\noutstanding amount is over Rs. 5,000,000 or 0.1% of the bank's capital\nbase, whichever is less.\n7.1 The frequency of valuation as referred to in Direction 2.2 (f) of the\ncited Direction shall be as follows:\na) Valuation of immovable property obtained as collateral against\nloans and advances which are non-performing shall be made at the\nfrequency as follows for any regulatory purpose.\ni. In respect of credit facilities granted against residential\nproperty which is occupied by the borrower for residential\npulposes: a report that is not more than five years old.\nii. All other credit facilities: a report that is not more than four\nyears old.\nb) Revaluation of immovable property as referred to in Directions 3.1\nb) and c) cited Direction shall be made in line with the internal\npolicies approved by the Board of Directors or depending on any\nsignificant and volatile changes in fair value of such immovable\nproperty are experienced. However, such gains can only be", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_7_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "property are experienced. However, such gains can only be\nincluded in Tier 2 capital once in three years.6.2\n6.3", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_7_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "c) Valuation of immovable property obtained as collateral against\nloans and advances which are performing, shall be made at the\ntime of initial granting and at the time of any subsequent\nenhancement of credit facilities.\nIndraj it Coomaraswarny\nChairman of the Monetary Board and\nGoyernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_7_of_2019.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "lq December 2019MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 08 of 2019\nASSESSMENT OF FITNESS AND PROPRIETY OF DIRE,CTORS OF\nLICENSED BANKS IN SRI LANKA\nIn terms of the powers conferred by Sections a6(1) and 76J(1) of the Banking Act No. 30 of 1988,\nas amended, the Monetary Board hereby issues these Directions to licensed commercial banks and\nlicensed specialised banks, hereinafter referred to as licensed banks, on assessment of fitness and\npropriety of Directors and information to be submitted by the persons proposed to be appointed,\nelected or nominated as a Director of a licensed bank in Sri Lanka for the purpose of obtaining\napproval of the Director of Bank Supervision in terms of Section 42 read with SectionT6H of the\nBanking Act.\nEmpowerment 1.1\nInformation to\nbe fumished and\ndeadline for\nsubmissiont.2In terms of Sections 46(l) and 76J(1) of the Banking Act,\nin order to ensure the soundness of the banking system,\nthe Monetary Board is empowered to issue Directions to\nall or any licensed bank, regarding the manner in which\nany aspect of the business of such banks is to be\nconducted.\nIn terms of Sections 42(1) and76H of the Banking Act, no\nperson shall be appointed, elected or nominated as a\nDirector of a licensed bank or continue as a Director of\nsuch bank unless that person is a fit and proper person to\nhold office and ifhe is notprevented from doing so by any\nprovision of this Act or of any other written law.\nThe person proposed to be appointed, elected or\nnominated as a Director of a licensed bank shall submit the\noriginal Affidavit as given in Schedule I, before such\nperson is appointed to the designated post of a licensed\nbank.2.1", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "lq December 2019MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.08 of2019\n2.2\n2.3The Affidavit shall be completed in line with the attached\nGuidelines for completing same.\nThe Company Secretary shall attest and forward the\nAffidavits with respect to the Directors of a licensed bank\nin order to assess the fitness and propriety of the proposed\npersons.\nThe Affidavit should be submitted under confidential\ncover to the Director of Bank Supervision 15 working\ndays prior to the expected date of appointment.\nLicensed banks shall inform the Director of Bank\nSupervision of the retirement/resignation/removal of\nDirectors of a licensed bank with reasons within 3 working\ndays of such retirement/resignation/removal.\nThe Director of Bank Supervision shall assess the fitness\nand propriety of the proposed person based on the criteria\nset out in the Banking Act and the Directions issued\nthereunder.\nThe Director of Bank Supervision shall assess the\ninformation submitted through the Affidavit and issue a\nletter approving or declining to approve the proposed\nappointment.\nDirectors shall undertake to keep the licensed banks fully\ninformed, as soon as possible, of all subsequent events\nrelevant to the information provided in the Affidavit which\nmay have an impact on the assessment of fitness and\npropriety.\n3.4 The Company Secretary of the licensed bank shall notify\nthe Director of Bank Supervision of all subsequent eventsAssessment of\nFitness and\nPropriety2.4\n2.5\n3.1\n3.2\nJ.J", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "\\{ December 2019MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.08 of20l9\nRe-assessments\nDate of\nImplementation\nRevocation of\nCirculars4.2as informed by the Directors under Direction 3.3 above\nwithin 15 days of becoming aware of such facts.\n4.1 Continuing Directors shall submit the Affidavit annually,\n15 working days before the Annual General Meeting of the\nrespective licensed bank or by 31't March of each year,\nwhichever is earlier.\nFitness and propriety of Directors willbe carried out at any\ntime where there are supervisory concerns in respect of any\nDirector as may be determined by the Director of Bank\nSupervision.\nThis Direction shall come into effect commencing 01\nJanuary 2020.\nThe following Circulars issued by the Director of Bank\nSupervision are hereby revoked.\n(i) Circular No.02l04/002100121002 dated 3l March\n2005 on Appointment of Directors of Banks (Section\n42 of the Banking Act, No. 30 of 1988 as amended)\n(ii) Circular No.02l04/00121002 dated i2 April 2005 on\nAppointment of Directors of Banks\n(iii) Circular No.021171600/0017/001 dated 27 August\n2010 on Appointment of Directors\nft^-l^l*1\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka5.1\n6.1", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "1 \n Schedule 1 \nAssessing Fitness and Propriety of Directors  of Licensed Banks  \n \n AFFIDAVIT  \n \nSection  1:  Information to be submit ted in terms of Section s 42 and 76H  of the Banking Act, \nNo. 30 of 1988 (As amended)  \n \n \n \n \n \n \n \nName of the Bank:  \nI \u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 ( full name ), \nholder of National Identity Card No1. \u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026  and Passport No . \n\u2026\u2026\u2026\u2026 \u2026\u2026 \u2026\u2026...\u2026\u2026\u2026 of\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 \u2026\u2026\u2026\u2026\u2026 \u2026\u2026\u2026\u2026\u2026\u2026\n\u2026.\u2026\u2026\u2026\u2026\u2026 ( address ), being a  [Buddhist / Hindu/ Muslim / Christian / Catholic/ other \u2026.. \n(please specify )] do hereby [solemnly, sincerely and truly declare and affirm /make  oath and state  \n(please specify  as appropriate )] as follows:  \n(1) I am the [affirmant / deponent] above named and I have been appointed/ elected / nominated or  \nproposed to be appointed/ elected /nominated as \u2026\u2026\u2026\u2026.. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026... \n(designation ) of  \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 \u2026..\u2026 (name of bank ) which is a licensed \ncommercial bank/licensed special ised bank under the Banking Act  No. 30 of 1988.  \n(2) I state that my perso nal details are as follows:  \n2.1 (i)  Name with Initials:  \n(ii) Title: Mr/Mrs/Ms/Dr/Prof/Other (Please \nspecify ) (iii) Age  as at date of signing the \naffidavit: days/months/years  \n (iv) Date of Birth:  dd/mm/yyyy  (v) Gender:  \n(vi) Civil Status:  (vii) Nationality : (viii) Citizenship2: \n(ix) Local/expatriate:  \n \n                                                           \n1 Not applicable for expatriate s \n2 A Dual Citizen is required to state whether he/she should be considered as local or expatriate   Passport size photo  \n(Taken within last 6 \nmonths)", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "2 \n 2.2 Contact \nDetails   Permanent Address :  \nResidential Address : \n(i) Telephone  Mobile   \nFixed line   \nFax  \n(ii) E-mail Personal   \nOfficial   \n2.3 Occupation  or Profession :  \n2.4 (i) Appointed , Elected or Nominated  \nPost/ Designation  in the bank : (ii) Date of appointment  to the  \nPost/Designation  (dd/mm/yyyy ) \n2.5 (i) Nature of the appointment (Please mark X in relevant box(es) : \n Independent3  Executive   Alternate   \n Non-Independent   Non-\nExecutive   Ex-officio   \n Working Director   Senior \nDirector   Other  (Please \nSpecify)   \n (ii) If non -independent, reasons for determining as non-independent : \n (iii)If nominated by major shareholder/s, name/s of such nominating shareholder/s:  \n (iv) If an Alternate, name of the Principal Director:  \n2.6 \n 2.6.1 Details of close relations in terms of Section 86 of the Banking Act  \n(i) Full name of the Spouse:  \n(ii) NIC No1: (iii) Passport No : \n2.6.2 Details of dependent children  \n(i) Full Name  (ii) NIC No1: (iii) Passport  No: \n   \n \n(3) I state that I possess the following academic and/or professional qualification/s:  \nIn this regard, licensed banks are required to maintain  documentary evidence and shall submit such \nevidence as and when required by the Director of Bank Supervision.  \n                                                           \n3 In terms of Direction 3(2)(iv) of the Banking Act Direction No. 11 & 12 on Corporate Governance  \n4 (i) Banking/Finance     (vii)       Strategic Planning   \n  (ii) Business /Administration    (viii)  Risk Management   \n  (iii) Economics      (ix) Human Resource Management     \n  (iv) Accounting /Auditing / Financial Analysis      (x)  Law and Regulation  \n  (v) Investment Management / Capital Markets    (xi)  Marketing  \n  (vi) Information Technology    (xii) Specific Qualifications according to the Mandate of the bank  \n  Qualifications (Academic)  Relevant \ndiscipline4 Country  Name of the \nInstitution  Year of \ncompletion  \n(i)     \n(ii)", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "discipline4 Country  Name of the \nInstitution  Year of \ncompletion  \n(i)     \n(ii)     \nQualifications  (Professional)      \n(i)", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "3 \n  \n(4) I state that the effective experience that I possess in banking, finance, business or administration  \nor of any other relevant discipline4 is as follows:  \nIn this regard,  licensed  banks are required to maintain  documentary evidence and shall submit such \nevidence as and when required by the Director of Bank Supervision.  \n(5) In addition to the above information , I state that I possess the following additional qualifications:  \n \n \n                                                           \n5 In terms of the Sri Lanka Accounting & Auditing Standards Act No.15 of 1995  Current Positions  Name of the \nInstitution/ \nown business  Designation\n/Position  Nature of \nAppointm\nent (as per \nitem 2.5 as \napplicable ) Work \nSpecializati\non Date of \nAppoin\ntment  \n(dd/mm/\nyyyy ) Service \nperiod  \n(dd/mm/\nyyyy to \ndd/mm/y\nyyy) \nDirectorships        \n(i) Specified \nBusiness \nEntities5       \n(ii) Other        \nOther Positions        \n       \nPrevious Positions  \nDirectorships        \n(i) Specified \nBusiness \nEntities5       \n(ii) Other        \nOther Positions        \n       \nSpecial Assignments / \nConsultancy  Name of the Institution  Description  Service Period  \n(dd/mm/yyyy to \ndd/mm/yyyy ) \n(i)    \n(ii)    \nOutstanding Contributions (Publications, Seminars Conducted, Research etc.)  \n \nTopic of the Research/publication  Institute/Place  Year", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 5, "year": 2019}, "type": "Document"}
{"page_content": "4 \n (6) I state that I hold/do not hold shares in licensed banks & their related companies (Subsidiaries6, \nAssociate s7 and Other  Companies8), finance companies, leasing companies and primary dealers \nregistered with/licensed by the Centr al Bank of Sri Lanka.  \n \n(7) Business Transactions  \n7.1. I state that I have/do not have deposits with the bank, its subsidiaries or associate \ncompanies.  (If yes, please state name of the institution/s).  \n7.2. I state that I currently have /had the following business transactions  during the two years \nimmediately preceding the appointment , with the licensed  banks  & their related companies \n(Subsidiaries , Associate s and Other Companies) , other related parties9 of the licensed bank, \nfinance companies,  leasing companies and primary dealers registered with/ licensed  by the \nCentral Bank of Sri Lanka .  \n \n \n \n \n \n \n \n                                                           \n6 \u2018Subsidiary\u2019 as defined by Section 17(3) of the Banking Act  \n7 \u2018Associate Co mpany\u2019 as defined by Section 46(1) of the Banking Act  \n8 Holds a substantial interest in terms of Section 86 of the Banking Act.  \n9 \u2018Related parties\u2019 as defined by Section 3(7)(i) of the Banking Act Direction No s.11 and 12 of 2007 on Corporate \nGovernance for  Licensed Banks in Sri Lanka.  \n10 Investments in Debt Instruments  Name of the \nInstitution /s Voting/Non -voting  No. of shares  Percentage holding  \nDirect  Indirect  Direct  Indirect  \n      \nName of the \nInstitution /s Date of \nTransaction  \n(dd/mm/yy yy) Amount as at  \ndd/mm/yy yy \n(Rs.mn)  Classification  \n(performing/  \nnon-\nperforming)  Type and \nValue of \nCollateral \n(Rs.mn)  % of \nBank\u2019s \nregulatory \nCapital  Limit  Outstanding  \nBorrowings        \n(i)Current        \n       \n(ii)Prior to \nappointment        \n       \nInvestments10       \n(i)Current        \n       \n(ii)Prior to \nappointment", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 6, "year": 2019}, "type": "Document"}
{"page_content": "5 \n (8) Appointments, Shareholdings and Business Transaction s of Close Relations  \n8.1. I state  the following details of my close relations presently employed as Directors, Chief \nExecutive  Officers  or Officers Performing Executive Functions of any licensed bank, its \nrelated companies ( Subsidiaries, Associates , and Other Companies) , finance companies, \nleasing companies and primary dealers registered with/licensed by the Central Bank of Sri \nLanka .   \nName of the Close Relation  Name of the Institution  Position Held  \n   \n   \n \n \n8.2. I state the following details of direct or indirect share ownership in the licensed bank,  its \nrelated companies ( Subsidiaries,  Associates,  and Other Companies) , finance companies, \nleasing companies & primary dealers registered with/licensed by the Central Bank of Sri \nLanka, if any, presently held by any close relation.  \n \n8.3. I state that the close relation of mine currently has/had the following business transactions \nwith licensed banks, its related companies ( Subsidiaries , Associate s and Other Companies),  \nfinance companies, leasing companies and primary dealers registered with/licensed by the \nCentral Bank of Sri Lanka, during the two years immediately preceding my appointment .  \n \n(9) I state that there is a finding/ no finding of any regulatory or supervisory authority, professional \nassociation, any Commission of Inquiry, tribunal or other body established by law in Sri \nLanka or abroad, to the effect that I have committed or have been c onnected with the \ncommission of  any act which involves fraud, deceit, dishonesty or any other improper \nconduct.  Name of the \nClose Relation  Name of the \nInstitution  No. of Shares  Percentage of Holding  \nDirect  Indirect  Direct  Indirect  \n      \n      \nName of  \nthe Close \nRelation  Name \nof the \nInstituti\non Date of \nTransaction \n(dd/mm/y y\nyy) Amount as at \ndd/mm/yy yy \n(Rs.mn)  Type and \nvalue of \ncollateral \n(Rs mn)  % of Bank\u2019s \nregulatory \ncapital", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 7, "year": 2019}, "type": "Document"}
{"page_content": "dd/mm/yy yy \n(Rs.mn)  Type and \nvalue of \ncollateral \n(Rs mn)  % of Bank\u2019s \nregulatory \ncapital  \nLimit  Outstanding  \n   \nBorrowings        \n       \nInvestments10", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 7, "year": 2019}, "type": "Document"}
{"page_content": "6 \n The averments contained herein were \nread over to the [affirmant/deponent] \nwho having understood the contents \nhereof and having accepted same as \ntrue, affirmed/swore to and placed \nhis/her signature at \u2026\u2026\u2026.  on this \n\u2026\u2026\u2026 day of \u2026\u2026\u2026 (Month, Year ) \n Before me  \n \nJUSTICE OF THE PEACE  / \nCOMMISSIONER FOR \nOATHS  \n (10) I state that I am subject to/ not subject to an investigation or inquiry consequent upon being \nserved with notice of a charge involving fraud, deceit, dishonesty or other similar criminal \nactivity, by any regulatory authority, supervisory authority, professional association, \nCommission  of Inquiry, tribunal or other body established by law, in Sri Lanka or abroad.  \n(11) I state that I have been convicted / not been convicted by any Court in Sri Lanka or abroad in \nrespect of a crime committed in connection with financial management or of any of fence \ninvolving moral turpitude.  \n(12) I state that I am /am not an undischarged insolvent and have been /not been  declared a bankrupt \nin Sri Lanka or abroad.  \n(13) I state that I have failed/ not failed, to satisfy any judgment or order of any Court whether in \nSri Lank a or abroad, or to repay a debt.  \n(14) I state that I have been/ not been declared by a Court of competent jurisdiction in Sri Lanka or \nabroad, to be of unsound mind.  \n(15) I state that I have been/  not been removed or suspended by an order of a regulatory or \nsupervi sory authority from serving as a Director/ Chief Executive Officer /Officer Performing \nExecutive Function s or any other officer  in a licensed bank or any other financial institution \nor corporate body, in Sri Lanka or abroad.  \n(16) I state that I have been/ not been a Director, Chief Executive Officer or have held/not held  any \nother position of authority in any bank or financial institution \u2013  \n(i) Whose licence has been suspended or cancelled; or  \n(ii) Which has been wound up or is being wound up, or which is being compulsorily", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 8, "year": 2019}, "type": "Document"}
{"page_content": "(ii) Which has been wound up or is being wound up, or which is being compulsorily \nliquidated; whether in Sri Lanka or abroad.  \n(17) I state that I am aware of the provisions of the Banking Act on assessment of fitness and \npropriety of my position and confirm that the above information is to the best of my \nknowledge and belief tru e and complete . I undertake to keep the bank fully informed, as soon \nas possible, of all subsequent events, which are relevant to the information provided above.  \n(18) I state that I am not prevented by any written law from being appointed to the above post.  \n(19) I state that to the best of my knowledge I am a fit and proper person to be appointed, nominated \nor elected as \u2026\u2026\u2026\u2026....\u2026\u2026\u2026\u2026 \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.( designation) of a licensed \ncommercial bank/licensed specialised bank in terms of the provisions of the Banking Act.  \n \n \n \n Affix Stamps \nas applicable  \u2026\u2026\u2026\u2026\u2026........", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 8, "year": 2019}, "type": "Document"}
{"page_content": "7 \n Section 2 : To be filled by the Company Secretary  \n1. Corporate Information  \n \n \n2. Remarks of the Board of Directors  \n(1) Any other explanation  / information regard ing the details  furnished above.  \n(2) Submitted to the Board of Directors of the Bank / Approval has been granted by the Board of \nDirectors for above appointment , nomination or election/proposed appointment, nomination or \nelection at the meeting dated\u2026\u2026\u2026\u2026( dd/mm/yyyy ) \n \n \nName:   \n \n \n \nSignature of the Company Secretary and  \nthe official stamp   \nDate:  \n \n \n \n \n \n \n \n \n Recommendation of the Nomination Committee/Appo inting Authority for \nDirectors  \nAssessment Criteria   \n(Please specify the specific \nknowledge/skills considered by the \nNomination Committee / Appointing \nAuthority)   \nRecommendation  \n(Please attach minutes of the \nresolution/decision of the Nomination \nCommittee/Appointing Authority)", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 9, "year": 2019}, "type": "Document"}
{"page_content": "1 \n Guidance to Duly Complete the Affidavit  \nto be submitted by the Directors of Licensed Banks  \n \nThis guidance is issued to ensure that sufficient and accurate information is provided by banks for \nassessing the fitness and propriety of Directors of licensed banks in Sri Lanka.  \n1. Purpose of Obtaining the Affidavit  \n \n(i) The purpose of obtaining Affidavit s of Directors of Licensed Banks (LBs) is to enable the \nBank Supervi sion Department to assess the ir fitness and propriety in terms of the provisions \nof the Banking Act. Accordingly, the Bank Supervision Department requires \ncomprehensive information to evaluate the qualifications, experience,  integrity and \ncompliance with o ther requirements specified in the Banking Act, to assess the suitability \nof the Directors.  This Affidavit shall  be the legally binding document in the event of any \ndispute.  \n \n2. Affidavit  \n(i) It is preferable that the Affidavit is prepared as a fresh document, based on the format \nprovided by the Bank Supervision Department, so as to avoid inclusion of unnecessary \nwords. However, if the given format is filled, all alterations, erasures and interlineations \nshould be initialed by the Commissioner for Oaths /Justice of the Peace  immediately after \nall such amendments.  \n(ii) All blank spaces should be completed appropriately .  \n(iii) Appropriate words should be used based on the religion of the officer . If the officer  \nrefrains/object s to disclose his/her religion, a confirmation should be submitted by the \nofficer stating that:  \n\u2022 He/she is an atheist or belongs to a religion not mentioned in this Affidavit; or  \n\u2022 He/she objects to disclosing his/her religion.  \n(iv) Strike -out the irrelevant word(s). If the irrelevant  words are stricken out, the Commissioner \nfor Oaths/Justice of the Peace should place his initials immediately after all such \namendments.  \n(v) If the person is a foreigner and signs the Affidavit while overseas:", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 10, "year": 2019}, "type": "Document"}
{"page_content": "amendments.  \n(v) If the person is a foreigner and signs the Affidavit while overseas:  \n\u2022 Signature of the person should be attested by a Commissioner for Oaths or an \nequivalent in the country in which he places his signature.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 10, "year": 2019}, "type": "Document"}
{"page_content": "2 \n \u2022 Attestation should be made in front of the diplomatic or consular officer of Sri Lanka \nin the country where the Director  resides or in terms of the laws applicable in  such \ncountry.   \n(vi) Affix a stamp for the value applicable as at the date of signing the Affidavit , if applicable.  \n(vii) Attest by a Commissioner for Oaths/Justice of the Peace immediately after the signature of \nthe person at \u2018Before me\u2019 . \n(viii) Section 2 should be filled by the Company Secretary a nnexing  a copy of the minutes of the \nNominations Committee  or Approving Authority  pertaining to the relevant appointment.  \n(ix) In item  2(1) of Section s 2 if there is no comment , it should be stated as Not \nApplicable/ Nil/None.", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_8_of_2019.pdf", "page": 11, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS q December 201.9 No.09 of 2019\nAMENDMENT TO THE BANKING ACT DIRECTIONS\nNos. 11 AND 12 OF 2007 ON CORPORATE GOVERNANCE FOR\nLICENSED BANKS IN SRI LANKA\nBanking Act Directions Nos. 11 and 12 of 2007 on Corporate Governance for Licensed\nCommercial Banks and Licensed Specialised Banks in Sri Lanka dated 26 December 2007 are\nhereby amended by inserting the following new Direction. Licensed Commercial Banks and\nLicensed Specialised Banks shall hereinafter be referred to as licensed banks.\n3(3) (iii) A Director or a Chief Executive Officer of a licensed bank operating in Sri Lanka shall\nnot be appointed as a Director or a Chief Executive Officer of another licensed bank\noperating in Sri Lanka before the expiry of a period of 6 months from the date of\ncessation of his/her office at the licensed bank in Sri Lanka. Any variation thereto in\nexceptional situations such as where expertise of retiringbankers maybe required when\nreconstituting Boards of licensed banks which need restructuring, shall be subject to\nthe prior approval of the Monetary Board. In this regard,licensed banks shall ensure to\nadhere to the requirement of the cooling-off period when appointing Directors or Chief\nExecutive Officer. If a Director is appointed to the licensed bank by an appointing\nauthority violating these Directions, the licensed bank shall take steps to prevent such\nappointee from exercising any powers or enjoying any privileges or benefits.\nf[,sl\"*--\nDr. Indrajit Coomaraswamy\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Directions_No_9_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT17 April 2019BANKING ACT DIRECTIONNo. 01 of 2019MEASURES TO CURTAIL IMPORTS OF MOTOR VEHICLES ANDNON-ESSENTIAL CONSUMER GOODSNational Savings Bank is hereby informed that the Banking Act Directions No.7 of 2018 dated 12 October 2018 on Measures to Curtail Imports of Motor Vehicles and Non- Essential Consumer Goods are withdrawn with effect from the date of this Direction.H A KarunaratneActing Senior Deputy Governor/Chief Executive Officer of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\Banking_Act_Direction_No_1_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "g @os\u00bb \u00a9co^|6Dlhl65)S LD^^Im 6U15hS0CENTRAL BANK OF SRI LANKA\u00a9so^ Ep3cs\u00a9d3 eurhjafl Gmfbun'rr^&u^ ^sD6wa&6iTLb Bank Supervision DepartmentApril 2019To - Chief Executive Officers of all Licensed BanksDear Sir/ Madam,Reference Rates applicable for Maximum Interest Rates on Sri Lanka Rupee Deposits of Licensed Banks for Quarter ending 30 June 2019With reference to the Monetary Law Act Order No. 01 of 2019 on the \u2018Maximum Interest Rates on Sri Lanka Rupee Deposits of Licensed Banks\u2019, the Standard Deposit Facility Rate (SDFR) as at the end of the first quarter of 2019 and, the simple average of the Weighted Average Yield Rates (WAYR) relating to the last 04 primary auctions for 364-days Treasury Bills conducted during the first quarter of 2019 are in Table 01 below.Table 01: Applicable Reference Rates for Quarter ending 30 June 2019Rate%SDFR8.00WAYR of 364-days Treasury Bills10.54You^ f^thfullyA M ThassimDirector of Bank Supervision\n6 Sto@, epoca 30, da\u00bb3\u00a9\u00a9 \u00a9JSCD, ocwg\u00ae 01, 6^LD 30 Qan\\ipibn 1 Level 6, No. 30, Janadhipathi Mawatha, Colombo 1coo. o\u00a9. 590, scale\u00ae 01, \u00a7 \u00a9oon\u00a9 Qu. \u00ae60.590, Qarr(ipihL| 01, gsDibiao\u00ae P. 0. Box. 590, Colombo 01, Sri Lanka.", "metadata": {"source": "data\\CBSL\\2019\\BSD_20190426_Circular_Letter_on_Reference_Rates.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "\u00a7 \u00a929^6015163)\u00ae LD^lLl GUfbiafilCENTRAL BANK OF SRI LANKA\u00a9SOQ SDIHJ^ GiErbuntTSinsu^ ^emewiasuLb Bank Supervision Department28 June 2019To - Chief Executive Officers of all Licensed BanksDear Sir/ Madam,Reference Rates applicable for Maximum Interest Rates on Sri Lanka Rupee Deposits of Licensed Banks for Quarter commencing 01 July 2019With reference to the Monetary Law Act Order No. 01 of 2019 on the \"Maximum Interest Rates on Sri Lanka Rupee Deposits of Licensed Banks\u2019, the Standard Deposit Facility Rate (SDFR) as at the end of the second quarter of 2019 and, the simple average of the Weighted Average Yield Rates (WAYR) relating to the last 04 accepted primary auctions for 364-days Treasury Bills conducted during the second quarter of 2019 are in Table 01 below.Table 01: Applicable Reference Rates for Quarter commencing 01 July 2019Rate%SDFR7.50WAYR of 364-days Treasury Bills8.83Yours faithfullyJ P GamalathActing Director of Bank Supervision\n6 Sen epota 30, danSoS \u00aeJ\u00a3)CD, \u00a9tajg\u00ae 01, 6 ^tb icrri^, @60. 30 ^anrra^ug? icrrsu^eiD^ Qairftpibiq 1 Level 6, No. 30, Janadhipathi Mawatha, Colombo 1os. \u00a9o. 590, \u00a9caj\u00a9\u00ae 01, \u00a9otaaO 5. Qu. @6V. 590, Qanxjptbq 01, \u00a9sorasDa P. 0. Box. 590, Colombo 01, Sri Lanka.", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_letter_20190628.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA\nBANIK SUPERVISION DEPARTMENT\n0[ January 2019 CIRCULAR No.01 of 2019\nGuidelines for the Employment of Expatriate Officers in\nLicensed Banks in Sri Lanka\nLicensed commercial banks and licensed specialised banks (hereinafter referred to as licensed\nbanks) shall adhere to the following guidelines for the employrnent of suitable and eligible\nexpatriate officers based on the needs of licensed banks.\n1 General 1.1\nRequirementsExpatriate officers, who are appointed as Chief Executive\nOfficers (CEOs) or such other officers performing executive\nfunctions in licensed banks, are subject to the fitness and\npropriety assessment in terms of Section 44A or Section 76H of\nthe Banking Act, No. 30 of 1988, as amended, in addition to\nthese Guidelines.\nLicensed banks shall give priority to local officers and\nemployment of expatriate officers shall be considered after all\nreasonable means have been taken to attract and employ local\nofficers. Local offrcers shall mean Sri Lankan citizens for the\npurpose of these Guidelines.\nLicensed banks shall establish succession planning to identify\nlocal staff and train such staff to take up the\npositions/responsibilities held by expatriate officers within a\nreasonable period.\nNevertheless, Guidelines 1.2 and 1.3 above will not be\napplicable in the case of a bank incorporated outside Sri Lanka,\nwhich is within the permitted limit as specified in Guideline 4.1.\nThe Central Bank of Sri Lanka (CBSL) may withdraw an\napproval granted for employment of an expatriate officer at any\ntime deemed necessary and shall communicate such decision to\nthe relevant licensed bank giving a maximum of four months oft.2\n1.3\nt.4\n1.5", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_01_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "ffi\nCENTRAL BANK OT'SRI LAIIKA\nBANK SUPERVISION DEPARTMENT\nof January2019 CIRCULAR No.01 of2019\n2 Expatriate\nOfficersnotice.\n2.1 Expatriate officers for the purpose of this Direction shall be:\n(i) permanent or contract employees who are on the\npayroll of the licensed bank or on the payroll of the\nparent bank ofbanks incorporated outside Sri Lanka,\nand is not limited to CEOs and such other officers\nperforming executive functions; and\n(ii) consultants/advisors to the Board of Directors or\nbank.\n3.1 Approval for expatriate officers will be granted on a case-by-\ncase basis taking into consideration the specific needs/projects\nof licensed banks.\n3.2 Approval will be granted for the employment of expatriate\nofficers in the following fields.\n(i) Implementation of the Basel regulatory framework\n(ii) InternationalFinancialReportingStandards\n(iii) Risk modeling\n(iv) Data warehousing and information technology risk\nmanagement\n(v) Structuring of derivative products\n(vi) Corporate govemance\n(vii) Any other area where a skills gap exists in Sri Lanka,\nas determined by CBSL\nValidity period of the approval shall be on a case-by-case basis\nup to a maximum of 3 years.\nLicensed banks shall submit projections on specific business or\ndeliverables expected from expatriate officers along with other\ndetails as in Part I of Annex I.\nExtension oftenure approved under 3.3 aboveEligibility\nCriteria for Banks\nlncorporated\nLocally\nJ.J\n3.4\n3.5", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_01_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "ffi\nof January 2019CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\nCIRCULAR No.01 of2019\nEligibility\nCriteria for Banks\nIncorporated\nOutside Sri Lanka4.1(D The extension of the term of expatriate officers will be\nconsidered on a case-by-case basis based on:\n(a) necessity of the extension of the project;\n(b) annual performance reviews of expatriate officers; and\n(c) the succession planning followed by the licensed\nbank.\n(iD Maximum extension period shall be I year.\nThe maximum number of expatriate officers permitted shall be\nbased on the number of permanent local staff employed by the\nlicensed bank as follows:\nPermanent local staff Permitted number of\nexpatriates\nLess than 75 J\n75 to 400 5\nMore than 400 10\nLicensed banks shall submit the details of expatriate offrcers to\nCBSL as attached in Part I of Annex I.\nValidity period of permission shall be up to a maximum of 4\nyears for CEOs and 3 years for other expatriate officers.\nExtension of tenure permitted under 4.3 above\n(i) Extension of tenure will be approved based on\nrecommendation of the regional office.\n(ii) Maximum extension period shall be 2 years for CEOs and\n1 year for other expatriate officers.\n(i) Under exceptional circumstances, approvals for\nappointment of expatriate officers in excess of the\nmaximum number of expatriate officers permiued in 4.1\nabove may be considered on a case-by-case basis for a4.2\n4.3\n4.4\n4.5", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_01_of_2019.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "+\nCENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENTI\nNo.01 of2019\nlssuance of Visa\nRecommendation\nLettersperiod up to 1 year. However, in order to consider such\nrequest at least 80% of the officers performing executive\nfunctions of the licensed bank should be local permanent\nstaff.\n(ii) For this pulpose, licensed banks shall submit specific skills\nof the nominated expatriate officers and specific\nresponsibilities/projects assigned to himlher along with\nother details as in Part I of Annex I.\n(iii) The extension of the term of such appointed expatriate\nofficers will be considered on a case-by-case basis based\non:\n(a) necessity ofthe extension ofthe project;\n(b) annual performance reviews of expatriate officers; and\n(c) the succession planning followed by the licensed bank.\n(iv) Maximum extension period on such appointments will be 2\nyears.\n4.6 For new branches of banks incorporated outside Sri Lanka,\napproval for employment of expatriate officers exceeding the\npermitted number specified in Guideline 4.1 will be granted on a\ncase-by-case basis taking into consideration the specific needs of\nthe bank.\n5.1 The issuance of visa recommendation letters by the Director of\nBank Supervision will be limited to:\n(i) expatriate officers on the payroll of licensed bank or on\nthe payroll of the parent bank of banks incorporated\noutside Sri Lanka, and permitted/approved in terms of\nthese guidelines:\n(a) the chief executive officer or officers performing\nexecutive functions; and", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_01_of_2019.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\n6ll- Janua 2019\n6 Revocation5.2\n5.3CIRCULAR No.01 of 2019\n(b) any other officers.\n(iD close relations as defined in the Banking Act (spouse and\ndependent children) and dependent parents of expatriate\nofficers;\n(iiD an expatriate director of a licensed bank; and\n(iv) consultants/advisors to the Board of Directors or bank\npermitted/approved in terms of these guidelines.\nA11 applicants recorlmended for visa by the Director of Bank\nSupervision shall conduct themselves in a responsible manner\nduring their stay in Sri Lanka.\nThe Board of Directors or CEOs of banks incorporated locally\nand, executive at head office/regional head office who is\nresponsible for the operations in Sri Lanka of banks\nincorporated outside Sri Lanka are responsible to inform the\nDirector of Bank Supervision of any improper conduct and\nother concerns relating to the expatriate officer's stay in Sri\nLanka.\nLicensed banks shall submit visa recommendation request\nforms as given in Part II of Annex I.\n6.1 The Circular Ref. No. 02101/00/0002/001 dated 31 December\n2007 on Guidelines for Employment of Expatriate Staff in\nBanks is hereby revoked.\nA A M Thassim\nDirector of Bank Supervision5.4", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_01_of_2019.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "Annex I\nPart I: Application Form for Appointment of an Expatriate Officer\n1Name of the bank\n2.Name of the expatriate officer\n3.Current designation of the expatriate officer in the parent bank (if\napplicable)\n4.Designation to be filled in Sri Lanka\n5.Responsibilities/proj ects assigned to the expatriate offi cer\n6.Duration of the posting/contract/project\n7.Projections for specific business/expected deliverables from the\nexpatriate officer (including Key Performance Indicators (KPI) and\ntarget dates for each KPI)\n8.Any other information relevant to the appointment (e.g. succession\nplan)\nAttachments to be submitted:\n1. Curriculum Vitae of the expatriate officer\n2. Certification on accuracy of details*\nAttachments to be submitted:\n1. Certified copy of the passport\n2. Certification on accuracy of details*\nDeclaration:\nI confirm that the above information is true and complete to the best of my knowledge\nand belief.\nDate: Signature:\n*'CEO shall certifu the accuracy of details submitted on expatriate fficers. Details with respect to\nCEO, his/her spouse, dependent children and dependent parents shall be certified by the\nCompany Secretary in case of a bank incorporated locally and by the executive at head\nffice/regional head ffice who is responsible for the operations in Sri Lanka in the case of a bank\nincorporated outside Sri Lonka. Such certification can also be included in the covering letter.Part II: Visa Recommendation Request Form\nOo be filled for each person requesting visa recommendation)\nIName in full\n2.Relationship to the expatriate officer\n3.Date of birth\n4.Nationality\n5.Gender\n6.Civil status\n7.Category of visa\n8.Reasons for applying for visa\n9.Passport details (passport number, date of issue, date of expiry)\n10.Any other relevant information", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_01_of_2019.pdf", "page": 5, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT12 March 2019 CIRCULAR No. 03 of 2019MARGIN REQUIREMENTS AGAINSTIMPORTS ON DOCUMENTS AGAINST ACCEPTANCE (DA) TERMSAll licensed banks are hereby informed that the Circular No 2 of 2018 dated 11 October 2018 on Margin Requirements Against Imports on Documents Against Acceptance (DA) Terms is withdrawn with effect from 13 March 2019.J P GamalathActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_03_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT 13 March 2019 CIRCULAR No. 04 of 2019NON-INTEREST BASED INCENTIVE SCHEMES FOR INTEREST BEARING SAVINGS AND TIME DEPOSITS OF LICENSED BANKS1Objective1.1The Central Bank of Sri Lanka is of the view that offering non-interest\n2Incentive2.1based incentive schemes for mobilising of interest bearing savings and time deposits create undue competition among licensed banks while undermining the interest rate policies implemented by the Central Bank of Sri Lanka. Accordingly, licensed banks are informed to adhere to the following with immediate effect in order to promote market determined interest rates and fair competition to safeguard the interests of the depositors.Licensed banks shall not conduct:\n3schemes not permittedPermitted3.1(i) lottery schemes/raffle draws.(ii) gift schemes, etc.that result in a disadvantageous situation for the customers where features of a financial product/service are distorted, e.g., relatively reduced interest rates on savings deposits, incorporating features of time deposits to savings accounts.Licensed banks may conduct gift schemes (seasonal/promotional)gift schemesprovided that:(i) all customers of the relevant product, service or category of the product/service receive the offered gift,(ii) applicable market interest rates are offered based on the nature of the product,(iii) cost of the gifts is not charged to customers, and(iv) no additional terms and conditions are imposed on customers with respect to the gifts offered.J P GamalathActing Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_04_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKABANK SUPERVISION DEPARTMENT26 April 2019 CIRCULAR No. 06 of 2019SUPPLEMENT TO CIRCULAR NO. 04 OF 2018 ON THEADOPTION OF SRI LANKA ACCOUNTING STANDARD - SLFRS 9: FINANCIAL INSTRUMENTS IN LICENSED BANKS1. On 31 December 2018, the Central Bank of Sri Lanka (CBSL) issued Guidelines to licensed banks on SLFRS 9 to be adopted within the requirements of SLFRS 9, promoting consistent and prudent application of same in the banking sector.2. The Monetary Board, considering the representations made by licensed banks and the Report of the Working Group on high market interest rates and issues faced by Small and Medium Enterprises (SMEs) has decided that licensed banks may adopt the following as an interim measure in respect of the adoption of SLFRS 9 during a transitional period with the approval of their Board of Directors.(i) With reference to the requirements set out in Section 1.2 of Annex I to the Guidelines to Licensed Banks on the Adoption of Sri Lanka Accounting Standard - SLFRS 9: Financial Instruments issued by CBSL on 31.12.2018, licensed banks may rebut the 30-day rebuttable presumption on significant increase of credit risk to 60 days subject to internally approved procedures laid down by the Board of Directors, for a temporary period between 01.01.2019 to 30.06.2020 with respect to credit facilities granted to SMEs up to an aggregate loan limit of Rs. 25 million per SME.(ii) With reference to Sections 1.2(b) and 1.3(b) of the Annex I of the above Circular, licensed banks may exempt credit facilities granted to SMEs up to an aggregate loan limit of Rs. 25 million per SME, which are subsequently restructured between 01.01.2019 to 30.06.2020.(iii) Further, it is reiterated that in terms of the above guidelines a credit facility shall be considered as restructured only if, original repayment terms have been amended due to a deterioration in credit quality, while the respective credit facility remained as performing in terms of CBSL Directions", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_06_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "quality, while the respective credit facility remained as performing in terms of CBSL Directions (including Temporary Overdrafts). An extension of the facility is possible without having to incur an impairment charge if there was an underlying business case and there was no significant increase in credit risk. The internal policies of the bank approved by its1", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_06_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKABANK SUPERVISION DEPARTMENT2k April 2019 CIRCULAR No. 06 of 2019Board of Directors should set out the factors to be considered in assessing the credit risk when the original repayment terms are changed or extended.(iv) During the interim period up to, 30.06.2020, licensed banks may take steps to analyse and back test their portfolios of advances to the SME sector and develop models to compute the expected loss provisions for this segment or any sub segment thereof.(v) Further, in lieu of Temporary Overdrafts, the licensed banks may devise products to facilitate short-term revolving funding to SMEs assessing the risk and pricing of such products at reasonable rates.u.Director of Bank Supervision\n2", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_06_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT08 May 2019 CIRCULAR No. 07 of 2019CONCESSIONS GRANTED TO TOURISM INDUSTRYIn view of the adverse impact on tourism industry due to the current situation of the country, licensed commercial banks and licensed specialised banks, hereinafter referred to as licensed banks, are requested to grant the following concessions to those individuals and entities in the tourism industry, who wish to avail such concessions.(i) Licensed banks may grant a moratorium to individuals and entities who have registered with Sri Lanka Tourism Development Authority or any other authority/ agency to provide services to tourism, on a case-by-case basis.(ii) The moratorium shall be granted for performing loans (both capital and interest) till 31 March 2020, in respect of outstanding credit facilities as at 18 April 2019.(iii) The Board of Directors of the licensed bank or any other authority delegated by the Board of Directors shall approve the granting of moratorium.(iv) Licensed banks shall convert the capital and interest falling due during the moratorium period into a term loan which shall be recovered from July 2020 onwards. A concessionary rate of interest may be charged for this facility.(v) The licensed bank and the borrower shall agree on the repayment period and the rate of interest on the above loans.(vi) Licensed banks may maintain non-performing loans in the same category for classification and provisioning purpose, during the moratorium period.(vii) Licensed banks shall waive off the penal interest to be charged on non- performing loans, during the moratorium period.(viii) Licensed banks shall use the funds in Enterprise Sri Lanka Loan Scheme (Jaya Isuru) and Sawbagya Loan Scheme of the Central Bank of Sri Lanka to grant working capital facilities, if necessary, after taking into account the moratorium granted for capital and interest dues.", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_07_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "08 May 2019CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENTCIRCULARNo. 07 of 2019(ix) Licensed banks shall maintain necessary documents to substantiate the granting of such concessions.(x) Licensed banks shall report the moratorium availed by borrowers as per the format in Annex I, to the Director of Bank Supervision on a monthly basis by 15th of the succeeding month. ~A A M ThassimDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_07_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "Annex 1Circular No. 07 of 2019Details of Borrowers Availing Concessions Granted to Tourism IndustryName of the Bank:..................................................................................................................................... as at end of......................\nPlease email to bsddb@cbsl.lk with a copy to dbsd@cbsl.lk by 15th of the subsequent month.Serial No.Name of the BorrowerAmount OutstandingRs. \u2018000 (as at 18.04.2019)Amount Considered for Moratorium Rs. \u2018000Loan Classification (performing/ NPL category)New loan for dues during moratoriumSource of funds for the new loan (Jaya Isuru/ Sawbagya)Repayment PeriodInterest Rate", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_07_of_2019.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT18 November 2019 CIRCULAR No. 08 of 2019LIST OF QUALIFIED AUDITORS TO AUDIT THE ACCOUNTS OF LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKSIn terms of the Sections 38A and 76H of the Banking Act, No. 30 of 1988, as amended, the Central Bank of Sri Lanka (CBSL), has reviewed the list of qualified auditors to conduct audits of licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) in Sri Lanka.1. Evaluation1.1 The Director of Bank Supervision with the approval of the MonetaryProcessBoard has selected qualified auditors to audit the accounts of licensed banks in Sri Lanka in accordance with the updated guidelines issued by the Monetary Board in this regard.1.2 The assessment criteria considered under the updated guidelines include number and qualifications of audit partners, staff strength and qualifi-cations, experience and expertise of the audit firm and availability of technical competencies including expertise on banking regulation & financial products, ability to undertake forensic audits and capabilities & experience on Information Technology audits.2. List of2.1 Accordingly, CBSL has selected the following Qualified Auditors toQualifiedaudit the accounts of licensed banks in Sri Lanka from financial yearsAuditorscommencing 01.01.2021:(i) BDO Partners\u201cCharter House\u201d, No. 65/2, Sir Chittampalam A Gardiner Mawatha, Colombo 02(ii) Ernst & Young, Sri LankaNo. 201, De Saram Place, Colombo 10(iii) KPMG Sri LankaNo. 32A, Sir Mohamed Macan Markar Mawatha, Colombo 03(iv) PricewaterhouseCoopersNo. 100, Braybrooke Place, Colombo 02(v) SJMS AssociatesNo. 11, Castle Lane, Colombo 04", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_08_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "18 November 20193. Revocationof PreviousCircularsCENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENTCIRCULARNo. 08 of 20193.1 The circulars dated 30 April 1998 on the List of Qualified Auditors issued to licensed banks will cease to be effective from financial yearscommencing 01.01.2021.Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2019\\bsd_circular_no_08_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT18 April 2019 CIRCULAR No. 05 of 2019REMOVAL OF RESTRICTIONS ONOPENING OF LETTERS OF CREDIT (LCs) FOR IMPORTATION OF MOTOR VEHICLES UNDER PERMITS ON CONCESSIONARY TERMS1. Licensed commercial banks and licensed specialised banks are informed of the removal of restrictions on the opening of LCs for importation of motor vehicles under the permits on concessionary terms as follows:(a) Permits issued for importation of motor vehicles in terms of P.A. Circular No. 22/99, LCs may be opened on or after:(i) 01.05.2019 for permits issued on or before 31.12.2018;(ii) 01.06.2019 for permits issued in any date.(b) Permits issued for importation/ purchase of motor vehicles in terms of Trade and Investment Policy Circular No. 01/2018 and subsequent amendments and officers appointed to Sri Lanka Mission/ Posts abroad, LCs may be opened on or after: (i) 01.06.2019 for permits issued on or before 30.09.2018;(ii) 01.07.2019 for permits issued on or before 30.11.2018;(iii) 01.08.2019 for permits issued on or before 28.02.2019;(iv) 01.09.2019 for permits issued on or before 30.06.2019;(v) 01.10.2019 for permits issued in any date.2. Direction No. 2 of the Banking Act Directions No. 06 of 2018 dated 28.09.2018 on Measures to Curtail imports of Motor Vehicles is withdrawn by Banking Act Direction No. 02 of 2019 dated 18 April 2019.J P GamalathActg. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2019\\BSD_Circular_No_5_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "Explanatory Note No. 01 of 2019Bank Supervision Department 16 May 2019INTERPRETATIONS FOR CIRCULAR NO. 07 OF 2019 ON CONCESSIONS GRANTED TO TOURISM INDUSTRYThe following interpretations are issued in relation the Circular No. 07 of 2019 dated 08 May 2019 on Concessions Granted to Tourism Industry.1. IndividualsIndividuals include persons providing services to tourism sector and permanent employees of entities who provide services to tourism sector.2. Registration(i) Persons and entities providing services to tourism sector shall be registered with any of the following Institutions, as at 18.04.2019.(a) Sri Lanka Tourism Development Authority(b) Agencies under Sri Lanka Tourism Development Authorityi) Sri Lanka Tourism Promotion Bureauii) Sri Lanka Tourism Convention Bureauiii) Sri Lanka Institute of Tourism and Hotel Management(c) The Hotels Association of Sri Lanka(ii) Persons and entities who have not registered with any of the Institutions referred in 2(i) above as at 18.04.2019, shall have at least registered their businesses/ services with the local government authorities such as Pradeshya Sabha, Urban Council or Municipal Council as at 18.04.2019 and in order to avail the moratorium, such persons and entities shall now be required to register with the relevant institution/s referred in 2(i) above.3. Granting of moratorium(i) Individuals or entities who wish to avail the moratorium shall make a request to the relevant licensed bank seeking such moratorium.(ii) Licensed banks shall evaluate such request individually, including the requirement stipulated in para 2 above, in order to assess the eligibility.(iii) The moratorium shall be granted for any performing credit facilities (both capital and interest) as at 18.04.2019 of such individuals or entities.", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_1_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "(iv) Licensed banks shall report all individuals or entities who have requested to avail the moratorium, as per the reporting format prescribed in the Circular No. 07 of 2019 on Concessions Granted to Tourism Industry.4. Accounting Treatment under SLFRS 9(i) Licensed banks shall comply with the instructions provided by the Chartered Accountants of Sri Lanka in relation to recognitions of interest income and accounting for financial assets (Annex I).", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_1_of_2019_e.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "CHARTERED13th May 2019Mr H A. KarunaratneDeputy GovernorCentral Bank of Sri Lanka.# 30. Janadhipathi Mawatha, Colombo 01Dear Mr KarunaratneRe: Concessions to the Tourism IndustryWe thank the Central Bank of Sri Lanka for referring to us the proposed concessions to the tourism industry announced by the government requesting to clarify the accounting treatment as per SLFRS 9 Financial InstrumentsAccordingly, with reference to your letter dated 07,n May 2019 under the above heading please find below the clarification you sought as per the recommendation made at the CA Sri Lanka Financial Reporting Standards Implementation & Interpretation Task Force meetingIssue 1: Recognition of interest income during the moratorium periodParagraph 5 4 1 of SLFRS 9Interest revenue shall be calculated by using the effective interest method This shall be calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for(a) purchased or originated credit-impaired financial assets For those financial assets the entity shall apply the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition(b) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets For those financial assets the entity shall apply the effective interest rate to the amortised cost of the financial asset in subsequent reporting periods.Paragraph 5 4 2 of SLFRS 9:An entity that m a reporting period, calculates interest revenue by applying the effective interest method to the amortised cost of a financial asset in accordance with paragraph 5 4 1(b) shall, in subsequent reporting periods calculate the interest revenue by applying the effective interest rate to the gross carrying amount if the credit risk on the financial instrument improves so that the financial asset is no longer credit-impaired and the improvement can be related", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_1_of_2019_e.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "so that the financial asset is no longer credit-impaired and the improvement can be related objectively to an event occurring after the requirements in paragraph 5 4 1(b) were applied (such as an improvement in the borrower's credit rating)Accordingly interest income can be recognised by the banks by using the Effective Interest Rate (EIR) applied to the gross carrying amount or the net carrying amount considering the stage into which that loan belongs to at the time of the modification", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_1_of_2019_e.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "Illi iHSinUIC DI CHARTEREDIssue 2: Consideration of the rescheduled loans (terms loans) under the same category for classification and provisioning purposesBased on the given information, banks are requested to convert the capital and interest falling due during the moratorium period into a loan Accordingly, there would be a modification of the financial assets where the banks would be required to re-estimate the cash flows attached to the financial assetsIn these circumstances the banks may need to assess whether the financial asset need to be derecognized under SLFRS 3.2.3(a) which states that an entity shall derecognize a financial asset when and only when: (a) the contractual rights to the cash flows from the financial asset expire On that basis de-recognition of a financial asset on the revised terms would occur where the moratorium results in substantial modification to the original cash flows which could be seen as an expiry of those cash flows.As per B5 5 25 of SLFRS 9 in some circumstances, the renegotiation or modification of the contractual cash flows of a financial asset can lead to the derecognition of the existing financial asset in accordance with this Standard When the modification of a financial asset results in the derecognition of the existing financial asset and the subsequent recognition of the modified financial asset, the modified asset is considered a 'new' financial asset for the purposes of this StandardAs per B5 5.26 Accordingly, the date of the modification shall be treated as the date of initial recognition of that financial asset when applying the impairment requirements to the modified financial asset This typically means measuring the loss allowance at an amount equal to 12-month expected credit losses until the requirements for the recognition of lifetime expected credit losses in paragraph 5 5 3 are met However in some circumstances following a modification that results in derecognition of the original financial asset, there may be", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_1_of_2019_e.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "a modification that results in derecognition of the original financial asset, there may be evidence that the modified financial asset is credit-impaired at initial recognition, and thus, the financial asset should be recognised as an originated credit-impaired financial asset This might occur, for example in a situation in which there was a substantial modification of a distressed asset that resulted in the derecognition of the original financial asset In such a case, it may be possible for the modification to result in a new financial asset which is credit-impaired at initial recognitionAccordingly the holder of the financial asset should perform a quantitative and qualitative evaluation of whether the modification is substantialAs per SLFRS 9. para 5.4.3 when the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the derecognition of that financial asset in accordance with this Standard, an entity shall recalculate the gross carrying amount of the financial asset and shall recognise a modification gain or loss in profit or loss. The gross carrying amount of the financial asset shall be recalculated as the present value of the renegotiated or modified contractual cash flows that are discounted at the financial asset s original effective interest rateParagraph B5 5 26 of SLFRS 9Accordingly the date of the modification shall be treated as the date of initial recognition of that financial asset when applying the impairment requirements to the modified financial asset This typically means measuring the loss allowance at an amount equal to 12-month expected credit losses until the requirements for the recognition of lifetime expected credit losses in paragraph 5 5.3 are met.", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_1_of_2019_e.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "Paragraph B5 5 27 of SLFRS 9If the contractual cash flows on a financial asset have been renegotiated or otherwise modified, but the financial asset is not derecognised, that financial asset is not automatically considered to have lower credit risk An entity shall assess whether there has been a significant increase in credit risk since initial recognition on the basis of all reasonable and supportable information that is available without undue cost or effort This includes historical and forward-looking information and an assessment of the credit risk over the expected life of the financial asset, which includes information about the circumstances that led to the modification Evidence that the criteria for the recognition of lifetime expected credit losses are no longer met may include a history of up-to-date and timely payment performance against the modified contractual terms Typically, a customer would need to demonstrate consistently good payment behaviour over a period of lime before the credit risk is considered to have decreasedAccordingly the modified loan referred to above in order to grant concessions to the tourism sector, should be classified in an appropriate stage considering the bank s assessment on whether there has been a significant increase in credit risk since initial recognition on the basis of all reasonable and supportable information at the time of modification and in subsequent reporting periods Otherwise, the modified loan result in the derecognition of the financial asset, guidance given in paragraph B5 5.25 and B 5 5.26 shall be appliedIssue 3: What should be the disclosure requirements in relation to the above?General disclosures in terms of SLFRS 7 Financial Instruments Disclosures need to be followed by the banks in the financial statements In addition to the general disclosures required, in relation to impairment requirements of financial assets which have had modifications to their contractual cash flows need to provide disclosures", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_1_of_2019_e.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "assets which have had modifications to their contractual cash flows need to provide disclosures required by SLFRS 7 (35F(f)), (35l)(b) and (35J)This explanation is provided purely based on the limited facts and information provided by you and as such the Institute of Chartered Accountants of Sn Lanka takes no responsibility if the explanation would have been different had more information been available Further, the application of the Sri Lanka Accounting Standards requires exercise of judgement Therefore, the ultimate responsibility for the recognition, measurement, presentation and disclosures of any transaction rests with the preparers of the financial statements In providing this clarification, we have exercised due care and diligence and therefore we believe that the clarification given is appropriate. If you require further clarifications on the issue, we advise you to seek professional adviceThank youYours sincerelyTHE INSTITUTE OF CHARTERED ACCOUNTANTSOF SRI LANKAJagath Perera PRESIDENT", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_1_of_2019_e.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "Explanatory Note No. 02 of 2019Bank Supervision Department20 June 2019INTERPRETATIONS FOR CIRCULAR NO. 07 OF 2019 ON CONCESSIONS GRANTED TO TOURISM INDUSTRYThe following interpretations are issued in relation the Circular No. 07 of 2019 dated 08 May 2019 on Concessions Granted to Tourism Industry.1. Registration(i) Persons and entities providing services to tourism sector and have not registered with any of the Institutions referred in Explanatory Note No. 01 of 2019, shall now be required to register with the Sri Lanka Tourism Development Authority, in order to avail the moratorium.2. Granting of moratorium(i) The moratorium shall be granted for any performing credit facilities (both capital and interest) as at 18.04.2019 of eligible individuals or entities (herein after referred to as eligible borrowers). However, if such eligible borrowers wish to avail the moratorium only for capital or interest, licensed bank may grant such moratorium for such eligible borrowers, as requested.(ii) Licensed banks may convert the capital or interest or both, as the case may be, falling due during the moratorium period into a new credit facility or extend the maturity of the original credit facility by the moratorium period with the consent of the eligible borrower.(iii) Licensed banks may grant the moratorium for a lesser period, if the eligible borrower wishes to avail the moratorium for a period less than the period stipulated in Circular No. 07 of 2019 dated 08 May 2019 on Concessions Granted to Tourism Industry. However, the repayment of capital, interest or both falling dues during the moratorium period shall commence after three months from the end of the applicable moratorium period.(iv) In the event, capital, interest or both falling due during the moratorium period are converted to a new facility, licensed banks may charge a concessionary rate of interest not exceeding the latest auction rate for 364-days Treasury Bill, at the end of the moratorium period, plus 1.00 per", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_2_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "latest auction rate for 364-days Treasury Bill, at the end of the moratorium period, plus 1.00 per cent per annum, for a repayment period not exceeding two years. The licensed bank and the borrower shall agree on the interest rate, if the repayment period exceeds two years.", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_2_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "(v) With regard to provision of working capital facilities, licensed banks shall comply with the Guidelines issued by the Department of Development Finance, Ministry of Finance.(vi) Licensed banks shall report the details of concessions granted to eligible borrowers on a cumulative basis for the week ending on each Friday by Wednesday of the following week, as per the revised format at Annex I.", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_2_of_2019_e.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "Annex ICircular No 07 of 2019 on Concessions Granted to Tourism Industry Weekly Report on Borrowers Availing ConcessionsName of the bank Cumulative position for the week ending................ ............ -........... .Rs. 000Serial No.Details of Moratorium Granted _____________________Details of Working Capital FacilityRemarks Name of the borrowerRequest considered for granting of moratorium (Yes/No)Reasons for not considering the request for the moratoriumAmount outstanding as at 18.04.2019Amount Considered for moratoriumType of the moratoriumPeriod of the MoratoriumNew loan created for amount falling due during the moratorium periodStatus of the moratoriumAmount granted for working capitalApplicable interest rateRepayment periodInterest rate 1234567891011121314\nNotes:Column 2 - Report the cumulative request received from borrowers to avail the concessionColumn 4 - Reasons for not considering the request made by the borrowerColumn 5 - Total exposure of the eligible borrower to tourism sectorColumn 6 - Outstanding balances of credit facilities that are considered for the moratoriumColumn 7 - Granted extension to original maturity of the facility (E), converted capital (C), interest (I) or both (Cl) to a new facilityColumn 8 - Report the moratorium periodColumn 10 - Report the applicable interest rate for the new facility or interest free facilityColumn 11 - Report whether moratorium has been granted or under approval processColumn 14 - Provide additional information, if anyPlease email to bsddb^cbsUk with a copy to dbsdgpcbsl.lk by Wednesday of the following week.", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_2_of_2019_e.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT18 July 2019EXPLANATORY NOTENo. 03 of 2019Interpretations for Banking Act Directions No. 01 of 2016 on Capital Requirements under Basel III for Licensed Commercial Banks and Licensed Specialised BanksThe banking sector in Sri Lanka has adopted Sri Lanka Accounting Standard - SLFRS 9: Financial Instruments for financial reporting periods beginning on or after 01.01.2018 as stipulated by the Institute of Chartered Accountants of Sri Lanka. Currently, when computing capital adequacy ratio under the above Directions the Capital Measure is calculated on Sri Lanka Accounting Standards based figures and Risk Weighted Assets (RWA) are computed based on the balance sheet prepared for regulatory reporting in line with Directions issued by the Central Bank of Sri Lanka.In order to implement a consistent approach to measure Capital and RWA when computing capital adequacy ratio, the following measures are introduced:1. Impairment eligible for inclusion in Tier 2 capital under web based return code 20.2.3.1.1.3 - General Provisions100 per cent of impairment for assets in Stage 1 and 50 per cent of impairment for assets in Stage 2 under SLFRS subject to a maximum limit of 1.25 per cent of RWA on credit risk under the Standardised Approach shall be eligible for inclusion in Tier 2 capital. Accordingly, licensed banks shall report the eligible impairment under the web-based return code 20.2.3.1.1.3.2. Application of Risk Weights for Non-Performing Assets (NPA)2.1 Impairment for NPA other than qualifying residential mortgage loansImpairment for assets in stage 3 under SLFRS shall be deducted from the respective credit exposures to arrive at net exposure1 and risk weighted as follows:\n1 In the case of collective impairment where it is not possible to identify the impairment with specific assets, licensed banks shall apportion the impairment charges on a pro rata basis.1", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_3_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT18 July 2019EXPLANATORY NOTENo. 03 of 2019(i) Web-based return code 20.3.1.11.1.0 - licensed banks shall report unsecured portion of NPA, other than qualifying residential mortgage loans, where stage 3 impairment under SLFRS is equal to or more than 20 per cent of the carrying value of the respective financial asset or group of assets.(ii) Web-based return code 20.3.1.11.2.0 - licensed banks shall report unsecured portion of NPA, other than qualifying residential mortgage loans, where stage 3 impairment under SLFRS is less than 20 per cent of the carrying value of the respective financial asset or group of assets.2.2 Impairment for NPA secured by Residential PropertyImpairment for assets in stage 3 under SLFRS shall be deducted from the respective credit exposures to arrive at net exposure1 and risk weighted as follows:(i) Web-based return code 20.3.1.12.1.0 - licensed banks shall report NPA secured by residential property, where stage 3 impairment under SLFRS is equal to or more than 20 per cent of the carrying value of the respective financial asset or group of assets.(ii) Web-based return code 20.3.1.12.2.0 - licensed banks shall report NPA secured by residential property, where stage 3 impairment under SLFRS is less than 20 per cent of the carrying value of the respective financial asset or group of assets.3. Foreign Claims on Central Government(i) Web-based return code 20.3.1.1.1.2 - Licensed banks shall deduct respective SLFRS based impairment charge, if any, from claims on foreign currency denominated securities issued by Government of Sri Lanka before applying the risk weight when computing the capital charge under Basel III. A A M ThassimDirector of Bank Supervision2", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_3_of_2019_e.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT18 July 2019 EXPLANATORY NOTE No. 04 of 2019Interpretations for Banking Act Directions No. 12 of 2018 on Leverage Ratio under Basel III for Licensed Commercial Banks and Licensed Specialised BanksThe Bank Supervision Department issued Explanatory Note 03 of 2019 on 18 July 2019 to ensure the consistency of capital and risk weighted assets computation in terms of the Banking Act Directions No. 01 of 2016 on Capital Requirements under Basel III considering the implications of adoption of Sri Lanka Accounting Standard - SLFRS 9: Financial Instruments.Accordingly, with a view to ensuring consistency licensed banks shall hereinafter use Sri Lanka Accounting Standards based Statement of Financial Position to compute the exposure measure in the Leverage Ratio computation under Basel III whilst computation of off-balance sheet exposure remains the same. A A M ThassimDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_4_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "Explanatory Note No. 0 5 of 2019  \n(3rd Explanatory Note for Circular No. 07 of 2019)  \n \nBank Supervision Department  \n        27 August  2019  \n \nINTERPRETATIONS FOR  CIRCULAR NO. 07 OF 2019 ON   \nCONCESSIONS GRANTED TO TOURISM INDUSTRY   \n \n  \nThe following interpretatio ns are issued in relation to the Circular No. 07 of 2019 dated 08 \nMay 2019 on Concessions Granted to Tourism Industry .  \n \n1. Registration  Requirements  \nIn line with the Cabinet  decision to extend the concessions granted  to tourism sector  \nto music groups who ar e registered at the Department of Cultural Affairs, licensed \nbanks are informed  that such persons and entities are exempted from the requirement \nto register with Sri Lanka Tourism Development Authority, in order to avail the \nconcessio ns granted to tourism industry.  \n \n \n********", "metadata": {"source": "data\\CBSL\\2019\\BSD_Explanatory_Note_No_5_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "September 2019MONETARY BOARD CENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDERNo. 02 of 2019ENHANCING EFFICIENCY OF THE TRANSMISSION OF RECENT POLICY DECISIONS TO RUPEE DENOMINATED MARKET LENDING RATESIssued under Section 104(l)(b) of the Monetary Law Act, No. 58 of 1949, as amended.The Central Bank of Sri Lanka (CBSL) has adopted several policy measures in the recent past such as reduction of policy interest rates and the statutory reserve ratio, and imposition of maximum interest rates on Sri Lanka Rupee (LKR) deposits to reduce cost of funds of licensed commercial banks (LCBs) and licensed specialised banks (LSBs), thereby reducing interest rates of lending products in the banking sector. However, due to the unduly long time lag observed in transmitting the reduction of policy and deposit rates broadly and equitably to interest rates of lending products, the Monetary Board hereby issues an Order on the interest rates applicable on LKR denominated loans and advances granted by LCBs and LSBs, while taking cognisance of differences in their funding structures.1. Empowerment1.1In terms of Section 104(l)(b) of the Monetary Law Act, the Monetaryunder the Monetary Law Act2. Interest rates on2.1Board may from time to time fix the maximum rates of interest which LCBs and LSBs may charge for different types of loans or other credit operations.Every LCB and LSB shall reduce the annual nominal interest rateLKR denominated loans and advances2.2applicable for all LKR denominated loans and advances, excluding credit facilities mentioned in Order 2.3 and credit facilities exempted under Order 5 below, by at least 200 basis points by 15.10.2019, in comparison to the interest rate applicable to the respective loans and advances as at 30.04.2019.However, if the annual nominal interest rate applicable to any LKR denominated loan or advance as at the date of this Order or anytime thereafter is 12.5 per cent or lower, it shall not be mandatory to give effect to the reduction required", "metadata": {"source": "data\\CBSL\\2019\\BSD_MLA_Order_No_2_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "is 12.5 per cent or lower, it shall not be mandatory to give effect to the reduction required under Order 2.1 above. Further, in cases where the applicable annual nominal interest rate as at the date of this Order or anytime thereafter is 12.5 per cent or less, the bank shall not increase the interest rates of such loans and advances from the level maintained as at the date of this Order.1", "metadata": {"source": "data\\CBSL\\2019\\BSD_MLA_Order_No_2_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA^September 2019 MONETARY LAW ACT ORDER No. 02 of 20192.3 Every LCB shall reduce the following product-wise lending rates to the maximum levels outlined herein, by 01.11.2019:(i) Interest rates on credit card advances to 28 per cent per annum.(ii) Interest rates on pre-arranged temporary overdrafts to 24 per cent per annum.2.4 Every LCB and LSB shall reduce the penal interest rates charged on all loans and advances, including credit facilities already granted, to a level not exceeding 400 basis points per annum, for the amount in excess of an approved limit or in arrears, during the overdue period, with effect from 15.10.2019.3. Maximum 3.1AverageWeighted Prime Lending Rate (AWPR)3.23.33.44. Monitoring 4.1(i) Every LCB shall reduce its weekly AWPR by at least 250 basis points by 27.12.2019, compared to its AWPR published by CBSL as at 26.04.2019 in the Weekly Economic Indicators publication.(ii) In the interim, every LCB shall reduce its weekly AWPR by at least 150 basis points by 01.11.2019, compared to its AWPR published by CBSL as at 26.04.2019.If the Weekly Economic Indicators published by CBSL as at 26.04.2019 does not contain AWPR of an LCB, such LCB shall maintain an AWPR not exceeding 9.5 per cent per annum.Order 3.1 above shall not apply to LCBs, whose AWPR reaches or falls below 9.5 per cent per annum as at the date of this Order or anytime thereafter. However, such LCB shall not increase its weekly AWPR above 9.5 per cent.Upon complying with Order 3.1 above, any LCB shall not increase its AWPR from the reduced level.All LCBs and LSBs shall ensure the accuracy of interest rate data submitted to CBSL and maintain internal documented recordselectronically or manually, in relation to the reductions in interest rates in respect of each loan and advance to which this Order applies.2", "metadata": {"source": "data\\CBSL\\2019\\BSD_MLA_Order_No_2_of_2019_e.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "24- September 2019MONETARY BOARD CENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDER5. Exemptions 5.1\n6. Implementation 6.1No. 02 of 2019Following categories of loans and advances shall be exempted from the requirements in Order 2 above.(i) Loans and advances granted before 15.10.2019 on fixed term interest rate contracts, until the end of the contracted fixed rate period. For avoidance of doubt these will include, leases and facilities collateralized by gold where applicable. However, the provisions of this Order shall apply to any revision to the annual nominal interest rate effected on or after 15.10.2019.(ii) Loans and advances collateralized by LKR deposits maintained with LCBs and LSBs, provided that the margin over the deposit rate is not increased above the margin applied by the bank to such advances as at the date of this Order.(iii) Loans and advances granted under a refinance scheme supported by the Government of Sri Lanka or CBSL or on concessionary terms under a general restructuring arrangement where the applicable interest rate or the basis of its determination is stipulated in such scheme or arrangement.These Orders shall be effective from the date of the Order.\nDr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n3", "metadata": {"source": "data\\CBSL\\2019\\BSD_MLA_Order_No_2_of_2019_e.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA24 September 2019 MONETARY LAW ACT ORDER No. 03 of 2019MAXIMUM INTEREST RATES ON SRI LANKA RUPEE DEPOSITSOF LICENSED BANKSMonetary Law Act Order No. 01 of 2019 dated 26.04.2019 on Maximum Interest Rates on Sri Lanka Rupee Deposits of Licensed Banks is hereby rescinded.Dr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2019\\BSD_MLA_Order_No_3_of_2019_e.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\n18 January 2019 CIRCULAR No.02 of2019\nPUBLICATION OF ANNUAL AND QUARTERLY FINANCIAL STATEMENTS\nAND OTHER DISCLOSURES BY LICENSED BANKS\n1. Requirements\nunder the\nBanking Act\n2. Empowerment 2.1\n3. Scope of\nApplication1.1 In terms of Sections 38 and 76 (H) of the Banking Act No. 30 of\n1988 as amended, all licensed banks (LBs) incorporated or\nestablished within Sri Lanka and all LBs incorporated outside Sri\nLanka shall:\n(i) transmit its audited financial statements within five months\nafter the close of its financial year to the Director of Bank\nSupervision;\n(ii) publish the audited financial statements at least once within\nthat period in Sinhala, Tamil and English daily newspapers\ncirculating in Sri Lanka; and\n(iii) exhibit them in a conspicuous place at each of its places of\nbusiness until the financial statements for the succeeding\nfinancial year are prepared and exhibited.\nIn terms of Sections 38(3) and 76 H of the Banking Act, the\nMonetary Board may specify the form of the financial statements\nincluding any disclosure requirements to be made and where such\nform is specified, financial statements of every licensed bank shall\nbe prepared in such form as may be specified.\nLicensed banks shall use the specified formats given in Annex I and\nAnnex II to this Circular for the preparation, presentation and\npublication of annual and quarterly financial statements,\nrespectively.\nLBs incorporated in Sri Lanka shall publish financial statements\nunder both solo and consolidated basis.\nIn terms of Section 28 of the Banking Act, the formats referred to\nin 3.1 above shall also be used for the preparation of financial\nstatements of the Off-shore Banking Units of licensed banks.3.1\n),2\naa-).-)", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "18 Januarv 2019CENTRAL BANK OF SRI LANKA\nBANK SUPERYISION DEPARTMENT\nCIRCULAR No.02 of 2019\n4. Compliances 4.tLicensed banks shall publish information with respect to the entire\nbank, i.e., including the off-shore banking unit and in the case of\nlicensed commercial banks incorporated in Sri Lanka, any branches\nestablished abroad by the licensed bank.\nLicensed banks shall publish annual and quarterly financial\ninformation and other disclosures in the Annual Report, Press and\nWebsite as given in Table 1 below.\nTable 1: Publication of Annual and Quarterly\nMinimum Disclosures\nType of Statement/InformationFrequency and\nLocation of Publication\nQuarterly Annually\nIncome Statement P,W A,P,w\nStatement of Comprehensive\nIncomeP,W A,P,w\nStatement of Financial Position P,W A,P,W\nStatement of Changes in Equity P,W A,P,w\nStatement of Cash Flows P,W A,P,W\nAnalysis of Financial Instruments\non Measurement Basisw A,W\nAnalysis of Loans and Advances W A,W\nAnalysis of Deposits w A,W\nSelected Performance Indicators P,W A, P,W\nA - Annual ReportP-Press W-Website\nLicensed banks shall report statement of financial position as at the\nend of the relevant quarter and shall publish comparative figures for\nthe same based on the audited financial statements for the previous\nfinancial year.\nThe reporting period in respect of the income statement should be\nthe cumulative position as at the end of the relevant quarter in the\nfinancial year. Comparative figures for the income statement should4.2\n4.3\n4.4", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "18 January 2019CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\nCIRCULAR No.02 of2019\n4.5\n4.6\n4.7\n4.8\n4.9\n5.1 5.\n5.2Responsibilities\nof the\nManagementbe in respect of the same reporting period in the previous financial\nyear.\nLicensed banks shall include details of audit qualifications, if any,\non audited financial statements when publishing such statements in\nthe Press and Website.\nLicensed banks shall report selected key performance indicators\n(KPIs) and the relevant ratios as at the reporting date while\ncomparative KPIs and ratios should be based on the audited\nfinancial statements for the previous financial year.\nLicensed banks incorporated outside Sri Lanka may publish the\nlatest available KPIs relating to the global operations of such bank\non a quarterly basis, and the ratios based on audited financial\ninformation along with the audited financial statements of the parent\nbank. Such information may be reported in home currency or in US\nDollars in the column for reporting the information of the Group.\nThe key performance indicators should be computed according to\nthe definitions given in the respective Banking Act Directions,\nDeterminations, Circulars and Guidelines.\nIf a 'nil' balance has to be reported in respect of an item in the\nformat, such items should be reported as 'nil', instead of deleting\nthe item.\nThe Board of Directors and the management of the licensed bank\nshall provide the true status of the financial condition of the bank,\nin discharging their fiduciary responsibility.\nLicensed banks shall ensure that adequate publicity is given to non-\ncompliance with the prudential ratios, if any, and the measures\nbeing taken by the licensed bank to meet these ratios.", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "18 January 2019CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\nCIRCULAR No.02 of2019\n6. Timeline for\nPublication of\nFinancial\nStatements\n7. Effective\ndate/period\n8. Revocations 8.15.3\n5.4\n6.1\n7.1\n7.26.2\n6.3Licensed banks shall avoid publishing incorrect\nstatements/information and non-disclosure of adequate information\nrequired for decision making process.\nLicensed banks shall adopt the disclosure requirements contained\nherein as a minimum and are encouraged to make additional\ndisclosures for the benefit of the general public.\nLicensed banks shall publish quarterly publication within two\nmonths from the end of each quarter, at least once in Sinhala, Tamil\nand English daily newspaper.\nPublication of annual audited financial statements shall be made\nwithin five months from the end of the financial year.\nIf the bank publishes its annual audited financial statements within\nthree months from the end of the financial year, the requirement to\npublish the financial statements for the fourth quarter in terms of\n6.1 above would not arise.\nFormats for quarterly reporting will be applicable for quarters\nbeginning on or after 0 1 .01 .20 I 9.\nFormats for annual reporting will be applicable for financial years\nbeginning on or after 01.01.2018.\nThe following Circulars are hereby revoked:\n(i) Circular No: BS/38/90 dated 02.06.1998 on Preparation of\nAnnual Audited Accounts of Banks;\n(ii) Circular No: B3162197 dated 10.09.2001 on Public\nDisclosure by Publication of Bank Accounts in the Press;\n(iii) Circular No: 02104100310401/001 dated 30.09.2005 on\nPublic Disclosure by Publication of Quarterly Financial\nStatements of Banks in the Press;\n(iv) Circular No: 02104100310401/001 dated 26.01.2006 on\nPublication of Quarterly Financial Statements of Banks in\nthe Press;", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "18 January 2019CENTRAL BANK OF SRI LANKA\nBAI\\K SUPERYISION DEPARTMENT\nCIRCULAR No.02 of2019\n(v) Circular dated 13.02.2006 on Submission of Audited\nFinancial Statements by Banks;\n(vi) Circular No: 02104100310401/001 dated 21.02.2006 on\nPublication of Audited Financial Statements of Banks in the\nPress;\n(vii) Circular No: 02/041003/0401/001 dated 24.03.2006 on\nInadequate/Incorrect Disclosures/Press Statements by\nBanks;\n(viii) Circular No : 02 I 17 I 900 I 000 I I 04 dated 1 | .02.20 13 on Public\nDisclosure by Publication of Quarterly Financial Statements\nof Banks in the Press;\n(ix) Circular No: 02117190010001104 dated 11.02.2013 on\nPreparation, Presentation and Publication of Annual\nAudited Accounts of Banks;\n(x) Circular No:02l171800/0002/002 dated 17.09.2013 on\nPublication of Financial Statements and Other Disclosures\non the Websites; and\n(*i) Circular No. 02117190010001/004\nAdditional Quarterly Disclosure indated 11.10.2013 on\nthe Press and on the\nWebsites.\nA A M Thassim\nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "Annex I  \n \n \n \n \n \n \n \n \n \n \n \n \n \nSPECIFIED FORMAT FOR THE PREPARATION , PRESENTATION \nAND PUBLICATION OF  \nANNUAL AUDITED FINANCIAL STATEMENTS  OF LICENSED \nBANKS  \n \n \nFor Financial Years commencing on or  after  01.01.2018", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 5, "year": 2019}, "type": "Document"}
{"page_content": "Financial Statements  \nTable of Contents  \n           Page No.  \nFinancial Statements  \nIncome Statement           1  \nStatement  of Comprehensive Income        2    \nStatement of Financial Position         3 \nStatement of Changes in Equity         4    \nStatement of Cash Flow s         5    \n          \nNotes to the Financial Statements  \n1 Corporate Information         6  \n2 Accounting Policies          6 \n3 Segment Information          7 \n4 Net Interest Income          7 \n5 Net Fee and Commission Income        8 \n6 Net Gain/(Loss) from Trading        8 \n7 Net Fair Value Gain/( Loss ) from Financial Instruments at Fair Value  through   \n Profit or Loss           8 \n8 Net Gain/(Loss) from  Derecognition of  Financial Assets     9 \n9 Net O ther Operating Income         9 \n10 Impairment Charges           9 \n11 Personnel Expenses          10 \n12 Other Expenses          10 \n13 Tax Expense s          10 \n14 Earnings Per Share          11 \n15 Analysis of Financial Instruments by Measurement Basis     12 \n16 Cash and  Cash Equivalents         13  \n17 Balances with Central Banks         13 \n18 Placements with Banks         13 \n19 Derivative Financial Instruments         14 \n20 Financial Assets Recognized through Profit or L oss     14 \n21 Financial Assets at Amortised Cost \u2013 Loans and A dvances     15", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 6, "year": 2019}, "type": "Document"}
{"page_content": "22 Financial Assets at Amortised Cost \u2013 Debt and O ther Instruments    16 \n23 Financial Assets Measured at Fair Value Through Other Comprehensive I ncome  17 \n24 Investment s in Subsidiaries         18 \n25 Investments in Asso ciates and Joint Ventures      18 \n26 Proper ty, Plant and Equipment        19 \n27 Investment Properties          20 \n28 Goodwill and Intangible Assets        21 \n29 Deferred  Tax Assets/Liabilities        21 \n30 Other Assets           22 \n31 Due to Banks           22 \n32 Derivative  Financial Instruments        22 \n33 Financial Liabilities Recognized Through Profit or L oss    22 \n34 Financial L iabilitie s at Amortised Cost       23 \n35 Debt Securities Issued          23 \n36 Retirement B enefit Obligations        24 \n37 Current Tax Liabilities         24 \n38 Other Provisions          24 \n39 Other Liabilities          24 \n40 Due to Subsidiaries          24 \n41 Stated C apital/Assigned Capital        25 \n42 Statutory Reserve Fund         25 \n43 Retained Earnings          25 \n44 Other Reserves          25 \n45 Non-controlling Interests         26 \n46 Contingent Liabilities and Commitments       26  \n47 Related Party Disclosures         26 \n48 Net As sets Value per Ordinary Share        26 \n49 Other Disclosure R equirements        27", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 7, "year": 2019}, "type": "Document"}
{"page_content": "1 \n \u2026\u2026\u2026\u2026\u2026\u2026.. BANK  \nINCOME STATEMENT  \nFOR THE YEAR ENDED \u2026\u2026\u2026\u2026\u2026\u2026  \n \n  Bank  Group  \nIn Rupee s Million   Note  20XX  20XX  20XX  20XX  \nInterest income       \nInterest expenses       \nNet interest income  04     \nFee and  commission income       \nFee and commission expenses       \nNet fee and commission income  05     \nNet gain/(loss) from trading  06     \nNet fair value gains/(loss es) from  financial \ninstruments  at fair value through profit or loss  07     \nNet gain s/(loss es) from  derecognition of financial \nassets    08     \nNet other operating income  09     \nTotal operating income       \nImpairment  charges  10     \nNet operating income       \nPersonnel expenses  \nDepreciation and amortization expenses  11     \nOther expenses  12     \nOperating profi t/(loss) before VAT & NBT on \nfinancial services       \nValue Added Tax (VAT)  on financial services  \nNation Building Tax (NBT) on financial services       \nOperating profit/(loss) after VAT & NBT on \nfinancial services       \nShare of profits of associates and joint venture s      \nProfit/(loss) before tax       \nIncome t ax expense s 13     \nProfit/(loss) for the year       \nProfit a ttributable to:       \nEquity holders of the parent       \nNon-controlling interests       \nEarnings per share on profit      14     \nBasic earnings per ordinary share           \nDiluted earnings per ordinary share", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 8, "year": 2019}, "type": "Document"}
{"page_content": "2 \n  \n\u2026\u2026\u2026\u2026\u2026\u2026 BANK  \nSTATEMENT OF COMPREHENSIVE INCOME  \nFOR THE YEAR ENDED \u2026\u2026\u2026\u2026..  \n  Bank  Group  \nIn Rupee s Million  Note  20XX  20XX  20XX  20XX  \nProfit/(loss) for the year       \n   Items that will be reclassified to income statement       \nExchange differences on translation of foreign \noperations       \nNet gain s/(loss es) on cash flow hedges  \nNet gain s/(loss es) on investments in debt \ninstruments measured at fair value through other \ncomprehensive income       \nShare of profits of associates and joint ventures       \nDebt instruments at fair value through other \ncomprehensive income  \nOthers (specify)  \nLess: Tax expense relating to items that will be  \nreclassified to income statement  \n \nItems that will not be reclassified to income statement  \nChange in fair value on investments in equity \ninstruments designated at fair value through other \ncomprehensive income  \nChange in fair value attributable to change in the \nBank\u2019s own credit risk on financial liabilities \ndesignated at fair value through profit or loss  \nRe-measurement of post -employment benefit \nobligations  \nChanges in revaluation surplus  \nShare of profits of associates and joint ventures  \nOthers (specify)  \nLess: Tax expense relating  to items that will not be \nreclassified to income statement       \nOther comprehensive income for the year, net of \ntaxes      \nTotal comprehensive income for the yea r      \nAttributable to:       \nEquity holders of the parent       \nNon-controlling interes ts", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 9, "year": 2019}, "type": "Document"}
{"page_content": "3 \n  \n\u2026\u2026\u2026\u2026\u2026..BANK  \nSTATEMENT OF FINANCIAL POSITION  \nAS AT  \u2026\u2026\u2026\u2026\u2026\u2026..  \n  Bank  Group  \nIn Rupee s Million  Note  20XX  20XX  20XX  20XX  \nAssets       \nCash  and cash equivalents  16     \nBalances with central banks  17     \nPlacements with banks  18     \nDerivative financial instruments  19     \nFinancial assets  recognized through profit or loss  \n      -  measured at fair value  20     \n      -  designated at fair value       \nFinancial assets at amortised cost  \n      - loans and advances   \n21     \n      - debt and other instruments  22     \nFinancial assets measured at fair value through \nother comprehensive income    \n23     \nInvestment in s ubsidiaries   24     \nInvestments in associates and joint ventures  25     \nProperty, plant and equipment  26     \nInvestment properties  27     \nGoodwill and intangible assets  28     \nDeferred tax assets   29     \nOther assets  30     \nTotal assets       \nLiabilities       \nDue to banks  31     \nDerivative  financial instruments  32     \nFinancial liabilities  recognized through profit or \nloss \n     - measured at fair value   \n33 \n     \n     - designated at fair value       \nFinancial liabilities at amortised cost  \n     - due to depositors  \n     - due to debt securities holders  34 \n     \n     - due to other borrowers  \nDebt securities issued   \n35     \nRetirement benefit obligations  36     \nCurrent tax liabilities  37     \nDeferred tax liabilities  29     \nOther provisions  38     \nOther liabili ties \nDue to subsidiaries  39 \n40     \nTotal liabilities       \nEquity       \nStated capital/Assigned capital  41     \nStatutory reserve fund  42     \nRetained earnings  43     \nOther reserves  44     \nTotal shareholders\u2019 equity       \nNon-controlling interests  45     \nTotal equity       \nTotal equity and liabilities       \nContingent liabilities and commitments  46     \nMemorandum Information  \nNumber of Employees  \nNumber of Branches  \nNote: Amounts stated are net of impairment  and depreciation.", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 10, "year": 2019}, "type": "Document"}
{"page_content": "4 \n  \n \n\u2026\u2026\u2026\u2026\u2026\u2026BANK  \nSTATEMENT OF CHANGES IN EQUITY  \nFOR THE YEAR ENDED \u2026\u2026\u2026\u2026\u2026..  \nBank /Group   \nIn Rupees Million  Stated capital/Assigned capital   Reserves  Total  Non-\ncontrolling \ninterest  Total \nequity  Ordinary \nvoting \nshares  Ordinary \nnon-voting \nshares  Assigned \ncapital  Statutory  \nReserve \nfund  OCI \nReserve  Revaluation \nreserve  Retained \nearnings  Other \nreserves  \nBalance as at DD/MM/YY \n(Opening balance)              \nTotal comprehensive \nincome for the year              \nProfit/(loss) for the year (net \nof tax)              \nOther comprehensive \nincome (net of tax)              \nTotal comprehensive \nincome for the year                       \n             \nTransactions with equity \nholders, recognised \ndirectly in equity              \nShare issue/increase of \nassigned capital              \nShare options exercised             \nBonus issue              \nRights issue              \nTransfers to reserves during \nthe period              \nDividends to equity holders              \nProfit transferred to head \noffice              \nGain/(loss) on revaluation of \nProperty, Plant and \nEquipment (if cost method \nis adopted)              \nOthers (Please specify)              \nTotal transactions with \nequity holders                       \n             \nBalance as at DD/MM/YY \n(Closing balance)                       \n \nNote: First day impact due to adoption of \u2018 SLFRS9: Financial Instruments \u2019 need s to be presented separately .", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 11, "year": 2019}, "type": "Document"}
{"page_content": "5 \n \u2026\u2026\u2026\u2026\u2026. BANK  \nSTATEMENT  OF CASH FLOWS  \nFOR THE YEAR ENDED \u2026\u2026\u2026\u2026\u2026\u2026  \nIn Rupees Million  Note  Bank  Group  \n20XX  20XX  20XX  20XX  \nCash flows from operating activities  \n     Interest receipts  \n     Interest payments  \n     Net commission receipts  \n     Trading income  \n     Payments to employees  \n     VAT & NBT on financial services  \n     Receipts from other operating activities  \n     Payments on  other operating activities  \n     Operating profit before change in operating assets & liabilities  \n         \n \n         \n(Increase) /  decrease in operating assets  \nBalances with Central Bank of Sri Lanka  \nFinancial assets at amortised cost \u2013 loans & advances  \nOther assets (please specify)  \n \nIncrease / (decrease) in operating liabilities  \nFinancial liabilities at amortised cost \u2013 due to depos itors \nFinancial liabilities at amortised cost \u2013 due to debt securities holders  \nFinancial liabilities at amortised cost \u2013 due to other borrowers  \nOther liabilities (please specify)  \nNet cash generated from operating activities before income tax  \n \nIncome tax pa id \nNet cash (used in) / from operating activities  \n \nCash flows from investing activities  \n     Purchase of property, plant and equipment  \n     Proceeds from the sale of property, plant and equipment  \n     Purchase of financial investments  \n     Proceeds from the sale and maturity of financial investments  \n     Net purchase of intangible assets  \n     Net cash flow from acquisition of investment in subsidiaries,  \nassociates  and joint ventures  \n     Net cash flow from disposal of subsidiaries , associates and joint \nventures  \n     Dividends received from investment in subsidiaries and associates  \n     Others (please specify)  \n     Net cash (used in)/from investing activities  \n         \n \n         \nCash flows from financing activities  \n     Net proceeds from the issue of ordinary share capital  \n     Net proceeds from the issue of other equity instruments", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 12, "year": 2019}, "type": "Document"}
{"page_content": "Net proceeds from the issue of other equity instruments  \n     Net proceeds from the issue of subordinated debt  \n     Repayment of subordinated debt  \n     Interest paid on subordinated debt  \n     Dividend paid to non -controlling interest  \n     Dividend paid to shareholders  of the parent company  \n     Dividend paid to holders of other equity instruments  \n     Others (please specify)  \n     Net cash (used in) / from financing activities  \n         \n \n         \nNet increase/(decrease) in cash & cash equivalents  \n     Cash and cash equivalents at the beginning of the year                                  16 \n    Exchange difference in respect of cash & cash equivalent  \n     Cash and cash equivalents at the end of the year                                                                                                                                     16         \n \nNote: Banks have the option  to use one of the two methods specified  in LKAS 7 for the preparation of the statement of cash flow s.", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 12, "year": 2019}, "type": "Document"}
{"page_content": "6 \n NOTES TO THE FINANCIAL STATEMENTS  \nFOR THE YEAR ENDED DD MM YYYY  \n  \n1 Corporate information  \n \n2 Accounting policies  \n2.1 Basis of preparation  \n2.1.1  Statement of compliance  \n2.1.2  Presentation of financial statements  \n2.2 Basis of consolidation  \n2.3 Significant accounting judgments and estimates  \n2.3.1 Fair value of financial instruments  \n2.3.2  Day 1 Impact  * \n2.3.3 Impairment losses on financial assets at amortised cost \u2013 loans and advances  \n2.3.4 Impairment losses on other financial assets  \n2.3.5 Deferred tax assets  \n2.3.6 Pensions obligation  \n2.3.7 Other s \n2.4 Changes in accounting policies  and disclosures  \n2.4.1  Reconciliation of statement of financial position balances from LKAS 39 to SLFRS 9  * \n2.4.2  Reconciliation of impairment allowance balance from LKAS 39 to SLFRS 9  * \n2.4.3  Reconciliation of reserves and retained earnings from LKAS 39 to SLFRS 9  * \n2.5 Summary of significant accounting policies  \n2.5.1 Foreign currency translation   \n2.5.2 Financial instruments  \n2.5.2.1  The \u2018Solely -Payment -of-Principal -and-Interest\u2019 (SPPI) test  \n2.5.2.2  Business model assessment  \n5.2.2.3  Initial classification and measurement of financial instruments  \n2.5.2. 4 Subsequent measurement  \n2.5.2.5 Impairment of financial assets (policies applicable before 01.01.2018)  * \n2.5.2. 6 Impairment of financial assets  \n2.5.3  Impairment of non -financial assets  \n2.5.4 Repurchase and reverse repurchase agreements  \n2.5.5 Securities lending and borrowing  \n2.5.7  Determination of fair value  \n2.5.8  Hedge accounting  \n2.5.9  Off-setting financial instruments  \n2.5.10  Leasing  \n2.5.11  Recognition of income and expenses  \n2.5.12  Cash and cash equivalents  \n2.5.13  Property, plant and equipment  \n2.5.14  Business combination and goodwill  \n2.5.15  Intangible asset s \n2.5.16  Financial guarantees  \n2.5.17  Pension benefits  \n2.5.18  Provisions  \n2.5.19  Share based payment transactions  \n2.5.20 Taxes  \n2.5.21  Dividends  \n2.5.22 Reserves", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 13, "year": 2019}, "type": "Document"}
{"page_content": "2.5.19  Share based payment transactions  \n2.5.20 Taxes  \n2.5.21  Dividends  \n2.5.22 Reserves  \n2.5.23  Segment reporting", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 13, "year": 2019}, "type": "Document"}
{"page_content": "7 \n 2.5.24  Other s (Please Specify)  \n \n*Applicable  for the first financial reporting period under  SLFRS 9.  \n \n3 Segment information  (as per SLFRS 8)  \n \n4 Net Interest Income    \n Bank  Group  \nIn Rupee s Million  20XX  20XX  20XX  20XX  \nInterest income      \n Cash and cash equivalents  \n Balances with central banks   \n Placements with banks   \n Derivative financial instruments  \n Financial assets recognized through profit or loss  \n       -  measured at fair value  \n      -  designated at fair value  \n Financial assets at amortised cost  \n      - loans and advances  \n      - debt and other instruments  \n Financial assets measured at fair value through other  \n comprehensive income  \n     \n Others  (Please specify)      \nTotal interest income      \nInterest expenses      \nDue to banks      \nDerivative  financial instruments      \nFinancial liabilities  recognized  through profit or \nloss \n        \u2013 measured at fair value  \n        \u2013 designated at fair value      \nFinancial liabilities at amortised cost  \n        \u2013 due to depositors  \n        - due to debt securities holders  \n        \u2013 due to other borro wers     \nOthers  (Please specify)      \nTotal interest expenses      \nNet interest income      \n     \na.      Net interest income from Sri Lanka Government Securities  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nInterest income  \nLess: Interest expenses      \nNet interest income from Sri Lanka \nGovernment Securities", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 14, "year": 2019}, "type": "Document"}
{"page_content": "8 \n 5 Net Fee and Commission Income    \n Bank  Group  \nIn Rupee s Million  20XX  20XX  20XX  20XX  \nFee and commission income      \nFee and commission expenses      \nNet fee and commission income      \nComprising      \nLoan s     \nCards      \nTrade and remittances      \nInvestment banking      \nDeposit s     \nGuarantees      \nOthers  (Please specify)      \nNet fee and commission income      \n     \n6 Net G ain/( Loss) from Trading  \n Bank  Group  \nIn Rupee s Million  20XX  20XX  20XX  20XX  \nForeign exchange  \nFrom banks  \nFrom other  customers      \nFixed income securities      \nEquity securities  \nDerivative financial instruments      \nOthers  (Please specify)      \nTotal      \n     \n7 Net Fair Value G ains/(Losses) From Financial Instruments at Fair Value Through \nProfit or Loss  \n Bank  Group  \nIn Rupee s Million  20XX  20XX  20XX  20XX  \nGains on f inancial assets at fair value  through \nprofit or loss      \nLosses on financial assets at fair value through \nprofit or loss      \nGains on f inancial liabilities at fair value  \nthrough profit or loss      \nLosses  on financial liabilities at fair value \nthrough profit or loss      \nTotal", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 15, "year": 2019}, "type": "Document"}
{"page_content": "9 \n 8 Net Gains/(Losses) F rom Derecognition of Financial A ssets  \n Bank  Group  \nIn Rupee s Million  20XX  20XX  20XX  20XX  \nRecognised at:       \nFair value through profit or loss  \nAmortised cost      \nFair value through other comprehensive \nincome      \nTotal      \n \n9 Net O ther Operating Income  \n Bank  Group  \nIn Rupee s Million  20XX  20XX  20XX  20XX  \nGain/(Loss)  on investment properties      \nGain /(Loss)  on sale of property, plant and \nequipment  \nGain/(Loss) on revaluation of foreign \nexchange  \nRecovery of loans written -off \nLess: Loans written off      \nOthers (Please specify)      \nTotal      \n \n10 Impairment Charges  \n Bank  Group  \nIn Rupee s Million  20XX  20XX  20XX  20XX  \nFinancial assets at amortised cost - loans and \nadvances (Note 21(b))      \nStage 1  \nStage 2  \nStage 3  \nFinancial assets at amortised cost \u2013 debt \ninstruments (Note 22(b))  \n            Stage 1  \n            Stage 2  \n            Stage 3  \nFinancial assets measured at fair value through \nother comprehensive income (Note 23(b))  \n            Stage 1  \n            Stage 2  \n            Stage 3  \nContingent liabilities & commitments (Note \n45(a))  \nStage 1  \nStage 2  \nStage 3      \nInvestment in subsidiaries ( Note 24(a))      \nInvestments in associates and joint ventures \n(Note 25(a))", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 16, "year": 2019}, "type": "Document"}
{"page_content": "10 \n Property, plant and equipment (Note 26(c))      \nInvestment properties ( Note 27(b))      \nOthers (Please specify)      \nTotal      \n \n11 Personnel Expenses  \n Bank  Group  \nIn R upees  Million  20XX  20XX  20XX  20XX  \nSalary and bonus      \nContributions to defined contribution /benefit  \nplans  \nProvision for defined benefit obligations  (Note \n36)     \nShare based expenses      \nOthers      \nTotal      \n \n12 Other Expenses  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nDirectors\u2019 emoluments      \nAuditors\u2019 remunerations  \nNon-audit fees to auditors  \nProfessional and legal expenses      \nOperating lease expenses      \nOffice administration and establishment \nexpenses      \nOthers (Please specify)      \nTotal      \n \n13 Tax Expenses  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nCurrent tax expense      \nCurrent year      \nPrior years\u2019 provision      \nDeferred tax expense      \nEffect of change in tax rates      \nTemporary differences      \nPrior years\u2019 provision      \nTotal", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 17, "year": 2019}, "type": "Document"}
{"page_content": "11 \n a. Reconciliation of tax expenses  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nProfit/(loss) before tax      \nIncome tax for the period (Accounting profit \n@ applicable tax rate)  \nAdjustment in respect of current income tax of \nprior periods  \nAdd: Tax effect of expenses that are not \ndeductible for tax purposes  \n(Less): Tax effect of expenses that are \ndeductible for tax purposes      \nTax expense for the period      \n \nb. The deferred tax (credit)/charge in the income statement comprise  of the following  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nDeferred tax assets      \nDeferred tax liabilities      \nOther temporary differences      \nDeferred tax (credit)/charge to income \nstatement      \n \n14 Earnings Per Share  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nNet profit attributable to ordinary equity holders  \nAdjust:  \nInterest on preference shares  \nInterest on convertible bond s \nNet profit attributable to ordinary equity holders  \nadjusted  for the effect of dilution  \nWeighted average number of ordinary shares for  \nbasic earnings per share  \nEffect of dilution  \nConvertible bonds  \nConvertible preference shares  \nOthers  \nWeighted average number of ordinary shares  \nadjusted for the effect of dilution  \nBasic earnings per ordinary share  \nDiluted earnings per ordinary share", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 18, "year": 2019}, "type": "Document"}
{"page_content": "12 \n 15 a. Analysis of Financial Instruments by Measurement Basis  \u2013 Bank Current year  \n \nIn Rupees Million  AC FVPL  FVOCI  Total  \nASSETS       \nCash and cash equivalents       \nBalances with central banks       \nPlacements with banks       \nDerivative financial instruments  \nLoans and advances  \nDebt instruments  \nEquity instruments  \nOthers (specify)   \n    \nTotal financial assets       \n      \nIn Rupees Million  AC FVPL  Total   \nLIABILITIES  \nDue to banks  \nDerivative financial instruments   \n  \nFinancial liabilities  \n      - due to depositors  \n      - due to debt security holders  \n      - due to other borrowers  \nOthers (specify)   \n  \nTotal financial liabilities     \n \nAC       \u2013 Financial assets/liabilities measured at amortised cost  \nFVPL   \u2013 Financial assets/liabilities measured at fair value through profit or loss  \nFVOCI \u2013 Financial assets measured at fair value through other comprehensive income  \n \nb. Bank  - Previous year (20 XX)   \n   \nIn Rupees Million  AC FVPL  FVOCI  Total  \nASSETS         \nCash and cash equivalents         \nBalances with central banks         \nPlacements  with banks         \nDerivative  financial instruments  \nLoans and advances  \nDebt instruments  \nEquity instruments  \nOthers (specify)   \n      \nTotal financial assets         \n        \nIn Rupees Million  AC FVPL  Total   \nLIABILITIES  \nDue to banks  \nDerivative  financial instruments   \n   \nFinancial liabilities  \n      - due to depositors", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 19, "year": 2019}, "type": "Document"}
{"page_content": "13 \n       - due to other borrowers  \nFinancial liabilities at amortised \ncost \n      - due to depositors  \n      - due to debt security holders  \n      - due to other borrowers  \nOther (specify)      \nTotal financial liabilities      \n \nc. Group  - Current year (20 XX)  (as per 15(a) above)  \n   \nd. Group  - Previous year (20 XX)  (as per 15(b) above)  \n \n16 Cash and Cash Equivalents  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nCash in hand      \nBalances with banks      \nMoney at call and short notice      \nTotal      \n     \n17 Balances with Central Banks  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nStatutory balances with central banks      \nCentral bank of Sri Lanka      \nOther central banks      \nNon-statutory balances with central banks      \nCentral bank of Sri Lanka      \nOther central banks      \nTotal balances with central banks      \n \n18 Placements with Banks  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nBank 1  \nBank 2  \nBank 3      \nTotal", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 20, "year": 2019}, "type": "Document"}
{"page_content": "14 \n 19 Derivative  Financial Instruments  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nInterest rate derivatives  \nInterest rate swaps  \nInterest rate futures  \nInterest rate options  \nOthers (Please specify)  \nForeign currency derivatives  \nCurrency swaps  \nForward foreign exchange contracts  \nOthers(Please specify)  \nOthers (Please specify)      \nTotal      \n \n20 Financial Assets Recognized Through Profit or L oss  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nMeasured at fair value  \nSri Lanka Government Securities  (separately \nby instrument -wise)      \nEquity  securities      \nCorporate d ebt securities      \nOther s (Please specify)       \nSub total      \nDesignated  at fair value  \nSri Lanka Government Securities  (separately \nby instrument -wise)      \nEquity  securities      \nCorporate d ebt securities      \nOther s (Please specify)      \nSub total      \nTotal      \n \na. Analysis  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nBy collateralisation  \nPledged as collateral      \nUnencumbered      \nGross t otal     \nBy currency  \n   Sri Lankan Rupee  \n   United States Dollar      \nGross total", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 21, "year": 2019}, "type": "Document"}
{"page_content": "15 \n 21 Financial Assets at Amortised  Cost \u2013 Loans and A dvances   \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nGross loans and advances  \n                 Stage 1  \n                 Stage 2  \n                 Stage 3      \n(Less): Accumulated impairment under:  \n                 Stage 1  \n                 Stage 2  \n                 Stage 3      \n     \nNet loans and advances      \n     \na. Analysis  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nBy product  \n   Overdrafts      \nTrade finance      \nLease rental receivable  \nCredit cards  \nPawning  \nStaff  loans  \nTerm loans  \nShort -term \nLong -term \nOthers  \nSri Lanka Government Securities (separately by \ninstrument -wise)      \nOthers (Please specify)      \nGross total      \nBy currency      \nSri Lankan Rupee      \nUnited States Dollar      \nGreat Britain Pound      \nOthers (Please specify)      \nGross total      \nBy industry      \nAgriculture and fishing      \nManufacturing      \nTourism      \nTransport      \nConstruction      \nTraders      \nNew economy      \nOthers      \nGross total", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 22, "year": 2019}, "type": "Document"}
{"page_content": "16 \n b. Movements in  impairment during the year \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nStage 1       \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite-off during the year      \nOther movements      \nClosing balance at DD MM YY      \nStage 2      \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite -off during the year      \nOther movements      \nClosing balance at DD MM YY      \nStage 3      \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite -off during the year      \nOther movements      \nClosing balance at DD MM YY      \n \nc. Lease rentals receivable (Disclose as per LKAS 17)  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nPlease specify      \n     \nTotal      \n \n22 Financial Assets at Amortised Cost \u2013 Debt and O ther Instruments  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nSri Lanka Government securities (separately \nby instrument -wise)  \nCorporate debt instruments  \nTrust certificates  \nOthers (please specify)      \nTotal      \n \na. Analysis  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nBy collateralization  \n   Pledged as collateral  \n   Unencumbered      \nGross total      \nBy currency      \nSri Lanka n Rupee      \nUnited State s Dollar", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 23, "year": 2019}, "type": "Document"}
{"page_content": "17 \n Others ( Please specify )     \nGross total      \n \nb. Movements in impairment during the year  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nStage 1      \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite -off during the year      \nOther movements      \nClosing balance at DD MM YY      \nStage 2      \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite -off during the year      \nOther movements      \nClosing balance at DD MM YY      \nStage 3      \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite -off during the year      \nOther movements      \nClosing balance at DD MM YY      \n \n23 Financial Assets at Fair Value Through Other Comprehensive I ncome   \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nSri Lanka Government Securities  (separately \nby instrument -wise)  \nEquity securities      \nCorporate d ebt securities      \nOther s \n(Less): Impairment      \nNet financial assets at fair value through \nother comprehensive income      \n \na. Analysis  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nBy collateralisation  \nPledged as collateral      \nUnencumbered      \nGross total      \nBy currency  \n   Sri Lankan Rupee  \n   United States Dollar  \n   Others (Please specify)      \nGross total", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 24, "year": 2019}, "type": "Document"}
{"page_content": "18 \n b. Movements in impairment during the year  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nStage 1      \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite -off during the year      \nOther movements      \nClosing balance at DD MM YY      \nStage 2      \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite -off during the year      \nOther movements      \nClosing balance at DD MM YY      \nStage 3      \nOpening balance as at DD MM YY      \nCharge/(Write back) to income statement      \nWrite -off during the year      \nOther movements      \nClosing balance at DD MM YY      \n \n24 Investment s in Subsidiaries  \n Bank  \nIn Rupees Million  20XX  20XX  \nQuoted equity investments   \nUnquoted equity investments    \n(Less): Impairment    \nNet total   \nNote:  Please provide details of subsidiaries  separately . \n \n \na. Movements in Impairment during the Year  \n Bank  \nIn Rupees Million  20XX  20XX  \nOpening balance at DD MM YY    \nCharge/(Write back) to income statement    \nNet w rite-off during the year    \nOther  movements    \nClosing balance at DD MM YY  \n   \n25 Investments in Associates and Joint Ventures  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nAssociates      \nUnquoted equity investments      \nQuoted equity investments      \n(Less): Impairment      \nSub total", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 25, "year": 2019}, "type": "Document"}
{"page_content": "19 \n Joint Ventures      \nUnquoted equity investments      \nQuoted equity investments      \n(Less): Impairment      \nSub total     \nTotal      \nNote:  Please provide details of associates and joint ventures separately . \n \na. Movements in Impairment during the Year  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nAssociates      \nOpening balance at DD MM YY      \nCharge/(Write back) to income statement      \nNet write -off during the year      \nOther  movements      \nClosing balance at DD MM YY      \nJoint Ventures      \nOpening balance at DD MM YY      \nCharge/(Write back) to income statement      \nNet write -off during the year      \nOther  movements      \nClosing balance at DD MM YY      \n \n26 Property, Plant and Equipment  \n \na. Property, Plant and Equipment -Bank  \n Bank 20 XX \nIn Rupees Million  Land and \nBuildings  Leasehold  \nProperties  Computer \nHardware  Computer \nSoftware  Office \nEquipment, \nFurniture \nand F ittings  Others  Total  \n20XX(Current year)        \nCost /fair value        \nOpening balance at DD MM YY        \nAdditions        \nDisposals        \nExchange rate variance  \nAdjustments        \nClosing balance at DD MM YY        \n(Less ): Accumulated depreciation        \nOpening balance at DD MM YY        \nCharge for the year  \nAdditions        \nDisposals        \nExchange rate variance  \nAdjustments        \nClosing balance at DD MM YY        \n(Less): Impairment  \nNet book value at DD MM YY", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 26, "year": 2019}, "type": "Document"}
{"page_content": "20 \n Market value at DD MM YY        \n \n20XX (Previous year )        \nCost /fair value        \nOpening balance at DD MM YY        \nAdditions        \nDisposals        \nExchange rate variance  \nAdjustments        \nClosing balance at DD MM YY        \n(Less ): Accumulated depreciation        \nOpening balance at DD MM YY        \nCharge for the year  \nAdditions        \nDisposals        \nExchange rate variance  \nAdjustments        \nClosing balance at DD MM YY        \n(Less): Impairment  \nNet book value at DD MM YY  \nMarket Value at DD MM YY  \n  \n     \nb. Property, Plant and Equipment - Group  (as per 2 6(a) above)  \n \nc. Movements in Impairment during the Year  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nOpening balance at DD MM YY      \nCharge/(Write back) to income statement      \nNet write -off during the year      \nExchange rate variance and other adjustments      \nClosing balance at DD MM YY      \n \n27 Investment Properties   \na.  Investment Properties at Cost/fair value  \n  \nBank   \nGroup  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nCost /fair value        \nOpening balance at DD MM YY        \nAdditions        \nDisposals        \nExchange rate variance  \nAdjustments        \nClosing balance at DD MM YY       \n(Less ): Accumulated depreciatio n       \nOpening balance at DD MM YY        \nCharge for the year  \nAdditions", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 27, "year": 2019}, "type": "Document"}
{"page_content": "21 \n Disposals        \nExchange rate variance  \nAdjustments        \nClosing balance at DD MM YY        \n(Less): Impairment  \nNet book value at DD MM YY        \nMarket  value at DD MM YY        \n \nb. Movements in Impairment during the Year  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nOpening balance at DD MM YY      \nCharge/ (Write back) to income statement      \nNet write -off during the year      \nExchange rate variance and o ther adjustments      \nClosing balance at DD MM YY      \n     \n28 Goodwill and Intangible Assets  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nGoodwill      \nOpening balance DD MM YY      \nAdjustments      \n(Less): Impairment      \nSub-total (closing balance at DD MM YY)      \nOther Intangible Assets      \nOpening balance at DD MM YY      \nAdjustments  \n(Less): Impairment      \nSub-total (closing balance at DD MM YY)      \nTotal      \n \n29 Deferred Tax Assets/ (Liabilities ) \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nOpening balance DD MM YYYY  \nCharge for the year recognized in  \n     - profit and loss  \n     - other comprehensive income   \n     \nClosing balance DD MM YYYY", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 28, "year": 2019}, "type": "Document"}
{"page_content": "22 \n 30 Other Assets  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nCost        \nReceivables        \nDeposits and prepayments        \nSundry debtors        \nOthers ( Please specify )       \nTotal        \n \n31 Due to Banks   \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nBorrowings      \nSecurities sold under repurchase (repo) \nagreements      \nOthers  (Please specify)      \nTotal      \n \n32 Derivative  Financial Instruments  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nInterest rate derivatives  \nInterest rate swaps  \nInterest rate options  \nOthers (Please specify)  \nForeign exchange derivatives  \nCurrency swaps      \nForward foreign exchange contracts  \nOthers (Please specify)  \nOthers (Please specify)      \nTotal      \n     \n33 Financial liabilities recognized through profit or loss  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nMeasured at fair value      \nDebt securities      \nDue to non -bank customers      \nOther financial liabilities      \nSub total      \nDesignated at fair value      \nDebt securities      \nDue to non -bank customers      \nOther financial liabilities      \nSub total      \nTotal", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 29, "year": 2019}, "type": "Document"}
{"page_content": "23 \n 34 Financial liabilities at amortised cost  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nDue to depositors  \nDebt securities issued by the bank  \nSecurities sold under repurchase (repo) \nagreements      \nOthers (Please specify)      \nTotal      \n \na. Analysis of amount due to depositors  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nBy product      \nDemand deposits (current account s)     \nSavings deposits      \nFixed deposits      \nOther deposits  (Please specify)      \nTotal      \nBy currency      \nSri Lanka Rupee      \nUnited State s Dollar     \nGreat Britain P ound      \nOthers ( Please specify )     \nTotal      \n \n35 Debt Securities Issued  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nIssued by the bank      \nIssued by other subsidiaries      \nTotal      \nDue within 1 year      \nDue after 1 year      \nTotal      \n \n \na. Details of Debt Securities Issue d \nType  Face \nValue  \nIn \nRupees \nMillions  Interest \nRate and \nRepayment \nTerms  Issue \nDate  Maturity \nDate  Bank  Group  \n20XX  20XX  20XX  20XX  \nIssued by the bank      \n(i)       \n(ii)       \nSub total", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 30, "year": 2019}, "type": "Document"}
{"page_content": "24 \n Issued by other subsidiaries  \n(i)       \n(ii)       \nSub total      \nTotal       \n \n36 Retirement benefit obligations  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nPresent value of defined benefit obligation  \nLess: Fair value of plan assets      \nTotal      \n \n37 Current  Tax Liabilities  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nOpening balance DD MM YYYY  \nCharge for the year        \nClosing balance DD MM YYYY        \n \n38 Other Provisions  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nPlease specify      \nTotal      \n \n39 Other Liabilities  \n Bank  \nIn Rupees Million  20XX  20XX  \nSundry creditors    \nInterest payable    \nImpairment in respect of off -balance sheet \ncredit exposures (Note 10)    \nOther payables    \nTotal    \n \n40 Due to subsidiaries  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nPlease specify      \nTotal", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 31, "year": 2019}, "type": "Document"}
{"page_content": "25 \n 41 Stated Capital/Assigned Capital  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nPlease specify      \nTotal      \n \n42 Statutory Reserve Fund  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nOpening balance at DD MM YY      \nTransfer s during the period      \nClosing balance at DD MM YY      \n \n43 Retained Earnings  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nOpening balance at DD MM YY      \nProfit for the year      \nTransfer s to other reserves      \nDividend      \nClosing balance at DD MM YY      \n \n44 Other Reserves    \n     \na. Bank - Current year (20XX)   \nIn Rupees Million  Opening balance \nat DD MM YY  Movement/ transfers  Closing balance at \nDD MM YY  \nGeneral reserve  \nRevaluation reserve      \nCash flow hedge reserve      \nForeign currency translation  \nreserve  \nOCI reserve      \nOthers(please specify)      \nTotal      \n     \nb. Bank \u2013 Previous year (20XX)   \n   \nIn Rupees Million  Opening balance \nat DD MM YY  Movement/ transfers  Closing balance at \nDD MM YY  \nGeneral reserve  \nRevaluation reserve      \nCash flow hedge reserve      \nForeign currency translation  \nreserve  \nOCI reserve      \nOthers  (please specify)      \nTotal", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 32, "year": 2019}, "type": "Document"}
{"page_content": "26 \n  \nc. Group  - Current year (20XX)  (as per 44 (a) above)  \n   \nd. Group - Previous year (20XX)  (as per 44 (b) above)  \n \n45 Non-controlling Interests  \n Group  \nIn Rupees Million  20XX  20XX  \nPlease specify    \n   \nTotal    \n \n46 Contingent Liabilities and Commitments  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nGuarantees      \nBonds      \nLetters of credit      \nOther contingent items      \nUndrawn loan commitments      \nOthers (Please specify)      \nTotal      \n \na. Movements in Impairment during the Year  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nOpening balance at DD MM YY      \nCharge/ (Write back) to income statement      \nNet write -off during the year      \nExchange rate variance and other adjustments      \nClosing balance at DD MM YY      \n \n47 Related Party Disclosures  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nPlease specify details      \n \n48 Net Assets Value per Ordinary Share  \n Bank  Group  \nIn Rupees Million  20XX  20XX  20XX  20XX  \nPlease specify", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 33, "year": 2019}, "type": "Document"}
{"page_content": "27 \n 49 Other Disclosure Requirements  \nWhile complying with the disclosure requirements of all applicable Sri Lanka Accounting \nStandards, t he following minimum disclosure requirements are applicable for all licensed \nbanks on standalone basis  and on consolidated basis f or the financial reporting periods \nbeginning on or after 01.01.201 8 and shall be d isclosed either on the face of financial \nstatements or  on the notes.  \n1. Information about the significance of financial instruments  for financial position and \nperformance  \n1.1 Statement of Financial Position   \n1.1.1  Disclosures on categories of financial assets and financial liabilities  (refer notes to the \nfinancial statements).  \n1.1.2 Other disclosures  \n(i) Special disclosures about financial assets and financial liabilities designated to be \nmeasured at fair value through profit or loss, including disclosures about credit risk \nand market risk, changes in fair values attributable to these risks and the methods \nof measurement .  \n(ii) Reclassifications of financial instruments from one category to another .   \n(iii) Information about financial assets pledged as collateral and about financial or non -\nfinancial assets held as collateral .   \n(iv) Reconciliation of the impairment allowance account for credit losses by class of \nfinancial assets .  \n(v) Information about compound financial instruments with multipl e embedded \nderivatives .  \n(vi) Breaches of terms of loan agreements .  \n \n1.2 Statement of Comprehensive Income   \n1.2.1  Disclosures on items of income, expense, gains and losses  (refer notes to the financial \n statements).  \n1.2.2 Other disclosures :  \n(i) Total interest income and total interest expense for those financial instruments that \nare not measured at fair value through profit and loss .  \n(ii) Fee income and expense .   \n(iii) Amount of impairment losses by class of financial assets .   \n(iv) Interest income on impaired financial assets .  \n \n1.3 Other disclosures", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 34, "year": 2019}, "type": "Document"}
{"page_content": "(iv) Interest income on impaired financial assets .  \n \n1.3 Other disclosures  \n1.3.1 Accounting policies for financial instruments  \n1.3.2 Financial liabilities designated as at FVTPL  \n(i) If a bank  is presenting  the effects of changes in that financial liability\u2019s credit risk \nin other comprehensive income (OCI) : \n- any transfers of the cumulative gain /loss within equity during the period, \nincluding the reason s for the transfer s;", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 34, "year": 2019}, "type": "Document"}
{"page_content": "28 \n - if the liability is derecognised during the period, then the amount (if any)  \npresented in OCI that was realised at derecognition ; \n- detailed description of the methodologies used to determine whether  presenting \nthe effects of changes in a liability\u2019s credit risk in OCI would create or  enlarge \nan accounting mismatch in profit or loss ; and  \n(ii) Detailed description, i f the effects of changes in a liability\u2019s credit risk  are \npresented in profit or loss . \n1.3.3 Investments in equity instruments designated as at FVOCI  \n(i) Details of  equity instruments that have been designated as at FVOCI  and the \nreasons for the designation;  \n(ii) Fair value of each investment at the reporting date;  \n(iii) Dividends recognised during the period, separately for investments derecognised \nduring the reporting period and those held at the reporting date;  \n(iv) Any transfers of the cumulative gain or loss within equity during the period and \nthe reason s for those transfe rs; \n(v) If investments in equity instruments measured at FVOCI are derecognized during \nthe reporting period,  \n- reasons for disposing of the investments;  \n- fair value of the investments at the date of derecognition; and  \n- the cumulative gain or loss on disposal.  \n1.3.4 Reclassifications of financial assets  \n(i) For all reclassifications of financial assets in the current or previous reporting \nperiod :  \n- date of reclassification;  \n- detailed explanation of the change in the business model and a qualitative \ndescription of its effect on the financial statements; and  \n- the amount reclassified into and out of each category.  \n(ii) For reclassifications from F VTPL to amortised cost or FVOCI : \n- the effective interest rate (EIR) determined on the date of reclassification;  and \n- the interest revenue recogni sed. \n(iii) For reclassifications from FVOCI to amortised cost, or from FVTPL to amortised  \ncost or FVOCI:", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 35, "year": 2019}, "type": "Document"}
{"page_content": "cost or FVOCI:  \n- the fair value of the financial assets at the reporting date; and  \n- the fair value gain or loss that would have been recognised in profit or  loss or \nOCI during  the reporting period if the financial assets had not been  reclassified.  \n1.3.5 Information on hedge accounting  \n1.3.6 Information about the fair values of each class of financial asset and financial liability, \nalong with:  \n(i) Comparable carrying amounts .  \n(ii) Description of how fair value was determined .  \n(iii) The level of inputs  used in determining fair value .  \n(iv) Reconciliations of movements between levels of fair value measurement hierarchy , \nadditional disclosures for financial instruments for which  fair value is determined \nusing level 3 inputs .  \n(v) Information  if fair value cannot be reliably measured .", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 35, "year": 2019}, "type": "Document"}
{"page_content": "29 \n 2. Information about the nature and extent of risks arising from financial instruments  \n2.1 Qualitative disclosures  \n2.1.1 Risk exposures for each type of financial instrument  \n2.1.2 Management's objectives, policies, and processes for managing those risks  \n2.1.3 Changes from the prior period  \n2.2 Quantitative disclosures  \n2.2.1 Summary of quantitative data about exposure to each risk at the reportin g date.  \n2.2.2 Disclosures about credit risk, liquidity risk, market risk, operational risk, interest rate risk \nand how these risks are managed.  \n(i) Credit Risk  \n(a) Maximum amount of exposure (before deducting the value of collateral), \ndescription of collateral, information about credit quality of financial assets \nthat are neither past due nor impaired and information about credit quality of \nfinancial assets.  \n(b) For fin ancial assets that are past due or impaired, disclosures on age, factors \nconsidered in determining as impaired and the description of collateral on each \nclass of financial asset.  \n(c) Information about collateral or other credit enhancements obtained or called .  \n(d) Credit risk management practices :  \n- Information about credit risk management practices and how they relate to the \nrecognition and measurement of expected credit losses (ECL), including the \nmethods, assumptions and information used to measure ECL.  \n- Quantitative and qualitative information to evaluate the amounts in the \nfinancial statements arising from ECL, including changes and the reasons for \nthose changes.  \n- How the bank determines whether the credit risk of financial instruments has \nincreased signi ficantly since initial recognition, including whether and how \nfinancial instruments are considered to have low credit risk, including the \nclasses of financial instruments to which the low credit risk exception has been \napplied; and the presumption that fin ancial assets with contractual payments", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 36, "year": 2019}, "type": "Document"}
{"page_content": "applied; and the presumption that fin ancial assets with contractual payments \nmore than 30 days past due have a significant increase in credit risk has been \nrebutted;  \n- The bank\u2019s definitions of default for different financial instruments, including \nthe reasons for selecting those definitions;  \n- How instruments are grouped if ECL are measured on a collective basis;  \n- How the bank determines that financial assets are credit -impaired;  \n- The bank\u2019s write -off policy, including the indicators that there is no reasonable \nexpectation of recovery; and  \n- How the modification requirements have been applied, including how the bank \ndetermines whether the credit risk of a financial asset that has been modified \nwhile subject to a lifetime ECL allowance has improved to the extent that the \nloss allowance reverts to being  measured at an amount equal to 12 -month ECL \nand monitors the extent to which the loss allowance on those assets \nsubsequently reverts to being measured at an amount equal to lifetime ECL.  \n(e) ECL calculations", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 36, "year": 2019}, "type": "Document"}
{"page_content": "30 \n - Basis of the inputs, assumptions and the estimatio n techniques used when , \n- estimating 12 -month and lifetime ECL ; \n- determining whether the credit risk of financial instruments has increased  \nsignificantly since initial recognition; and  \n- determining whether financial assets are credit -impaired.  \n- How forward -looking information has been incorporated into the  determination \nof ECL, including the use of macro -economic information; and  \n- changes in estimation techniques or significant assumptions made during  the \nreporting period and the reasons for those cha nges.  \n(f) Amounts arising from ECL  \n- Provide reconciliation  for each class of financial instrument  [Financial assets \nmeasured at AC, Financial assets mandatorily measured at FVOCI, Loan \ncommitments when there is a n obligation to extend credit ( except those \nmeasu red at Fair Value through Profit or Loss ), Financial guarantee  contracts \n(except those measured at Fair Value through Profit or Loss ), Lease \nreceivables within the scope of LKAS 17: Leases, Contract assets within the \nscope of SLFRS 15: Revenue fro m contrac ts with customers etc\u2026]  of the \nopening  balance to the closing balance of the impairment loss allowance.  \n- Explain the reasons for changes in the loss allowances in the reconciliation.  \n(g) Collateral s \n- Amount that best represents the bank \u2019s maximum exposure to credit  risk at the \nreporting date, without taking account of any collateral held or  other credit \nenhancements;  \n- Narrative description of collateral held as security and other credit \nenhancements (e xcept for lease receivables ), including:  \n- discussion on the n ature and quality of the collateral s held;  \n- explanation of any significant changes in quality as a result of a  \ndeterioration or changes in the bank \u2019s collateral policies during the  \nreporting period;  \n- information about financial instruments for which the bank  has not", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 37, "year": 2019}, "type": "Document"}
{"page_content": "reporting period;  \n- information about financial instruments for which the bank  has not  \nrecognised a loss allowance because of the collateral;  \n- quantitative information about the collateral held as security and other \ncredit  enhancements ;  \n- information about the fair value of the collateral and other credit  \nenhancements, or to quan tify the exact value of the collateral that was \nincluded  in the calculation of ECL.  \n(h) Written -off assets  \n- Contractual amount outstanding of financial assets written off  during the \nreporting period that are still subject to enforcement activity.  \n(i) For other disclosures, refer Pillar  III disclosures of the Banking Act Directions \nNo. 01 of 2016 on Capital Requirements under Basel III for Licensed Banks . \n(ii) Liquidity Risk  \n(a) A maturity analysis of financial assets and liabilities.  \n(b) Description of approach t o risk management.  \n(c) For other disclosures, refer Pillar III disclosures of the Banking Act Directions \nNo. 01 of 2016 on Capital Requirements under Basel III for Licensed  Banks .", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 37, "year": 2019}, "type": "Document"}
{"page_content": "31 \n (iii) Market Risk  \n(a) A sensitivity analysis of each type of market risk to which the bank is  exposed.  \n(b) Additional information, if the sensitivity analysis is not representative of the \nbank 's risk exposure.  \n(c) For other disclosures, refer Pillar III disclosures of the Banking Act Directions \nNo. 01 of 2016 on Capital Requirements under Basel III for Licensed Banks.  \n(iv) Operational Risk  \nFor other disclosures, refer Pillar III disclosures of the Banking Act Directions No. 01 \nof 2016 on Capital Requirements under Basel III for Licensed Banks.  \n(v) Equity risk in the banking book  \n(a) Qualitative disclosures  \n\u2022 Differentiation between holdings on which capital gains are expected and \nthose taken under other objectives including for relationship and strategic \nreasons.  \n\u2022 Discussion of important policies covering the valuation and accounting of \nequity holdings in the banking book.  \n(b) Quantitative disclosures  \n\u2022 Value disclosed in the statement of financial position of investments, as \nwell as the fair value of those investments; for quoted securities, a \ncomparison to publicly quoted share values where the share price is \nmaterially different from fair value.  \n\u2022 The types and nature of investments  \n\u2022 The cumulative realised gains/(losses) arising from sales and liquidations in \nthe reporti ng period.  \n(vi) Interest rate risk in the banking book  \n(a) Qualitative disclosures  \n Nature of interest rate risk in the banking book (IRRBB) and key assumptions  \n(b) Quantitative disclosures  \nThe increase/(decline) in earnings or economic value (or relevant measure used  \nby management) for upward and downward rate shocks according to \nmanagement\u2019s method for measuring IRRBB, broken down by currency (as \nrelevant).  \n2.2.3 Information on concentrations of risk  \n \n \n3. Other disclosures  \n3.1 Capital  - Refer Pillar III disclosures of the Banking Act Directions No. 01 of 2016 on \nCapital Requirements under Basel III for Licensed Banks .", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 38, "year": 2019}, "type": "Document"}
{"page_content": "Annex II  \n \n \n \n \n \n \n \n \n \n \n \nSPECIFIED FORMAT FOR THE PUBLICATION  \nOF QUARTERLY FINANCIAL STATEMENTS  \nAND OTHER INFORMATION  \nOF LICENSED BANKS IN THE PRESS AND WEBSITES  \n \n \nFor Financial Quarter s commencing  on or after 01.01.2019", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 39, "year": 2019}, "type": "Document"}
{"page_content": "1 \n \u2026\u2026\u2026\u2026..BANK  \nINCOME STATEMENT  \nFOR THE PERIOD  ENDED \u2026\u2026\u2026\u2026.  \n \n Bank  Group  \nIn Rupees Millions  Current \nPeriod  Previous \nPeriod  Current \nPeriod  Previous \nPeriod  \n From  \nDD/MM/YY  \nTo \nDD/MM/YY  From  \nDD/MM/YY  \nTo \nDD/MM/YY  From  \nDD/MM/YY  \nTo \nDD/MM/YY  From  \nDD/MM/YY  \nTo \nDD/MM/YY  \nInterest income      \nInterest expenses      \nNet interest income      \nFee and commission income      \nFee and commission expenses      \nNet fee and commission income      \nNet gain s/(loss es) from trading      \nNet fair value gains/(losses)  on: \nfinancial assets at fair value through profit or loss  \nfinancial liabilities at fair value through profit or loss  \nNet gains/(losses) on derecognition of financial assets : \nat fair value through profit or loss  \nat amortised cost      \nat fair value through other comprehensive income       \nNet other operating income      \nTotal operating income      \nImpairment charges      \nNet operating income      \nPersonnel expenses  \nDepreciation and amortization expenses      \nOther expenses      \nOperating profit/(loss) before VAT & NBT on \nfinancial services      \nValue Added Tax ( VAT ) on financial services  \nNation Building Tax (NBT) on financial services      \nOperating profi t/(loss) after VAT  & NBT on financial \nservices      \nShare of profits of associates and joint ventures      \nProfit/(loss) before tax      \nIncome t ax expenses      \nProfit/(loss) for the period      \nProfit attributable to:      \nEquity holders of the parent      \nNon-controlling  interests      \nEarnings per share on profit      \nBasic earnings per ordinary share      \nDiluted earnings per ordinary share", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 40, "year": 2019}, "type": "Document"}
{"page_content": "2 \n \u2026\u2026\u2026\u2026BANK  \nSTATEMENT OF COMPREHENSIVE INCOME  \nFOR THE PERIOD  ENDED \u2026\u2026\u2026\u2026.  \n Bank  Group  \nIn Rupees Millions   Current \nPeriod  Previous \nPeriod  Current \nPeriod  Previous \nPeriod  \n From  \nDD/MM/YY  \nTo \nDD/MM/YY  From  \nDD/MM/YY  \nTo \nDD/MM/YY  From  \nDD/MM/YY  \nTo \nDD/MM/YY  From  \nDD/MM/YY  \nTo \nDD/MM/YY  \nProfit/(loss) for the period      \n     \nItems that  will be reclassified to income statement      \nExchange differences on translation of foreign operations  \nNet gains/(losses) on cash flow hedges  \nNet gains/(losses) on investments in debt instruments \nmeasured at fair value through other comprehensive \nincome  \nShare of profits of associates and joint ventures  \nDebt instruments at fair value thr ough other \ncomprehensive income  \nOthers (specify)  \nLess: Tax expense relating to i tems that will be reclassified \nto income statement  \n \nItems that will not be reclassified to income statement  \nChange in fair value on investments in equity instruments \ndesignated at fair value through other comprehensive \nincome   \nChange in fair value attributable to change in the Bank\u2019s \nown credit risk on financial liabilities designated at fair \nvalue through profit or loss   \nRe-measurement of post -employment benefit obligations   \nChanges in revaluation surplus  \nShare of profits of associates and joint ventures  \nOthers  (specify)  \nLess: Tax expense relating to  items that will not be \nreclassified to income statement      \nOther Comprehensive Income  (OCI)  for the \nperiod, net of tax es     \nTotal comprehensive income for the period      \nAttributable to:      \nEquity holders of the parent      \nNon-controlling interests", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 41, "year": 2019}, "type": "Document"}
{"page_content": "3 \n \u2026\u2026\u2026\u2026\u2026\u2026..BANK  \nSTATEMENT OF FINANCIAL POSITION  \nAS AT  \u2026\u2026\u2026\u2026\u2026\u2026.  \n Bank  Group  \nIn Rupees Millions  Current \nPeriod  Previous \nPeriod  Current \nPeriod  Previous \nPeriod  \n As at  \nDD/MM/YY  As at  \nDD/MM/YY  As at  \nDD/MM/YY  As at  \nDD/MM/YY  \nAssets  \nCash and cash equivalents      \nBalances with central banks      \nPlacements with banks      \nDerivative financial instruments  \nFinancial assets  recognized through profit or loss  \n       - measured at fair value  \n       - designated at fair value  \nFinancial assets at amortised cost  \n       - loans and advances  \n       - debt and other instruments      \nFinancial assets  measured at fair value through other comprehensive \nincome  \nInvestment in subsidiaries      \nInvestments in associates and joint ventures  \nProperty, plant and equipment  \nInvestment properties  \nGoodwill and intangible assets  \nDeferred tax assets  \nOther assets   \n \n    \nTotal assets      \nLiabilities      \nDue to banks      \nDerivative  financial instruments      \nFinancial liabilities recognized through profit or loss  \n       - measured at fair value  \n       - designated at fair value  \nFinancial liabilities at amortised cost  \n       - due to depositors  \n       - due to debt securities holders  \n       - due to other borrowers        \nDebt securities issued      \nRetirement benefit obligations  \nCurrent tax liabilities  \nDeferred tax liabilities  \nOther provisions  \nOther liabilities  \nDue to subsidiaries      \nTotal liabilities      \nEquity      \nStated capital/Assigned capital      \nStatutory reserve fund      \nOCI reserve  \nRetained earnings      \nOther reserves      \nTotal shareholders\u2019 equity      \nNon-controlling interests      \nTotal equity      \nTotal equity and liabilities      \nContingent liabilities and commitments      \nMemorandum Information  \nNumber of Employees  \nNumber of Branches  \nNote: Amounts stated are  net of impairment and depreciation.", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 42, "year": 2019}, "type": "Document"}
{"page_content": "4 \n \u2026\u2026\u2026\u2026\u2026BANK  \nSTATEMENT OF CHANGES IN EQUITY  \nFOR THE PERIOD  ENDED \u2026\u2026\u2026\u2026\u2026.  \nBank /Group   \nIn Rupees Millions  Stated capital/Assigned capital   Reserves  Total  Non-\ncontrolling \ninterest  Total \nequity  Ordinary \nvoting \nshares  Ordinary \nnon-\nvoting \nshares  Assigned \ncapital  Statutory  \nReserve \nfund  OCI \nreserve  Revaluation \nreserve  Retained \nearnings  Other \nreserves  \nBalance as at DD/MM/YY \n(Opening balance)      \n     \n   \nTotal comprehensive income for \nthe period      \n     \n   \nProfit/(loss) for the year (net of \ntax)     \n     \n   \nOther comprehensive income (net \nof tax)      \n     \n   \nTotal c omprehensive income for \nthe period                       \n     \n     \n   \nTransactions with equity \nholders, recognised directly in \nequity      \n     \n   \nShare issue/increase of assigned \ncapital      \n     \n   \nShare options exercised             \nBonus issue      \n     \n   \nRights issue      \n     \n   \nTransfers to reserves during the \nperiod      \n     \n   \nDividends to equity holders      \n     \n   \nProfit transferred to head office      \n     \n   \nGain/(loss) on revaluation of \nProperty, Plant and Equipment (if \ncost method is adopted)      \n     \n   \nOthers (Please specify)      \n     \n   \nTotal transactions with equity \nholders                       \n     \n     \n   \nBalance as at DD/MM/YY \n(Closing balance)                       \n \n  Note: First day impact due to adop tion of \u2018SLFRS 9: Financial Instruments \u2019 need s to be presented separately .", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 43, "year": 2019}, "type": "Document"}
{"page_content": "5 \n \u2026\u2026\u2026\u2026\u2026\u2026\u2026..BANK  \nSTATEMENT OF CASH FLOWS  \nFOR THE PERIOD ENDED \u2026\u2026\u2026\u2026.  \nIn Rupees Millions  Bank  Group  \nCurrent \nPeriod  Previous \nPeriod  Current \nPeriod  Previous \nPeriod  \n DD/MM/YY  DD/MM/YY  DD/MM/YY  DD/MM/YY  \nCash flows from operating activities      \nInterest receipts      \nInterest payments  \nNet commission receipts      \nTrading income      \nPayments to employees      \nVAT & NBT on financial services  \nReceipts from other operating activities  \nPayments on  other operating activities      \nOperating profit before change in operating assets & liabilities      \n     \n(Increase) / decrease in operating assets      \nBalances with Central Bank of Sri Lanka      \nFinancial assets at amortised cost \u2013 loans & advances      \nOther assets (please specify)      \n \nIncrease / (decrease) in operating liabilities  \nFinancial liabilities at amortised cost \u2013 due to depositors  \nFinancial liabilities at amortised cost \u2013 due to  debt securities holders  \nFinancial liabilities at amortised cost \u2013 due to other borrowers  \nOther liabilities (please specify)      \nNet cash generated from operating activities before income tax      \n    \nIncome tax paid      \nNet cash  (used in) / from  operating activities          \n         \nCash flows from investing activities      \nPurchase of property, plant and equipment      \nProceeds from the sale of property, plant and equipment      \nPurchase of financial investments      \nProceeds from the sale and maturity of financial investments      \nNet purchase of intangible assets      \nNet cash flow from acquisition of investment in subsidiaries, joint \nventures and associates      \nNet cash flow from disposal of subsidiaries, associates and joint \nventures      \nDividends received from investment in subsidiaries and associates      \nOthers (please specify)      \nNet cash (used in)  / from investing activities          \n         \nCash flows from financing activities      \nNet proceeds from the issue of ordinary share capital", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 44, "year": 2019}, "type": "Document"}
{"page_content": "Net proceeds from the issue of ordinary share capital      \nNet proceeds from the issue of other equity instruments      \nNet proceeds from the issue of subordinated debt      \nRepayment of subordinated debt      \nInterest paid on subordinated  debt     \nDividend paid to non -controlling interest      \nDividend paid to shareholders of the parent company      \nDividend paid to holders of other equity instruments      \nOthers (please specify)      \nNet cash (used in) / from financing activities          \n \n         \nNet increase  / (decrease) in cash & cash equivalents      \nCash and cash equivalents at the beginning of the period      \nExchange difference in respect of cash & cash equivalent s     \nCash and cash equivalents at the end of the period          \n \nNote: Banks have the option to use one of the two methods specified in LKAS 7 for the preparation of the statement of cash flows.", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 44, "year": 2019}, "type": "Document"}
{"page_content": "6 \n \u2026\u2026\u2026\u2026BANK  \nANALYSIS OF FINANCIAL INSTRUMENTS ON MEASUREMENT BASIS  \nAS AT \u2026\u2026\u2026\u2026\u2026\u2026.  \n \na.  Bank - Current period   \nIn Rupees Millions  AC FVPL  FVOCI  Total  \nASSETS          \nCash and cash equivalents  \nBalances with central banks  \nPlacements with banks  \nDerivative financial instruments  \nLoans and advances  \nDebt instruments  \nEquity instruments  \nOthers (specify)   \n       \nTotal financial assets          \n         \nIn Rupees Millions  AC FVPL  Total  \nLIABILITIES  \nDue to banks  \nDerivative financial instruments   \n    \nFinancial liabilities  \n     - due to depositors  \n     - due to debt securities holders  \n     - due to other borrowers  \nOthers (specify)   \n    \nTotal financial liabilities       \n \nAC       - Financial assets/liabilities measured at amortised cost  \nFVPL   - Financial assets/liabilities measured at fair value through profit or loss  \nFVOCI - Financial assets measured at fair value through other comprehensive income  \n \n \nb. Bank \u2013 Previous period as above  \n   \nc. Group \u2013 Current period as above  \n \n \nd. Group \u2013 Previous period as above", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 45, "year": 2019}, "type": "Document"}
{"page_content": "7 \n \u2026\u2026\u2026\u2026BANK  \nANALYSIS OF LOANS & ADVANCES , COMMITMENTS, CONTINGENCIES AND \nIMPAIRMENT    \nAS AT \u2026\u2026\u2026\u2026\u2026\u2026.  \n \nIn Rupees Millions  Bank  Group  \nCurrent \nPeriod  Previous \nPeriod  Current \nPeriod  Previous \nPeriod  \n DD/MM/YY  DD/MM/YY  DD/MM/YY  DD/MM/YY  \nProduct -wise Gross loans & advances  \nBy product \u2013 Domestic currency  \nOverdrafts  \nTerm loans  \nLease rentals receivable  \nCredit cards  \nPawning  \nOther loans (s pecify)  \nSub total  \n \nBy product \u2013 Foreign currency  \nOverdrafts  \nTerm loans  \nGuarantees  \nBonds  \nOther loans (s pecify)  \nSub total  \nTotal  \n \nProduct -wise commitments and contingencies  \nBy product \u2013 Domestic currency  \nGuarantees  \nBonds  \nUndrawn credit lines  \nOther commitments (specify)  \nOther contingencies (specify)  \nSub total  \n \nBy product \u2013 Foreign currency  \nGuarantees  \nBonds  \nUndrawn credit lines  \nOther commitments (specify)  \nOther contingencies (specify)  \nSub total  \nTotal  \n     \n \nStage-wise impairment on loans &  advances , \ncommitments and contingencies  \nGross loans and advances, commitments and \ncontingencies  \nLess: Accumulated impairment under stage 1  \n         Accumulated impairment under stage 2      \n         Accumulated impairment under stage 3  \nNet value of loans and advances, commitments and \ncontingencies  \n     \nMovement of impairment during the period  \nUnder Stage 1  \nCharge/(Write back) to income statement  \nWrite -off during the year  \nOther movements  \nClosing balance at DD/MM/YY  \n \nUnder Stage 2  \nCharge/(Write back) to income statement", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 46, "year": 2019}, "type": "Document"}
{"page_content": "8 \n Write -off during the year  \nOther movements  \nClosing balance at DD/MM/YY  \n \nUnder Stage 3  \nCharge/(Write back) to income statement  \nWrite -off during the year  \nOther movements  \nClosing balance at DD/MM/YY  \n \nTotal impairment", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 47, "year": 2019}, "type": "Document"}
{"page_content": "9 \n \u2026\u2026\u2026\u2026BANK  \nANALYSIS OF DEPOSITS   \nAS AT \u2026\u2026\u2026\u2026\u2026\u2026.  \n \nIn Rupees Millions  Bank  Group  \nCurrent \nPeriod  Previous \nPeriod  Current \nPeriod  Previous \nPeriod  \n DD/MM/YY  DD/MM/YY  DD/MM/YY  DD/MM/YY  \nBy product \u2013 Domestic currency  \nDemand deposits (current accounts)  \nSavings deposits  \nFixed deposits  \nOthers (Specify)  \nSub total  \n \nBy product \u2013 Foreign currency  \nDemand deposits (current accounts)  \nSavings deposits  \nFixed deposits  \nOthers (Specify)  \nSub total  \nTotal", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 48, "year": 2019}, "type": "Document"}
{"page_content": "10 \n \u2026\u2026\u2026\u2026BANK  \nSELECTED PERFORMANCE INDICATORS  \nAS AT \u2026\u2026\u2026\u2026\u2026\u2026.  (Based on Regulatory Reporting)  \nItem  Reporting \nPeriod  Previous Reporting \nPeriod  \nRegulatory Capital Adequacy  (LKR in Millions)  \nCommon Equity Tier 1  \nCore (Tier 1) Capital  \nTotal Capital Base    \nRegulatory Capital Ratios (%)  \nCommon Equity Tier 1 Capital (%) (Minimum Requirement - \u2026.) \nTier 1 Capital Ratio (%) (Minimum Requirement - ....) \nTotal Capital Ratio (%) (Minimum Requirement - ....)   \nLeverage Ratio (Minimum Requirement - ....)   \nRegulatory Liquidity  \nStatutory Liquid Assets (LKR in Millions)  \nStatutory Liquid Assets Ratio (%) (Minimum Requirement - 20%)  \nDomestic Banking Unit (%)  \nOff-Shore Banking Unit (%)  \nTotal Stock of High -Quality Liquid Assets (LKR in Millions)  \nLiquidity Coverage Ratio (%) (Minimum Requirement - \u2026. ) \n Rupee  (%) \nAll Currency (%) \nNet Stable Funding Ratio (%) - (Minimum Requirement - ....) *   \nAssets Quality (Quality of Loan Portfolio)  \nGross Non -Performing Advances Ratio  (% ) (net of interest in suspense)  \nNet-Non Performing Advances  (% ) (net of interest in suspense and \nprovision)    \nProfitability  \nInterest Margin (%)  \nReturn on Assets (before Tax) (%)  \nReturn on Equity (%)    \n* After implementation  \n \nCERTIFICATION:      \n     \nWe, the undersigned, being the Chief Executive Officer and the Chief Financial Officer  of ............ Bank jointly certify  that:\n     \n(a) the above statements have been prepared in compliance with the format and definitions prescribed by the Central  Bank \nof Sri Lanka;      \n(b) the information contained in these statements have been extracted from the unaudited financial statements of \n the bank unless indicated as audited.   \n \n                  (Name)                                    (Name)  \n(Sgd.) Chief Executive Officer                                             (Sgd.) Chief Financial Officer  \n          Date: DD/MM/YY                                        Date: DD/MM/YY", "metadata": {"source": "data\\CBSL\\2019\\Circular No. 2 of 2019 to be uploaded in CBSL WEB.pdf", "page": 49, "year": 2019}, "type": "Document"}
{"page_content": "No. 01 of 2019MONETARY BOARDCENTRAL BANK OF SRI LANKA2 6 April 2019MONETARY LAW ACT ORDERMAXIMUM INTEREST RATES ON SRI LANKA RUPEE DEPOSITSOF LICENSED BANKSConsidering the high real interest rates on deposits and lending products prevailing in the economy and the need to strengthen and expedite monetary policy transmission through the financial system, and for licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) to reduce interest rates on lending and thereby enhance credit flows to the real economy, the Monetary Board hereby issues an Order on maximum interest rates to be paid in respect of deposit products of licensed banks.1. Empowerment 1.1 under theMonetary Law ActIn terms of Section 104(l)(a) of the Monetary Law Act, No. 58 of 1949, the Monetary Board may from time to time fix the maximum rates of interest which licensed commercial banks and licensedspecialised banks may pay upon various classes of deposits.2. Maximum Interest Rates on LKR deposits2.1 Except as provided for in this Order, the maximum interest rates that may be offered or paid by a licensed bank on Sri Lanka Rupee (LKR) deposits shall;(i) not exceed the interest rates derived in accordance with Table 01 below, and(ii) be based on the Standing Deposit Facility Rate (SDFR) or the Weighted Average Yield Rate (WAYR) of 364-days Treasury Bills (T-bill rate).Table 01: Maximum Interest Rates at Maturity for LKR Deposits of Licensed BanksTenure of DepositMaximum Interest Rate Per annumSavings and other deposits of a tenure of less than 03 months or maturity is not specifiedSDFR - 0.50%Term Deposits03 months and less than 06 monthsT-bill rate - 0.50%06 months and less than 01 yearT-bill rate01 year and less than 02 yearsT-bill rate + 1.00%02 years and less than 03 yearsT-bill rate + 1.50%03 years and less than 05 yearsT-bill rate + 2.00%05 years or moreT-bill rate + 2.50%1", "metadata": {"source": "data\\CBSL\\2019\\Monetary_Law_Act_Order_No_1_of_2019.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "No. 01 of 20190-1= April 2019\n3. Applicable SDFR and Yield RateMONETARY BOARD CENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDER2.2 Further, the rate at which any periodic interest payments are made on term deposits during the tenure of the deposit should be computed so that the Annual Effective Rate (AER) does not exceed the specified maximum interest rates stipulated above.2.3 Notwithstanding the provisions in Order 2.1(i) above, the maximum rate payable by a licensed bank for savings deposits of children under the age of 18 years and for term deposits with a tenure of 01 year or more of senior citizens shall be 50 basis points (0.5%) higher than rates given in Table 01. With respect to joint accounts of senior citizens, all account holders shall be senior citizens in order for the enhanced ratein Order 2.3 to apply.3.1 The reference rates shall be as follows:(i) SDFR for the quarter shall be SDFR as at the end of the immediately preceding quarter.(ii) WAYR of 364 days Treasury Bills for the quarter shall be basedon the simple average of WAYR of last 04 accepted primary auctions for 364 days Treasury Bills in the immediately preceding quarter.3.2 SDFR and WAYR of 364 days Treasury Bills referred to in Order 2.1(i) shall be announced by the Director of Bank Supervision at the end of the months of March, June, September and December of each year which will be applicable for the following quarter.\n2", "metadata": {"source": "data\\CBSL\\2019\\Monetary_Law_Act_Order_No_1_of_2019.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "221 April 2019 No. 01 of 2019MONETARY BOARD CENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDER4. Interest rate applicable to Early Withdrawal4.1 In the case of an early withdrawal of any term deposit prior to its original contracted maturity date, the interest payable on the deposit up to the date of withdrawal shall be computed on the basis of the lower of, the published interest rate of the licensed bank applicable to the completed period prevailing at the time of withdrawal or at a rate of 100 basis points less than the contracted rate. The licensed bank shall at the time of early withdrawal recover any excess interest that may have been paid above the interest amount so computed during the period the deposit was held. However, banks may apply a different formula that would result in the interest and any benefit paid on the early withdrawal of the deposit not exceeding the amount of interest that would have been paid from the application of the formula given in this Direction provided that the basis of calculation is made known to the depositor at the time of making the deposit.5. Exemptions5.1 The maximum rate in Order 2.1 (i) above shall not apply to;(i) the Special Interest Scheme on Fixed Deposits for Senior Citizens provided by the Government of Sri Lanka,(ii) debt securities issued by a licensed bank and listed on a licensed stock exchange, and,(iii) unlisted debt securities issued by a licensed bank that are specifically excluded from this Order by the Monetary Board from time to time.6. Regulatory Reporting6.1 Every licensed bank shall submit details of the interest rates in accordance with the existing requirements of weekly web based return on \u2018BSD-WF-13-IR - Interest Rates (\u201cBank Only\u201d Totals)\u2019.", "metadata": {"source": "data\\CBSL\\2019\\Monetary_Law_Act_Order_No_1_of_2019.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "April 20197. Interpretations 7.1\n8. Implementation 8.1MONETARY BOARDCENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDER No. 01 of 2019In this Order:(i) Term deposits shall mean any deposit other than savings deposits accepted or renewed by a bank with an agreement to repay after a specified time of 03 months or more.(ii) Savings deposits shall mean all interest-bearing accounts to which funds can be credited or from which funds can be withdrawn other than on specified dates.(iii) Senior citizens shall mean persons who are over sixty (60) years of age at the time of accepting or renewal of a deposit.This Order shall come into effect commencing 29 April 2019 and shall be applicable for new deposits, existing savings deposits and at the renewal of term deposits.\nDr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n4", "metadata": {"source": "data\\CBSL\\2019\\Monetary_Law_Act_Order_No_1_of_2019.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA20 December 2019REGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLS ORDINANCE DIRECTIONSNo. 01 of 2019REPURCHASE AND REVERSE REPURCHASE TRANSACTIONS OF DEALER DIRECT PARTICIPANTS IN SCRIPLESS TREASURY BONDS AND SCRIPLESS TREASURY BILLSIssued under Section 21C(3) of the Registered Stock and Securities Ordinance No. 7 of 1937, as amended and Section 8(2) of the Local Treasury Bills Ordinance No. 8 of 1923, as amended.The Monetary Board issues Directions as follows for the manner in which repurchase and reverse repurchase transactions in Scripless Treasury Bonds and Scripless Treasury Bills shall be carried out by Dealer Direct Participants (DDPs).\nTreasury BillsOrdinance1. Empowerment under the1.1 In terms of Section 21C(3) of the Registered Stock and Securities Ordinance No. 7 of 1937, as amended and Section 8(2) of the LocalRegisteredStock andTreasury Bills Ordinance No. 8 of 1923, as amended, the Central Bank may issue Directions to Direct Participants or any category thereof toSecuritiesprovide for the manner and means by which Scripless Treasury BondsOrdinance andand Scripless Treasury Bills, or interests therein, may be purchased,the Localsold, transferred, pledged or encumbered.2. Applicability2.1 These Directions shall be applicable to all repurchase and reverse repurchase transactions in Scripless Treasury Bonds and Scripless Treasury Bills entered into by a DDP, except for Intra Day Liquidity Facility (ILF) transactions and repurchase and reverse repurchase transactions entered into with the Open Market Operations and Standing Facilities of the Central Bank of Sri Lanka (CBSL).Page 1 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 0, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA20 December 2019REGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLSORDINANCE DIRECTIONS No. 01 of 20192.2 These Directions shall be applicable in addition to the Scripless Treasury Bonds (Transactions) Regulations of No. 02 of 2004 and Scripless Treasury Bills (Transactions) Regulations of No. 02 of 2004 and the LankaSettle System Rules.3. Eligible3.1 For the purposes of these Directions, a DDP shall use only the ScriplessSecurities forTreasury Bonds and Scripless Treasury Bills issued by CBSL on behalfRepurchase andof the Government, as securities for repurchase and reverse repurchaseReversetransactions.RepurchaseTransactions4. Valuation of4.1 Eligible securities used for repurchase and reverse repurchaseEligibletransactions shall be valued at market value. Market value of suchSecurities,eligible securities shall be calculated using the dirty priceHaircutcorresponding to the average of the buying and selling yield quotes forRequirementsthe relevant security, as indicated in the Daily Summary Reportandcompiled based on the information provided by Primary Dealers andReplenishmentcirculated by the Public Debt Department of CBSL, for the relevant dateof Eligibleor any other basis which may be prescribed for this purpose by CBSL.SecuritiesIn the event that the Daily Summary Report for the relevant date is not available at the time of entering into the transaction, the Daily Summary Report for the immediately preceding working day shall be used.4.2 Notwithstanding Direction 4.1 above, a DDP may use any other input to calculate the market value of eligible securities, subject to such alternative input source being;Page 2 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 1, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA20 December 2019REGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLSORDINANCE DIRECTIONS JVo. 01 of 2019(i) approved by the Director of Bank Supervision (DBS) in case of DDPs which are Licensed Banks and Director of the Department of Supervision of Non-Bank Financial Institutions (DSNBFI) in case of DDPs which are Primary Dealer Companies;(ii) provided for in a documented internal policy of the DDP, and; (iii)consistently applied by the DDP.4.3 A DDP shall assess and agree in writing, with the counterparty, the haircut requirement for each repurchase and reverse repurchase transaction, taking into consideration the tenor of the transaction, maturity date and marketability of the eligible securities, assessment of counterparty risk, requirements of the counterparty and any other factor which is deemed relevant.4.4 Notwithstanding Direction 4.3 above, a DDP shall ensure that, at the time of entering into a repurchase transaction, the market value of eligible securities adequately covers the repurchase value of the securities (maturity value of the repurchase transaction), i.e., amount borrowed by the DDP plus the interest that will accrue on the repurchase transaction over its tenor, with a minimum haircut as specified below.Remaining Term to Maturity of the Eligible SecurityMinimum Haircut (%)up to 1 year4.0more than 1 year and up to 3 years6.0more than 3 years and up to 5 years8.0more than 5 years and up to 8 years10.0more than 8 years12.0Page 3 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 2, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA20 December 2019REGISTERED STOCK AND SECURITIESORDINANCE AND LOCAL TREASURY BILLS ORDINANCE DIRECTIONS No. 01 of 20194.5 Notwithstanding the Direction 4.3 above, a DDP shall ensure that, at the time of entering into a reverse repurchase transaction, the market value of eligible securities adequately covers the resale value of the securities (maturity value of the reverse repurchase transaction), i.e., amount lent by the DDP plus the interest that will accrue on the reverse repurchase transaction over its tenor, with a minimum haircut as specified below.Remaining Term to Maturity of the Eligible SecurityMinimum Haircut (%)up to 1 year4.0more than 1 year and up to 3 years6.0more than 3 years and up to 5 years8.0more than 5 years and up to 8 years10.0more than 8 years12.04.6 Notwithstanding the Directions 4.4 and 4.5 above, haircuts less than those required by Directions 4.4 and 4.5 above may be used for repurchase and reverse repurchase transactions entered into between two Direct Participants, with the written agreement of both parties.4.7 In the event of the market value of securities falling below the repurchase value of the securities (maturity value of the repurchase transaction), at any time prior to the maturity of the transaction, a DDP shall allocate additional eligible securities for the said transaction or settle part of the transaction in cash, prior to the closure of the LankaSettle System on the relevant day, to the extent required to ensure that the total market value of eligible securities adequately covers the said maturity value of the repurchase transaction.Page 4 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 3, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKAREGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLS20 December 2019 ORDINANCE DIRECTIONSNo. 01 of 20194.8 In the event of the market value of securities falling below the resale value of the securities (maturity value of the reverse repurchase transaction), at any time prior to the maturity of the transaction, a DDP shall obtain additional eligible securities for the said transaction or obtain cash for partial settlement of the transaction, prior to the closure of the LankaSettle System on the relevant day, to the extent required to ensure that the total market value of eligible securities adequately covers the said maturity value of the reverse repurchase transaction.5. Sale,5.1 A DDP shall not sell on outright basis, the eligible securities receivedSubstitutionfor reverse repurchase transactions.and Maturity of Eligible Securities5.2 A DDP may use the securities received for reverse repurchase transactions for repurchase transactions only if such use is explicitly provided for in the Repurchase or Reverse Repurchase Agreement entered into with the counterparty and if so provided for, in accordance with conditions included in the Repurchase or Reverse Repurchase Agreement.5.3 A DDP may sell, either on outright or repurchase basis, the securities used for a repurchase transaction only if such trading is explicitly provided for in the Repurchase or Reverse Repurchase Agreement entered into with the counterparty and if so provided for, in accordance with conditions included in the Repurchase or Reverse Repurchase Agreement.5.4 If a DDP decides to sell the securities used for a repurchase transaction in terms of the provisions of Direction 5.3 above or transfer the securities used for a repurchase transaction out of the securities account of the counterparty held at the Central Depositary System (CDS), thePage 5 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 4, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA20 December 2019REGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLSORDINANCE DIRECTIONS No- 01 of 2019DDP shall ensure that the securities being sold or transferred out are substituted in the securities account of the counterparty held at the CDS, by other eligible securities to the extent required by Directions 4.4 or 4.6, depending on which is applicable to the relevant transaction, prior to or simultaneously with the removal of the securities from the securities account of the counterparty held at the CDS.5.5 Where a counterparty of a DDP intends to sell the securities used for a reverse repurchase transaction or transfer the securities used for a reverse repurchase transaction out of the securities account of the counterparty held at the CDS, the DDP shall obtain other eligible securities to the extent required by Directions 4.5 or 4.6, depending on which is applicable to the relevant transaction, in substitution of the securities being sold or transferred out of the securities account of the counterparty held at the CDS, prior to or simultaneously with the removal of the securities from the securities account of the counterparty held at the CDS.5.6 Where the eligible securities used for a repurchase transaction or securities received for a reverse repurchase transaction matures during the tenor of the transaction, the DDP shall allocate or obtain, as the case may be, eligible securities with a market value equivalent to or exceeding the market value of the maturing eligible securities, in substitution of the maturing eligible securities.\nPage 6 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 5, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA20 December 20196. Responsibilities of the DDP, Board of Directors, Risk Management, Compliance and Internal AuditREGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLS ORDINANCE DIRECTIONSNo. 01 of 20196.1 In entering into repurchase and reverse repurchase transactions, a DDP shall manage all relevant risks including counterparty credit risk, market risk, operational risk, liquidity risk and legal risk associated with such transactions.6.2 In entering into repurchase and reverse repurchase transactions, the DDP shall ensure that relevant requirements stipulated in all applicable Laws, Regulations, Directions, Codes of Conduct, LankaSettle System Rules and other guidelines are strictly adhered to.6.3 The Board of Directors of a DDP shall ensure DDP\u2019s compliance with these Directions and formulate policies, procedures and guidelines covering repurchase and reverse repurchase transactions and establish an effective risk management framework and internal controls on repurchase and reverse repurchase transactions including the preparation of periodic reconciliations of securities, in order to ensure such compliance.6.4 The Compliance Officer or any other officer heading the compliance function of a DDP shall conduct independent verifications to ascertain the DDP\u2019s compliance with these Directions and report the findings of such verifications to the Board of Directors or to a relevant sub-committee of the Board of Directors on a regular basis, at least quarterly.6.5 The DDP shall assess the adequacy of internal controls on repurchase and reverse repurchase transactions by conducting internal audits at least bi-annually and by obtaining a certification from the external auditor on a regular basis, at least annually.Page 7 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 6, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA20 December 20197. Disclosure and Reporting Requirements\n8. Penalties for Non- compliance with DirectionsREGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLSORDINANCE DIRECTIONS  No. 01 of 20197.1 A DDP shall disclose in its annual audited financial statements;(i) the carrying value of securities allocated for repurchase transactions as at the period end date(ii) the market value of securities received for reverse repurchase transactions as at the period end date(iii) DDP\u2019s policy on haircuts for repurchase and reverse repurchase transactions(iv) any penalties imposed on the DDP under Direction 8 below7.2 DDPs which are Licensed Banks shall report to the DBS, the details of the repurchase and reverse repurchase transactions in such format and at such intervals as may be required by the DBS.7.3 DDPs which are Primary Dealer Companies shall report to the DSNBFI, the details of the repurchase and reverse repurchase transactions in such format and at such intervals as may be required by the DSNBFI.8.1 Where a DDP fails to allocate or obtain sufficient eligible securities as required by Directions 4.4, 4.5, 4.7, 4.8 and 5.5 above or as agreed with a Direct Participant in terms of Direction 4.6 above, DBS, in case of DDPs which are Licensed Banks, and DSNBFI, in case of DDPs which are Primary Dealer Companies, may impose on such DDP, a penalty of 2.0 per cent (2.0%) of the difference between the market value of allocated or obtained eligible securities and the market value of eligible securities required to be allocated or obtained with respect to the relevant repurchase or reverse repurchase transaction, per day.8.2 Where a DDP uses the securities received for reverse repurchase transactions in violation of the provisions of Directions 5.1 and 5.2Page 8 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 7, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA20 December 2019REGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLS ORDINANCE DIRECTIONSNo. 01 of 2019above or sells the securities used for a repurchase transaction or transfers the securities used for a repurchase transaction out of the securities account of the counterparty held at the CDS in violation of the provisions of Directions 5.3 and 5.4 above, DBS in case of DDPs which are Licensed Banks and DSNBFI in case of DDPs which are Primary Dealer Companies, may impose on such DDP, a penalty of 2.0 per cent (2.0%) of the face value of the securities so misused, per day.8.3 Where a DDP is unable to comply with any provision of these Directions due to reasons beyond the control of the DDP, such DDP shall inform of such circumstances to the DBS or DSNBFI, as the case may be, not later than 4.00 p.m. on the following working day, and if such reasons are acceptable to the relevant Director, penalties in terms of Directions 8.1 and 8.2 above shall not be imposed on such DDP.\nwith these Directions, before 31.03.2020.9. Effective Date, Transitional9.1 These Directions shall be effective from 01.01.2020 subject to the transitional provisions in Directions 9.2 and 9.3 below.Provisions and9.2 Where the templates of the Repurchase or Reverse RepurchaseRescinding ofPreviousAgreement or any other documentation used by a DDP contains any clause which is in contradiction to any Direction herein, the DDP shallDirectionsmake necessary amendments to such template to ensure compliance9.3 Where the existing Repurchase or Reverse Repurchase Agreements entered into with any of the counterparties of a DDP contains any clause which is in contradiction with any Direction herein, the DDP shall enter into a new Repurchase or Reverse Repurchase Agreement or make necessary amendments to the existing Repurchase or ReversePage 9 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 8, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKAREGISTERED STOCK AND SECURITIES ORDINANCE AND LOCAL TREASURY BILLS ORDINANCE DIRECTIONS No. 01 of 2019Repurchase Agreement with such counterparties, to ensure compliance with these Directions, before 30.06.2020.9.4 Direction on Repurchase or Reverse Repurchase Agreements dated 02.05.2002 and Direction on Accounting for Repo Transactions dated 19.12.2003, both issued by the Superintendent of Public Debt, are hereby rescinded.10. Definitions 10.1 For the purposes of these Directions;(i) a repurchase transaction shall mean a transaction where a DDP sells an eligible security with an agreement to purchase it on an agreed date at an agreed price.(ii) a reverse repurchase transaction shall mean a transaction where a DDP purchases an eligible security with an agreement to sell it on an agreed date at an agreed price.(iii) haircut shall mean the discount applied on the market value of a security.(iv) direct participant shall mean a person appointed as a direct participant in terms of the Registered Stock and Securities Ordinance (Chapter 420) and Local Treasury Bills Ordinance (Chapter 417).(v) dealer direct participant shall mean a person appointed as a dealer direct participant in terms of the Registered Stock and Securities Ordinance (Chapter 420) and Local Treasury Bills Ordinance (Chapter 417).(vi) counterparty shall mean the person or entity with whom a DDP enters into a repurchase or a reverse repurchase transaction.Page 10 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 9, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA20 December 2019REGISTERED STOCK AND SECURITIESORDINANCE AND LOCAL TREASURY BILLS ORDINANCE DIRECTIONS No. 01 of 2019(vii) dirty price shall mean the price of the eligible security inclusive of interest that has accrued on the relevant security from the date of last coupon payment, to the relevant date.(viii) carrying value shall mean the value at which the eligible security is reported in the annual audited financial statements.Dr. Indrajit CoomaraswamyChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\nPage 11 of 11", "metadata": {"source": "data\\CBSL\\2019\\SNBFI_directions_no_1_of_2019_e_0.pdf", "page": 10, "year": 2019}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKANovember 2020 BANKING ACT DETERMINATION No. 01 of 2020ANNUAL LICENCE FEE OFLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKSDetermination made by the Monetary Board of the Central Bank of Sri Lanka underSections 8 and 76D (6) of the Banking Act, No. 30 of 1988, as amended.The Monetary Board of the Central Bank of Sri Lanka (CBSL), considering the possible adverse impact on licensed banks due to the COVID-19 outbreak and in line with the extraordinary regulatory measures introduced by CBSL, has determined to maintain licence fee structure applicable for years 2019 and 2020 unchanged for the year 2021.Accordingly, in terms of Sections 8(1) and 76D (6) of the Banking Act No. 30 of 1988, every licensed commercial bank and licensed specialised bank shall pay the licence fee in respect of the calendar year 2021 to the Central Bank of Sri Lanka on or before 31 January 2021, based on the total assets of such bank as at the end of 2020, as set out in the Table below.Annual licence fee for the year 2021Total Assets as at the end 2020 (Rs. Bn)Licence Fee (Rs. Mn)Above 100033Above 750 to 100032Above 500 to 75026Above 200 to 50023Above 125 to 20017Above 75 to 12511.625 to 756Less than 253Prof/W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Determination_No_1_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "30 September 2020MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 10 of 2020\nAMENDMENTS TO BANKING ACT DIRECTIONS ON FINANCIAL DERIVATIVE\nTRANSACTIONS FOR LICENSED COMMERCIAL BANKS AND LICENSED\nSPECIALISED BANKS\nIn the exercise of the powers conferred by Sections a6(1) and 76J(1) of the Banking Act No. 30 of\n1988, as amended, the Monetary Board, having considered the necessity to encourage foreign\ninflows to the country, hereby issues the following Directions amending the Banking Act\nDirections No. 4 of 2018 dated 21.08.2018 on Financial Derivative Transactions for Licensed\nCommercial Banks and Licensed Specialised Banks.\nAccordingly, Directions 5.1 b) and 5.7 c) are replaced, and Direction 5.11 is inserted immediately\nafter Direction 5.10 as follows:\n5. General\nTerms and\nConditions5.1\n5.7b) Non Market Maker (NMM) Deals: Transactions executed by EBs\nwith their customers, i.e., any party other than an EB or with another\nEB with the intention of making a spread. In these transactions an EB\nshall not take any market risk into its own books and shall cover the\ntransaction on the same day on a back-to-back basis with another EB\nin Sri Lanka or with a foreign counterparty or Central Bank of Sri\nLanka.\nc) a marked-to-market gain (financial gain) should not be paid to the\ncustomer. However, EBs may pay the marked-to-market gain arising\nfrom unwinding/selling back of derivatives for which the underlying\ntransaction is an investment in Government Securities, by foreign\ninvestors;\nIn the case of Inward Investments SWAPs entered into by licensed\ncommercial banks in terms of Operating Instructions No.\n331041012100111002 dated 23.09.2020 and any subsequent\ninstructions, issued by the Central Bank of Sri Lanka, Directions 5.7\nshall not be applicable.\nffirbbv*-^,\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka5.11", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Directions_No_10_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT11 December 2020 BANKING ACT DIRECTIONS No. 11 of 2020INVESTMENTS 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 the pressure on the exchange rate and the stress on financial markets due to the impact of the Covid-19 outbreak, requires the licensed commercial banks and National Savings Bank to suspend the purchase of Sri Lanka International Sovereign Bonds (ISBs) for a period of six months unless such purchase of ISBs is funded by new foreign currency inflows to such licensed banks sourced from abroad.This Direction shall be implemented with immediate effect.Prof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Directions_No_11_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "23 December2020MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 12 of 2020\nINVESTMENTS IN SRI LANKA INTERNATIONAL SOVEREIGN BONDS BY\nLICENSED COMMERCIAL BANKS AND NATIONAL SAVINGS BANK\nIssued in terms of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act No.\n30 of 1988, as amended.\nThe Central Bank of Sri Lanka observes that a sizable amount of investment in Sri Lanka\nInternational Sovereign Bonds (ISBs) has been made by licensed banks thus far during the year.\nFurthermore, it has been observed that licensed banks continue to purchase Sri Lanka ISBs using\ninflows to the current account of the balance of payments, thereby adding undue pressure to the\ndomestic foreign exchange market.\nIn consideration of these developments, licensed commercial banks and National Savings Bank\nare required to suspend the purchase of Sri Lanka ISBs with immediate effect for a period of\nthree months.\nAccordingly, the Banking Act Directions No. ll of 2020 dated 11 December 2020 on the above\nsubject are hereby withdrawn.\nThis Direction shall be irirplemented with immediate effect.w\nProf. W D Lakshman\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Directions_No_12_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "31December2020MONETARYBOARI)\nCENTRAL BAI\\K OF'SRI LAI\\KA\nBANKING ACT DIRECTIONS No.13 of2020\nAMEITDMENTS TO REGTILATORY FRAMEWORK ON VALUATION OF'\nIMMOVABLE PROPERTIES OF LICENSED COMMERCIAL BANKS AI\\D LICENSEI)\nSPECIALISED BATIKS\nIn the exercise of the powers conferred by Sections a6(l) and 76(JXl) ofthe Banking Act, No. 30\nof 1988, the Monetary Board hereby issues the following amendments to Banking Act Directions\nNo. 01 of 2014 on the Regulatory Framework on Valuation of Immovable Properties of Licensed\nCommercial Banks and Licensed Specialised Banks, hereinafter referred to as licensed banks.\nAccordingly, the following Directions of the Banking Act Directions No. 01 of 2014 on the\nRegulatory Framework on Valuation of Immovable Property of licensed banks shall be replaced\nas follows:\n5. Eligibility 5.1. Every licensed bank shall ensure that:\nCriteria forValuers a) eligibility criteria for valuers are set out as follows.\nA. A member of the Institute of valuers of sri Lanka (IvsL)\nwho shall be:\ni. A Fellowmember; or\nii. A Professional Associate member with 5 years of\nexperience in such grade ofmembership.\nFor the pqpose of determining number of years of\nexperience in the grade of professional Associate\nMembership, the transitional provisions stated in the\nSection 24 of the IVSL (Amendment) Act, No. 9 of 2019,\nshall be applicable.\nB. A chartered valuation surveyor of the Royal Institution of\nchartered surveyors (Rrcs) of the united Kingdom who\nshall be:\ni. A Fellowmember; or\nii. other members with at least 5 years of experience in such\ngrade of membership.\n)", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Directions_No_13_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "31December2020MONETARYBOARI)\nCENTRAL BANK OF SRI LANKA\nBAI\\IKING ACT DIRECTIONS No. 13 of 2020\nb)valuers selected for the panel of valuers of the licensed banks as per\nthe qualifications set out in Direction 5.1 a) above shall acquire\ncontinuous Professional Development as approved/recommended\nby the respective professional body;\nintemal valuation of immovable property is undertaken by valuers\nwho satisft the eligibility criteria set out in Direction 5.1 a) above;\nand\nvaluers who maintain highest levels of professional conduct, ethics\nand integrity in carrying out valuations of immovable property of\nlicensed banks are included in the panel of valuers.\nIn respect of immovable property obtained/to be obtained as collaterals\nagainst all performing loans and advances, banks shall establish an\nappropriate threshold for intemal and external valuation uN per the bank's\npolicy.\nIn respect of non-performing loans, where the capital outstanding amount\nis less than Rs. 10,000,000 or 0.1%o of the bank's capital base, whichever\nis less, an intemal valuation report may be obtained.\nLicensed banks shall obtain an external valuation report in the case of\nobtaining valuation for a foreclosed properly where the capital\noutstanding amount is over Rs. 5,000,000 or 0.1% of the bank's capital\nbase, whichever is less.\n7.1 rhe frequency of valuation as referred to in Direction2.2 (f) of the\ncited Direction shall be as follows:\na) valuation of immovable property obtained as collateral against\nloans and advances which are non-performing shall be made at\nthe frequency as follows for any regulatory pu{pose.\ni. In respect of credit facilities granted against residential\nproperty which is occupied by the borrower for residentialc)\nd)\n6. Threshold\nfor internal\nand\nextemal\nvaluation\nreports\n7. X'requency\nof\nValuation6.1\n6.2\n6.3\n)", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Directions_No_13_of_2020.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "ffi\nMONETARYBO\n3l December202OARI)\nCENTRAL BAI\\K OF SRI LAIIKA\nBA}IKING ACT DIRECTIONS No.13 of2020\npulposes: a report that is not more than five years old.\nii. All other credit facilities: a report that is not more than four\nyears old.\nRevaluation of immovable properly as qeferred to in Directions\n3.1 b) and c) of the cited Direction on Valuation of Immovable\nProperties shall be made in line with the intemal policies\napproved by Board of Directors or depending on any significant\nand volatile changes in fair value of such immovable property\nare experienced. However, such gains can only be included in\nTier 2 capital once in three years.\nValuation of immovable property obtained as collateral against\nloans and advances which are performing, shall be made at the\ntime of initial granting and at the time of any subsequent\nenhancement of credit facilities.\nBanking Act Directions No. 07 of 2019 on Amendments to Regulatory\nFramework on valuation of Immovable Properties of Licensed Commercial\nBanks and Licensed Specialised Banks are hereby revoked.\nChairman ofthe Monetary Board and\nGovernor of the Central Bank of Sri Lankab)\nc)\n9.Revocation\nof\nDirections\n)", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Directions_No_13_of_2020.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "ffi September 2020MONETARYBOARI)\nCENTRAL BANK OF SRI LANKA\nBANKINGACT DIRECTIONS No. 08 of 2020\nAMENDMENT TO TIIE BANKING ACT DIRECTIONS ON\nOWNERSHIP OF ISSUED CAPITAL CARRYING VOTING RIGHTS FOR\nLICENSED COMMERCIAL BANKS\nIn the exercise of the powers conferred by Section a6(l) of the Banking Act No. 30 of 1988, as\namended, the Monetary Board, having considered the benefits to the banking system through the\ninvestments by Multilateral Financial Organisations in the shareholding of licensed commercial banks\nhereby issues the following Direction amending the Banking Act Directions No.l of 2007 dated 19\nJanuary 2007.\nDirection 4 of the Banking Act Directions No. I of 2007 is replaced as follows:\n\\-\n4. Maximum percentage\nof ownership of\nsharesAccordingly, the Monetary Board, subject to Sections 12(18), l2(1C)\nand 13 and subject to terms and conditions it may deem fit, may grant\npermission on a case-by-case basis to:\n(a) any of the categories of shareholders referred to in Sections\nLz(lC) and 46(1Xd) to acqutre a material interest not exceeding\n15 per cent of the issued capltal carrying voting rights in a\nlicensed commercial bank,\n(b) Multilateral Financial Organisations such as the World Bank,\nInternational Finance Corporation (IFC), Asian Development\nBank (ADB) and any other Multil ateruI Financial Organisation\nas approved by the Monetary Board of the Central Bank of Sri\nLanka, notwithstanding (a) above, to acquire a material interest\nnot exceeding 20 per cent of the issued capital canylng voting\nrights in a licensed commercial bank subject to the condition that\nthe material interest so acquired shall be reduced to 15 per cent\nwithin a period of 10 years from the date of stipulation.\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri LankaProf W D Lakshman", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Directions_No_8_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "ffi\n.,*'ffJ*'Iffi\",I:fl,o**\n$K September 2020 BANKING ACT DIRECTIONS No. 09 of 2020\nAMENDMENT TO THE BANKING ACT DIRECTIONS ON\nOWNERSHIP OF ISSUED CAPITAL CARRYING VOTING RIGIITS FOR\nLICENSED SPECIALISED BANKS\nIn the exercise of the powers conferred by Section 761(l) of the Banking Act No. 30 of 1988, as\namended, the Monetary Board, having considered the benefits to the banking system through the\ninvestments by Multilateral Financial Organisations in the shareholding of licensed specialised banks\nhereby issues the following Direction amending the Banking Act Directions No. 2 of 2007 dated 19\nJantary 2007.\nThe following new Direction will be\nDirections No. 2 of 2007 .\n3. Maximum percentage\nof ownership of sharesinserted immediately after Dirrgction 3(2) of the Banking Act\n(3) Notwithstanding (1) above, the Monetary Board, subject to\nterms and conditions it may deem fit, may grant permission\non a case-by-case basis to acquire a material interest not\nexceeding 20 per cent of the issued capttal carrying voting\nrights in a licensed specialised bank by Multil ateralFinancial\nOrganisations such as the World Bank, International Finance\nCorporation (IFC), Asian Development Bank (ADB) and any\nother Multilateral Financial Organisation as approved by the\nMonetary Board of the Central Bank of Sri Lanka subject to\nthe condition that the material interest so acquired shall be\nreduced to 15 per cent within a period of 10 years from the\ndate of stipulation.\nChairman of the Monetary Board and\nGovernor of the Central Eiank of Sri LankaProf. W D Lakshman", "metadata": {"source": "data\\CBSL\\2020\\Banking_Act_Directions_No_9_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "Draft  \n \nCENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n   13 January 2020  CIRCULAR           No. 01 of 20 20 \n1 \n \n \nCREDIT SUPPORT TO ACCELERATE ECONOMIC GROWTH    \n \nWith a view to accelerating economic growth in the country and  based on discussions held \nwith the Hon. Prime Minister and the Minister of Finance, officials of the Office of the \nPresident, Office of the Pri me Minister and Ministry of Finance, the licensed commercial \nbanks and licensed specialised banks  (hereinafter referred to as licensed banks ), have agreed to \nprovide a special credit support scheme to eligible Small and Medium Enterprise borrowers of \nrespe ctive licensed banks during 01.01.2020 to 31.12. 2020 to complement the fiscal incentives \nalready announced by the Government.   \n \nBased on the discussions the Central Bank of Sri Lanka (CBSL) had with the licensed banks, it \nis observed that the proposed scheme may not cause an undue level of stress or threaten the \nstability of the banking system. Accordingly, this Circular sets out the guidelines for giving \neffect to the Scheme in a consistent manner across licensed banks . \n \n \n \n \n \n1. General Terms and Conditions  \n(i) Eligible Participants : Small and Medium Enterprises (SMEs)  engaged in \nbusiness sectors specified in para (ii) below that have obtained credit facilities \nfrom licensed  banks. For  the purpose of this scheme, SMEs shall mean \nborrowers with an annual turnover b etween Rs. 16 m n to Rs. 750 mn  for the \nyear ended 31.12.2019 .  \n(ii) The supported business sectors shall be manufacturing, services, agriculture  \n(including processing) and construction.  For the avoidance of doubt, import \nfacilities for imports other than import ation of machinery and equipment are \nexcluded from the scheme. Facilities for importation of vehicles shall not be \npermitted.  \n(iii) Credit facilities to be supported under this scheme shall be business related term", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_01_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "(iii) Credit facilities to be supported under this scheme shall be business related term \nloans, leasing facilities, overdrafts and trad e finance facilities denominated in \nRupee s subject to the requirements specified below .", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_01_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "Draft  \n \nCENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n   13 January 2020  CIRCULAR           No. 01 of 20 20 \n2 \n \n(iv) Licensed banks shall offer the credit support scheme to all eligible borrowers  \nupon a written request being made by such borrowers on or before 31.01.2020 \nand operatio nalise the scheme by 31.03.2020 .  \n(v) During the period of the credit support scheme, borrowers shall be required to \ncontinue to service the interest due on credit facilities considered under this \nscheme in a timely manner in accordance with the conditions app licable to this \nscheme . \n(vi) Borrowers who fail to service interest as required in para (v) above will not be \nentitled to enjoy the benefits of this scheme  and will be considered as non -\nparticipants of this scheme.  \n(vii) The operational details of the Scheme are as s et out in sections 2 to 6 of this \nCircular . \n2. Performing Loans  \n(i) Eligible borrowers with aggregate outstanding fund based exposure of  up to Rs. \n300 mn as at 31.12.2019 with a licensed bank may avail of the concessions \nunder this scheme from such licensed bank.   \n(ii) Upon a written request being made by a borrower  on or before 31.01.2020 , \nlicensed banks shall offer a capital moratorium  during 01.01.2020 to 31.12.2020  \nin respect of all eligible Rupee  term loans.  \n(iii) Licensed banks shall extend the  existing tenure of loans  eligible  for capital \nmoratorium by  the moratorium period without increasing the value of \ninstalments . \n(iv) During the period of deferment, the interest shall be charged on the contracted \nbasis without any penal component.  \n(v) Permanent overdraft facilities fallin g due for settlement or maturing or are \nreviewed during the period up to 31.03.2020, shall be extended up to", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_01_of_2020.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "Draft  \n \nCENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n   13 January 2020  CIRCULAR           No. 01 of 20 20 \n3 \n \n30.06.2020.  \n(vi) Eligible trade finance facilities falling due for settlement or maturing or are \nunder review during the period up to 31.03.2020, shall  be extended by 30 days .  \n(vii) Licensed  banks may grant a n additional  loan or  a new loan facility not \nexceeding Rs . 300 mn per bank  per borrower  provided that the borrower \nsubmits a credible business plan subject to the following condition s:  \n(a) The loan facility shall be repaid over five years at an interest rate equal to \nAWPLR to expand business activities.  \n(b) A maximum grace period of one year may be considered  for such loans .        \n(c) Licensed banks may obtain suitable collateral to mitigate the risk relating \nto any  additional credit facilities granted under this scheme.  \n(viii) Concessions already granted under different relief schemes and which are due to \nexpire before 31.12.2020, will be extended up to 31.12.2020. However, such \nborrowers shall be required to comply with t he requirements of this scheme .  \n(ix) Licensed  banks may consider inclusion of borrowers whose total borrowings \nexceed Rs. 300 mn , on case -by-case basis, upon a written  request from  such \nborrower.   \n3. Non-Performing Loans  (NPLs)  \n(i) Eligible SME s which  are in the NPL  category as at 31.12.2019 , including those \nwhere the banks have commenced or given notice of recovery action under the \nprovisions of the Recovery of Loans by Banks (Special Provisions) Act, No. 4 \nof 1990 , will be eligible to avail of the concessions set o ut below upon a written \nrequest from such borrowers  on or before 31.01.2020 . \n(ii) The total penal  component of  interest accrued and unpaid on NPL loans and \nadvances referred above shall be waived  by licensed  banks  at their cost .", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_01_of_2020.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "Draft  \n \nCENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n   13 January 2020  CIRCULAR           No. 01 of 20 20 \n4 \n \n(iii) Rescheduling of loans  and advances  shall be as follows:  \n(a) Where the borrower has repaid 50% or more of the initial capital, 50% of \nthe accumulated  and unpaid  interest (after waiver of penal interest referred \nto above) of the defaulted instalments up to the date of consideration  by \nthe licensed bank under this scheme , shall be deferred  and the balance \ncapital and interest shall be rescheduled . The deferred interest shall be \nwaived by the licensed banks , after the borrower settles the rescheduled \nloan in the manner provided in para (c) and (d) below . \n(b) Where the borrower has repaid less than 50% of the initial capital, 25% of \nthe accumulated and unpaid interest (after waiver of penal interest referred \nto above) of the defaulted instalments up to the date of consideration by \nthe licensed bank under this scheme, shall be deferred and the balance \ncapital and interest shall be rescheduled. The deferred interest shall be \nwaived by the licensed banks, after the borrower settles the rescheduled \nloan in the manner provided in para (c) and (d) bel ow. \n(c) The rescheduled loan referred in para (a) and (b) above shall be repaid \nover a period not exceeding twice the remaining number of instalments of \nthe original loan.  \n(d) A one -year grace period shall be granted for capital repayment of loans \nreferred in para (c) above.  However, borrowers will be required  to service \ninterest in a timely manner .  \n(iv) Licensed banks shall subject to para (d) below , grant a new working capital loan \n(or temporary progressively reducing overdraft facility) for SMEs which are in \nthe NPL  category as follows, to revive businesses:  \n(a) Maximum amount to be three months working capital requirement with a \nmaximum tenure of six months . \n(b) A three -month moratorium shall be granted for the repayment  of capital of", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_01_of_2020.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "Draft  \n \nCENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n   13 January 2020  CIRCULAR           No. 01 of 20 20 \n5 \n \nsuch loan or overdraft , provided howeve r that i nterest shall be serviced  in \na timely manner .  \n(c) Interest rate for this loan shall not be more than 2% plus the prevailing  \nStanding Lending Facility Rate .       \n(d) The new working capital loan  is included in a credit guarantee scheme  \nadministered by CBS L as mentioned in para 5 below .  \n(v) Licensed  banks shall  defer passing new resolutions under the Recovery of Loans \nby Banks (Special Provisions) Act, No. 4 of 1990 for recovery of loans and \nadvances until 31.12.2020 in respect of borrowers participat ing in th is scheme . \nIn instances where resolutions  for recovery have already been passed,  \nauction ing of assets  will be deferred  until 31.12.2020  in respect of such \nborrowers  who are participants in the Scheme and meet the requirements of the \nScheme . Failure to adhe re to the requirements will result in the banks treating \nsuch borrowers as non-participants  of this scheme.  \n(vi) In instances where there are on-going litigation s in courts relating to recovery, \nborrowers will be permitted to participate in the Scheme upon ente ring into an \nagreement in Court with regard to the requirements set out in this scheme .  \n(vii) Licensed  banks shall suspend legal action against non-performing borrowers \nwho have been accepted under this scheme .   \n4. Repayment of Capital by Banks unde r Refinance Sc hemes  \n(i) The Government has indicated its willingness to defer capital repayments on \nrefinance loans granted to licensed banks falling due from 01.01.2020 until \n31.12.2020 and extend the final repayment date by 12 months. However, banks \nare required to seek s uch extension if required and  enter into  supplementary \nagreements with the relevant Government agency in this regard.", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_01_of_2020.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "Draft  \n \nCENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n   13 January 2020  CIRCULAR           No. 01 of 20 20 \n6 \n \n                                                                                  5. Credit Guarantee Scheme  \n(i) The Government and CBSL  will formulate a Credit Guarantee Scheme to \nprovide risk mitigation arising from any add itional loans and advances for up to \n75% of the capital sum granted by licensed banks under para 3 (iv) of this \ncircular.  \n(ii) The Guarantee fee applicable will be 1 % per annum and will be borne by \nlicensed banks if they wish to avail of the Guarantee .  \n6. Reporti ng to the Credit Information Bureau (CRIB)  \n(i) Licensed banks  are expected  to have a mechanism  not to decline loan \napplications solely  based on an adverse CRIB record.  \n(ii) Licensed banks , in consultation with CRIB , shall develop a reporting modality \nin respect of the capital deferment granted under this scheme  to performing \nborrowers , so that participation in the Scheme  will not have an impact on the \ncredit score of borrowers in the future, or be negatively reflected in future CRIB \nreports.  \n \n \n(Mrs. ) V A A N De Silva    \nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_01_of_2020.pdf", "page": 5, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n   30 January 2020  CIRCULAR           No. 02 of 20 20 \n1 \n \n \nCREDIT SUPPORT TO ACCELERATE ECONOMIC GROWTH    \n \nWith a view to accelerating economic growth in the country and  based on discussions held \nwith the Hon. Prime Minister and the Minister of Finance, officials of the Office of the \nPresident, Office of the Pri me Minister and Ministry of Finance, the licensed commercial \nbanks and licensed specialised banks  (hereinafter referred to as licensed banks ), have agreed to \nprovide a special credit support scheme to eligible Small and Medium Enterprise borrowers of \nrespe ctive licensed banks during 01.01.2020 to 31.12. 2020 to complement the fiscal incentives \nalready announced by the Government.   \n \nBased on the discussions the Central Bank of Sri Lanka (CBSL) had with the licensed banks, it \nis observed that the proposed scheme may not cause an undue level of stress or threaten the \nstability of the banking system. Accordingly, this Circular sets out the guidelines for giving \neffect to the Scheme in a consistent manner across licensed banks . \n \n \n \n \n \n1. General Terms and Conditions  \n(i) Eligible Participants : Small and Medium Enterprises (SMEs)  engaged in \nbusiness sectors specified in para (ii) below that have obtained credit facilities \nfrom licensed  banks. For  the purpose of this scheme, SMEs shall mean \nborrowers with an annual turnover b etween Rs. 16 m n to Rs. 750 mn  for the \nyear ended 31.12.2019 . However, in the case of SMEs which are in the NPL \ncategory as at 31.12.2019, the lower limit of annual turnover, i.e. , Rs. 16 mn, \nshall not apply .     \n(ii) The supported business sectors shall be man ufacturing, services, agriculture  \n(including processing) and  construction.  For the avoidance of doubt, import \nfacilities for imports other than importation of machinery and equipment are \nexcluded from the scheme. Facilities for importation of vehicles shal l not be", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "excluded from the scheme. Facilities for importation of vehicles shal l not be \npermitted.  However, in the case of SMEs which are in the NPL category as at \n31.12.2019, the business sectors supported under this scheme shall also include \nvalue addition businesses and trading .", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n   30 January 2020  CIRCULAR           No. 02 of 20 20 \n2 \n \n(iii) Credit facilities to be supported under this schem e shall be business related term \nloans, leasing facilities, overdrafts and trade finance facilities denominated in \nRupee s subject to the requirements specified below .  \n(iv) Licensed banks shall offer the credit support scheme to all eligible borrowers  \nupon a wr itten request being made by such borrowers on or before 10.02.2020  \nand operationalise the scheme by 31.03.2020 .  \n(v) During the period of the credit support scheme, borrowers shall be required to \ncontinue to service the interest due on credit facilities consid ered under this \nscheme in a timely manner in accordance with the conditions applicable to this \nscheme . \n(vi) Borrowers who fail to service interest as required in para (v) above will not be \nentitled to enjoy the benefits of this scheme  and will be considered as non-\nparticipants of this scheme.  Accordingly, licensed banks may initiate \nappropriate  risk mitigation processes.  \n(vii) The operational details of the Scheme are as set out in sections 2 to 6 of this \nCircular . \n2. Performing Loans  \n(i) Eligible borrowers with aggregate outstanding fund based exposure of  up to Rs. \n300 mn as at 31.12.2019 with a licensed bank may avail of the concessions \nunder this scheme from such licensed bank.  \n(ii) Upon a written request being made by a borrower  on or before 10.02.2020 , \nlicensed banks shall offer a capital moratorium  during 01.01.2020 to 31.12.2020  \nin respect of all eligible Rupee  term loans.  \n(iii) Licensed banks shall extend the  existing tenure of loans  eligible  for capital \nmoratorium by  the moratorium period without increasing the value of \ninstal ments .", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n   30 January 2020  CIRCULAR           No. 02 of 20 20 \n3 \n \n(iv) During the period of deferment, the interest shall be charged on the contracted \nbasis without any penal component.  \n(v) Permanent Overdraft facilities falling due for settlement or maturing or are \nreviewed during the period up to 31.03.2020, shall be ex tended up to \n30.06.2020.  However, in the case of Temporary Overdraft facilities as at \n31.12.2019, the expiry of Temporary Overdraft limits shall be extended by two \nmonths.     \n(vi) Eligible trade finance facilities falling due for settlement or maturing or are \nunder review during the period up to 31.03.2020, shall be extended by 30 days .  \n(vii) Licensed  banks may grant a n additional  loan or  a new loan facility not \nexceeding Rs . 300 mn per bank  per borrower  for investment or working capital \npurpose s, provided that the b orrower submits a credible business plan subject to \nthe following condition s:  \n(a) The investment purpose  loan facility shall be repaid over five years at an \ninterest rate equal to maximum of AWPLR  plus 1.5%  to expand business \nactivities.  \n(b) The working capital p urpose loan facility shall be repaid over two years at \nan interest rate equal to AWPLR . \n(c) A maximum grace period of one year may be considered  for such loans .        \n(d) Licensed banks may obtain suitable collateral to mitigate the risk relating \nto any additiona l credit facilities granted under this scheme.  \n(viii) Concessions already granted under different relief schemes and which are due to \nexpire before 31.12.2020, will be extended up to 31.12.2020. However, such \nborrowers shall be required to comply with the require ments of this scheme .  \n(ix) Licensed  banks may consider inclusion of borrowers whose total borrowings \nexceed Rs. 300 mn , on case -by-case basis, upon a written  request from  such", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n   30 January 2020  CIRCULAR           No. 02 of 20 20 \n4 \n \nborrower.   \n \n3. Non-Performing Loans  (NPLs)  \n(i) Eligible SME s which  are in the NPL category as at 31.12.2019 , including those \nwhere the banks have commenced or given notice of recovery action under the \nprovisions of the Recovery of Loans by Banks (Special Provisions) Act, No. 4 \nof 1990 , will be eligible to avail of the concessions set out below u pon a written \nrequest from such borrowers  on or before 10.02.2020 . \n(ii) The total penal  component of  interest accrued and unpaid on NPL loans and \nadvances referred above shall be waived  by licensed  banks  at their cost .         \n(iii) Rescheduling of loans  and advances  shall be as follows:  \n(a) Where the borrower has repaid 50% or more of the initial capital, 50% of \nthe accumulated  and unpaid  interest (after waiver of penal interest referred \nto above) of the defaulted instalments up to the date of consideration  by \nthe licens ed bank under this scheme  shall be deferred . The balance capital  \noutstanding, balance portion of interest of the  defaulted instalments and \nthe future interest shall be rescheduled . The deferred interest shall be \nwaived by the licensed banks , after the borr ower settles the rescheduled \nloans in the manner provided in para (c) and (d) below . \n(b) Where the borrower has repaid less than 50% of the initial capital, 25% of \nthe accumulated and unpaid interest (after waiver of penal interest referred \nto above) of the de faulted instalments up to the date of consideration by \nthe licensed bank under this scheme  shall be deferred . The balance capital \noutstanding, balance portion of interest of the  defaulted instalments and \nthe future interest shall be rescheduled . The deferr ed interest shall be \nwaived by the licensed banks, after the borrower settles the rescheduled \nloans in the manner provided in para (c) and (d) below .", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "loans in the manner provided in para (c) and (d) below . \n(c) The balance capital outstanding  referred in para (a) and (b) above shall be", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n   30 January 2020  CIRCULAR           No. 02 of 20 20 \n5 \n \nrescheduled and repaid over a period not exceeding twice the remaining \nnumber of instalments of the original loan . An e xample is provided in \nAnnex I \n(d) The balance portion of interest of the  defaulted instalments and the future \ninterest  referred in para (a) and (b) above shall be reschedu led and repaid \nover a period not exceeding twice the remaining number of instalments of \nthe original loan . An e xample is provided in Annex I \n(e) A one -year grace period shall be granted for capital repayment of loans \nreferred in para (c) above.  However, borrow ers will be required  to service \ninterest referred in para ( d) in a timely manner .  \n(iv) Licensed banks shall subject to para (d) below , grant a new working capital loan \n(or temporary progressively reducing overdraft facility) for SMEs which are in \nthe NPL categ ory as follows, to revive businesses:  \n(a) Maximum amount to be three months working capital requirement with a \nmaximum tenure of six months . \n(b) A three -month moratorium shall be granted for the repayment  of capital of \nsuch loan or overdraft , provided however that  interest shall be serviced  in \na timely manner .  \n(c) Interest rate for this loan shall not be more than 2% plus the prevailing  \nStanding Lending Facility Rate .       \n(d) The new working capital loan  is included in a credit guarantee scheme  \nadministered by CBSL as m entioned in para 5 below .  \n(v) Licensed  banks shall  defer passing new resolutions under the Recovery of Loans \nby Banks (Special Provisions) Act, No. 4 of 1990 for recovery of loans and \nadvances until 31.12.2020 in respect of borrowers participat ing in this sch eme. \nIn instances where resolutions  for recovery have already been passed,  \nauction ing of assets  will be deferred  until 31.12.2020  in respect of such", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n   30 January 2020  CIRCULAR           No. 02 of 20 20 \n6 \n \nborrowers  who are participants in the Scheme and meet the requirements of the \nScheme . Failure to adhere to the requirements will result in the banks treating \nsuch borrowers as non-participants  of this scheme.  \n(vi) In instances where there are on-going litigation s in courts relating to recovery, \nborrowers will be permitted to participate in the Scheme upon entering i nto an \nagreement in Court with regard to the requirements set out in this scheme .  \n(vii) Licensed  banks shall suspend legal action against non-performing borrowers \nwho have been accepted under this scheme .   \n4. Repayment of Capital by Banks unde r Refinance Schemes  \n(i) The Government has indicated its willingness to defer capital repayments on \nrefinance loans granted to licensed banks falling due from 01.01.2020 until \n31.12.2020 and extend the final repayment date by 12 months. However, banks \nare required to seek such ex tension if required and  enter into  supplementary \nagreements with the relevant Government agency in this regard.   \n5. Credit Guarantee Scheme  \n(i) The Government and CBSL  will formulate a Credit Guarantee Scheme to \nprovide risk mitigation arising from any additional  loans and advances for up to \n75% of the capital sum granted by licensed banks under para 3 (iv) of this \ncircular.  \n(ii) The Guarantee fee applicable will be 1 % per annum and will be borne by \nlicensed banks if they wish to avail of the Guarantee .  \n6. Reporting to the Credit Information Bureau (CRIB)  \n(i) Licensed banks  are expected  to have a mechanism  not to decline loan \napplications solely  based on an adverse CRIB record.  \n(ii) Licensed banks , in consultation with CRIB , shall develop a reporting modality \nin respect of the capital deferment granted under this scheme  to performing", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 5, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n   30 January 2020  CIRCULAR           No. 02 of 20 20 \n7 \n \n                                                                                  borrowers , so that participation in the Scheme  will not have an impact on the \ncredit score of borrowers in the future, or be negatively reflected in future CRIB \nreports.  \n7. Reporting Requirement  \nLicensed  banks shall report the details of moratorium availed by borrowers to the \nDirector of Bank Supervision  as at 15th and 30th of each month , within 5 working days \ncommencing from 01.02.2020 . \n8. Revocation of the Circular   \nThe Circular No. 01 of 2020 on Credit S upport to Accelerate Economic Growth is \nhereby revoked.       \n \n(Mrs.)  V A A N de Silva  \nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_02_of_2020_0.pdf", "page": 6, "year": 2020}, "type": "Document"}
{"page_content": "Draft  \n \nCENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMEN T \n    04 March  2020  CIRCULAR           No. 03 of 20 20 \n \nRECOVERY OF ACCOMMODATION TO EXPORTERS     \n \nFurther to our Circular dated 03 August 2015 on the above subject, licensed commercial banks  \n(LCBs) are informed of the following .  \n(i) The Central Bank of Sri Lanka has decided to extend t he maximum period for the \nsettlement of export credit facilities out of export proceeds to 180  days from the date of \nshipment . \n(ii) This Circular shall come into operation with effect from 01 March 2020 . \n  \n                                                                                                               \n  \n(Mrs. ) V A A N De Silva    \nDirector  of Bank Supervision", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_03_of_2020.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA03 November 2020 CIRCULAR No. 10 of 2020DEBT MORATORIUM FOR COVID-19 AFFECTEDBUSINESSES AND INDIVIDUALSWith a view to meeting the challenges faced by businesses and individuals due to the second wave of COVID-19, the Central Bank of Sri Lanka (CBSL) directs licensed commercial banks and licensed specialised banks, (hereinafter referred to as licensed banks), to extend the debt moratorium to COVID-19 affected businesses and individuals (hereinafter referred to as the Scheme) for a further period of six months commencing from 1 October 2020 as specified below.Accordingly, this Circular is issued to give effect to the Scheme in a consistent manner across all licensed banks. However, licensed banks may offer any additional concessions to borrowers in a way that the overall benefits to borrowers are not less than the benefits offered under this Circular.1. Tenure and applicability of the moratorium(a) The tenure of the moratorium shall not exceed 6 months commencing from 1 October 2020 or a shorter period as applicable, considering the financial difficulties faced by the eligible borrowers, based on internal guidance given by the licensed bank\u2019s Board of Directors or other delegated authority.(b) The moratorium shall be granted for both capital and interest on the request made by affected borrowers.2. Deadline for submission of the applicationEligible borrowers may request for the moratorium on or before 30 November 2020 in writing or through electronic means. Licensed banks are required to provide a simple format (hard form/ soft form) for affected borrowers to make the request and communicate the concessions, deadline and format for submission via printed and/or electronic means including email and SMS.1", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_10_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA09 November 2020 CIRCULAR No. 10 of 20203. Eligible borrowers(a) Businesses, proprietors and individuals engaged in tourism, direct and indirect export-related businesses including apparel, IT, tea, spices, plantation, logistic suppliers, event management, and any other sectors that have been adversely affected by work disruption and local and overseas lockdowns resulting from COVID-19.(b) Small and Medium Enterprises (SMEs) and individuals engaged in business sectors such as manufacturing, non-financial services, agriculture (including processing), construction, value addition and trading businesses including authorised domestic pharmaceutical suppliers. For this purpose, SMEs refer to businesses with an annual turnover up to Rs. 1 bn.(c) Self-employment businesses and individuals who have lost their jobs or income due to the outbreak of COVID-19.(d) Foreign currency earners (individuals and businesses) who have to repay loans in foreign currency and whose incomes/businesses have been adversely affected due to the outbreak of COVID-19.4. Eligible credit facilitiesTerm loans, leasing facilities, pawning, overdrafts, trade finance or any other credit facilities denominated in Rupees and foreign currency, which are in the performing category as at 01 October 2020. In the case of granting moratorium for Saubagya COVID- 19 Renaissance Facility under Phase I, II and III, licensed banks shall adhere to the instructions issued by CBSL on 06 November 2020.5. Structuring of the moratorium(a) Licensed banks shall convert the capital and interest on contracted rate falling due during the moratorium period from 1 October 2020 to 31 March 2021, or a shorter period as applicable, into a term loan.(b) Licensed banks may charge an interest rate for the converted loan, not exceeding the latest auction rate for 364-days Treasury Bills, available immediately after the respective moratorium period, plus 1 per cent per annum. In the case of foreign", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_10_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "after the respective moratorium period, plus 1 per cent per annum. In the case of foreign currency loans, licensed banks shall charge an interest rate below the current2", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_10_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA03 November 2020 CIRCULAR No. 10 of 2020market interest rate or the contracted interest rate whichever is lower, for the converted loan.(c) The repayment period of such converted loan shall be minimum of 24 months and the repayment shall commence from 01 April 2021.(d) In the case of overdrafts, licensed banks shall convert the interest falling due duringthe moratorium period from 1 October 2020 to 31 March 2021, or a shorter period as applicable, into a term loan and charge an interest rate not exceeding 4 per cent per annum for the converted loan. The repayment period of such converted loan shall be minimum of 12 months and the repayment shall commence from 01 April 2021.(e) However, if the borrower wishes to repay the converted loan in less than the specified period or if a licensed bank wishes to offer a longer period than the specified period, licensed banks may facilitate such requests. Licensed bank and the borrower shall agree on the interest rate, if the repayment period of the converted loan varies from the stipulated period.(f) In the case of pawning facilities, the due dates falling during the moratorium periodshall be extended till 01 April 2021.(g) In the case of credit card facilities, licensed banks may take appropriate business decisions to accommodate any request for concessions made by eligible borrowers.(h) Licensed banks shall waive off the penal interest accrued and unpaid as at 1 October 2020, if any. Penal interest shall not be accrued and charged during the moratorium period.(i) Licensed banks shall not levy excessive fees or charges in relation to granting of the moratorium.(j) Licensed banks shall ensure that eligible borrowers are made aware of the structureof moratorium facilities prior to approving such moratorium. In the case of declined requests, licensed banks shall clearly mention the reason for such decline.6. Accounting considerations on the moratoriumLicensed banks shall account for the", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_10_of_2020_e.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "for such decline.6. Accounting considerations on the moratoriumLicensed banks shall account for the moratorium as per Sri Lanka Accounting Standards and any additional guidance provided by CA Sri Lanka (CASL) on Financial Reporting3", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_10_of_2020_e.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA08 November 2020 CIRCULAR No. 10 of 2020implications due to the outbreak of COVID-19. Licensed banks may seek advice from CASL and Auditors for additional guidance/clarification in this regard.7. Reporting requirementLicensed banks shall report the details of moratorium availed by their borrowers to the Bank Supervision Department as at the 15th and 30th of each month, within 5 working days, commencing from 15.12.2020.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n4", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_10_of_2020_e.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n \n   27 March  2020  CIRCULAR           No. 05 of 20 20 \n \n1 \n \n \nRUPEES  50 B ILLION, SIX -MONTH RE-FINANC ING  FACILITY TO  \nSUPPORT COVID -19 HIT BUSINESSES INCLUDING  \nSELF EMPLOYMENT AND INDIVIDUALS   \n   \n1. Introduction  \n(i) The Central Bank of Sri Lanka has decided to set up the above Re-financ ing Facility \nin order to implemen t the decision s taken by the Cabinet of Ministers  on 20.03.2020 \nto introduce  a wide range of fiscal and financial concessions for COVID -19 hit \nbusiness  activities  including self -employment businesses  and individuals . Among \nthese concessions are debt moratorium (capital and interest) and a working capital \nloan at the interest rate  of 4% p.a. for eligible customers . \n(ii) The licensed commercial banks , licensed specialised banks, licensed finance \ncompanies  and specialised leasing companies (hereinafter referred to as Financial \nInstitutions ) will be  eligible  to participate in this re-financing facility  to support \nCOVID -19 hit businesses including self-employment businesses and individuals  \ncommencing 25.03.2020 .  \n(iii) This Circular is issued to supplement the  Circular No. 04 of 2020 dated 24.03.2020 \nand sets out the operational guidelines to give effect to the re-financing facility .  \n \n \n \n2. General  Terms and Conditions  of the Financing Facility  \n(i) Eligible businesses /sectors : \n(a) Tourism, direct  and indirect  export -related businesses including apparel, \nIT, tea, spices, plantation and related logistic suppliers that have been  \nadversely  affected by work disruption  and overseas lockdown s resulting \nfrom COVID \u2013 19. \n(b) Small and Medium Enterprises (SMEs) engaged in business sectors such \nas manufacturing, services, agriculture (i ncluding processing),  \nconstruction , value addition and trading businesses including authorised \ndomestic pharmaceutical suppliers  with turnover below Rs. 1 bn.", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n \n   27 March  2020  CIRCULAR           No. 05 of 20 20 \n \n2 \n \n(c) Self-employ ment  businesses and  individuals  who have lost their jobs or \nincome due to the outbreak of COVID -19.    \n(d) Foreign currency earners (individuals and corporates) who have to repay \nloans in foreign currency and whose income s/ business es have been \nadversely affected due to the outbreak of COVID -19.  \n(ii) For the avoidance of doubt, import facilities shall not be permitted under this \nre-finance facilit y, for imports other than  pharmaceutical drugs , medical \nequipment , food, fertilizer and essential raw materials and machinery and \nequipment.  \n(iii) Credit facilities to be supported under this Financ ing Scheme shall be term \nloans, leasing facilities, pawning , overdrafts and trade finance facilities \ndenominated in Rupees and foreign currency subject to the requirements \nspecified.  \n(iv) Financial institutions shall  offer concessions under this Scheme to all \nborrowers  who have been affected by work disruption due to COVID \u2013 19 and \noverseas lockdown s and requested relief  through online facilities or other \ncommunication arrangements before 30.04.2020 . The financial institutions \nshall c omplete processing of such r equests within 45 days  from the date of \nreceipt of the request . Until the process ing of requests  is conclude d recovery \nof loans from the respective applicant s shall be suspended.   \n \n3. Concessions for Existing Performing Loans  as at 25.03.2020  \n(i) Upon a communication by a borrower  reque sting concessions under this \nscheme on or before 30.04.2020 , the financial institutions shall offer a debt \nmoratorium for the period as given below  in respect of all eligible Rupee and \nforeign currency term loans.  \n(a) A six-month debt moratorium on the leasing rentals of all three -\nwheelers, school vans, lorries, small goods transport vehicles  and buses", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "wheelers, school vans, lorries, small goods transport vehicles  and buses  \nand related assets such as motor  bikes  and taxies  operated by the self -\nemployed / owners .", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n \n   27 March  2020  CIRCULAR           No. 05 of 20 20 \n \n3 \n \n(b) A debt moratorium  until 30.05.2020 on personal loans granted to all \nprivate sec tor non -executive employees.  \n(c) A three -month debt moratorium for all personal loans and leasing where \nthe granted amount is less than Rs. 1 million . \n(d) A six -month debt moratorium for affected industries in small & medium \nenterprises , tourism, apparel, plantation, IT and related logistic service \nproviders . \n(e) A six-month debt moratorium  for all other  eligible  businesses/sectors \nspecified under 2 (i) above.   \n(ii) Financial institutions shall extend the existing tenure of loans eligible for debt \nmoratorium by the respective moratori um period . \n(iii) Permanent Overdraft facilities falling due for settlement or maturing or are \nreviewed during the period up to 25.03 .2020 shall be extended up to \n30.09.2020. However, in the case of Temporary Overdraft facilities as at \n25.03.2020 , the expiry shall be extended by two months for eligible \nborrowers . Interest rate on such facilities will be capped at 1 3 percent during \nthe extended period.  \n(iv) Eligible trade finance facilities falling due for settlement or maturing or were \nunder review during the period up to 25.03.2020  shall be extended up to \n30.09.2020 . \n(v) Pawing facilities falling due for settlement or maturing during the period up \nto 25.03.202 0 shall be extended up to 30.09.2020.  \n \n4. Concessions for Existing Non -Performing Loans (NPLs)  as at 25.03.2020  \n(i) The penal interest charged u p to 25.03.2020 shall be waived off by the \nconcerned financial institutions.  \n(ii) Rescheduling of loans and advances shall be as follows:  \n(a) Where  the borrower has repaid 50% or more of the initial capital, 50% \nof the accumulated and unpaid interest  (after waiver of penal interest \nreferred to above) of the defaulted instalments  up to the date of", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n \n   27 March  2020  CIRCULAR           No. 05 of 20 20 \n \n4 \n \nconsideration by the concerned  financial institutions  unde r this  re-\nfinancing facility shall be deferred . The balance capital outstanding, \nbalance  portion of interest of the defaulted instalments and the future \ninterest shall be rescheduled  over a 3  year period . The deferred interest \nshall be waived by the financial institution , after the borrower settles the \nrescheduled loans in the manner provided in para (c) and (d) below.  \n(b) Where the borrower has repaid less than 50% of the initial capital, 25% \nof the accumula ted and unpaid interest (after waiver of penal interest \nreferred to above) of the defaulted instalments up to the date of \nconsideration by the financial  institution under this re-financing facility \nshall be deferred. The balance capital ou tstanding, balance portion of \ninterest of the defaulted instalments and the future interest shall be \nrescheduled  over a 3 year period . The deferred interest shall be waived \nby the financial institutions  concerned , after the borrower settles the \nreschedule d loans in the manner provided in para (c) and (d) below.  \n(c) The balance capital outstanding referred to in para graphs (a) and (b) \nabove shall be rescheduled and repaid over a period of 3 years.  \n(d) The balance portion of interest of the defaulted instalments and the \nfuture interest referred to in para graphs (a) and (b) above shall be \ntransferred to a suspense account and recovered o ver a period of 3 years.  \n(e) A moratorium up to 30.09.2020 shall be granted .  \n(f) Licensed banks may reclassify NPLs under this Scheme as performing \nloans and advances provided that the borrower has serviced interest for \nsix consecutive months during the debt moratorium period, if required. \nHowever, in the case of instalments in arrears before rescheduling the", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "However, in the case of instalments in arrears before rescheduling the \nNPL facility is less than six m onths, upgrading to performing category \nshall be done only after the borrower has serviced interest for a period \nequal to instalments in arrears before rescheduling the NPL facility.", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n \n   27 March  2020  CIRCULAR           No. 05 of 20 20 \n \n5 \n \n \n(iii) Suspension of recovery actions  \n(a) In the case of eligible borrowers who are in the NPL c ategory as at the \ndate of this Circular, if financial institutions have commenced or given \nnotice of recovery action under the provisions of the Recovery of Loans \nby Banks (Special Provisions) Act, No. 4 of 1990  or Mortgage Act No. \n06 of 1949 as amended or Finance Leasing Act  No. 56 of 2000, such \nrecovery action will be suspended on condition that the concerned \nfinancial institution and the client reach a debt re -payment agreement.  \n(b) Financial institutions shall defer passing new resolutions under the above \nActs, for recovery of loans and advances in respect of borrowers \nparticipating in this Scheme. In instances where resolutions for recovery \nhave already been passed, auctioning of assets will be suspended until \n30.09.2020  in respect of such borrowers who are participants in the \nScheme . \n(c) In instances where there are on -going litigations in courts relating to \nrecovery, borrowers will be permitted to participate in the Scheme upon \nentering into an agreement by submission of affidavit to Court s agreeing \nto comply with the requirements set out in this Scheme.  \n(d) All financial institutions shall suspend legal action against non -\nperforming borrowers who have been accepted under this Scheme .   \n \n5. New Working Capital or Investment Purp ose Loan  \n(i) Financial institutions may grant an additional loan or a new loan facility in \nRupees for working capital or investment purposes subject to the following \nconditions , provided that the borrower submits a credible business  plan:     \n(a) The working capital purpose loan facility shall be granted to eligible \nperforming and non -performing bo rrowers in Rupees not exceeding Rs. \n25 mn per bank per borrower and Rs. 10 mn per other financial", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "25 mn per bank per borrower and Rs. 10 mn per other financial \ninstitutions per borrower  or 2 months working capital req uirement", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n \n   27 March  2020  CIRCULAR           No. 05 of 20 20 \n \n6 \n \nwhichever  is higher, based on the requirement for working capital cycle . \nSuch loan shall be repaid over two years at an interest  rate equal to 4% \np.a. CBSL will subsidise interest cost up to 4% for licensed banks and \nup to 7% for other financial institutions as a rebate .  \n(b) The investment purpose loan facility shall be granted only  by banks and \nonly for performing borrowers in Rupees not exceeding Rs. 300 mn per \nbank per borrower to expand business activities . Such loan shall be \nrepaid over five years at an interest rate equal to maximum of AWPLR \nplus 1.5%.    \n(ii) Financial institutions shall properly evaluate the funding requirement of the \nborrower and agree on the loan size.  \n(iii) A moratorium for a period 25.03.2020 to 30.09 .2020 will be granted for both \nworking capital loan s and investment  loans.    \n(iv) Financial institutions may obtain suitable collateral to mitigate the risk \nrelating to any additional credit facilities granted under this re-finance facility . \n \n6. Repayment  of Capital by Banks under Refinance Schemes  \nThe Government has indicated its willingness to defer capi tal repayments on \nrefinance loans granted to licensed banks falling due from 01.01.2020 until \n31.12.2020 .  However, banks are required to seek extension if required and enter into \nsupplementary agreements with the relevant Government agency in this regard.  \n \n7. Reporting to the Cred it Information  Bureau (CRIB)  of Sri Lanka  \n(i) Financial Institutions are expected to have a mechanism not to decline loan \napplications solely based on an adverse CRIB record.  \n(ii) Financial Institutions , in consult ation with CRIB, shall develop a reporting \nmodality in respect of the capital deferment granted under this scheme to \nperforming borrowers, so that participation in the Scheme will not have an", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 5, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n \n   27 March  2020  CIRCULAR           No. 05 of 20 20 \n \n7 \n \n impact on the credit score of borrowers in the future, or be neg atively reflected \nin future CRIB reports.  \n \n8. Financial institutions shall  discontinue charging  for cheque return s, stop payment s, \nlate payment fee on all credit cards  and other credit facilities  during the period up to \n30.09.2020.   \n \n9. Reporting  Requirement  \nFinancial institutions shall report the details of moratorium availed by  their borrowers to \nthe Bank Supervision  Department and the Depart ment of Supervision of Non -bank \nFinancial Institutions , as relevant , as at 15th and 30th of each month, within 5 wo rking days , \ncommencing from 01.05 .2020.", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_5_of_2020_e1_0.pdf", "page": 6, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA29 April 2020 CIRCULAR No. 06 of 2020AMENDMENT TO CIRCULARS No 04 and 05 of 2020The Central Bank of Sri Lanka issues the following amendments to Circular No. 04 of 2020 on Relief Measures to Assist COVID-19 Affected Businesses and Individuals and Circular No. 05 of 2020 on Rupees 50 billion, Six-month Re-financing Facility to Support COVID-19 Hit Businesses Including Self-employment and Individuals dated 24.03.2020 and 27.03.2020, respectively.Paragraph 5 of Circular No. 04 of 2020 is amended as follows:5. Licensed banks shall extend the validity period of cheques valued less than Rs. 500,000 until 15.05.2020.Paragraph 2(iv) of Circular No. 05 of 2020 is amended as follows:2. (iv) The deadline for submission of request by eligible borrowers to avail concessions under these Schemes has been extended till 15.05.2020. Other clauses of this paragraph remain unchanged.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_6_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \n  CENTRAL BANK OF SRI LANKA  \n \n16 July 2020                                           CIRCULAR                                         No. 07 of 2020  \n \n \n \nRELIEF MEASURES TO ASSIST COVID -19 AFFECTED BUSINESSES AND \nINDIVIDUALS   \nThe Central Bank of Sri Lanka , considering the potential adverse impact of COVID -19 pandemic \non tourism sector businesses and individuals , requests  licensed commercial banks, licensed \nspecialised banks, licensed finance companies and specialised leasing companies (hereinafter \nreferred to as Financial Institutions) to provide the following  relief measures  to eligibl e borrowers : \n  \n \n1. Financial institutions shall extend the existing 6 months moratorium period granted in terms \nof Paragraph s 2 and 3 of Circular No. 05 of 2020 issued on 27 March 2020 to 12 months in \nrespect of capital outstanding of leasing facilities granted to tourism related vehicle s. \n2. Financial institutions may recover interest during the moratorium period  from eligible \nborrowers referred to in paragraph (1) above , in a manner that is not inco nvenient to the \nborrower . \n3. Financial institutions shall waive off the accrued penal interest in respect of leasing facilities \ngranted to tourism related vehicle s.", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_no_7_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \n  CENTRAL BANK OF SRI LANKA  \n \n26 August 2020                                  CIRCULAR                                        No. 08 of 2020  \n \n \n \nEXTENSION OF DEBT MORATORIUM FOR COVID -19 AFFECTED  \nBUSINESSES AND INDIVIDUALS IN THE TOURISM INDUSTRY  \n   \nWith a view to meet ing the challenges faced by the tourism industry due to the Easter Sunday \nAttack and the outbreak of COVID -19, the Central Bank of Sri Lanka (CBSL) has implemented \ndebt moratorium schemes  since April 2019 . Considering the ongoing travel restrictions, disruption  \nto economic activities and representation s made by the Ministry of Tourism  and related agencies , \nCBSL request s licensed commercial banks and licensed specialised banks (hereinafter referred to \nas licensed banks), to provide a debt moratorium to COVID -19 affected  businesses and individuals \nin the tourism sector (hereinafter refer red to as the Scheme) for a further period of six months \ncommencing from 1 October 2020 to 31  March 2021. CBSL  observed that the proposed Scheme \nmay not cause an undue level of stress or threaten the stability of the banking system  considering \nthe lower level of exposure to the tourism sector by lice nsed banks , the capital buffers maintained \nby licensed banks  and measures proposed by the Ministry of Tourism to revive the tourism \nindustry . Accordingly, this Circular is issued  to give effect to the Scheme in a consistent manner \nacross all licensed banks.  However, licensed banks may offer any additional concession s to \nborrowers in a way  that the overall benefits to borrower s are not less than the benefit s offer ed \nunder this Circular.       \n \n \n \n \n \n1. General Terms and Conditions  \n(i) Eligible borrowers   \n(a) Businesses and individuals who are affected by COVID -19 and registered \nwith:  \ni) Ministry of Tourism  \nii) Sri Lanka Tourism Development Authority   \niii) Agencies under Sri Lanka Tourism Development Authority", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_8_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "iii) Agencies under Sri Lanka Tourism Development Authority  \niv) Local Government Authorities such as Pradesh ia Sabha, Urban \nCouncil or Municipal Council. However, such businesses shall now \nregister with the relevant institutions referred in i), ii) and iii) above", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_8_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \n  CENTRAL BANK OF SRI LANKA  \n \n26 August 2020                                  CIRCULAR                                        No. 08 of 2020  \n \nv) Department  of Cultural Affairs  \nvi) The Hotels Association of Sri Lanka    \n(b) Employees of eligible business es who are affected by COVID -19. In the \ncase of such employees, the registration of the business with the relevant \ninstitutions referred in (a) above shall be considered sufficient.     \n(ii) Credit facilities to be supported under this Scheme shall include all performing \ncredit facilities as at 18 April 2019 or a later date, granted to eligible borrowers  \nand non -performing loans re -structured under Circular No. 05 of 2020 issued on \n27 March 2020 .  \n(iii) Debt moratorium refers to moratorium for both capital and interest for a further \nperiod of six months commencing 1 October 2020 to 31 March 2021 .    \n(iv) Eligible borrowers  who wish to avail the moratorium shall make a request seeking \nsuch moratorium to the relevant licensed bank on or before 25 September 2020 . \nAny eligible borrower who has the capacity to service the loan repayment is \nexpected to service such loan repayment s instead of requesting for this extension.     \n(v) Licensed banks shall accommodate such requests, considering the potential  \nrepayment capacity of the borrower.    \n   \n2. Structuring the debt moratorium  \n(i) Licensed banks shall convert the capital and interest falling due during the \nmoratorium period commencing from 1 October 2020 to 31 March 2021 into a \nterm loan . Licensed banks may amalgamate the capital and interest falling due \nduring 1 April 2020 to 30 Se ptember 2020 with the capital and interest falling \ndue during 1 October 2020 to 31 March 2021, except for EMI loans for which \nthe interest rate for the moratorium period is capped at 7 per cent per annum.    \n(ii) Such converted  loan shall be  recover ed not earli er than 1 July 202 1 onwards .", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_8_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \n  CENTRAL BANK OF SRI LANKA  \n \n26 August 2020                                  CIRCULAR                                        No. 08 of 2020  \n \n \n (iii) Licence d bank s may charge an interest rate for the converted  loan, not exceeding \nthe latest auction rate for 364 -days Treasury Bills, available by 1 April 202 1, plus \n1 per cent per annum .  \n(iv) The repayment period of such converted loan shall be minimum of two years. \nHowever, if the borrower wishes to repay the loan in less than two years or if the \nlicensed bank wishes to offer a longer period, licensed banks may facilitate such \nrequests. Licens ed bank and the borrower shall agree on the interest rate, if the \nrepayment period varies from the stipulated two-years period.      \n(v) Licensed banks shall waive off the accrued and unpaid penal interest  as at 1 \nOctober 2020 , if any,  on performing and non -performing loans  considered under \nthis Circular . Penal interest shall n ot be accrued and charged during the \nmoratorium period . \n \n3. Reporting  Requirement  \nLicensed banks shall report the details of moratorium availed by borrowers to the \nDirector of Bank Supervis ion as at 30th of each month, within 15 wo rking days \ncommencing from 1 November 2020 . A reporting format will be issued in due course . \n \n4. Revocation s  \nCircular No 07 of 2020 dated 16 July 2020 on R elief Measures to Assist COVID -19 \nAffected Businesses and Individuals  is hereby  revoked.", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_8_of_2020_e.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n     28 October 2020  CIRCULAR  No. 09 of 2020  \n \nAmendments to Circular No. 04 of 2018 on Guidelines to Licensed Banks on the \nAdoption of Sri Lanka Accounting Standards \u2013 SLFR S 9: Financial Instruments  \n \nThe Central Bank of Sri Lanka with a view to establishing consistent practices on the adoption \nof Sri Lanka Accounting Standards \u2013 SLFRS 9: Financial Instruments by licensed banks under \nCOVID -19 environment, issues amendments to Circular No. 04 of 2018 dated 31 December \n2018 as specifi ed at Annex I.  Further , the following clarifications are provided to licensed \nbanks:  \n(1) In the case where direct temporary restrictions on economic activities are in place due \nto COVID -19 outbreak, licensed banks may exercise judgment on case -by-case basis, \nto determine whether to classify facilities as Stage 3 facilities or not, considering the \nborrower\u2019s inability to revive the business and generate sufficient cash flows  to repay \nthe exposure once the restrictions on economic activities are removed;  \n(2) Licensed  banks may  consult CA Sri Lanka and Auditors in order to obtain further \nguidance in respect of computing Probability of Default for Foreign Currency \ndenominated Sovereign instruments; and  \n(3) Licensed banks shall continue to follow the guidance prescribed in t he Circular No. 04 \nof 2018 in respect to Loss Given Default (LGD) to be used when computing expected \nlosses for exposures denominated in foreign currencies issued by sovereigns.  \n \n \n \nSgd. Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_9_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n     28 October 2020  CIRCULAR  No. 09 of 2020  \n \nAnnex I  \nAmendments to Circular No. 04 of 2018 on Guidelines to Licensed Banks on the \nAdoption of Sri Lanka Accounting Standards \u2013 SLFR S 9: Financial Instruments  \n \n1. Guideline 4.8 shall  be inserted immediately after Guideline 4.7 as follows:  \n  Licensed banks shall with the approval of the Board of Directors of \nthe bank include clear guidelines on staging of loans and advances for \nimpairment purposes in the related policies, amidst the extraordinary \ncircumstances caused by the COVID -19 outbreak.  \n2. Guideline 5.3 (a ) and (b) shall  be rep laced with the following:  \n  (a) Licensed banks shall use forecasts and projections published \nby the Central Bank of Sr i Lanka (CBSL) when adjusting \ncredit provisioning models to reflect the economic conditions \nand forecasts, on a consistent basis.  \n(b) If CBSL forecasts are not available, licensed banks shall use \ncredible alternative sources on a consistent basis and shall \nmaintain relevant documentary evidence.  \n3. Annex 1 Guideline 1.3 (b) shall be replace d as follows:  \n  All restructured loans, which are restructured more than twice, other \nthan credit facilities/exposures mentioned in 3.2 below . \nLicensed banks may exercise judgment on case -by-case basis to \ndetermine whether to categorise such facilities as Stage 3 facilities or \nnot, if a facility has been restructured more than twice due to adverse \neconomic consequences of the COVID -19 outbreak or the Easter \nSunday Attack.", "metadata": {"source": "data\\CBSL\\2020\\bsd_circular_No_9_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT 19 March 2020 BANKING ACT DIRECTIONS No. 01 of 2020MEASURES TO CURTAIL IMPORTS AND FOREIGN CURRENCY INVESTMENTSIssued in terms of the powers conferred by Sections 46(1) and 76(J)( 1) of the Banking Act No. 30 of 1988, as amended.In terms of Sections 46(1) and 76J(1) of the Banking Act No. 30 of 1988, in order to ensure the soundness of the banking system, the Monetary Board is empowered to issue Directions to all or any licensed commercial bank and licensed specialised bank, respectively, regarding the manner in which any aspect of the business of such bank or banks is to be conducted.The Central Bank of Sri Lanka with a view to easing the pressure on the exchange rate and the stress on financial markets due to the impact of COVID-19 outbreak, requires licensed commercial banks and National Savings Bank, to adopt the following measures during the next three months.1. Suspend facilitating importation of:a. motor vehicles, other than items specified in Schedule A of Annex I, under Letters of Credit, andb. non-essential goods specified in Schedule B of Annex 1 under Letters of Credit, Documents Against Acceptance and Advance Payment.2. Suspend the purchase of Sri Lanka International Sovereign Bonds.These Directions shall be implemented with immediate effect.Chairman of the Monetary Board and Governor of the Central Bank ofSri Lanka", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "Annex ISchedule -AExclusion List of Motor VehiclesHS HdgHS CodeDescription87.01Tractors (other than tractors of heading 87.09) (+)8701.10.00Single axle tractors :8701.10.10More than ten years old8701.10.90Other8701.20.00Road tractors for semi-trailers:8701.20.10Not more than five years old8701.20.20More than five years old8701.30.00Track-laying tractors :8701.30.10Not more than five years old8701.30.20More than five years oldOther, of an engine power:8701.91Not exceeding 18kW:8701.91.10Agricultural tractors, not more than ten years old8701.91.20Agricultural tractors, more than ten years old8701.91.30Other, not more than ten years old8701.91.40Other, more than ten years old8701.92.00Exceeding 18 kW but not exceeding 37 kW:8701.92.10Agricultural tractors, not more than ten years old8701.92.20Agricultural tractors, more than ten years old8701.92.30 .Other, not more than ten years old8701.92.40Other, more than ten years old8701.93.00Exceeding 37 kW but not exceeding 75 kW:8701.93.10Agricultural tractors, not more than ten years old8701.93.20Agricultural tractors, more than ten years old8701.93.30Other, not more than ten years old8701.93.40Other, more than ten years old8701.94.00Exceeding 75 kW but not exceeding 130 kW :8701.94.10Agricultural tractors, not more than ten years old8701.94.20Agricultural tractors, more than ten years old8701.94.30Other, not more than ten years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "8701.94.40Other, more than ten years old8701.95.00Exceeding 130 kW : - .8701.95.10Agricultural tractors, iiot more than ten years old8701.95.20Agricultural tractors, more than ten years old8701.95.30Other, not more than ten years old8701.95.40Other, more than ten years old-87.02Motor vehicles for the transport of ten or more persons, including the driver8702.10.00With only compression- ignition internal combustion piston engine (diesel or semi - diesel) :Motor vehicles for the transport of less than 13 persons (adults) including the driver, not more than three and a half years old:8702.10.12Modified Vehicles of heading 87.03, not more than two years old8702.10.13Modified Vehicles of heading 87.03, more than two years old8702.10.19OtherMotor vehicles for the transport of less than 13 persons (adults) including the driver, more than three and a half years old:8702.10.21Modified Vehicles of heading 87.038702.10.29Other-Motor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, not more than five years old :8702.10.32Modified Vehicles of heading 87-03, not more than two years old8702.10.33Modified Vehicles of heading 87.03, more than two years old8702,10.39OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, more than five years old :8702.10.41Modified Vehicles of heading 87.038702.10.49Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": ".......Motor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, not more than ten years old :8702.10.53Modified Vehicles of heading 87.03, not more than two years old8702.10.54Modified Vehicles of heading 87.03, more than two years old8702.10.55Other, not more than five years old8702.10.59OtherMotor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, more than ten years old :8702.10.61Modified Vehicles of heading 87.038702.10.69OtherOther, not more than ten years old :-8702.10.73Modified Vehicles of heading 87.03, not more than two years old-8702.10.74 .Modified Vehicles of heading 87.03, more than two years old ; s '8702.10.75Other, not more than five years old8702.10:79Other :Other, more than ten years old :8702.10.81Modified Vehicles of heading 87.038702.10.89Other8702.20.00With both compression- ignition internal combustion piston engine (diesel or semi- diesel) and electric motor as motors for propulsionMotor vehicles for the transport of less than 13 persons (adults) including the driver, not more than three and a half years old:8702.20.11Modified Vehicles of heading 87.03, not more than two years old8702.20.12Modified Vehicles of heading 87,03, more than two years old8702.20.19Other.Motor vehicles for the transport of less than 13 persons (adults) including the driver, more than three and a half years old:", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "8702.20.21Modified vehicles of heading 87.038702.20.29OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, not more than five years old:8702.20.31Modified vehicles of heading 87.03, not more than two years old8702.20.32Modified vehicles of heading 87.03, more than two years old8702.20.39OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, more than five years old :8702.20.41Modified vehicles of heading 87.038702.20.49OtherMotor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, not more than ten years old :8702.20.51Modified vehicles of beading 87.03, not more than two years old8702.20.52 -Modified vehicles of heading 87.03, more than two years old8702.20.53Other, not more than five years old8702.20.59OtherMotor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, more than ten years old :8702.20.61Modified vehicles of heading 87.038702.20.69 .OtherOther, not more than ten years old :8702.20.71Modified vehicles of heading 87.03, not more than two years old8702.20.72Modified vehicles of heading 87.03, more than two years old8702.20.73Other, not more than five years old8702.20.79Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "Other, more than ten years old :8702.20.81Modified vehicles of heading 87.038702.20.89Other8702.30.00With both spark-ignition internal combustion reciprocating piston engine and electric motor as motors for propulsion:Motor vehicles for the transport of less than 13 persons (adults) including the driver, not more than three and a half years old:8702.30.11Modified vehicles of heading 87.03, not more than two years old8702.30.12Modified vehicles of heading 87.03, more than two years old8702.30.19OtherMotor vehicles for the transport of less than 13 persons (adults) including the driver, more than three and a half years old:8702.30.21Modified vehicles of heading 87.038702.30.29OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, not more than five years old:8702.30.31Modified vehicles of heading 87.03, not more than two years old8702.30.32Modified vehicles of heading 87.03, more than two years old8702.30.39OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, more than five years old:8702.30.41Modified vehicles of heading 87.038702.30.49OtherMotor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, not more than ten years old :", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 5, "year": 2020}, "type": "Document"}
{"page_content": "8702.30.51Modified vehicles of heading 87.03, not more than two years old8702.30.52Modified vehicles of heading 87.03, more than two years old8702.30.53Other, not more than five years old8702.30.59OtherMotor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, more than ten years old :8702.30.61Modified vehicles of heading 87.038702.30.69OtherOther, not more than ten years old :8702.30.71Modified vehicles of heading 87.03, not more than two years old8702.30.72Modified vehicles of heading 87.03, more than two years old-8702.30.73Other, not more than five years old8702.30.79OtherOther, more than ten years old :8702.30.81Modified vehicles of heading 87.038702.30.89Other8702.40.00With only electric motor for propulsion :Motor vehicles for the transport of less than 13 persons (adults) including the driver, not more than three and a half years old:8702.40.11Modified vehicles of heading 87.03, not more than two years old8702.40.12Modified vehicles of heading 87.03, more than two years old.8702.40.19OtherMotor vehicles for the transport of less than 13 persons (adults) including the driver, more than three and a half years old:8702.40.21Modified vehicles of heading 87.038702.40.29OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, not more than five years old :", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 6, "year": 2020}, "type": "Document"}
{"page_content": "8702.40.31Modified vehicles of heading 87.03, not more than two years old8702.40.32Modified vehicles of heading 87.03, more than two years old8702.40.39OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, more than five years old :8702.40.41Modified vehicles of heading 87.038702.40.49OtherMotor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, not more than ten years old:8702.40.51Modified Vehicles of heading 87.03, not more than two years old8702.40.52Modified Vehicles of heading 87.03, more than two years old8702.40.53Other, not more than five years old8702.40.59OtherMotor vehicles for the transport of 25 or more persons . (adults) but less than 35 persons (adults) including the driver, more than ten years old :8702.40.61Modified vehicles of heading 87.038702.40.69OtherOther, not more than ten years old:8702.40.71Modified vehicles of heading 87.03, not more than two years old8702.40.72Modified vehicles of heading 87.03, more than two years old8702.40.73Other, not more than five years old8702.40.79OtherOther, more than ten years old:8702.40.81Modified vehicles of heading 87.038702.40.89Other8702.90.00Other:", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 7, "year": 2020}, "type": "Document"}
{"page_content": "Motor vehicles for the transport of less than 13 persons (adults) including the driver, not more than three and a half years old \u25a08702.90.12Modified Vehicles of heading 87.03, not more than two years old8702.90.13Modified Vehicles of heading 87.03, more than two years old8702.90.19OtherMotor vehicles for the transport of less than 13 persons (adults) including the driver, more than three and a half years old :8702.90.21Modified Vehicles of heading 87.038702.90.29OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, not more than five years old :8702.90.32Modified Vehicles of heading 87.03, not more than two years old8702.90.33Modified Vehicles of heading 87.03, more than two years old8702.90.39OtherMotor vehicles for the transport of 13 or more persons (adults) but less than 25 persons (adults) including the driver, more than five years old:8702.90.41Modified Vehicles of heading 87.038702.90.49OtherMotor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, not more than ten years old:8702.90.53Modified Vehicles of heading 87.03, not more than two years old8702.90.54Modified Vehicles of heading 87.03, more than two years old8702.90.55Other, not more than five years old8702.90.59Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 8, "year": 2020}, "type": "Document"}
{"page_content": "Motor vehicles for the transport of 25 or more persons (adults) but less than 35 persons (adults) including the driver, more than ten years old :8702.90.61Modified Vehicles of heading 87.038702.90.69OtherOther, not more than ten years old :8702.90.73Modified Vehicles of heading 87.03, not more than two years old8702.90.74 .Modified Vehicles of heading 87.03, more than two years old8702.90.75Other, not more than five years old8702.90.79OtherOther, more than ten years old : . y8702.90.81Modified Vehicles of heading 87.038702.90.89 Other87.03Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02), including station wagons and racing cars.Other vehicles, with only spark-ignition internal combustion reciprocating piston engine :8703.21.10Ambulances and prison vans not more than three years old8703.21.20Ambulances and prison vans more than three years old8703.21.30Hearses not more than three years old8703.21.40Hearses more than three years old8703.22.00Of a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc:8703.22.10Ambulances and prison vans, not more than three years old8703.22.20Ambulances and prison vans, more than three years old8703.22.30Hearses not more than three years old8703.22.40Hearses more than three years oldOf a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc:8703.23.10Ambulances and prison vans not more than three years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 9, "year": 2020}, "type": "Document"}
{"page_content": "8703.23.20Ambulances and prison vans more than three years old8703.23.30Hearses not more than three years old8703.23.40Hearses more than three years old8703.24.00Of a cylinder capacity exceeding 3,000 cc :8703.24.10Ambulances and prison vans not more than three years old8703.24.20Ambulances and prison vans more than three years old8703.24.30Hearses not more than three years old8703.24.40Hearses more than three years old8703.31.00Of a cylinder capacity not exceeding 1,500 cc :8703.31.10Ambulances and prison vans not more than three years old8703.31.20Ambulances and prison vans more than three years old8703.31.30Hearses not more than three years old8703.31.40Hearses more than three years old8703.32.00 \u25a0Of a cylinder capacity exceeding 1,500 cc but not exceeding 2,500 cc :8703.32.10Ambulances and prison vans not more than three years old8703.32.20Ambulances and prison vans more than three years old8703.32.30Hearses not more than three years old8703.32.40Hearses more than three years old8703.33.00Of a cylinder capacity exceeding 2,500 cc :8703.33.10Ambulances and prison vans not more than three years old8703.33.20Ambulances and prison vans more than three years old8703.33.30Hearses not more than three years old8703 33.40Hearses more than three years oldOther vehicles, with both spark-ignition internal combustion reciprocating piston engine and electric motor as motors for propulsion, other than those capable of being charged by plugging to external source of electric power:Vehicles other than motor cars including station wagons and racing cars, of a cylinder capacity not exceeding 1,000 cc:8703.40.11Ambulances and prison vans not more than three years old .8703.40.12 .Ambulances and prison vans more than three years", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 10, "year": 2020}, "type": "Document"}
{"page_content": "8703.40.13 Hearses not more than three years old8703.40.14Hearses more than three years oldOf a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc:8703.40.31 Ambulances and prison vans, not more than three years old8703.40.32Ambulances and prison vans, more than three years old8703.40.33 Hearses not more than three years old8703.40.34Hearses more than three years old-Vehicles other than motor ears including station wagons and racing cars of a cylinder capacity exceeding 1,500 cc but not exceeding 2,000 cc :8703.40.41Ambulances and prison vans not more than three years old8703.40.42 Ambulances and prison vans more than three years old8703.40,43 Hearses not more than three years old8703.40.44 Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 2,000 cc but not exceeding 3000cc :8703.40.61Ambulances and prison vans not more than three years old8703.40.62 Ambulances and prison vans more than three years old8703.40.63 Hearses not more than three years old8703.40.64Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 3000cc:8703.40.81 Ambulances and prison vans not more than three years old8703.40.82Ambulances and prison vans more than three years old8703.40.83Hearses not more than three years old8703.40.84Hearses more than three years oldOther vehicles, with both compression-ignition internal combustion piston engine (diesel or semi-diesel) and electric motor as motors for propulsion, other than those capable of being charged by plugging to external source of electric power :", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 11, "year": 2020}, "type": "Document"}
{"page_content": "Vehicles other than motor cars including station wagons and racing cars ,of cylinder capacity not exceeding 1,000 cc:8703.50.11Ambulances and prison vans not more than three years old8703.50.12Ambulances and prison vans more than three years8703.50.13Hearses not more than three years old8703.50.14Hearses more than three years oldOf a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc:8703.50.31Ambulances and prison vans, not more than three years old8703.50.32Ambulances and prison vans, more than three years old8703.50.33Hearses not niore than three years old\u25a0-8703.50.34Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 1,500 cc but not exceeding 2,000 cc :8703.50.41Ambulances and prison vans not more than three years old8703.5042Ambulances and prison vans more than three years old8703.50.43Hearses not more than three years old8703.50.44Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 2,000 cc but not exceeding 3000cc :8703.50.61Ambulances and prison vans not more than three years old8703.50.62Ambulances and prison vans more than three years old8703.50.63Hearses not more than three years old8703.50.64Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 3000cc : .8703.50.81Ambulances and prison vans not more than three years old8703.50.82Ambulances and prison vans more than three years old8703.50.83Hearses not more than three years old8703.50.84Hearses more than three years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 12, "year": 2020}, "type": "Document"}
{"page_content": "Vehicles other than motor cars including station wagons and racing cars ,Of cylinder capacity not exceeding 1,000 cc:8703.60.11Ambulances and prison vans not more than three years old8703.60.12Ambulances and prison vans more than three years8703.60.13Hearses not more than three years old8703,60.14Hearses more than three years oldOf a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc:8703.6031Ambulances and prison vans, not more than three years old8703.60.32Ambulances and prison vans, more than three years old8703.60.33Hearses not more than three years old8703.60.34Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 1,500 cc but not exceeding 2,000 cc :8703.60.41Ambulances and prison vans not more than three years old8703.60.42Ambulances and prison vans more than three years old8703.60.43Hearses not more than three years old8703.60.44Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 2,000 cc but not exceeding 3000cc :8703.60.61Ambulances and prison vans not more than three years old8703.60.62Ambulances and prison vans more than three years old8703.60.63Hearses not more than three years old8703.60.64Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 3000cc:8703.60.81Ambulances and prison vans not more than three years old8703.60.82Ambulances and prison vans more than three years old8703.60.83Hearses not more than three years old8703.60.84Hearses more than three years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 13, "year": 2020}, "type": "Document"}
{"page_content": "8703.70.11Ambulances and prison vans not more than three years old8703.70.12Ambulances and prison vans more than three years8703.70.13Hearses not more than three years old8703.70.14Hearses more than three years oldOf a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc:8703.70.31Ambulances and prison vans, not more than three years old8703.7032Ambulances and prison vans, more than three years old8703.70.33Hearses not more than three years old8703.70.34 Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 1,500 cc but not exceeding 2,000 cc :8703.70.41Ambulances and prison vans not more than three years old8703.70.42Ambulances and prison vans more than three years old-8703.70.43 Hearses not more than three years old8703.70.44Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 2,000 cc but not exceeding 3000cc :8703.70.61Ambulances and prison vans not more than three years old8703.70.62Ambulances and prison vans more than three years old8703.70.63Hearses not more than three years old8703.70.64Hearses more than three years oldVehicles other than motor cars including station wagons and racing cars of a cylinder capacity exceeding 3000cc :8703.70.81Ambulances and prison vans not more than three years old8703.70.82Ambulances and prison vans more than three years old8703.70.83Hearses not more than three years old8703.70.84Hearses more than three years old87.04 Motor vehicles for the transport of goods.8704.10.00Dumpers designed for off- highway use", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 14, "year": 2020}, "type": "Document"}
{"page_content": "Other, with compression- ignition internal combustion piston engine (diesel or semi- diesel) :8704.21.00g.v.w. not exceeding 5 tonnes :Special purpose tankers/bowsers and trucks:8704.21.11Tankers / bowsers with stainless steel tanks for transport of milk, not more than five years old8704.21.12Tankers / bowsers with stainless steel tanks for transport of milk,more than five years old8704.21.13Garbage trucks equipped with waste compacting mechanism, not more than five years old8704.21.14Garbage trucks equipped with waste compacting mechanism, more than five years oldAuto-trishaws:8704.21.21Not more than four years old8704.21.22More than four years oldChassis fitted with engines and cabs8704.21.31for vehicles of national subdivision 8704.21.43, not more than four years old8704.21.32for vehicles of national subdivision 8704.21.44, more than four years old8704.21.33for vehicles of national subdivision 8704.21.51, not more than four years old8704.21.34for vehicles of national subdivision 8704.21.52, more than four years old8704.21.35for vehicles of national subdivision 8704.21.63,not more than four years old8704.21.36for vehicles of national subdivision 8704.21.64, more than four years old8704.21.37for vehicles of national subdivision 8704.21.67, not more than four years old8704.21.38for vehicles of national subdivision 8704.21.68, more than four years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 15, "year": 2020}, "type": "Document"}
{"page_content": "Vehicles with separate bodies for cabin and for cargo area, the cabin been designed for 3 persons (adults) or less, including the driver, with no additional space in the cabin that can be converted for other uses, and cargo carrying capacity of less than 2000 kg, but excluding those vehicles with an engine compartment totally protruding to the front of the vehicle from the driving cab :8704.21.41Cargo carrying capacity of less than 800kg, not more than four years old8704.21.42Cargo carrying capacity of less than 800kg , more than four years old8704.21.43Cargo carrying capacity of 800kg or more, not more than four years old8704.21.44Cargo carrying capacity of 800kg or more, more than four years oldVehicles with separate bodies for cabin and cargo area, the cabin been designed for 3 persons (adults) or less, including the driver, with no additional space in the cabin that can be converted for other uses, and cargo carrying capacity of 2000 kg or more :8704.21.51Not more than four years old8704.21.52 More than, four years oldVehicles with separate bodies for cabin and for cargo area, the cabin been designed for 3 persons (adults) or less, including the driver, with no additional space in the cabin that can be converted for other uses, and cargo carrying capacity of less than 2000 kg:-8704.21.61Vehicles fitted with front leaf sprigs and Cargo carrying capacity of less than 800kg, not more than four years old8704.21.62Vehicles fitted with front leaf sprigs and Cargo carrying capacity of less than 800kg , more than four years old8704.21.63Vehicles fitted with front leaf sprigs and Cargo carrying capacity of 800kg or more, not more than four years old8704.21.64Vehicles fitted with front leaf sprigs and Cargo carrying capacity of 800kg or more, more than four years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 16, "year": 2020}, "type": "Document"}
{"page_content": "8704.21.65Other Vehicles, Cargo carrying capacity of less than 800kg, not more than four years old8704.21.66Other Vehicles, Cargo carrying capacity of less than 800kg, more than four years old8704.21.67Other Vehicles, Cargo carrying capacity of 800kg or more, not more than four years old8704.21.68Other Vehicles, Cargo carrying capacity of 800kg or more, more than four years oldOther vehicles with separate bodies for cabin and cargo area, cabin been designed for six persons (adults) or less including the driver, with no additional space in the cabin that can be converted for other use, and a cargo carrying capacity of 800 kg or more, but excluding those vehicles with an engine compartment totally protruding to the front of the vehicle from the driving cab :8704.21.71Not more than four years old8704.21.72More than four years oldOther:8704.22.00g.v.W. exceeding 5 tonnes but not exceeding 20 tonnes :Tankers and bowsers with stainless steel tanks for transport of milk and refrigerated trucks :8704.22.41Not more than five years old8704.22.42More than five years old but less than ten years old8704.22.43More than ten years oldGarbage trucks equipped with waste compacting mechanism.:8704.22.51Not more than five years old8704.22.52More than five years oldOther:8704.22.61Not more than five years old8704.22.62More than five years old but less than ten years old8704.22.63More than ten years old8704.23.00g.v.w. exceeding 20 tonnes :Tankers and bowsers with stainless steel tanks for transport of milk and refrigerated trucks :", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 17, "year": 2020}, "type": "Document"}
{"page_content": "8704.23.51Not more than five years old8704.23.52More than five years old but less than ten years old8704.23.53More than ten years oldGarbage trucks equipped with waste compacting mechanism:8704.23.61Not more than five years old8704.23:62More than five years oldOther:8704 23.71Not more than five years old8704.23.72More than five years old but less than ten years old8704.23.73More than ten years oldOther, with spark-ignition internal combustion piston engine: '8704.31.00g.v.w. not exceeding 5 tonnes:Special purpose tankers/bowsers and trucks:.8704.31.11Tankers / bowsers with stainless steel tanks for transport of milk, not more than five years old8704.31.12Tankers / bowsers with stainless steel tanks for transport of milk,more than five years old8704.31.13 .Garbage trucks equipped with waste compacting mechanism, not more than five years old8704.31.14Garbage trucks equipped with waste compacting mechanism, more than five years oldAuto-trishaws :8704.31.21With two-stroke petrol engine8704.3 L22Other, not more than four years old8704.31.23Other, more than four years oldChassis fitted with engines and cabs :8704.31.31for vehicles of national subdivision 8704.31.43, not more than four years old8704.31.32for vehicles of national subdivision 8704.31.44, more than four years old8704.31.33for vehicles of national subdivision 8704.31.51, not more than four years old8704.31.34for vehicles of national subdivision 8704.31.52, more than four years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 18, "year": 2020}, "type": "Document"}
{"page_content": "8704.31.35for vehicles of national subdivision 870431.63, not more than four years old8704.31.36for vehicles of national subdivision 8704.31.64, more than four years old870431.37for vehicles of national subdivision 870431.67, not more than four years old87043 1 38for vehicles of national subdivision 870431.68, more than four years oldVehicles with separate bodies for cabin and for cargo area, the cabin been designed for 3 persons (adults) or less, including the driver, with no additional space in the cabin that can be converted for other uses, and cargo carrying capacity of less than 2000 kg, but excluding those vehicles with an engine compartment totally protruding to the front of the vehicle from the driving cab :870431.41Cargo carrying capacity of less than 800kg, not more than four years old8704.31.42Cargo carrying capacity of less than 800kg , more than four years old870431.43Cargo carrying capacity of 800kg or more, not more than four years old8704.31.44Cargo carrying capacity of 800kg or more, more than four years oldVehicles with separate bodies for cabin and cargo area, cabin been designed for three persons (adults) or less, including the driver with no additional space in the cabin that can be converted for other uses and cargo carrying capacity of2000 kg or more:8704.31.51Not more than four years old870431.52More than four years oldVehicles with separate bodies for cabin and for cargo area, the cabin been designed for 3 persons (adults) or less, including the driver, with no additional space in the cabin that can be converted for other uses, and cargo carrying capacity of less than 2000 kg :870431.61Vehicles fitted with front leaf sprigs and Cargo carrying capacity of less than 800kg, not more than four years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 19, "year": 2020}, "type": "Document"}
{"page_content": "8704.31.62Vehicles fitted with front leaf sprigs and Cargo carrying capacity of less than 800kg , more than four years old8704.31.63Vehicles fitted with front leaf sprigs and Cargo carrying capacity of 800kg or more, not more than four years old8704.31.64Vehicles fitted with front leaf sprigs and Cargo carrying capacity of 800kg or more, more than four years old8704.31.65Other Vehicles, Cargo carrying capacity of less than 800kg, not more than four years old8704.31.66Other Vehicles, Cargo carrying capacity of less than 800kg, more than four years old8704.31.67Other Vehicles, Cargo carrying capacity of 800kg or more, not more than four years old8704.31.68Other Vehicles, Cargo carrying capacity of 800kg or more, more than four years old\u25a0Other vehicles with separate bodies for cabin and cargo area, cabin been designed for six persons (adults) or less including the driver, with no additional space in the cabin that can be converted for other use, and a cargo carrying capacity of 800 kg or more, but excluding those vehicles with an engine compartment totally protruding to the front of the vehicle from the driving cab:8704.31.71Not more than four years old8704.31.72More than four years oldOther:8704.31.93Other not more than four years old8704.31.99Other more than four years old8704.32.00g.v.w. exceeding 5 tonnes :Tankers and bowsers with stainless steel tanks for transport of milk and refrigerated trucks :8704.32.41Not more than five years old8704.32.42More than five years old but not more than ten years old8704.32.43More than ten years oldGarbage trucks equipped with waste compacting mechanism:8704.32.51Not more than five years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 20, "year": 2020}, "type": "Document"}
{"page_content": "870432.52More than five years oldOther:870432.61Not more than five years old870432.62More than five years old but not more than ten years old8704.32.63More than ten years old8704.90.00Other:8704.90.10Electric auto-trishaws not more than five years old\u20228704.90.20 ;Electric auto-trishaws more than five years old8704.90.30Other electric, not more than five years old8704.90.40Other electric, more than five years old8704.90.50Other, not more than five years old8704.90.60Other, more than five years old87.05Special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, breakdown lorries, crane lorries, fire fighting vehicles, concrete-mixer lorries, road sweeper lorries, spraying lorries, mobile workshops, mobile radiological units)8705 10.00Crane lorries :8705.10.10Not more than ten years old8705.10.20More than ten years old8705.20.00Mobile drilling derricks :8705.20.10Not more than seven years old87.05.20.20More than seven years bld8705.30.00Fire fighting vehicles :8705.30.10Not more than seven years old8705.30.20More than seven years old8705.40.00Concrete-mixer lorries :8705.40.10Not more than ten years old8705.40.20More than ten years old8705.90.00Other:Mobile workshops8705.90.11Not more than seven years old", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 21, "year": 2020}, "type": "Document"}
{"page_content": "8705.90.12More than seven years oldGully bowzers equipped with suction pumps for extracting sewage water /wastes:8705.90.21Not more than seven years old8705.90.22More than seven years oldConcrete pump trucks :8705.90.31Not more than ten years old8705:90.32More than ten years oldOther:87059091g. v. w. not exceeding 4 tonnes , not more than seven-years old8705.90.92g. v. w. not exceeding 4 tonnes , more than seven years old8705.90.93g. v. w. exceeding 4 tonnes , not more than seven years old8705.90.94g. v. w. exceeding 4 tonnes , more than seven years old87.068706.00.00Chassis fitted with engines, for the motor vehicles of heading 87.01 to 87.05.8706.00.10New chassis, fitted with engines for motor vehicles of heading 87.02, for the transport of twenty eight or more passengers including the driver8706.00.20New chassis fitted with engines for other motor vehicles of heading 87.028706.00.30New chassis fitted with engines for motor vehicles of heading 8704.21, 8704.22, 8704.23, 8704.31 and 8704.32 with a g.v.w. of 3,000 kg or more8706.00.40Other new chassis fitted with engines for other motor vehicles8706.00.50Used chassis fitted with engines87.07Bodies (including cabs), for the motor vehicles of headings 87.01 to 87.05.8707.10.00For the vehicles of heading 87.03 :8707.10.10Used vehicle bodies fully equipped with fittings and accessories8707.10.20Other vehicle bodies fully equipped with fittings and accessories", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 22, "year": 2020}, "type": "Document"}
{"page_content": "8707.10.30Used vehicle bodies hilly equipped with fittings and accessories excluding seats and upholstery8707.10.40Other vehicle bodies fully equipped with fittings and accessories excluding seats and upholstery8707.10.50Rough coated ,bare body frame with /without doors , bonnet and boot lid8707.10.60Used bare body frame with /without doors , bonnet and boot lid8707.10.90Other8707.90.00 Other:8707.90.10Bodies and cabs incorporating attachments left over in the process of separating same from the main vehicle by cutting, but not meriting classification elsewhere by virtue of those left over attachments8707.90.20Other, for the motor vehicles of heading 87.02, for the transport of 25 or more persons including the driver8707.90.30Other, for the vehicles of sub- heading 8701.20 and the vehicles of heading 87.04, of a G.V.W. exceeding 3,000kgOther, bodies for the vehicles of 10 or more persons but less than 25 of heading 87.02 including the driver :8707.90.41Used bodies fully equipped with fittings and accessories8707.90.42Other vehicle bodies fully equipped with fittings and accessories8707.90.43Used vehicle bodies fully equipped with fittings and accessories excluding seats and upholstery8707.90.44Other vehicle bodies fully equipped with fittings and accessories excluding seats and upholstery8707.90.48Rough coated ,bare body frame with /without doors, bonnet and boot lid8707.90.49Used bare body frame with /without doors , bonnet and boot lid8707.90.90Other87.08Parts and accessories of the motor vehicles of headings 87.01 to 87.05.8708.10.00Bumpers and parts thereofOther parts and accessories of bodies (including cabs):8708.21.00Safety seat belts", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 23, "year": 2020}, "type": "Document"}
{"page_content": "8708.29.00Other:8708.29.10\u2019\u2019Cut-portions\" of bodies and cabs8708.29.90Other8708.30.00Brakes and servo-brakes; parts thereof8708.40.00Gear boxes and parts thereof8708.50.00Drive-axles with differential, whether or not provided with other transmission components, and non-driving axles; parts thereof8708.70.00Road wheels and parts and accessories thereof:8708.70.10Rims fitted with tyres, showing signs of wear8708.70.20Other, rims fitted with tyres8708.70.90Other8708.80.00Suspension systems and parts thereof (including shock- absorbers)Other parts and accessories :8708.91.00Radiators and parts thereof:8708.91.10Radiators and parts thereof8708.91.20 Parts - .\u25a0\u2022_\u2019.\u20228708.92.00Silencers (mufflers) and exhaust pipes; parts thereof8708.93.00Clutches and parts thereof8708.94.00Steering wheels, steering columns and steering boxes; parts thereof ' \u25a0 -8708.95.00Safety airbags with inflater system; parts thereof8708.99.00Other:8708.99.10New chassis not fitted with engines, but with or without fittings for motor vehicles of heading 87.02 and 87.04 with a g.v.w. of 3,000 kg or more-8708.99.20Other new chassis not fitted with engines, but with or without fittings8708.99.30Other used chassis not fitted with engines, but with or without fittings8708.99.40\"Cut-portions\" of motor vehicles8708.99.90Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 24, "year": 2020}, "type": "Document"}
{"page_content": "87.09Works trucks, self- propelled, not fitted with lifting or handling equipment, of the type used in factories, warehouses, dock areas or airports, for short distance transport of goods; tractors of the type used on railway station platforms; parts of the foregoing vehicles.Vehicles :\u20228709.11.00Electrical8709.19.00Other8709.90.00Parts87.108710.00.00Tanks and other armoured fighting vehicles, motorised, whether or not fitted with weapons, and parts of such vehicles.87.13Carriages for disabled persons, whether or not motorised or otherwise mechanically propelled.8713.10.00Not mechanically propelled8713.90.00Other87.14Parts and accessories of vehicles of headings 87.11 to 87.13.8714.10.00Of motorcycles (including mopeds): . . .8714.10.10Frames, with or without ffount folk8714.10.90Other8714.20.00Of carriages for disabled personsOther:*8714.91.00Frames and forks, and parts thereof:8714.91.10Bicycle frames8714.91.20Front forks8714.91.90Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 25, "year": 2020}, "type": "Document"}
{"page_content": "8714.92.00Wheel rims and spokes :8714.92.10Wheel rims8714.92.90Other8714.93.00Hubs, other than coaster braking hubs and hub brakes, and free-wheel sprocket- wheels8714.94.00Brakes, including coaster braking hubs and hub brakes, and parts thereof8714.95.00Saddles8714.96.00 Pedals and crank-gear, and parts thereof8714.99.00Other:8714.99.10 Mudguards8714.99.20Chain stays8714.99.30 Seat staysOther:8714.99.91Bicycle rims fitted with new tyres8714.99.92Bicycle rims fitted with tyres showing signs of wear8714.99.99Other87.158715.00.00Baby carriages and parts thereof.87.16Trailers and semi-trailers; other vehicles, not mechanically propelled; parts thereof.8716.10.00Trailers and semi-trailers of the caravan type, for housing or camping:8716.10.10Not more than five years old8716.10.20More than five years old8716.20.00Self-loading or self-unloading trailers and semi-trailers for agricultural purposes :8716.20.10Not more than five years old8716.20.20More than five years oldOther trailers and semi- trailers for the transport of goods:", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 26, "year": 2020}, "type": "Document"}
{"page_content": "8716.31.00Tanker trailers and tanker semi-trailers :8716.31.10Not more than five years old8716.31.20More than five years old8716.39.00 Other :8716.39.10Not more than five years old8716.39.20More than five years old8716.40100Other trailers and semi-trailers :8716.40.10Not more than five years old8716.40.20More than five years old8716.80.00Other vehicles :8716.80.20Wheelbarrows8716.80.30Other not more than five years old8716.80.40Other more than five years old8716.90.00Parts:8716.90.10For wheelbarrows8716.90.90Others", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 27, "year": 2020}, "type": "Document"}
{"page_content": "Schedule -BNon Essential Consumer GoodsHS HdgHS CodeDescription33.0333O3.db.OOPerfumes and toilet waters3303.00.10 PerfumesToilet waters3303.00.21Baby cologne conforming to SLS 589 and containing alcohol not\u2019 less than 55% and not more than 65% by v/v3303.00.22Other colognes containing alcohol not less than 50% and not more than 90% by v/v3303.00.29 Other33.07Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations not elsewhere specified or included; prepared room deodorisers, whether or not perfumed or having disinfectant properties3307.10.00Pre-shave, shaving or after-shave preparations3307.20.00Personal deodorants and antiperspirants3307.30.00 Perfumed bath salts and other bath preparationsPreparations for perfuming or deodorizing rooms, including odoriferous preparations used during religious rites :3307.41.00\u201d Agarbatti\u201d and other odoriferous preparations which operate by burning3307.49.00Other3307.90.00Other:3307.90.10Contact lens solutions3307.90.90 Other40.11 New pneumatic tyres, of rubber (+)4011.10.00Of a kind used on motor cars (including station wagons and racing cars)4011.20.00Of a kind used on buses or lorries :Having a rim size 20 inches and above :4011.20.11Tyre casing without markings4011.20:19Other4011.20.90Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 28, "year": 2020}, "type": "Document"}
{"page_content": "4011.30.00Of a kind used on aircraft4011.40.00Of a kind used on motorcycles4011.50.00 Of a kind used on bicycles4011.70.00Of a kind used on agricultural or forestry vehicles and machines4011.80 00Of a kind used on construction, mining or industrial handling vehicles and machines:4011.80.10Having a rim size not exceeding 61 cm4011.80.90Having a rim size exceeding 61 cm4011.90.00 Other:4011.90.10Of a kind used on auto trishaws4011.90.90Other64.1)2Other footwear with outer soles and uppers of rubber or : plasticsSports footwear:6402.12.00Ski-boots, cross-country ski footwear and snowboard boots6402.19,00Other:6402.19.10Football shoes and rugby shoes6402.19.19Other6402.20.00Footwear with upper straps or thongs assembled to the sole by means of plugsOther footwear:6402.91.00 Covering the ankle6402.99.00 Other64.03Footwear w ith outer soles of rubber, plastics, leather or composition leather and uppers of leatherSports footwear:6403.12.00Ski-boots, cross-country ski footwear and snowboard boots6403.19.00 Other:6403.19.10 Football shoes, rugby shoes6403.19.19 Other6403.20.00Footwear with outer soles of leather, and uppers which consist of leather straps across the instep and around the big toe6403.40.00 Other footwear, incorporating a protective metal toe-capOther footwear with outer soles of leather :6403.51.00,Covering the ankle6403.59.00OtherOther footwear:", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 29, "year": 2020}, "type": "Document"}
{"page_content": "6403.91.00 Covering the ankle6403.99.00Other64.04Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materialsFootwear with outer soles of rubber or plastics :6404.11.00Sports footwear; tennis shoes, basketball shoes,, gym shoes, training shoes and the like6404.19.00 Other6404.20.00Footwear with outer soles of leather or composition leather64.05Other footwear6405.10.00 With uppers of leather or composition leather6405.20.00 With uppers of textile materials6405.90.00Other84.15Air conditioning machines, comprising a motor driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated(+)8415.10.00Of a kind designed to be fixed to a window, wall, ceiling or floor, self-contained or \u201dsplit system\" :8415.10.10 Used / reconditioned\"Split system\":8415.10.21 .Of a capacity not exceeding 9,000 BTU8415.10.22Of a capacity exceeding 9,000 BTU and not exceeding 12,000 BTU8415.10^23Of a capacity exceeding 12,000 BTU and not exceeding 18,000 BTU8415.10.24Of a capacity exceeding 18,000 BTU and not exceeding 24,000 BTU8415.10.25Of a capacity exceeding 24,000 BTU and not exceeding 30,000 BTU8415.10 29OtherSelf-contained :8415.10.31Of a capacity not exceeding 9,000 BTU8415.10.32Of a capacity exceeding 9,000 BTU and not exceeding 12,000 BTU8415.10.33 Of a capacity exceeding 12,000 BTU and not exceeding 18,000 BTU8415.10.34Of a capacity exceeding 18,000 BTU and not exceeding 24,000 BTU8415.10.35 Of a capacity exceeding 24,000 BTU and not exceeding 30,000 BTU8415.10.39Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 30, "year": 2020}, "type": "Document"}
{"page_content": "8415.20.00Of a kind used for persons, in motor vehicles :8415.20.10Used / reconditioned. 8415.20.90 OtherOther:8415.81.00 Incorporating a refrigerating unit and a valve for reversal of tire cooling/heat cycle (reversible heat pumps):8415.81.10 Used / reconditioned8415.81.90 Other8415.82.00 Other, incorporating a refrigerating unit:8415.82.10 Used / reconditioned8415.82.90 Other8415.83.00 Not incorporating a refrigerating unit:8415.83.10 Used / reconditioned'8415:83.90 Other8415.90.00 Parts:8415.90.10 Outdoor units of split type air conditioning machines:8415.90.11Used / reconditioned8415.90.19 Other8415.90.20 Indoor units of split type air conditioning machines:8415.90.21 Used / reconditioned8415.90.29Other8415.90.90 Other \u25a0 ;84.18Refrigerators, freezers and other refrigerating or freezing equipment, electric or other: heat pumps other than air conditioning machines of heading 84.158418.10.00 Combined refrigerator-freezers, fitted with separate external doors :8418.10.10 Used / reconditioned8418.10.90 OtherRefrigerators, household type:8418.21.00 Compression-type :8418.21.10 Used / reconditioned8418.21.90 Other8418.29.00Other:8418.29.10 Used / reconditioned absorption-type, electrical8418.29.20Other absorption-type, electrical8418.29.30 Other used / reconditioned8418.29.90 Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 31, "year": 2020}, "type": "Document"}
{"page_content": "8418.30.00 Freezers of the chest type, not exceeding 8001 capacity :8418.30.10 Not exceeding 566 1 used / reconditioned8418.30.20 Other, not exceeding 566 18418.30.30 Other, used / reconditioned8418.30.90Other8418.40.00 Freezers of the upright type, not exceeding 9001 capacity:8418,40.10Not exceeding 566 1 used/ reconditioned8418.40 20 Other, not exceeding 566 18418.40.30 Other, used / reconditioned8418.40.90Other8418.50.00 Other furniture (chests, cabinets, display counters, show-cases and the like) for storage and display, incorporating refrigerating or freezing equipment:841850.10Used / reconditioned8418.50.90Other-Other refrigerating or freezing equipment; heat pumps :8418.61.00 Heat pumps other than air conditioning machines of heading 84.158418.69.00 Other:8418.69.10 Cabinet and chest type refrigerators exceeding 566 1 and below 850 1 used/ reconditioned8418.69.20Other, cabinet and chest type refrigerators exceeding 566 1 and below 85018418:69.30Blast-freezers for preserving poultry meat used/ reconditioned8418.69.40 Other, blast-freezers for preserving poultry meat8418.69.50 Milk chilling tanks used/ reconditioned8418.69.60Other, milk chilling tanks8418.69.70Other, used/ re-conditioned8418.69.90 OtherParts :8418.91.00Furniture designed to receive refrigerating or freezing equipment:8418.91.10 Cabinets for refrigerators8418.91.20Other cabinets8418.91.90 Other8418.99.00Other", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 32, "year": 2020}, "type": "Document"}
{"page_content": "85.17Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 84.43, 85.25,85.27 or 85.28Telephone sets, including telephones for cellular networks or for other wireless networks :8517.1 LOOLine telephone sets with cordless handsets8517.12.00Telephones for cellular networks or for other wireless networks:8517.12.10Used / reconditioned cellular mobile telephones8517.12.20Other, cellular mobile telephones8517.12.90Other851718.00OtherOther apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network):8517.61.00 Base stations8517.62.00Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus :8517.62.10Transmission apparatus with or without reception apparatus8517.62.90Other8517.69.00 Other8517.70.00 Parts85.28Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatusCathode-ray tube monitors:8528.42.00Capable of directly connecting to and designed for use with an automatic data processing machine of heading 84.71 -8528.49.00Other:8528.49.10Used / reconditioned8528.49.90OtherOther monitors:", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 33, "year": 2020}, "type": "Document"}
{"page_content": "8528.52.00 Capable of directly connecting to designed for use with an automatic data processing machine of heading 84.718528.59.00 Other:8528.59.10 Used / reconditioned8528.59.90 OtherProjectors:8528.62.00 Capable of directly connecting to designed for use with an automatic data processing machine of heading 84.718528.69.00 OtherReception apparatus for television, whether or not incorporating radio- broadcast receivers or sound or video recording or reproducing apparatus :8528.71.00 Not designed to incorporate a video display or screen:8528.71.10 Used / reconditioned8528.71.20Other, colour8528.71.90 Other8528.72.00 Other, colour:8528.72.10Unassembled in completely knocked- down form8528.72.20Used / reconditionedOther, with cathode ray tube :8528.72.31Havin g a screen of less than 14 inches8528.72.32 . Having a screen of 14 inches and not exceeding 15 inches8528.72.33Having a screen of exceeding 15 inches and not exceeding 21 inches8528.72.34Having a screen of exceeding 21 inches and not exceeding 25 inches8528.72.35 Having a screen of exceeding 25 inches and not exceeding 29 inches8528.72.36Having a screen of exceeding 29 inches and not exceeding 34 inches8528.72.39OtherOther, with LCD:8528.72.41Having a screen of not exceeding 32 inches8528.72.49 OtherOther:18528.72.91Having a screen of not exceeding 32 inches", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 34, "year": 2020}, "type": "Document"}
{"page_content": "8528.72.99 Other8528.73.00 Other, monochrome :8528.73.10Used / reconditioned and completely knocked-down with or without cathode ray tube8528.73.20 Other, completely knocked-down with or without cathode ray tube8528.73.30 Other, used / reconditioned8528.73.90 Other84.50Household or laundry-type washing machines, including machines which both wash and dn(+)Machines, each of a dry linen capacity not exceeding 10 kg-:8450.11.00 Fully-automatic machines:8450.11.10Unassembled in completely knocked-down form8450.11.20 Used / reconditionedOther, top loading:8450.11.31 Of a dry linen capacity less than 4 kg8450.11.32Of a dry linen capacity exceeding 4 kg and not exceeding 5.5 kg8450.11.33 Of a dry linen capacity exceeding 5.5 kg and not exceeding 7.5 kg8450.11.34 Of a dry linen capacity exceeding 7.5 kg and not exceeding 9.5 kg8450.11.39 OtherOther, front loading:8450.11.41Of a dry linen capacity less than 4 kg8450.11.42Of a dry linen capacity exceeding 4 kg and not exceeding 5.5 kg8450.11.43Of a dry linen capacity exceeding 5.5 kg and not exceeding7.5 kg8450.11.44..Of a dry linen capacity exceeding 7.5 kg and not exceeding 9.5 kg, .8450.11.49 Other8450.12.00Other machines, with built-in centrifugal drier :. 8450.12.10Unassembled in completely knocked-down form8450.12.20 Used / reconditionedOther:8450.12.31 Of a dry linen capacity less than 4 kg8450.12.32Of a dry linen capacity exceeding 4 kg and not exceeding 5.5 kg8450.12.33Of a dry linen capacity exceeding 5.5 kg and not exceeding7.5 kg", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 35, "year": 2020}, "type": "Document"}
{"page_content": "8450.1234 Of a dry linen capacity exceeding 7.5 kg and not exceeding .9.5 kg8450.12.39Other - \u25a0 .8450.19-00. Other:8450.19.10Unassembled in completely knocked-down form8450.19.20 Used / reconditionedOther:8450.1931Of a dry linen capacity less'than 4 kg8450.1932Of a dry linen capacity exceeding 4 kg and not exceeding 5.5 kg8450.1933Of a dry linen capacity exceeding 5.5 kg and not exceeding7.5 kg8450.1934 Of a dry linen capacity exceeding 7.5 kg and not exceeding 9.5 kg8450.19.39Other8450.20.00Machines, each of a dry linen capacity exceeding 10 kg8450.90.00 Parts", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_1_of_2020_e.pdf", "page": 36, "year": 2020}, "type": "Document"}
{"page_content": "5 May 2020MONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONNo. 02 of 2020LIQUID ASSETS FOR LICENSED COMMERCIAL BANKSAND LICENSED SPECIALISED BANKSConsidering the potential adverse impact on the liquidity position of licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) due to the COVID-19 pandemic, as an extraordinary measure in terms of the powers conferred by Sections 21(1), 86, 46(1) and 76(J)(1) of the Banking Act No. 30 of 1988, as amended, the Monetary Board has determined that the following assets shall be considered as liquid assets, until 30 June 2021 in this exceptional circumstance.1. Empowerment under the1.1 In terms of Section 21(1) of the Banking Act, every licensed commercial bank (LCB) shall maintain liquid assets in suchBanking Actamount 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 the Monetary Board shall not be less than 20 per cent and not more than 40 per cent.1.2 In terms of Section 86 item (g) under Liquid Assets, the Monetary Board is empowered to determine such other assets as Liquid Assets.1.3 In terms of Sections 46(1) and 76J(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 or any licensed bank, regarding the manner in which any aspect of the business of such bank or banks is to be conducted.2. Liquid Assets2.1 For the purpose of computation of Statutory Liquid Assets Ratio (SLAR) the following shall be considered as liquid assets until 30 June 2021.(i) Interest subsidy receivable on Senior Citizens Special Deposit Scheme.1", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_2_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA3? May 2020 BANKING ACT DIRECTION No. 02 of 2020(ii) Exposures to State Owned Entities guaranteed by the Government of Sri Lanka and classified in Stage 1 under SLFRS 9: Financial Instruments for financial reporting purposes with maturity not exceeding one year with hair-cut of 10%.(iii) Fixed Deposits held by licensed banks in other licensed banks(a) where remaining period to maturity exceeds 1 year but is less than or equal to 2 years, with hair-cut of 20%(b) if the remaining period to maturity exceeds 2 years but is less than or equal to 3 years, with hair-cut of 30%.(iv) Loans secured by deposits under lien equivalent to 20% of the deposits.(v) Receivables from Employees Provident Fund (EPF) in settlement of loans.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n2", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_2_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA13 May 2020 BANKING ACT DIRECTION No. 03 of 2020RESTRICTIONS 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 COVID-19 outbreak and the importance of maintaining appropriate levels of liquidity in licensed banks while managing cash flows prudently, hereby issues these Directions on restrictions on discretionary payments of licensed banks.1. Empowerment1.1 In terms of Sections 46(1) and 76J( 1) of the Banking Act No. 30 of 1988, as amended, in order to ensure the soundness of the banking system, the Monetary Board is empowered to issue Directions to all or any licensed bank, regarding the manner in which any aspect of the business of such bank or banks is to be conducted.2. Scope andPeriod ofApplication2.1 These Directions shall be applicable to licensed banks:(i) incorporated or established in Sri Lanka, and(ii) incorporated or established outside Sri Lanka.2.2 These Directions shall come in to effect immediately and be applicable until 31 December 2020.3. Restrictions on Discretionary Payments3.1 Licensed banks incorporated or established in Sri Lanka shall refrain from declaring cash dividends not already declared for financial year 2019 and any interim cash dividends for financial year 2020.3.2 Licensed commercial banks incorporated outside Sri Lanka shall refrain from repatriation of profits not already declared for financial years 2019 and 2020.1", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_3_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "l3 May 2020MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSNo. 3 of 20203.3 Licensed banks shall refrain from buying-back its own shares.3.4 Licensed banks shall refrain from increasing management allowances and payments to Board of Directors.3.5 Licensed banks shall exercise prudence and refrain to the extent possible from incurring non-essential expenditure such as advertising, business promotions, sponsorships, travelling and training, etc..3.6 Licensed banks shall exercise extreme due diligence and prudence when incurring capital expenditure, if any.Prof. W D LakshmanChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka\n2", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_3_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENTI 5 May 2020BANKING ACT DIRECTIONSNo. 04 of 2020LOAN TO VALUE RATIOS FOR CREDIT FACILITIES GRANTEDIN RESPECT OF MOTOR VEHICLESIssued under Sections 46(1) and 76(J)(1) of the Banking Act, No. 30 of 1988, as amended.The Central Bank of Sri Lanka issues Directions as follows for implementation of loan to value ratios in respect of credit facilities granted by licensed commercial banks (LCBs) and licensed specialised banks (LSBs), hereinafter referred to as licensed banks, for the purpose of purchase or utilisation of motor vehicles.1. The following will replace Directions 1 (i) of the Banking Act Directions No. 04 of 2019 on Loan to Value Ratios for Credit Facilities Granted in respect of Motor Vehicles.(i) Credit facilities granted by licensed banks for the purpose of purchase or utilisation of motor vehicles shall not exceed the following percentages of the market value of such vehicles.(a) In respect of unregistered vehicles and registered vehicles which have been usedin Sri Lanka for less than one year after the first registration;Table 1 - Loan to Value RatioVehicle CategoryVehicle Class of Department of Motor TrafficElectric VehiclesOtherCommercial vehiclesC1,C, CE,D1,D, DE,G1,G,J90%90%Motor Cars, SUVs and VansB (other than light trucks & single cabs)90%50%Locally Assembled Motor Cars, SUVs and VansB (other than light trucks & single cabs)90%70%Three wheelersBl90%25%Light trucksB90%90%Any other vehicleAl, A and single cabs categorized under B90%70%Hybrid Motor Cars, Vans and SUVsB (other than light trucks & single cabs)50%(b) 70 per cent in respect of registered vehicles which have been used in Sri Lanka for more than one year after the first registration.", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_4_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT15 May 2020BANKING ACT DIRECTIONSNo. 04 of 20202. Loan to Value Ratio for credit facilities granted for importation or purchase of motor vehicles under permits on concessionary terms shall be computed based on the proforma invoice value, instead of the market value of the motor vehicle.3. The Banking Act Directions No. 04 of 2019 dated 31.05.2019 on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles are withdrawn with effect from the date of this Directions.Prof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_4_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n    19 June  2020  BAN KING ACT DIRECTIONS           No. 05 of 2020 \n \n \n \nINVESTMENTS IN SRI LANKA INTERNATIONAL SOVEREIGN BONDS BY \nLICENSED COMMERCIAL BANKS AND NATIONAL SAVINGS BANK    \n \nIssued i n terms of th e powers conferred by Section s 46(1) and 76(J)(1) of the Banking Act \nNo. 30 of 1988, as amended . \n \nThe Central Bank of Sri  Lanka with a view to easing the pressure on the exchange rate and the \nstress on financial markets due to the impact of Covid -19 outbreak, requires licensed \ncommercial banks  and National Savings Bank  to suspend the purchase of Sri Lanka \nInternational Sovereign Bonds  (ISBs ) for a period of three months unless such purchase of \nISBs is funded by using new foreign currency inflows to the banks . \n \nThese Directions shall be implemented with immediate effect .", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_5_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \n  CENTRAL BANK OF SRI LANKA  \n \n    16 July 2020                           BANKING ACT  DIRECTION S                    No. 06 of 2020  \n1 \n \n \nEXTRAORDINARY REGULATORY MEASURES AMIDST COVID -19  \nThe Central Bank of Sri Lanka  (CBSL) , considering the national importance of reviving business \nsector s that w ere adversely affected by the COVID -19 and the exceptional circumstances of the \neconomic impact of COVID -19 pandemic,  has implemented a Credit Guarantee and Interest \nSubsidy scheme under Phase III of Saubagya COVID 19 Renaissance Facility  and a liquidity \nfacility to construction sector  against  \u201cLetter of Acceptance of Payments of Outstanding Bills to \nContractors \u201d issued by the Government  to settle dues to contractors by 31 December 2020 .    \n \nIn this regard, t he Monetary Board, in terms of the powers conferred by Sections 21(1), 86, 46(1) \nand 76J(1)  of the Banking Act No. 30 of 1988, as amended, has approved the following \nextraordinary regulatory measures . \n \n \n1. Empowerment under \nthe Banking Act  \n \n \n \n \n \n \n \n \n \n  \n 1.1 In terms of Section  21(1) of the Banking Act, every licensed \ncommercial bank  shall maintain liquid assets in such amount as \nmay from time to time be determined by the Monetary Board \nhaving regard to the nature of the business carried on by such \nbank  provided that the percentage  determined by the Monetary \nBoard  shall  not be less than 20 per  cent and not more than 40 \nper cent. \n1.2 In terms of Section 86 item (g) under Liquid Assets, the \nMonetary Board is empowered to determine such other assets \nas \u201cliquid assets\u201d . \n1.3 In terms of Sections 46(l) and 76J(1) of the Banking Act, in \norder to ensure the soundness of the banking system, the \nMonetary Board is empowered to issue Directions to all or any  \nlicensed commercial  banks and licensed specialised bank s, \nhereinafter referred to as  licensed bank s, regarding the manner", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_6_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "hereinafter referred to as  licensed bank s, regarding the manner \nin which any aspect of the business of such bank or banks is to \nbe conducted.  \n2. Liquid Assets  for \nComputation of \nStatutory Liquid \nAssets Ratio    2.1 Licensed commercial banks shall consider  the new  credit \nfacilities granted to the construction sector against  \u201cLetter of \nAcceptance of Payments  of Outstanding Bills to Contractors \u201d \nissued by the Government  as referred  to in the Operating", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_6_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \n  CENTRAL BANK OF SRI LANKA  \n \n    16 July 2020                           BANKING ACT  DIRECTION S                    No. 06 of 2020  \n2 \n \n \n \n \n  Instructions No. 35/03/023/0001/002 or any other subsequent \namendments issued by the Domestic Operations Department  of \nCBSL , as liquid asset s for the purpose of computation of \nStatutory Liquid Assets Ratio (SLAR),  until 31 December \n2020 , subject to a haircut of 10%  of such credit facilities . \n3. Classification of \nLoans and \nAdvances, Income \nRecognition and \nProvisioning  \n  3.1 In terms of Banking Act Directions No. 03 of 2008 on  \nClassification of Loans and Advances, Income Recognition \nand Provisioning  and any subsequent amendments, l icensed \ncommercial  banks are permitted to  initially classify the new \ncredit facilities granted  to the construction sector against  \n\u201cLetter of Acceptance of Payments of Outstanding Bills to \nContractors \u201d issued by the Government,  as performing loans \nwithout considering the current  classification status of other \nexisting facilities , provided that the new facility is granted for \nthe purpose of new economic activities.    \n3.2 Licensed commercial  banks shall ensure compliance with all \nother requirements relating to c lassification of loans and \nadvances, in case of subsequent default or potential risk  of such \nborrowers . \n4. Computation of \nCapital Adequacy \nRatio    4.1 In terms of Part III (C) of the Banking Act Directions No. 01 of \n2016 on Capital Requirements under Basel III for Licensed \nBanks,  the following will qualify as acceptable credit risk \nmitigant s for credit facilities granted against the same and shall  \nbe risk weighted at zero per cent  \n(i) The \u201cLetter of Acceptance of Payment of Outstanding \nBills due to Contractors \u201d issued by the Government . \n(ii) The Credit Guarantee provided under Phase III of \nSaubagya COVID -19 Renaissance Facility .", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_6_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \n  CENTRAL BANK OF SRI LANKA  \n \n   16 July 2020                           BANKING ACT  DIRECTION S                    No. 07 of 2020  \n \n \n \nAMENDMENTS TO BANKING ACT DIRECTIONS NO. 01 OF 2016 ON CAPITAL \nREQUIREMENTS UNDER BASEL III FOR LICENSED COMMERCIAL BANKS AND \nLICENSED SPECIALISED BANKS  \n \nIn terms of powers conferred by Sections l9(7 )(a) and 76G(7) of the Banking Act No. 30 of  1988, \nthe Monetary Board is empowered to  determine the minimum capital ratios for licensed \ncommercial  banks and licensed specialised banks , hereinafter referred to as  licensed bank s.  \n \nAccordingly, Section d) i) II of web-based return code 20.3.1.8.1.0  referred  to in Part III (A) of the \nBanking Act Directions No. 01 of 2016 on Capital Requirements under Basel III for Licensed \nBanks is amended as follows:  \n \nThe annual turnover of the SME shal l not exceed Rs. 1 billion", "metadata": {"source": "data\\CBSL\\2020\\bsd_directions_no_7_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK O F SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n14 February 2020           FREQUENTLY ASKED QUESTIONS (FAQs)         No. 01 of 20 20 \n \nLast updated on 15 June  2020  \n \n \nBanking Act Directions No. 04 of 2018 on Financial Derivative Transactions for  \nLicensed Commercial Banks a nd Licensed Specialised Banks  \n \n1) Is an underlying transaction (a current transaction or a permitted capital transaction \nin terms of the Foreign Exchange Act and the Regulations issued thereunder) \nrequired when a licensed commercial bank or a licensed specialized bank in Sri \nLanka (i.e. Eligible Bank as defined in the said Direc tion) is entering into a \nderivative transaction with a foreign counterparty?  \n \nYes, a valid underlying transaction is necessary when a n Eligible Bank  enter s \ninto a derivative transaction with any counterparty in Sri Lanka or abroad \nother than an inter -bank transaction.    \n \n2) Are derivative transactions which Eligible Banks are permitted to enter into with \nforeign counterparties limited to End User Deals (as described in paragraph 5.1 (a) \nof the said Direction) and hedging on back -to-back basis of its Non -Market  Maker \n(NMM) Deals with its local customers and other Eligible Banks  (as described in \nparagraph 5.1 (b) of the said Direction)?  \n \nEnd User Deals and Non-Market  Maker Deals can be entered into with \nforeign counterparties. However, Derivative Market Maker Deals are not \npermitted to enter into with foreign counterparties.         \n \n3) What is the position with respect to transfers of cash and securities under a Credit \nSupport Annex? Are Eligible Banks permitted to make such transfers to a foreign \ncounterparty without a specific regulatory approval?", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_1_of_2020_20200615_update_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK O F SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n14 February 2020           FREQUENTLY ASKED QUESTIONS (FAQs)         No. 01 of 20 20 \n \nLast updated on 15 June  2020  \nThe Direction requires to sign ISDA agreement with the counterparty.  CSA is \npart of the ISDA agreement and a CSA cannot be executed without an ISDA . \nAccordingly, if both part ies want to sign CSA they should enter into ISDA . \nHowever , if both part ies agree, they can refrain from signing an ISD A. \nSpecific regulatory approval is not required  for the transfer of cash and \nsecurities under CSA.    \n \n4) Paragraph 6.3 of the said Direction prohibits Eligible Bank to make an upfront \npayment  other than option premiums , to a customer  in relation to a derivati ve \ntransaction . Does this prohibition apply to upfront payments by an Eligible Bank \nentering into a derivative transaction with a foreign counterparty?  \n \nDirection 6.3 equally applies to derivative transaction s with a foreign \ncounterparty as well.  \n \n5) Can a b ank extend or unwind and re -book a FX forward contract at the historical \nrate (i.e., originally contracted rate)?  \n \nIn terms of the Direction 5.7 of Banking Act Directions No. 04 of 2018 on \nFinancial Derivative Transactions, unwinding and re -booking of der ivative \ncontracts shall be done as follows:  \n\u2022 Parties may unwind/sell back a derivative partially or fully, if such \nderivative is no longer required.  \n\u2022 All derivative contracts once unwound are eligible to be rebooked \nsubject to the terms specified in the cited Directions.  \n\u2022 In the case of unwinding a derivative contract before maturity while the \nunderlying transaction still exists, marked -to-market loss should be \ncharged to such customer.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_1_of_2020_20200615_update_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK O F SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n14 February 2020           FREQUENTLY ASKED QUESTIONS (FAQs)         No. 01 of 20 20 \n \nLast updated on 15 June  2020  \n\u2022 Any marked -to-market gain (financial gain) should not be paid to the \ncustomer.  \n\u2022 However, the rate benefit may be passed on to the customer at the time \nof rebooking.   \n \nIn terms of Direction 4.1 (xii) of Banking Act Directions No. 03 of 2009 on \nRisk Manageme nt Relating Foreign Exchange Businesses, FX transactions \nshould be executed at current market rates and off-market or historical rate \nrollovers are not permitted.  \n \nHowever, under the prevailing COVID -19 business environment, customers \nmay not be in a posit ion to absorb FX losses due to their inability to deliver \nthe FX forward contracts at maturity. Therefore, licensed banks may extend \nthe FX forward contracts as at 19.03.2020 , as and when maturi ng, at the \ncontracted rate after adjusting the forward premium  applicable for the \nextended period. However, banks should take the necessary steps to \nverify  that the customer is genuinely unable to deliver the forward contract \non the due date, due to the current global pandemic.  \n \n6) Can the marked -to-market gain (financ ial gain) be paid to the customer, in the case \nof unwinding and rebooking of a derivative  transaction ? \n \nIn terms of the Direction 5.7 of Banking Act Directions No. 04 of 2018 on \nFinancial Derivative Transactions, unwinding and re -booking of derivative \ncontracts shall be done as follows:  \n\u2022 Parties may unwind/sell back a derivative partially or fully, if such \nderivative is no longer required.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_1_of_2020_20200615_update_e.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK O F SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n14 February 2020           FREQUENTLY ASKED QUESTIONS (FAQs)         No. 01 of 20 20 \n \nLast updated on 15 June  2020  \n\u2022 All derivative contracts once unwound are eligible to be rebooked \nsubject to the terms specified in the cited Directions.  \n\u2022 In the case of unwinding a derivative contract before maturity while the \nunderlying transaction still exists, marked -to-market loss should be \ncharged to such customer.  \n\u2022 Any marked -to-market gain (financial gain) should not be paid to the \ncustome r.  \n\u2022 The rate benefit may be passed on to the customer at the time of \nrebooking.   \n \nHowever, considering the importance to retain foreign investors in \nGovernment securities, banks  may pay the marked -to-market gain arising \nfrom unwinding/ selling back of derivatives for which the underlying \ntransaction is an investment in Government Securities, by foreign investors . \n \n***********************************************", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_1_of_2020_20200615_update_e.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n1 \n \nFrequently Asked Questions  \nCircular Nos. 04, 05 and 06 of 2020 on Concessions granted to  \nCOVID -19 Hit Businesses including Self -Employment and Individuals,  \nthe Letter Dated 27.03.2020 on Extraordinary Regulatory Measures, and  \nthe Monetary Law Act Order No. 1 of 2020 on Maximum Interest Rates on Pawning \nAdvances of Licensed Banks  \n \n \n \n \n \n1. Who are the eligible individuals under the COVID -19 relief scheme?  \n\uf0a7 Self-employed individuals and other individuals who have lost their jobs or income due to the \noutbreak of COVID -19. \n\uf0a7 Foreign currency earners (who have to repay loans in foreign currency) whose incomes/ \nbusinesses have been adversely affected due to the outbreak of COVID -19. \n \n2. What are the businesses/sectors eligible for the COVID -19 reliefs?  \n\uf0a7 Tourism, direct and indirect export -related businesses including apparel, IT, tea,  spices, \nplantation and related logistic suppliers that have been adversely affected by work disruption \nand overseas lockdowns resulting from COVID \u2013 19. There is no turnover limit stipulated for \nthese businesses/sectors to avail of the concessions.  \n\uf0a7 Small and Medium Enterprises (SMEs) engaged in business sectors such as manufacturing, \nservices, agriculture (including processing), construction, value addition and trading \nbusinesses including authorised domestic pharmaceutical suppliers with turnover below Rs . 1 \nbn (for this purpose annual turnover is considered based on the latest available accounts or \nestimates).  \n\uf0a7 Foreign currency earning corporates who have to repay loans in foreign currency and whose \nincomes/ businesses have been adversely affected due to the outbreak of COVID -19. Please note that these \u2018Frequently Asked Questions (FAQs)\u2019 have been compiled ba sed on", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "regulations issued by the Central Bank of Sri Lanka up to 06.05.2020 and the responses herein \nare subject to changes based on future regulations and/or amendments, if any, relating to the \nconcessions granted to individuals and businesses affected by  COVID -19.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n2 \n \n \n \n3. What is meant by \u2018Debt Moratorium\u2019?  \n\uf0a7 Debt moratorium refers to the deferment of capital and/or interest payments which fall due \nwithin the respective concession periods.  \n\uf0a7 However, debt moratorium does not mean a waive -off of capit al and/or interest permanently. \nThe customer should pay the capital and/or interest payments which fall due within the \nconcession periods at a later date according to the revised repayment plan.  \n \n4. From whom can I get these reliefs?  \nAll licensed commercial banks, licensed specialized banks, licensed finance companies and \nspecialized leasing companies that are regulated by the Central Bank of Sri Lanka will be offering \nthese reliefs.  \n \n5. Can\u2019t I get a relief for loans obtained from Rural Banks, SANASA Banks and Co-operative \nBanks/Societies?  \n\uf0a7 Only the licensed commercial banks, licensed specialized banks, licensed finance companies \nand specialized leasing companies regulated by the Central Bank of Sri Lanka will be offering \nthese reliefs.  \n\uf0a7 SANASA Development Bank PL C (A licensed specialized bank) is the only SANASA Bank \nregulated by the Central Bank of Sri Lanka.  \n \n6. What types of credit facilities are eligible for reliefs under this scheme?  \nTerm loans, leasing facilities, pawning, overdrafts and trade finance facilities denominated in \nRupees and foreign currency subject to the requirements specified in Circular Nos. 4, 5 & 6 of \n2020 issued by the Central Bank of Sri Lanka upon a request made by the eligible borrowers on \nor before 15.05.2020.  \n \n7. Are cash backed fa cilities and housing loans excluded from reliefs?", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n3 \n \nNo. The type of collateral has not been considered when offering the reliefs. So cash backed \nfacilities and housing loan facilities too can be offered the relief.   \n \n8. What is the effective date for these rel iefs?  \nThe loan installments and/or lease rentals that fell due on or after 25.03.2020.  \n \n9. Do I have to submit a request to avail these reliefs? If so, How?  \n\uf0a7 Yes. The customer is expected to submit a request on or before 15.05.2020 through online \nfacilities or  other communication arrangements including -mail/SMS/WhatsApp, etc. with \nminimum basic information such as customer name, national identity card/business \nregistration number, loan reference/account number that would facilitate the financial \ninstitutions to  provide such reliefs.  \n\uf0a7 However, wherever possible, financial institutions would grant concessions to eligible \nborrowers without a request being made by the borrower (e.g., loans to individuals, overdrafts, \ntrade finance, pawning, credit cards, etc).  \n \n10. What if I am in a rural area with no access to communication facilities and I cannot make a \nwritten application?  \n\uf0a7 Wherever possible, financial institutions would grant concessions to eligible borrowers \nwithout a request being made by the borrower.  \n\uf0a7 However, if yo u can make a request through a suitable method with the minimum basic \ninformation such as customer name, national identity card/business registration number, loan \nreference/account number on or before 15.05.2020, it would help the financial institution to \nexpedite granting the relief package.  \n\uf0a7 Majority of the banks advertise dedicated phone numbers on their websites, social media and \nTV. So, you can call the respective financial institution and make further inquiries in this \nregard.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "regard.  \n \n11. Why can\u2019t the financial institutions grant these reliefs without any request?", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n4 \n \n\uf0a7 Wherever possible, financial institutions would grant concessions to eligible borrowers \nwithout a request being made by the borrower.  \n\uf0a7 However, financial institutions serve a large number of customers and loan recoveries are \nhandled through automated systems.  \n\uf0a7 So, when an eligible customer makes a request, it helps the financial institution to separate \nthese customers and to manually effect the concessions in the systems.  \n \n12. How will I know if I have been granted the concession, upon request?  \n\uf0a7 The financial institutions are required to complete processing of customer requests within 45 \ndays from the date of receipt of the request.  \n\uf0a7 Until the processing of requests is concluded, recovery of loans from the resp ective applicants \nis to be suspended.  \n\uf0a7 Hence the financial institutions will notify the outcome of the requests within this 45 day time -\nperiod.  \n \n13. What about the credit facilities which remained overdue (in arrears) prior to the effective \ndate of the scheme?  \n\uf0a7 Concession will be granted for the loan installments/lease rentals that fall due on or after \n25.03.2020.  \n\uf0a7 However, if the credit facility remains in performing category with an arrears/overdue \nposition , the customer may request the financial institution to cover that arrears within the \napplicable moratorium period. In this case the future moratorium period will reduce by the \narrears/overdue period.  \n\uf0a7 For example, if loan installments for February and Mar ch 2020 remained in arrears for a \nperforming loan which is eligible to get a 6 months moratorium period starting from April \n2020, the customer may request the financial institution to back date such moratorium period \nto start from February 2020. In this ca se, the six months will be counted from February 2020 \nand not from April 2020.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n5 \n \n\uf0a7 Further, in this case the customer should make a request for such adjustment and negotiate \nwith the financial institution.  \n\uf0a7 Otherwise, since loan deductions are automated, finan cial institutions may recover any \noverdue up to 25.03.2020, as soon as money is deposited to a customer\u2019s account.  \n\uf0a7 If the credit facilities were in the non -performing category as at 25.03.2020 , a debt moratorium \nwill be granted until 30.09.2020.  Customer s who belong to the eligible businesses defined \nunder the relief scheme can request the financial institution to reschedule their remaining \ncapital installments along with existing and future interest due, and the repayment of the \nrescheduled loan will com mence on or after 01.10.2020.  \n\uf0a7 Depending on the already settled portion of the existing non -performing loan, if the borrower \nsettles all future interest and installments, 25% or 50% of the arrears interest will be waived.  \n \n14. Can I apply for a concession witho ut settling the existing arrears?  \nYes, an application can be made even if there is an overdue.  \n \n15. Why has the financial institution deducted my loan installments even though I am eligible \nfor the concessions?  \n\uf0a7 The financial institution may have deducted the loan installment unintentionally, since loan \ndeductions are generally handled through automated systems. Financial institutions will have \nto be given a reasonable time period, (preferably before 15.05.2020) to manually effect the \nrefunds.  \n\uf0a7 If installments h ave been already deducted from credit facilities which are granted a \nconcession, they will be reversed and refunded through credits to the customer\u2019s accounts.  \n \n16. Why has the financial institution deducted my loan installments even when non -eligible \nborrower s have been given a concession up to 60 days?", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "borrower s have been given a concession up to 60 days?  \n\uf0a7 The financial institution may have deducted the loan installment unintentionally, since loan \ndeductions are generally handled through automated systems. Financial institutions will have \nto be given a reasonable  time period (preferably before 15.05.2020) to manually effect the \nrefunds.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n6 \n \n\uf0a7 Even for borrowers who are not entitled to any other concessions under this scheme, since an \nadditional 60 -day period to settle loans and advances that become due for settlement du ring \nthe 60 days period commencing from 01.04.2020 has been granted, refunds will be made for \ndeductions done during such period.  \n \n17. What if my facilities remained in non -performing? Am I not eligible for any concession?  \n\uf0a7 Even if your facilities remained in n on-performing, you will be given concessions if you \nbelong to one of the eligible categories  \n\uf0a7 The following concessions will be granted only to eligible businesses (i.e., Tourism, direct \nand indirect export -related businesses including apparel, IT, tea, spi ces, plantation and related \nlogistic suppliers that have been adversely affected by work disruption and overseas \nlockdowns resulting from COVID \u2013 19 and Small and Medium Enterprises engaged in \nbusiness sectors such as manufacturing, services, agriculture ( including processing), \nconstruction, value addition and trading businesses including authorised domestic \npharmaceutical suppliers):  \no The penal interest charged up to 25.03.2020 shall be waived off by the concerned financial \ninstitutions.  \no A moratorium up to 30.09.2020 will be granted.  \no The balance capital outstanding and balance portion of interest of the defaulted \ninstallments and the future interest can be rescheduled over a 3 year period. However, if \nthe original maturity period is over 3 years, financial i nstitutions can reschedule such \nfacilities to be recovered over an equal maturity period.  \no Accordingly, if you request the financial institution to grant a moratorium against your \nexisting non -performing credit facility, the financial institution will grant  a moratorium up", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 5, "year": 2020}, "type": "Document"}
{"page_content": "existing non -performing credit facility, the financial institution will grant  a moratorium up \nto 30.09.2020 and reschedule the loan so that this new rescheduled loan will have to be \npaid off within 3 years (or an agreed longer period for facilities with an original maturity \nof more than 3 years), commencing from 01.10.2020.  \no Further, if you fully repay this rescheduled loan within these 3 years or the agreed longer \nperiod, you can obtain a waiver for the interest installments deferred up to 30.09.2020.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 5, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n7 \n \no Depending on the already settled portion of the existing non -performing loa n, if the \nborrower settles all future interest and installments, 25% or 50% of the arrears interest will \nbe waived.  \n \n18. Will the financial institutions refund the installments they deducted from me? If so, under \nwhat conditions and by when?  \n\uf0a7 Yes. If installmen ts have been already deducted from credit facilities which are granted a \nconcession, they will be reversed and refunded through credits to the customer\u2019s accounts.  \n\uf0a7 Even for borrowers who are not entitled to any other concessions under this scheme, since an  \nadditional 60 -day period to settle loans and advances that become due for settlement during \nthe 60 days period commencing from 01.04.2020 has been granted, refunds will be made for \ndeductions done during such period.  \n\uf0a7 Since loan deductions are generally ha ndled through automated systems, financial institutions \nwill have to be given a reasonable time period (preferably before 15.05.2020) to manually \neffect the refunds.  \n \n19. What if we are not an eligible business/individual but we don\u2019t have any source to repay \nloans taken from the financial institutions?  \nAll borrowers who are not entitled to any concessions  included in the Circulars can avail of an \nadditional 60 -day period to settle loans and advances that become due for settlement during the \n60 days period commencing from 01.04.2020.  \n \n20. What will happen to the interest component during the concession/moratorium period?  \nPayment of installments (interest + capital) is not requi red until the end of the moratorium period. \nHowever, when the moratorium period ends, customers will have to start making payments as \nagreed before the concessions were offered. No additional in terest will be charged by licensed", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 6, "year": 2020}, "type": "Document"}
{"page_content": "agreed before the concessions were offered. No additional in terest will be charged by licensed \nbanks from customers, on th e deferred capital and/or interest installments.  \n \n21. Will the bank recover the capital and interest installments that are applicable for the \nmoratorium period from the customers in future? If so how?", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 6, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n8 \n \n\uf0a7 Yes. As per the Circulars, the respective moratoriums only give customers the ability to  defer \nthe repayment of capital and interest.  As such, the moratorium does not require the licensed \nbanks to waive -off the capital and/or interest installments. For example, the moratorium will \nwork as follows:  \nExample  \nLoan grant date 01.04.2019  \nLoan amount Rs. 2,000,000  \nLoan Term (original) 24 months  \nInterest Rate 16%  \nMonthly installment value (derived) = Rs. 97,926  \n   Remaining no. of monthly installments as of end March 2020 = 12  \n  \no If a customer eligible for a 6 months deb t moratorium from April 2020, then that customer \nwill now not be required to pay installments to the bank from April 2020 to September \n2020.  \no However , this customer will be required to pay monthly installments of Rs. 97,926 from \nOctober 2020 to the initiall y agreed date of March 2021 and for additional six months until \nSeptember 2021.  \no Basically, original repayment schedule will be extended by an equal period of time to the \nmoratorium with the same installment value to be paid by the customers.  \n \n22. If I need to stop my cheque payments, how can I do it and is there any charge?  \nYou can request your respective licensed bank to effect stop payments on the cheques drawn. All \nfinancial institutions have been told not to charge for stop payments during the period up to \n30.09.2020.  \n \n23. Will I be charged any penal charges or late payment fees for credit facilities, whether I am \neligible or not for concessions?  \n\uf0a7 All financial institutions have been told not to charge for cheque  returns, stop payments, late \npayment fees on all credit cards and other credit facilities during the period up to 30.09.2020.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 7, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n9 \n \n\uf0a7 No additional interest will be charged on the capital and/or interest installments that are \ndeferred under the concessions grante d. \n \n24. What would happen to lease facilities that are serviced solely from business income but the \nleased vehicle is not listed in the circulars?  \n\uf0a7 A six -month debt moratorium is granted on leasing rentals only to self -employed individuals \nand individuals who own three wheelers, school vans, lorries, small goods transport vehicles \nand buses, and related assets such as motor bikes and taxies used for b usiness purposes (not \nfor personal use).     \n\uf0a7 So if the leased vehicle does not fall into the above category and is also for personal use, you \ncan avail of an additional 60 -day period to settle loans and advances that become due for \nsettlement during the 60  days period commencing from 01.04.2020, which is granted for all \nother borrowers that are not entitled to any other concessions  included in the Circulars.  \n \n25. I am having a business but my turnover is Rs. 1.2 billion, what are the reliefs applicable to \nme? \n\uf0a7 This will depend on the sector to which your business belongs.  \n\uf0a7 There is no turnover limit given for businesses/sectors under tourism, direct and indirect \nexport -related businesses including apparel, IT, tea, spices, plantation and related logistic \nsuppliers  that have been adversely affected by work disruption and overseas lockdowns \nresulting from COVID \u2013 19. \n\uf0a7 If your business does not belong to any of these sectors and is not eligible for any \nconcessions  included in the Circulars, still you can avail of an ad ditional 60 -day period to \nsettle loans and advances that become due for settlement during the 60 days period \ncommencing from 01.04.2020.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 8, "year": 2020}, "type": "Document"}
{"page_content": "commencing from 01.04.2020.  \n \n26. I have a textile business with turnover of Rs. 2 million per month but I do not have accounts \nto show. However, I main tain a current account with Bank ABC. I have stocks in my shop \nand my business will be closed indefinitely due to this situation and my wife and children do \nnot have any other means of living. What are the reliefs available to me from this scheme?", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 8, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n10 \n \n\uf0a7 The sche me provides a six -month debt moratorium for affected businesses in the apparel \nsector irrespective of the turnover, which will be applicable for loans obtained in the name of \nyour business.  \n\uf0a7 Also, a six -month debt moratorium is granted on the leasing rental s only to self -employed \nindividuals and individuals who own three wheelers, school vans, lorries, small goods \ntransport vehicles and buses, and related assets such as motor bikes and taxies used for \nbusiness purposes.  \n\uf0a7 All overdrafts, trade finance and pawn ing facilities that are falling due for settlement or \nmaturing or are under review during the period up to 30.09.2020 have been extended up to \n30.09.2020.  \n\uf0a7 Further, a three -month debt moratorium for all personal loans and leasing rentals has been \ngranted to  eligible individuals and this includes all credit facilities such as housing loans, \nconsumptions loans, cash backed loans, leasing facilities, etc., provided that the granted \namount is Rs. 1 million or less.  \n\uf0a7 If the credit facilities obtained by you aren\u2019t  eligible for any of these concessions  included in \nthe Circulars, still you can avail of an additional 60 -day period to settle loans and advances \nthat become due for settlement during the 60 days period commencing from 01.04.2020.  \n\uf0a7 Additionally, the validit y period of cheques valued less than Rs. 500,000, has been extended \nuntil 15.05.2020, provided that such cheques have become stale or are to expire in March and \nApril 2020.  \n\uf0a7 Further, all financial institutions have been told not to charge for cheque returns , stop \npayments, late payment fees on all credit cards and other credit facilities during the period up \nto 30.09.2020.No additional interest will be charged on the capital and/or interest installments", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 9, "year": 2020}, "type": "Document"}
{"page_content": "to 30.09.2020.No additional interest will be charged on the capital and/or interest installments \ndeferred under the concessions granted.  \n \n27. I have a small business and employ 6 girls who are engaged in making selected garment \nitems and I also run a sales outlet. The Sales outlet has 3 employees, a vehicle and a driver. \nI still have to pay their salaries, rental for the shop and work place and leasing installment \nfor the vehicle which is Rs. 225,000 per month. I have obtained a bank loan of Rs. 10 million", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 9, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n11 \n \nwith capital and interest to be paid monthly. What are the reliefs available to me from this \nscheme?  \n\uf0a7 The scheme provides a six -month debt mora torium for affected businesses in the apparel sector \nirrespective of the turnover, which will be applicable for loans obtained in the name of your \nbusiness.  \n\uf0a7 Also, a six -month debt moratorium is granted on the leasing rentals only to self -employed \nindividua ls and individuals who own three wheelers, school vans, lorries, small goods transport \nvehicles and buses, and related assets such as motor bikes and taxies used for business purposes.  \n\uf0a7 All overdrafts, trade finance and pawning facilities that are falling d ue for settlement or \nmaturing or are under review during the period up to 30.09.2020 have been extended up to \n30.09.2020.  \n\uf0a7 Further, a three -month debt moratorium for all personal loans and leasing rentals has been \ngranted to eligible individuals and this in cludes all credit facilities such as housing loans, \nconsumptions loans, cash backed loans, leasing facilities, etc., provided that the granted amount \nis Rs. 1 million or less.  \n\uf0a7 If the credit facilities obtained by you aren\u2019t eligible for any of these conces sions  included in \nthe Circulars, still you can avail of an additional 60 -day period to settle loans and advances that \nbecome due for settlement during the 60 days period commencing from 01.04.2020.  \n\uf0a7 Additionally, the validity period of cheques valued less t han Rs. 500,000, has been extended \nuntil 15.05.2020, provided that such cheques have become stale or are to expire in March and \nApril 2020.  \n\uf0a7 Further, all financial institutions have been told not to charge for cheque returns, stop payments, \nlate payment fee s on all credit cards and other credit facilities during the period up to", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 10, "year": 2020}, "type": "Document"}
{"page_content": "late payment fee s on all credit cards and other credit facilities during the period up to \n30.09.2020. No additional interest will be charged on the capital and/or interest installments \ndeferred under the concessions granted.  \n \n28. What are the concessions available for Overdra fts? \n\uf0a7 Permanent Overdraft facilities falling due for settlement or maturing or are reviewed during \nthe period up to 30.09.2020 have been extended up to 30.09.2020.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 10, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n12 \n \n\uf0a7 However, in the case of Temporary Overdraft facilities as at 25.03.2020, the expiry shall be  \nextended by two months for eligible borrowers.  \n\uf0a7 Interest rate on such facilities will be capped at 13 percent during the extended period.  \n\uf0a7 Borrowers are not required to service interest during the moratorium period. However, any \nborrower who wishes to pay interest on overdrafts, can do so.  \n \n29. What are the concessions available for trade finance facilities?  \n\uf0a7 Eligible trade finance facilities falling due for settlement or maturing or were under review \nduring the period up to 30.09.2020 have been extended up to 3 0.09.2020.  \n\uf0a7 These include import facilities  for pharmaceutical drugs, medical equipment, food, fertilizer \nand essential raw materials and machinery &equipment and export facilities  granted to \ntourism, direct and indirect export -related businesses including apparel, IT, tea, spices, \nplantation and related logistic suppliers that have been adversely affected by work disruption \nand overseas lockdowns resulting from COVID \u2013 19. \n \n \n \n \n30. What  are the concessions available for pawning facilities?  \n\uf0a7 Pawning facilities falling due for settlement or maturing during the period up to 30.09.2020 \nhave been extended up to 30.09.2020.  \n\uf0a7 For all new pawning advances and existing pawning facilities that becom e due for renewal on \nor after 27.04.2020, where the money has been lent on the security of personal articles made \nof gold accepted as a pledge for pawning, the maximum interest rate chargeable by licensed \nbanks is limited to 12% per annum or 1% per month i f the pawning period is less than one \nyear.  \n \n31. Are only personal loans eligible for these concessions?  \nNo. Term loans, leasing facilities, pawning, overdrafts and trade finance facilities denominated in", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 11, "year": 2020}, "type": "Document"}
{"page_content": "Rupees and foreign currency are the eligible credit fac ilities subject to the requirements specified \nin Circular Nos. 4 & 5 of 2020 issued by the Central Bank of Sri Lanka.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 11, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n13 \n \n \n32. What are the concessions available for customers who have obtained housing loans?  \n\uf0a7 A three -month debt moratorium provided that the granted  amount is Rs. 1 million or less.  \n\uf0a7 Since housing loans granted in excess of Rs. 1 mn are not entitled to any concessions  included \nin the Circulars, such customer can only avail of an additional 60 -day period to settle loans \nand advances that become due for settlement during the 60 days period commencing from \n01.04.2020.  \n \n33. How many housing loan installments can I save?  \n\uf0a7 A three -month debt moratorium has been granted for housing loans provided that the granted \namount is Rs. 1 million or less.  \n\uf0a7 Since housing loans  granted in excess of Rs. 1 mn are not entitled to any concessions  included \nin the Circulars, such customer can only avail of an additional 60 -day period to settle loans \nand advances that become due for settlement during the 60 days period commencing from \n01.04.2020. So, during the eligible moratorium period you can stop paying your housing loan \ninstallments but you will have to eventually pay them once repayment starts at the end of the \nmoratorium period.  \n \n34. What are the concessions granted to private sector  non-executive employees?  \n\uf0a7 A debt moratorium has been granted until 30.05.2020 on personal loans granted to all private \nsector non -executive employees and there is no limit on the value of these personal loans.  \n\uf0a7 However, financial institutions will decide o n whether the borrower is a \u2018non -executive \nemployee\u2019 based on the hierarchical designation of the borrower or by obtaining a \nconfirmation from the employer.  \n \n35. What are the concessions granted to Government sector employees?  \n\uf0a7 A three -month debt moratorium for  all personal loans and leasing rentals of value less than \nRs. 1 million.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 12, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n14 \n \n\uf0a7 This includes all credit facilities granted to Government sector employees, including housing \nloans, consumptions loans, cash backed loans, leasing facilities etc., provided that the  granted \namount is Rs. 1 million or less.  \n\uf0a7 For all other credit facilities obtained by Government sector employees, which are not entitled \nto any other concessions  included in the Circulars, they can only avail of an additional 60 -day \nperiod to settle loans  and advances that become due for settlement during the 60 days period \ncommencing from 01.04.2020.  \n \n36. What are the concessions granted to pensioners?  \n\uf0a7 A three -month debt moratorium for all personal loans and leasing rentals of value less than \nRs. 1 million.  \n\uf0a7 This includes all credit facilities granted pensioners, including housing loans, consumptions \nloans, cash backed loans, leasing facilities etc., provided that the granted amount is Rs. 1 \nmillion or less.  \n\uf0a7 For all other credit facilities obtained by pensioner s, if not entitled to any concessions  included \nin the Circulars, can avail only an additional 60 -day period to settle loans and advances that \nbecome due for settlement during the 60 days period commencing from 01.04.2020.  \n \n \n \n \n37. Are the pensioners and/or gove rnment -sector employees who have borrowed in excess of \nRs. 1mn eligible for the concessions/ moratoriums?  \nYes. An additional 60 -day period has been granted to settle loans and advances that become due \nfor settlement during the 60 days period commencing from 01.04.2020.  \n \n38. What requirements do we have to fulfill to obtain the working capital loan and/or \ninvestment purpose loan and what are the characteristics of such loans?  \n\uf0a7 Financial institutions may grant an additional loan or a new loan facility in Rupees for working", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 13, "year": 2020}, "type": "Document"}
{"page_content": "\uf0a7 Financial institutions may grant an additional loan or a new loan facility in Rupees for working \ncapital or investment purposes subject to the following conditions, provided that the b orrower \nsubmits a credible business plan.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 13, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n15 \n \n\uf0a7 The working capital loan will be granted under the Saubhagya (Prosperity) Loan Scheme as a \n\u2018Saubhagya COVID 19 Renaissance Facility\u2019 only to micro, small and medium sized \nbusinesses including manufacturing, service s, agriculture, construction, self -employment \nbusinesses and individuals and the businesses in the sectors of tourism, exports and related \nlogistics suppliers.  \n\uf0a7 One borrower (business) is eligible for only one loan even when the borrower has credit \nfaciliti es in several financial institutions. Financial institutions granting this facility will be \nobtaining a written confirmation from the customer that the customer has not approached other \nfinancial institutions for loans under the same Scheme.  \n\uf0a7 The respectiv e financial institution will assess the true eligibility of the borrower based on the \nbank accounts maintained (including foreign currency accounts) and collateral provided.  \n\uf0a7 The maximum loan amount herein is to be the two months working capital requirement  of the \nbusiness concerned. So the respective financial institution will properly evaluate the working \ncapital requirement of the borrower and agree on the loan size, limiting it to cover only the \nobligatory expenses (such as salaries/wages) to be incurred  during the 2 -month period. If the \nbusiness is non -operational, usual components of working capital such as raw material will be \nexcluded when computing the two months working capital requirement.  \n\uf0a7 The financial institution may request for suitable collater al, when providing the working \ncapital/investment purpose loan depending on the customer risk profile and past track record.  \n\uf0a7 Accordingly, financial institutions would grant a working capital purpose loan facility to", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 14, "year": 2020}, "type": "Document"}
{"page_content": "\uf0a7 Accordingly, financial institutions would grant a working capital purpose loan facility to \neligible performing and non -performing b orrowers in Rupees (no foreign currency facility) \nnot exceeding 2 months\u2019 working capital requirement and such loan shall be repaid over two \nyears at an interest rate equal to 4% p.a.  \n\uf0a7 The investment purpose loan facility shall be granted only by licensed b anks and only for \nperforming borrowers in Rupees not exceeding Rs. 300 mn per bank per borrower to expand \nbusiness activities. Such loan shall be repaid over five years at an interest rate equal to \nmaximum of AWPLR plus 1.5% p.a.  \n\uf0a7 A moratorium for a period 25.03.2020 to 30.09.2020 will be granted for both working capital \nloans and investment purpose loans.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 14, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n16 \n \n    \n39. What can I do if the financial institution is not answering my calls or not responding to my \ne-mails?  \n\uf0a7 You can visit the respective financial instituti on\u2019s official website and obtain the general \ncontact details or if a complaints facility is available, lodge a complaint through the website.  \n\uf0a7 For e -mails, SMS/WhatsApp messages, CBSL has required financial institutions to respond \nwithin 45 days. Hence, ple ase allow a reasonable time for such institutions to respond to you.  \n\uf0a7 Majority of the financial institutions advertise dedicated phone numbers on TV. So you can \ncall the respective financial institutions on those numbers.  \n \n40. What if I have already made a requ est to a financial institution and am awaiting a response \nor have already availed of the concessions granted to Small and Medium Enterprises (SMEs) \nunder Circular No. 2 of 2020 on Credit Support to Accelerate Economic Growth? Am I \neligible to avail of the concessions granted under Circular Nos.  4 and 5 of 2020 as well?  \n\uf0a7 The previous Circular No. 02 of 2020 on Credit Support to Accelerate Economic Growth is \nstill valid.  \n\uf0a7 Borrowers who wish to continue with the concessions granted under the previous scheme \n(considering the longer period for capital moratorium and no additional interest cost for the \nextended period. However, interest rate for working capital is higher) may c ontinue with the \nprevious scheme.  \n\uf0a7 If the borrower wishes to switch to the new scheme (including borrowers who have been \napproved under the previous scheme) banks shall accommodate such requests under the new \nscheme.  \n\uf0a7 However, bank shall not force the cust omer to continue with the previous scheme.  \n\uf0a7 Further, the borrower cannot enjoy concessions under both schemes at the same time.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 15, "year": 2020}, "type": "Document"}
{"page_content": "\uf0a7 Further, the borrower cannot enjoy concessions under both schemes at the same time.  \n \n41. Can a retail distributer who has not registered his business and maintains no account can \nget the moratorium?  \n\uf0a7 He will get an add itional 60 -day period to settle loans and advances that become due for \nsettlement during the 60 days period commencing from 01.04.2020.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 15, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTME NT \n \n06 May  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 02  of 2020  \n \n \n17 \n \n \n42. I\u2019m doing an agriculture business with a turnover above Rs. 1 bn. Can I get the 6 -month \nmoratorium?  \n\uf0a7 A 6\u2013month moratoriu m is granted for an agriculture business only if such business falls into \nthe SME category (i.e., annual turnover should be equal to or below Rs 1 bn).  \n\uf0a7 Since the turnover of this business is over Rs. 1 bn, a 6 \u2013month moratorium will not be granted.  \n\uf0a7 However,  an additional 60 -day period will be granted to settle loans and advances that become \ndue for settlement during the 60 days period commencing from 01.04.2020.  \n \n43. I\u2019m a self -employed vehicle importer, can I get a moratorium?  \n\uf0a7 Vehicle import business is not eli gible for any moratorium under Circular No. 04 and 05 of \n2020, issued by the Central Bank of Sri Lanka.  \n\uf0a7 However, the general concession of an additional 60 -day period will be granted to settle loans \nand advances that become due for settlement during the 60  days period commencing from \n01.04.2020.  \n \n44. What is the applicable concession for Estate workers, who have obtained personal loans/ \nhousing loan?  \n\uf0a7 They are eligible to obtain a three -month debt moratorium for all personal loans and leasing \nwhere the granted amount is less than Rs. 1 million.  \n\uf0a7 If the granted amount is over Rs. 1 million, the general concession of an additional 60 -day \nperiod will be gra nted to settle loans and advances that become due for settlement during the \n60 days period commencing from 01.04.2020.   \n \n--------------------------  These FAQs were last updated on 06.05.2020 ----------------------------", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_2_of_2020_e.pdf", "page": 16, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n  19 June  2020  FREQUENTLY ASKED QUESTIONS  (FAQs)      No. 0 3 of 2020  \n \n \n \nAmendments to Frequently Asked Questions  No. 02 of 2020  \nCircular Nos. 04, 05 and 06 of 2020 on Concessions granted to  \nCOVID -19 Hit Businesses including Self -Employment and Individuals  \nthe Letter Dated 27.03.2020 on Extraordinary Regulatory Measures,  and  \nthe Monetary Law Act Order No. 1 of 2020 on Maximum Interest Rates on Pawning \nAdvances of Licensed Banks  \n  \n \n \n \n \n \n \nAmended response to FAQ No. 20  \nWhat will happen to the interest component during the concession/moratorium period ? \n\u25aa Payment of installments (interest + capital) is not required until the end of the moratorium \nperiod. Once  the moratorium period ends, customers will have to start making payments as \nagreed before the concessions were offered.  \n\u25aa However, licensed banks have raised concerns on interest cost relating to deposit/borrowing \nliabilities during the corresponding debt  moratorium period and have made  representation s to \nhigher authorities in this regard. Based on the outcome of such representation s and subsequent \ndiscussions  with CBSL , banks are permitted to  charge  additional interest on the deferred \ninstallment s of term loans as follows:    \n\u27a2 Up to 7% interest per annum as additional interest on the differed installments  in \nrelation to Equated Monthly  Installment (EMI) loans  granted in Rupee .  \n\u27a2 The above interest shall be recovered at the end of the extended  remaining tenure of \nthe loan.  Banks should not recover  this interest immediately after the end of the \nmoratorium period.  \n\u27a2 For other type s of facilities  granted in Rupee or foreign currency , banks and the \nborrower need to  agree on a concessionary interest rate for the deferred instalment s. \n \n Please note that these \u2018Frequently Asked Questions (FAQs)\u2019 have been compiled based on", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_3_of_2020_e1.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "Please note that these \u2018Frequently Asked Questions (FAQs)\u2019 have been compiled based on \nregulations issued by the Central Bank of Sri Lanka and the respons es herein are subject to \nchange  based on future regulations and/or amendments, if any, relating to the conces sions \ngranted to individuals and businesses affected by COVID -19.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_3_of_2020_e1.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "2 \n  \nAmended response to FAQ No. 28  \nWhat are the concessions available for Overdrafts?  \n\u25aa Permanent Overdraft facilities falling due for settlement or maturing or are reviewed during \nthe period up to 30.09.2020 have been extended up to 30.09.2020.  \n\u25aa However, in the case of Temporary Overdraft facilities as at 25.03.2020, the expiry shall be \nextended by two months for eligible borrowers. Interest rate on such TOD facilities will be \ncapped at 13 percent per annum during the extended period.  \n\u25aa Borrowers are not required to service interest during the moratorium period. However, any \nborrower who wishes  to pay interest on overdrafts, can do so.  \n \n \n--------------------------  These FAQs were last updated on 19.06.2020 ---------------------------", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_3_of_2020_e1.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEPARTMENT  \n \n 21 July 2020  FREQUENTLY ASKED QUESTIONS  (FAQs)      No. 0 4 of 2020  \n \n \n \nAmendments to Frequently Asked Questions  No. 02 of 2020  \n \n \n \n \n \n \n \nAmended response to FAQ No. 20  \nWhat will happen to the interest component during the concession/moratorium period ? \n\u25aa Payment of installments (interest + capital) is not required until the end of the moratorium \nperiod. Once  the moratorium period ends, customers will have to start making payments as \nagreed before the concessions were offered.  \n\u25aa However, licensed banks have raised concerns on interest cost relating to deposit/borrowing \nliabilities during the corresponding debt  moratorium period and have made  representation s to \nhigher authorities in this regard. Based on the outcome of such represe ntation s and subsequent \ndiscussions  with CBSL , banks are permitted to  charge  additional interest on the deferred \ninstallment s of term loans as follows:    \n\u27a2 Up to 7% interest per annum as additional interest on the differed installments  in \nrelation to Equated Monthly Installment (EMI) loans  granted in Rupee .  \n\u27a2 The above interest shall be recovered at the end of the extended  remaining tenure of \nthe loan.  Banks should not recover  this interest immediately after the end of the \nmoratorium per iod.  \n\u27a2 For other type s of facilities  granted in Rupee or foreign currency , banks and the \nborrower need to  agree on a concessionary interest rate for the deferred instalment s. \n\u25aa Licensed banks may charge maximum of 4% per annum as additional interest for the \nmoratorium period in relation to leasing facilities granted for buses providing public transport \nservices and shall recover such amounts in equal installments over 2 years period or during the \nremaining tenure o f the leasing facility, commencing from 01 October 2020 . \n \n \n Please note that these \u2018Frequently Asked Questions (FAQs)\u2019 have been compiled based on", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_4_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "Please note that these \u2018Frequently Asked Questions (FAQs)\u2019 have been compiled based on \nregulations issued by the Central Bank of Sri Lanka and the respons es herein are subject to \nchange  based on future regulations and/or amendments, if any, relating to the concessions \ngranted to individuals and businesses affected by COVID -19.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_4_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "2 \n New FAQ No. 45 \nI\u2019m engaged in tourism related business and I have obtained a vehicle lease facility. Is there a \npossibility to extend the current moratorium period of 6 months granted to me?  \n\u25aa The C entral Bank of Sri Lanka, considering the potential adverse impact of COVID -19 \npandemic on tourism sector businesses and individuals, requests licensed commercial \nbanks, licensed specialised banks, licensed finance companies and specialised leasing \ncompani es (hereinafter referred to as Financial Institutions) to provide the following relief \nmeasures to eligible borrowers : \n\u27a2 To extend the existing 6 months moratorium period already granted to 12 months in \nrespect of capital outstanding of leasing facilities granted to tourism related vehicles.  \n\u27a2 However, borrowers need to service interest during the moratorium period . Financial \ninstitutions are requested to recover such interest in a manner that is not inconvenient \nto the borrower.  \n\u27a2 To waive off the accrued penal interest in respect of leasing facilities granted to \ntourism related vehicles . \n \n--------------------------  These FAQs were last updated on 21.07.2020 ---------------------------", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_4_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n22 Dece mber  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 05  of 2020  \n \n1 \n \nMonetary Law Act Order No. 3 of 2020 on  \nMaximum Interest Rates on Mortgage -backed Housing Loans  \n \n \n \n \n \n1. What are the key purposes/expectations of this Order?  \n\u25aa Support the expansion of home ownership of the Sri Lankan general public.  \n\u25aa Provide an additional stimulus to the domestic construction sector and its supply chains.  \n \n2. Who are eligible to obtain housing loans under the terms of this Order ? \nSalaried employees  serving  in confirmed service in the  public and private sectors , obtaining new \nmortgage -backed housing loans from a licensed bank under the terms of this Order , with effect from  \n10 December 2020.  \n \n3. What other conditions are to be met to be eligible to obtain housing loans under the terms of \nthis Order ? \n\u25aa The same property to be developed/purchased is to be mortgaged to the bank.  \n\u25aa Such mortgage i s to be only a primary mortgage.  \n\u25aa If a condominium property is purchased out of this loan, then the bank and customers are to enter \ninto an arrangement to convert the property to a primary mortgage when the construction is \ncompleted.  \n \n4. What are the terms of repayment for housing loans obtained under the terms of this Order ? \n\u25aa Tenure of repayment:  \no Will be from the date borrowed up to the period where the salaried employee is expected to \nretire from such employment.  Please note that these FAQs  have been compiled based on regulations issued by the Central Bank \nof Sri Lanka up to 22.12.2020 . An update to these FAQ s is available in FAQ s No. 01 of 2021 \ndated 17.02.2021", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_5_of_2020_e1.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n22 Dece mber  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 05  of 2020  \n \n2 \n \n \no Employees are to provide banks a confirmation from their respective employer regarding the \nretirement date/age, as applicable.  \n\u25aa Rate of interest:  \no Interest during the first 5 years will be fixed at a rate of 7% per annum.  \no Interest during the period after the first 5 years will vary based on the Average Weighted \nPrime Lending Rate (AWPR) as the applicable rat e is AWPR plus 1% per annum.  \no The interest rate variance after the fixed 5 years will take place every 6 months based on the \naverage monthly  AWPR for the banking sector published by the Central Bank of Sri Lanka \nduring the immediately preceding 6 months.  \n \n5. Will customers be allowed to obtain a housing loan  under the terms specified in this Order to \nsettle existing housing loans at the same or any other bank?  \nNo. \n \n6. For what purposes can the housing loan under this Order be utilized?  \n\u25aa Housing  loans under the terms of this Order can be obtained for  the following purposes provided \nthat the facility is secured by primary mortgage over the same property:  \no purchase of land for construction of a house,  \no purchase of a house,  \no construction of a house, or  \no renovation  of an existing house.  \n\u25aa However, this scheme is not intended for commercial scale real estate developers.  \n \n7. Can borrowers settle housing loans obtained under the terms of this Order without a pre -\nsettlement cost?  \nYes, b ut only if the facility is settled in full at end of the first 5 years where the rate of interest remains \nfixed  at 7% per annum.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_5_of_2020_e1.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n22 Dece mber  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 05  of 2020  \n \n3 \n \n \n8. Is there a minimum or maximum limit on the amount permitted to be borrowed under the \nterms specified in this Order?  \nNo.  \nThe amount will depend on the respective bank\u2019s assessment/evaluation over the borrower\u2019s income, \nrepayment capacity, value of property offered as the primary mortgage and any other factors based \non the bank\u2019s internal policy and/or business decision.  \n \n9. Will a bank consider other income (non -related to salary) of the borrower as a source of income \nfor repayment?  \nAt the discretion of the respective bank , based on their internal policy and/or business decision , the \nbank may consider other income of the borrower  as an additional source of income for repayment.  \n \n10. Will a bank grant a joint housing loan under the terms of this Order for two individuals to \npurchase/ develop the same property, when both are eligible for housing loans and both expect \nto obtain the loan?  \nYes, if both parties are salaried employees in the public and/or private sector  and t he housing loan is \nsecured by primary mortgage over the same property.  \n \n11. What if only one of the joint borrowers is a salaried employee in the public/private sector?  \nSuch r equests can be considered favourably, however, only at the discretion of the respective bank \nbased on their internal policy and/or business decision.  \n \n12. Are borrowers  allowed to mortgage another (alternative) property and obtain a loan to build a \nhouse or purchase land at some other place?   \nNo, housing loans granted under the terms of this Order is limited only to develop/purchase the same  \nproperty that is offered as a primary mortgage to the bank.", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_5_of_2020_e1.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n22 Dece mber  2020        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 05  of 2020  \n \n4 \n \n \n13. Will a bank grant a housing loan under the terms of this Order to purchase/ develop  properties \nowned by the spouse of salaried employees?  \nYes, a joint loan secured by primary mortgage over the same property  can be considered by the bank.  \n \n14. Can the  Non-executive  Directors  of companies with monthly fixed remuneration as resolved by \nthe company, apply for a housing loan under this Order?  \nNon-executive Directors  are not considered as employees of the company and there is no retirement \nage for such pos itions. Therefore, such positions are not covered by this Order.  \n \n15. Will a bank grant an additional housing loan (2nd loan) under the terms of this Order, for the \nsame property,  which is purchased with bank funds, mortgaging the same property?  \nHousing loans  cannot be granted under the terms of this Order based on mortgages other than the \nprimary mortgages.  \n \n16. What if the existing housing loans are repaid at a much higher interest rate compared to the \nterms specified under this Order? Can the interest rate of such existing housing loans be \nreduced?  \nConsidering the cost of funds, market interest rates and other relevant factors based on their internal \npolicy and/or business decision, the respective bank may reduce the interest rate of an existing \nhousing loan  at their discretion.  However , such housing loans will not fall under this scheme.  \n \n--------------------------  These FAQs were last updated on 22.12.2020 ----------------------------", "metadata": {"source": "data\\CBSL\\2020\\bsd_frequently_asked_questions_no_5_of_2020_e1.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "Deshamanya Professor W D Lakshman GOVERNORCentral Bank of Sri Lanka30, Janadhipathi Mawatha, Colombo 1, Sri Lanka27 March 2020To All Chief Executive Officers of Licensed Commercial Banks and Licensed Specialised BanksDear Chief Executive OfficersExtraordinary Regulatory Measures taken by the Central Bank of Sri Lanka to Provide Flexibility to Licensed Banks to Support Businesses and Individuals Affected by the Outbreak of Coronavirus Disease (COVID-19)The Monetary Board of the Central Bank of Sri Lanka after assessing the safety and soundness of the banking sector, decided to introduce extraordinary regulatory measures to be implemented by licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) considering the imminent need to provide flexibility to licensed banks to support businesses and individuals affected by the outbreak of COVID-19, in this exceptional situation.Accordingly, the extraordinary regulatory measures approved by the Monetary Board are set out below to provide further space for licensed banks to assist the affected parties on an urgent basis. The details of these Extraordinary Measures are annexed.1. Permit Domestic Systemically Important Banks (D-SIBs) and non D-SIBs to draw-down their Capital Conservation Buffers by 100 bps and 50 bps out of the total of 250 bps, respectively.2. Allow classification of non-performing loans and recovery of foreign currency loans:(a) Permit licensed banks to provide additional 60-day period to settle loans and advances which are becoming past due during March 2020 and permit licensed banks to not to consider such facilities as past due facilities until the end 60-day concessionary period with respect to borrowers who are not entitled to any other concessions.(b) Allow licensed banks to consider all changes made to payment terms and loan contracts from 16.03.2020 to 30.06.2020, due to challenges faced by customers amidst COVID-19 outbreak as modifications to loans and", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "due to challenges faced by customers amidst COVID-19 outbreak as modifications to loans and advances instead of", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "P O. Box 590ColomboTEL: (9411)2477477(9411)2477577 FAX: (9411) 2477677E-MAIL: governor@cbsl.lk", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "restructuring of loans and advances for classification of loans & advances and the computation of impairment.(c) Withdraw the requirement to classify all credit facilities extended to a borrower as non-performing when the aggregate amount of all outstanding non-performing loans granted to such borrower exceed 30% of total credit facilities.(d) Permit converting and recovery of loans in foreign currency to Rupee denominated loans, where necessary, subject to banks ensuring that borrowers do not get an undue advantage at the cost of country\u2019s foreign reserves or cause pressure on the exchange rate and maintaining proper documentations.3. Defer the enhancement of capital by licensed banks, which are yet to meet the minimum capital requirement of end 2020, until end 2022. Such banks will need to restrict cash dividend distribution to 25 per cent of distributable profits in respect of financial Years 2019 and 2020 to preserve and build up capital.4. Reset the timelines for rectification of supervisory concerns/findings, if necessary, prioritizing on the severity/importance of the concerns raised for rectification. Banks which are required to meet timelines to address supervisory concerns/findings during the period up to 30 May 2020, shall be granted a further period of 3 months.5. Extend the reporting period for submission of statutory returns to the Bank Supervision Department by two weeks and publication of quarterly financial statements by one month until further notice. Depending on the circumstances, the Director Bank Supervision may permit further extensions.Licensed banks, however, should refrain from using the release of capital on any capital related relaxations granted, to distribute dividends or declare bonuses to its management and staff or avail of any other similar action. Accordingly, all licensed banks are requested to avail these relaxations in the best interest of supporting their customers and the economy at large, the benefits of which would, in", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "interest of supporting their customers and the economy at large, the benefits of which would, in return, accrue to the banking sector to remain resilient.Licensed banks are advised to diligently monitor their risk profile and resources in these times of stress, while the Central Bank will continue to closely monitor the liquidity and capital positions of licensed banks and any early warnings of stress to ensure safety and soundness of the banking sector.Prof. W D LakshmanChairman of Monetary Board andGovernor of the Central Bank of Sri LankaYours sincerely,", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "AnnexEXTRAORDINARY REGULATORY MEASURES TAKEN BYTHE CENTRAL BANK OF SRI LANKA TO PROVIDE FLEXIBILITY TOLICENSED BANKS TO SUPPORT COVID-19 AFFECTEDBUSINESSES AND INDIVIDUALSAt present, the banking sector in Sri Lanka as a whole is operating with healthy capital and liquidity buffers reflecting resilience and stability. Since 2017, the banks have built-up capital which can be utilized in times of stress. As at end 2019, total Capital Adequacy Ratio of the banking sector stood at 16.5 per cent, which is well above the regulatory minimum of 13.5 / 14.0 per cent and 12.5 per cent applicable for domestic systemically important banks (D-SIBs) and non D-SIBs, respectively. At present, the capital buffers in excess of the Capital Conservation Buffer (CCB) in the banking sector amounts to around Rs. 200 bn, whilst the CCB amounts to Rs. 170bn. These buffers can be drawn down and can be leveraged up to 8 to 10 times during times of stress.Overall liquidity position of banks has been healthy and the Liquidity Coverage Ratio (LCR) of the banking sector as at end 2019 was 212.8 per cent where the regulatory minimum is 100 per cent. The buffers maintained in excess of the required LCR were comfortably high indicating that banks had high quality liquid assets to meet the next 30 day outflows.The subsequent reduction in policy interest rates and statutory reserve requirement has enabled banks to strengthen its liquidity position. Further, the Central Bank of Sri Lanka (CBSL) has already announced that it will ensure the availability of adequate liquidity in the market in order to facilitate smooth operations amidst the COVID-19 outbreak.In the meantime, CBSL will closely monitor the liquidity position of banks, due to the potential changes to their liquidity risk profile considering the already announced debt moratoriums and other measures.Accordingly, the Monetary Board has decided to introduce the following extraordinary measures to provide further space for banks to assist", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "to introduce the following extraordinary measures to provide further space for banks to assist COVTD-19 affected businesses and individuals on an urgent basis.", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "1.RELEASE OF CAPITAL CONSERVATION BUFFERAs an immediate measure, D-SIBs and non-D-SIBs are permitted to draw-down their CCBs by 100 bps and 50 bps out of the total of 250 bps, respectively. This amounts to around Rs. 50 bn enabling banks to expand their lending capacity by nearly Rs. 400 bn to facilitate smooth credit flows to the economy and COVID-19 affected borrowers to sustain their businesses in the immediate future.CBSLwill re-assess the impact of CO VID-19 on bank\u2019s capital and will release further CCB, if required.2. RELAXATIONS ON CLASSIFICATION OF LOANS & ADVANCES AND RECOVERY OF FOREIGN CURRENCY LOANSAs of end February 2020, the total banking sector loans and advances were around Rs. 8 Trillion and total non-performing loans and advances (NPLs) accounted to Rs. 435 Bn. It is observed that during the first two months of 2020, new NPLs close to Rs. 50 Bn have emerged in the banking sector. However, considering prevailing extraordinary circumstances the Monetary Board has decided to grant following measures in respect of classification of loans & advances and recovery of foreign currency loans to provide further space for banks to assist COVID-19 affected businesses and individuals.In circumstances where recovery of loans in foreign currency is remote, the banks are permitted, as a last resort, to convert such loans to Sri Lanka Rupee denominated loans, where necessary, and recover them in Rupees. However, banks shall ensure that borrowers do not get an undue advantage at the cost of country\u2019s foreign reserves or cause pressure on the exchange rate. Further, licensed banks shall maintain necessary documents in this regard. Further instructions on this regard will be issued to banks by Director, Department of Foreign Exchange.The requirement to classify all credit facilities extended to a borrower as non-performing when the aggregate amount of all outstanding non-performing loans exceeding 30% of the total credit facilities extended will cease to apply with", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "non-performing loans exceeding 30% of the total credit facilities extended will cease to apply with immediate effect.With respect to borrowers who are not entitled to any other concessions, licensed banks are permitted to provide additional 60 days period to settle loans and advances which are becoming past due during March 2020. Such facilities should not be considered as past due facilities until the end 60 day concession period.", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 3, "year": 2020}, "type": "Document"}
{"page_content": "Banks shall consider all changes made to payment terms and loan contracts from 16.03.2020 to 30.06.2020, due to challenges faced by customers amidst COVID-19 outbreak as modifications to loans and advances instead of restructuring of loans and advances for the purpose of classification of loans & advances and computing impairment.Further, CBSL is in the process of finalizing a Credit Support Scheme to CO VID-19 affected customers through a debt moratorium and working capital facility at concessionary rates of interest, consequent to the decisions taken by the Cabinet of Ministers. CBSL has already issued initial instructions to banks to implement these decisions.3. DEFERING THE ENHANCEMENT OF MINIMUM CAPITAL REQUIREMENTCBSL in its efforts to strengthen the capital position of banks and with a view to encouraging banks to maintain scale to operate in an effective and meaningful manner, in 2017, enhanced the minimum capital requirement of licensed commercial banks and licensed specialised banks by end 2020 to Rs. 20 bn and Rs.7.5 bn, respectively. In this regard, the banks which were in the process of infusing capital or planning mergers had submitted their capital plans to the Central Bank.The requirement to meet higher levels of capital by the banks, which are yet to meet the requirement, is deferred until end 2022, considering the potential challenges ahead of raising capital and strategizing for mergers.All banks, however, should refrain from using the release of capital on any capital related relaxations granted, to distribute dividends or declare bonuses to its management and staff or avail of any other similar action.4. EXTENTION OF DEADLINES TO ADDRESS SUPERVISORY CONCERNSThe process of addressing supervisory concerns communicated through the Letters of Findings of the Statutory Examinations and other correspondence are in progress in banks. However, considering the disruptions to smooth operations of banking business and with the change of priorities due to", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "the disruptions to smooth operations of banking business and with the change of priorities due to the exceptional circumstances, meeting timelines set by CBSL and the Banks may be challenging. For this purpose, banks are permitted to reset the timelines if necessary, prioritizing them on the basis of severity/importance. In the case of banks which are required to meet timelines to address", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 4, "year": 2020}, "type": "Document"}
{"page_content": "supervisory concerns/findings during the period up to 30 May 2020, such banks are granted a further period of 3 months for rectification of supervisory concerns/findings.5. FACILITATING APPLICATION OF ACCOUNTING STANDARDSCBSL is in discussion with CA Sri Lanka (CASL) on any facilitation for banks on the application of SLFRS 9, considering the extraordinary circumstances arising from COVID-19 outbreak. Both CBSL and CASL will closely monitor the developments locally and internationally and take appropriate measures to address any concerns arising from the current situation.6. EXTENSION OF TIMELINES FOR SUBMISSION AND PUBLICATION OF STATUTORY RETURNS & FINANCIAL STATEMENTSTimely submission of Key Statutory Returns and publication of financial statements will be challenging during these exceptional times. Therefore, the reporting period for submission of statutory returns to the Bank Supervision Department will be extended by two weeks and publication of quarterly financial statements will be extended by one month until further notice. However, depending on the circumstances the period may be further extended.CBSL will continue to closely monitor the liquidity and the capital position of banks and any early warnings of stress, to ensure safety and soundness of the banking sector.All licensed banks are requested to avail these relaxations in the best interest of supporting their customers and the economy at large, benefits of which would in return accrue to the banking sector to remain resilient.", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_by_cbsl_to_support_businesses_and_individuals_affected_by-COVID19.pdf", "page": 5, "year": 2020}, "type": "Document"}
{"page_content": "Annex IIIDeshamanya Professor W D Lakshman GOVERNORCentral Bank of Sri Lanka30, Janadhipathi Mawatha, Colombo 1, Sri LankaMay 2020To : All Chief Executive Officers of Licensed Commercial Banks and Licensed Specialised BanksDear Chief Executive Officers,Extraordinary Regulatory Measures to provide Liquidity to Licensed Banks amidst COVID-19 OutbreakThe Monetary Board of the Central Bank of Sri Lanka (CBSL) in the wake of the possible adverse impact on liquidity and other key performance indicators of licensed banks due to the implementation of the credit support scheme to assist COVID-19 hit businesses and individuals, and the need to meet other urgent liquidity needs, considers it imperative to strengthen the liquidity position of banks. The Monetary Board expects all financial institutions to provide uninterrupted credit flows in a prudent manner to revive the economic activities where in turn all sectors including financial sector of the economy will benefit. The confidence that certain fallback options are in place are expected to drive the banks' management to take their decisions comfortably.In view of the above, the Monetary Board granted approval for the following extraordinary measures to strengthen the liquidity position of licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) to ensure continued supply of credit and to meet urgent liquidity needs of banks under these exceptional circumstances.(i) Provide additional funding under the refinance facility or through credit operations under the Monetary Law Act, enabling the banking sector to provide working capital and other loans at concessionary rates of interest, to spur demand in the economy.P O. Box 590ColomboTEL. : (9411)2477477(9411)2477577FAX: (9411) 2477677E-MAIL : governor@cbsl.lk10", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_to_provide_liquidity_to_banks_covid19.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "(ii) Permit licensed banks to consider certain assets as liquid assets in the computation of Statutory Liquid Assets Ratio (SLAR) under the Banking Act during the period up to 30 June 2021, subject to hair-cut and other conditions. Licensed Bankswill be notified of these Assets in due course.(iii) Permit licensed banks to operate maintaining a Liquidity Coverage Ratio and Net Stable Funding Ratio at 90%, in this exceptional circumstance, with enhanced supervision and frequent reporting up to 30 June 2021.(iv) Allocate funds from the Sri Lanka Deposit Insurance and Liquidity Support Scheme as liquidity support to the banking sector.(v) Provide liquidity to banks under the provisions of the Monetary Law Act as emergency loans and advances in Rupees and facilitate the supply of liquidity for banks which are in need of funds. Such funds will be made available under an approved Framework of Emergency Loans and Advances to Licensed Banks based on acceptable collateral and liquidity forecasts.Licensed banks are strongly advised to monitor the liquidity position of their respective banks and use liquid funds accruing as a result of the above Measures prudently for intended purposes of strengthening credit flows in the economy and liquidity management, and to refrain from utilizing such funds for discretionary payments such as dividends, bonuses, share buybacks and other non-essential operational expenses.Yours sincerely,Deshamanya Prof.W D Lakshman Chairman of Monetary Board and Governor of the Central Bank of Sri Lanka\n211", "metadata": {"source": "data\\CBSL\\2020\\bsd_instructions_extraordinary_regulatory_measures_to_provide_liquidity_to_banks_covid19.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n27 April 20 20               MONETARY LAW  ACT ORDER                    No. 01 of 2020 \nProf. W D Lakshman  \nChairman of the Monetary Board and  \n Governor of the Central Bank of Sri Lanka  \n MAXIMUM INTEREST RATES ON  PAWNING ADVANCES  \nOF LICENSED BANKS  \nIssued under Section  104(1)(b) of the Monetary Law Act, No. 58 of 1949 , as amended . \nConsidering the necessity to provide relief to low income individuals who are pawning gold \njewellery to meet short -term financing needs due to the adverse economic situation resulting \nfrom the COVID -19 outbreak , the Monetary Board hereby  issue s an Order on  maximum interest \nrates of pawning advances granted by  licensed  commercial  banks  and licensed specialised banks \n(hereinafter referred to as licensed banks) . \n                                                                                      \n  \n1. Empowerment \nunder the \nMonetary Law  \nAct 1.1  In term s of Section  104(1)(b) of the Monetary Law  Act, the \nMonetary Board may from time to time fix the maximum rates \nof interest which licensed banks may charge for different types \nof loans or other credit operations.  \n2. Applica bility of \nthis Order  2.1  This Order shall apply to the business of pawn broking, \n(here inafter referred to as pawning) carried on by a licensed bank \nor any branch or agency of such bank.   \n3. Maximum \ninterest rates on \npawning \nadvances  \n 3.1  The rate of interest chargeable by licensed banks on the money \nlent for pawning advances coll ateralised by personal articles \nmade of gold accepted as a pledge , shall  be 12 % per annum or \n1% per month for advances with a tenure of less than one year.   \n3.2  The above interest rate shall be applied to all new paw ning \nadvances and existing pawning facilities that become due for \nrenewal commencing the date of the Order.", "metadata": {"source": "data\\CBSL\\2020\\bsd_monetary_law_act_order_1_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n21 August 2020       MONETARY LAW ACT ORDER              No. 02 of 2020  \n1 \n \n \nMAXIMUM INTEREST RATES ON  LENDING PRODUCTS  OF LICENSED BANKS  \n \nIssued under Section  104(1)(b) of the Monetary Law Act, No. 58 of 1949 , as amended . \n \nThe Central Bank of Sri Lanka (CBSL) has adopted several policy measures in the recent past such as \nreduction of policy interest rates, statutory reserve ratio and the bank rate,  and introduction of \nextraordinary regulatory measures to reduce the cost of funds of licensed commercial banks (LCBs) \nand licensed specialised banks (LSBs). These measures were implemented to facilitate licensed banks \nto assist businesses and individuals affected by the COVID -19 crisis. Consequently, while overall \nmarket interest rates have declined in recent weeks, the Monetary Board anticipates a further reduction \nin overall market lending rates, thereby encouraging borrowing for productive economic acti vity and \nreinforcing support for COVID - 19 hit businesses as well as the broader economy, given the conditions \nof subdued inflation. The Monetary  Board has therefore, decided to adopt targeted measures to reduce \nspecific interest rates that it considered t o be excessive, which would help marginal borrowers.   \n  \nAccordingly,  the Monetary Board hereby issues an Order on the  maximum  interest rates applicable on  \nSri Lanka Rupee (LKR) denominated loans and advances granted by LCBs and LSBs, while taking \ncognizan ce of differences in their funding structures.  \n            \n1. Empowerment \nunder the \nMonetary Law \nAct 1.1  In terms of Section 104(1)(b) of the Monetary Law Act, the Monetary \nBoard may from time to time fix the maximum rates of interest which \nLCBs and LSBs may charge for different types of loans or other credit \noperations .  \n2. Interest Rates on \nLKR \ndenominated \nloans and \nadvances  2.1  Every LCB and LSB shall reduce the lending rates  for the following", "metadata": {"source": "data\\CBSL\\2020\\bsd_monetary_law_act_order_2_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "loans and \nadvances  2.1  Every LCB and LSB shall reduce the lending rates  for the following \ncredit facilities  at least  to the stated  levels:  \n(i) Interest rates on credit card advances to 18 per cent per annum \ncommencing from the next billing cycle.  \n(ii) Interest rates on pre -arranged temporary overdrafts to 16 per cent \nper annum.  \n(iii) Interest rates on the money lent for pawning advances \ncollateralised by pe rsonal articles made of g old accepted as a", "metadata": {"source": "data\\CBSL\\2020\\bsd_monetary_law_act_order_2_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n21 August 2020       MONETARY LAW ACT ORDER              No. 02 of 2020  \n2 \n \npledge, to 10 per cent  per annum for all new pawning advances \nand existing pawning facilities that are renewed . \n 2.2  Every  LCB and LSB shall  ensure that the continuous decline in market \ninterest rates  are reflected on the interest rates charged for  all other \ncredit facilities at the time of their renewal  or when repricing of such \nfacilities . \n 2.3  Every LCB and LSB shall reduce the penal interest rates charged on \nall loans and advances, including credit fa cilities already granted, to a \nlevel not exceeding 200 basis points per annum , for the amount in \nexcess of an approved limit or in arrears.  \n 2.4  Further to Circular s dated 04 March 2020, 28 May 2015 and 16 \nFebruary 2001 on Recovery of Accommodation to Exporters, c harging \nof enhanced  rates of interest on such accommodation where the \nborrower does not repay on time , to be reduc ed to 200 basis points per \nannum until further notice . \n 2.5  Every LCB and LSB shall continue to provide concessions given  under \nthe following Circulars relating to interest rates and charging of penal \ninterest rates if such concessions  are more favourable than th ose \nprovided under this Orde r.  \n(i) No. 07 of 2019 on Concessions granted to Tourism Industry  dated  \n08 May 20 19. \n(ii) No. 02 of 2020 on Credit Support to Accelerate Economic Growth  \ndated  30 January 2020.  \n(iii) No. 04 of 2020 on Relief Measures to Assist COVID -19 Affected \nBusinesses and Individuals  dated  24 March 2020.  \n(iv) No. 05 of 2020 on Rupees 50 Billion six -month Re -financing \nFacility to Support COVID -19 hit Businesses including Self -\nemployment and Individuals  dated 27 March 2020.  \n(v) No. 07 of 2020 on Relief Measures to Assist COVID -19 Affected \nBusinesses and Individuals  16 July 2020.", "metadata": {"source": "data\\CBSL\\2020\\bsd_monetary_law_act_order_2_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n21 August 2020       MONETARY LAW ACT ORDER              No. 02 of 2020  \n3 \n \n \n 3. Monitoring  3.1  All LCBs and LSBs shall ensure the accuracy of interest rate s data \nsubmitted to CBSL and maintain internal documented records \nelectronically or manually, in relation to the reductions in interest rat es \nin respect of each type of credit facility  to which this Order applies.  \n4. Implementation  4.1  This Order shall come into effect commencing 24 August 2020.  \n5. Revocation of \nMonetary Law \nAct Orders  5.1  The following Monetary Law Act Orders  are hereby revoked  \n(i) No. 02 of 2019 on Enhancing Efficiency of  the Transmission of  \nRecent Policy Decisions to Rupee Denominated Market Lending \nRates  dated 24 September 20 19. \n(ii) No. 01 of 2020 on Maximum Interest Rates on Pawning Advances \nof Licensed Banks  dated 27 April 2020", "metadata": {"source": "data\\CBSL\\2020\\bsd_monetary_law_act_order_2_of_2020_e.pdf", "page": 2, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKADecember 2020MONETARY LAW ACT ORDER No. 03 of 2020MAXIMUM INTEREST RATES ON MORTGAGE-BACKED HOUSING LOANSIssued under Section 104( 1 )(b) of the Monetary Law Act, No. 58 of 1949, as amended.Considering the current and expected macroeconomic developments, the reduction in policy interest rates thus far during the year, the significant levels of excess liquidity prevailing in the domestic money market and the need for a continued downward adjustment in lending rates to revive the economy, the Monetary Board hereby issues an Order on maximum interest rates for mortgage-backed housing loans obtained by salaried employees in the public and private sectors, from licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks). This Order is also expected to support the expansion of home ownership of the Sri Lankan general public, and provide an additional stimulus to the domestic construction sector and its supply chains.1. Empowerment under the Monetary Law Act1.1 In terms of Section IO4(l)(b) of the Monetary Law Act, the Monetary Board may from time to time fix the maximum rates of interest which licensed banks may charge for different types of loans or other credit operations.2. Applicability of this Order2.1 This Order shall apply to housing loans granted by licensed banks after implementation of this Order to salaried employees serving in confirmed service in the public and private sectors in Sri Lanka:(i) secured by prirnary mortgages over the same property; and(ii) for purchase of condominium property based on an arrangement acceptable to licensed banks which must be converted into a primary mortgage over the property when construction is completed.3. Interest Rates and tenure of mortgage-backed housing loans of salaried employees3.1 The applicable maximum interest rates for mortgage-backed housing loans specified under Order 2.1 above shall be:(i) A fixed interest rate of 7 per cent per", "metadata": {"source": "data\\CBSL\\2020\\bsd_monetary_law_act_order_3_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "housing loans specified under Order 2.1 above shall be:(i) A fixed interest rate of 7 per cent per annum at least for the first five years of the loan tenure.", "metadata": {"source": "data\\CBSL\\2020\\bsd_monetary_law_act_order_3_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "Ol\\- December 2020MONETARY BOARD CENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDERNo. 03 of 2020(ii) A floating interest rate linked to the monthly Average Weighted Prime Lending Rate (AWPR) plus a maximum margin of 1 percentage point for the remaining tenure of the loan.(iii) In computing the monthly loan instalment for the first five years, the licensed bank shall consider the interest rate for the entire tenure of the loan as 7 per cent per annum.(iv) After the expiry of the fixed rate loan tenure, the licensed bank may re-price the loan every six months, based on the average monthly AWPR published by the Central Bank of Sri Lanka during the immediately preceding six months.4. Settlement5. Implementation3.2 In deciding on the loan tenure, licensed banks may consider the retirement year of the borrower as confirmed by the employer as the final year of settlement.4.1 Licensed banks shall permit borrowers to settle the loan obtained under this Order at the end of the fixed tenure of five years without being subject to any early settlement fee or charges.5.1 Licensed banks shall issue internal Circulars to its Branches expeditiously to implement this Order with effect from 10 December 2020.Prof. W D LakshmanChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka\n2", "metadata": {"source": "data\\CBSL\\2020\\bsd_monetary_law_act_order_3_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA24 March 2020 CIRCULAR No. 04 of 2020RELIEF MEASURES TO ASSIST COVID-19 AFFECTED BUSINESSES AND INDIVIDUALSIn line with the decision taken by the Cabinet of Ministers at the Cabinet meeting held on 20.03.2020 on the Direction issued by His Excellency the President to provide relief measures to assist businesses and individuals who are adversely affected by the prevailing Covid-19 outbreak, the Central Bank of Sri Lanka hereby issues this Circular to the licensed commercial banks, licensed specialised banks and leasing companies, hereinafter referred to as financial institutions.1. All such financial institutions shall implement a debt moratorium (on capital and interest) as follows:a. A six-month moratorium on the leasing rentals of all three-wheelers, school vans, lorries, small goods transport vehicles and buses operated by the self-employed;b. A moratorium until 30.05.2020 on personal loans granted to all private sector non-executive employees;c. A three-month moratorium for all personal loans and leasing rentals of value less than Rs. 1 million; andd. A six-month debt moratorium for affected industries in small & medium enterprises, tourism, apparel, plantation, IT and related logistic service providers.2. Financial institutions shall provide working capital requirements at an interest rate of 4% and waive-off interest payments for at least 6 months for sectors in item 1(d) above. An interest subsidy will be included in refinance.3. Financial institutions are required to accommodate customers to submit loan applications for items 1 and 2 above until 30.04.2020 and financial institutions are required to finalise the same within 45 days.4. Financial institutions shall charge a maximum interest rate of 15 per cent on local credit card transactions of value up to Rs. 50,000; the minimum monthly payment on credit cards shall be reduced by 50 percent; and repayment of all credit cards below the limit of Rs. 50,000 to be extended", "metadata": {"source": "data\\CBSL\\2020\\mb_circular_no_4_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "by 50 percent; and repayment of all credit cards below the limit of Rs. 50,000 to be extended until 30.04.2020.5. Licensed banks shall extend the validity period of cheques valued less than Rs. 500,000 until 30.04.2020.", "metadata": {"source": "data\\CBSL\\2020\\mb_circular_no_4_of_2020_e.pdf", "page": 0, "year": 2020}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA24 March 2020CIRCULARNo. 04 of 20206. All branches of licensed banks shall be kept open from 8.00 a.m. to 1.00 p.m. on non-curfew days with a minimum number of employees, and the corporate branches shall be kept open during curfew days to facilitate international transactions relating to food, medicine, travel and other customers.7. Detailed instructions on foregoing shall be issued on 27.03.2020.PrdEW D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n2", "metadata": {"source": "data\\CBSL\\2020\\mb_circular_no_4_of_2020_e.pdf", "page": 1, "year": 2020}, "type": "Document"}
{"page_content": "27 December 2021*\nMONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DETERMINATION No.01 of 2021\nANNUAL LICENCE FEE OF\nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nDetermination made by the Monetary Board of the Central gurk of Sri Lankaunder\nSections 8 and 76D (6) of the Banking Act, No. 30 of 1988, as amended.\nIn terms of Sections 8(1) and 76D (6) of the Banking Act No. 30 of 1988, the Monetary Board\nhas determined that every licensed commercial bank and licensed specialised bank shall pay the\nlicence fee in respect of the calendar year 2022 to the Central Bank of Sri Lanka on or before 31\nJanuary 2oz2,based on the total assets of such bank as at the end of 2021, as set out in the Table\nbelow.\nAnnual licence fee for theyear 2022\nTotal Assets\nas at the end202l (Rs. Bn)Licence Fee\n(Rs. Mn)\nAbove 2,000 38.0\nAbove 1,000 to 2,000 3s.0\nAbove 500 to 1,000 28.5\nAbove 200 to 500 25.0\nAbove 125 to 200 18.5\nAbove 75 to 125 t2.5\n25 to 75 6.5\nLess than 25 J.J\nfil ttl e'-/a-\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Determination_No_1_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA25 April 2021 BANKING ACT DIRECTIONS No. 07 of 2021FORWARD 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.In view of the need to avoid excess volatility in the foreign exchange market and the impact on banks\u2019 risk management, licensed commercial banks (LCBs) shall refrain from entering into forward contracts of foreign exchange with value date beyond Spot date except for the following, until further notice.(i) Forward purchase of foreign exchange from their customers including from exporters.(ii) Facilitate SWAP arrangements on foreign exchange borrowings of Licensed Specialised Banks and Licensed Finance Companies regulated by the Central Bank of Sri Lanka (CBSL) in order to hedge their FX exposures arising from foreign currency borrowings, approved by CBSL.(iii) Facilitate SWAP arrangements on foreign exchange borrowings of corporate clients in order to hedge their FX exposures arising from foreign currency borrowings, approved by CBSL.(iv) Amend/extend the value date of existing forward/SWAP contracts of clients at historical rates based on express requests from clients, after verifying the bona fide of the transactions.(v) Enter into inter-bank forward and SWAP transactions with single counterparty (i.e. only between two banks).(vi) Enter into forward cross currency transactions.FrofrWU LakshmanChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka1", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No._7_of_2021_on_Forward_Sales_and_Purchases_of_Foreign_Exchange_by_LCBs.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA16 June 2021BANKING ACT DIRECTIONSNo. 10 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.1. The Central Bank of Sri Lanka (CBSL) hereby revokes the Banking Act Directions No. 06 of 2021 dated 23 April 2021 on Investments in Sri Lanka International Sovereign Bonds (ISBs) by Licensed Commercial Banks (LCBs) and National Savings Bank (NSB), subject to the conditions set out in this Direction.2. LCBs and NSB may purchase ISBs in the secondary market subject to the following conditions: (i) Source of funds to be limited to fresh borrowings from overseas and it should be established to the satisfaction of the CBSL. For this purpose, LCBs and NSB are required to provide documentation of the borrowings overseas as specified in Direction 9.1 of the Banking Act Directions No. 11 of 2018 on Foreign Currency Borrowings by Licensed Banks, to the Director of Bank Supervision (DBS).(ii) Investment of funds sourced as per 2 (i) above in Sri Lanka Development Bonds (SLDBs) and ISBs in the proportion of 50 per cent each, and LCBs and NSB shall submit the following information on their investments in ISBs and SLDBs to DBS and the Superintendent, Public Debt Department.a. Date of investmentb. International Securities Identification Number (ISIN)c. Amount invested in ISBs and SLDBs(iii) LCBs and NSB to adopt risk mitigation measures to prevent maturity mismatches between the borrowings and the ISB/SLDB investments, adopting appropriate risk mitigation arrangements to bridge any short-term maturity mismatches that may occur, in addition to other risk mitigation measures already prescribed/followed.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_10_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "No. 11 of 202113 July 2021MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSRESTRICTIONS 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 COVID-19 outbreak 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. Empowerment1.1 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. Scope ofApplication2.1 These 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 on3.1 Every licensed bank incorporated or established in Sri Lanka shallDiscretionaryPaymentsdefer payment of cash dividend until the financial statements/interim financial statements for 2021 are finalised and audited by its External Auditor.1", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_11_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "13 Julv2021\n4. Effective DateMONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSNo. 11 of 20213.2 Every licensed commercial bank incorporated outside Sri Lanka shall refrain from repatriation of profits not already declared for financial years 2020 and 2021 until the financial statements/interim financial statements for 2021 are finalised andaudited by its External Auditor.3.3 Licensed banks shall give due consideration to the requirements of the Banking Act Directions No. 01 of 2016 on Capital Requirements under Basel 111 for Licensed Banks, expected assets growth, business expansion and the potential impact of the COVID-19 pandemic and prevailing market conditions when deciding on payments of cash dividends and profit repatriation.3.4 Licensed banks shall adhere to the following until 31 December 2021.(a) Refrain from buying-back of its own shares;(b) Refrain from increasing management allowances and payments to Board of Directors;(c) Exercise prudence and refrain to the extent possible from incurring non-essential expenditure such as advertising, business promotions, gift schemes, entertainment, sponsorships, travelling and training etc.; and(d) Exercise extreme due diligence and prudence when incurring capital expenditure, if any.4.1 These Directions shall be in effect from 01 July 2021.Prof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka2", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_11_of_2021.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA08 September 2021__________ BANKING ACT DIRECTIONS________________ No. 12 of 2021MARGIN 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 Schedule A, made under Documents against Acceptance (DA) terms.2. In the case of NSB, the margin requirements specified in Directions 1 above, shall be applicable for such imports made under Letter of Credit (LC) terms.3. In the case of existing DAs covering the importation of goods covered by this Direction, no increase in the value of such DAs shall be permitted by LCBs and NSB unless such increase is covered by the cash margin deposits as required in Directions 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.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 this 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 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", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_12_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "to enable importers to place the margin deposits in respect of these imports.9. The provisions of this 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. .Prof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_12_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "Schedule ANo.HS code10304412030449303045140304615030462603046970304748040299909040310100403901104051012040620130406301404069015080410201608051010170805211018080610190806202008081021081090902211041223110419241104222511042326110429271104302811051029110520301107103111072032110814No.HS code33180620341806313518063236180690371902113819021939190220401902304119024042190410431904204420091190452009714620097947200990482202104922029150220299105122029930522202994053220299515422029959552202996156220299695722029970582202999159220299996022030010612203002062220300906322041064220421No.HS code652205106622082067220830682208401069220850702208607122087072240210732402205074240220607524031990762403999077330300107833030021793303002280330300298133041082330420833304308433049185330499863305108733052088330530893305909033061091330690923307109333072094330730953307499633079090No.HS code97340119209834013020993406001004011101010140111090102401120111034011201910440113010540117010640118010107401180901084012901010940129090no401692in4201001124202111134202121144202191154202211164202221174202291184202311194202321204202391214202911224202921234202991244203101254203211264203291274203301284203402", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_12_of_2021.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "Schedule ANo.HS code1294205001013043040013144219990132570292133570320134570330135570500136610120137610130138610190139610210140610220141610230142610290143610310144610322145610323146610329147610331148610332149610333150610339151610341152610342153610343154610349155610413156610419157610422158610423159610429160610431No.HS code161610432162610433163610439164610442165610443166610444167610449168610452169610453170610459171610461172610462173610463174610469175610510176610520177610590178610610179610620180610690181610711182610712183610719184610721185610729186610791187610799188610811189610819190610821191610822192610829No.HS code193610831194610832195610839196610891197610892198610899199610910200610990201611011202611012203611019204611020205611030206611090207611120208611130209611190210611211211611212212611219213611231214611239215611241216611249217611300218611420219611430220611490221611510222611529223611530224611594No.HS code225611595226611596227611599228611610229611691230611692231611693232611699233611710234611780102356117802023662011123762011223862011323962011924062019224162019324262019924362021124462021224562021324662021924762029124862029224962029325062029925162031125262031290253620319902546203229025562032390256620329903", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_12_of_2021.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "Schedule ANo.HS code257620331258 6203329025962033390260 62033990261 620341262 6203429026362034390264 62034990265620412902666204139026762041990268 62042290269 6204239027062042990271 62043127262043290273 62043390274 62043990275620441276 62044290277 6204439027862044490279 620449902806204529028162045390282620459902836204612846204629028562046390286620469902876205209028862053090No. HS code289 6205909029062061090291 6206202926206309029362064090294 62069090295 62071129662071929762072290298 62079190299 6207999030062081190301620821903026208229030362082990304 62089190305 62089290306 62089990307 620920308 620930309620990310621010311621020312621030313621040314 621050315621111316621112317621120318621132903196211339032062113990No.HS code32162114219322 621142923236211429932462114319325 621143923266211439932762114919328 6211499232962114999330 6212103316212203326212303336212903346213209033562139090336 62141090337 621440903386214909033962151034062152034162159034262160034363011034463012034563013034663014034763019034863021034963022190350630222903516302299035263023190No.HS code3536302329035463023990355630240356630251903576302599035863026090359630291903606302939036163029990362630312363 630319364630391365 630392366 630399367 63041136863041990369 63042037063049137163049290372 63049390373 63049990374 63051090375 630520376630532377 6305333786305393796305903806306123816306193826306223836306293846306304", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_12_of_2021.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "Schedule ANo. HS code385630640386630690387630710388630720389 64021239064021910391 64021919392 640220393 640291394640299395 6403123966403191039764031919398640320399640340400640351401640359402640391403 640399404 640411405640419406640420407 64051040864052040964059041065010041165020041265040041365050010414 650500904156506911041665069190No. HS code417 6506991041865069990419650700420660110421660191422660199423670300424670411425670419426670420427 670490428 69120010429701310430 701322431701328432701333433701337434701341435701342436701349437 70139143870139990439701810440701820441732111442732112443732119444 732181445732182446732189447 732310448732391No.HS code449732392450732393451 7323944527323994537324101045473241090455 73242145673242945773249045876151020459 7615109046082159946183052046283062946384145146484145946584151021466 84151022467 8415102346884151024469 841510294708415103247184151033472841510344738415103547484151039475841581904768415829047784158390478841590194798415902948084181090No. HS code481 841821904828418292048384182990484 8450111048584501131486 84501132487845011334888450113448984501139490 845011414918450114249284501143493 8450114449484501149495 845012104968450123149784501232498 84501233499 84501234500 84501239501845019105028450193150384501932504 8450193350584501934506845019395078508115088509405098509805108510105118510205128510305", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_12_of_2021.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "Schedule ANo. HS code513 8513101051485131090515851610516 851621517851629518 851631519851632520 851633521851640522 851650523 8516601052485166090525851671526 85167252785167910528 85167920529851680530851711531 851712105328517122053385171290534 85171853585258090536852712537852713538852719539852721540852729No. HS code54185279154285279254385279954485285990545 852869546852871205478528719054885287210549 85287231550 85287232551 8528723355285287234553 85287235554 85287236555 85287239556852872415578528724955885287291559852872995608528732056185287390562 852910105638529109056485299056585392110566853921905678539221056885392220No. HS code56985392290570 853929571853929105728539299057385393110574 853949575 853950576 853990577900410578 910121579 910211580 910219581910221582 910229583910521584 920290585920710586 9208905879401209058894013090589 9401719059094019090591940320905929403909059394051010594940510205959405109059694052010No. HS code59794052020598 94052090599940530600 94054010601 9405402060294054030603 94054040604 94054090605940550106069405502060794055090608 94056060994059161094059261194059910612 9405999061395030010614 9503003061595030050616 950300706179503009061895042061995044062095045062195049090622950510623961590\n6", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_12_of_2021.pdf", "page": 5, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021BANKING ACT DIRECTIONSNo. 13 of 2021CLASSIFICATION, RECOGNITION AND MEASUREMENT OF CREDIT FACILITIES IN LICENSED BANKSIn the exercise of the powers conferred by Sections 46A, 46(1) and 76(J)(1) of the Banking Act, No. 30 of 1988, as amended, the Monetary Board of the Central Bank of Sri Lanka (CBSL) hereby issues the following Directions on Classification, Recognition and Measurement of credit facilities in licensed commercial banks and licensed specialised banks, hereinafter referred to as licensed banks, with a view to further strengthening and harmonising the regulatory framework on classification, recognition and measurement of credit facilities in licensed banks with the Sri Lanka Accounting Standard, \u2018SLFRS 9: Financial Instruments\u2019 (hereinafter referred to as SLFRS 9) and establishing consistent and prudent practices in the banking industry.L 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 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 and Applicability2.1 All requirements in these Directions shall be applicable to licensed banks in addition to the requirements of the Sri Lanka Accounting Standards.3. Definitions3.1 The following definitions shall be applicable for purposes of these Directions.3.1.1 Credit facilities shall mean:a. On balance sheet loans and advances which are measured under amortized cost or fair value through other1", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 2021comprehensive income and net investment in lease receivables; andb. Off-balance sheet assets including commitment to accept contingent liabilities, and include guarantees, bonds, letters of credit, acceptances and undrawn commitment component of credit facilities such as credit cards and overdraft facilities etc.3.1.2 Borrower shall include individuals, companies, the Government of Sri Lanka, public corporations, statutory bodies, firms, state owned entities (SOEs), associations of persons and any other entity.3.1.3 Board of Directors shall mean the Board of Directors of locally incorporated licensed banks and in the case of foreign banks, the Head Office/ Regional Monitoring Office.3.1.4 Chief Executive Officer (CEO) and Key Management Personnel (KMPs) shall mean CEO and Officers Performing Executive Functions of licensed banks as determined under the Banking Act.4. Governance 4.1 The Board of Directors, CEO and the respective KMPs are responsible Framework for for ensurjng that the licensed bank has robust credit risk management Credit Facilitiespolicies and practices, including an effective system of internal controls, to manage the credit risk in the licensed bank in accordance with the policies and procedures, applicable Sri Lanka Accounting Standards and relevant regulatory and supervisory guidance.4.2 The Board of Directors shall ensure that the credit policy of the licensed bank includes the following at a minimum in addition to requirements stipulated in Banking Act Directions on Integrated Risk Management Framework for licensed banks:4.2.1 A policy on classification, measurement and recognition of credit facilities;4.2.2 Adequate credit risk management policies and processes to identify, measure, monitor, report and mitigate credit risk on a2", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "14 September 2021MONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 13 of 2021timely basis covering the full credit life cycle. Such process shall be documented, while adhering to sound methodologies, procedures and controls for assessing and measuring the credit risk of loans and advances;4.2.3 Adequate policies and processes in place for the timely identification of credit facilities and management of under- performing/non-performing assets and determining an adequate impairment allowance, and to strengthen the credit risk management process in accordance with the Sri Lanka Accounting Standards and the regulatory framework;4.2.4 Ensure that clear guidelines are provided on;(a) Staging of loans, including how to differentiate stage 2 and 3 loans based on potential risk criteria;(b) Methodologies for determining the Probability of Default (PD), Loss Given Default (LGD), Economic Factor Adjustment etc. for impairment purposes ;(c) Assessment thresholds and borrower-wise coverage of credit facilities to be assessed individually for impairment;(d) Collateral to be considered for impairment along with valuation requirements on such collateral and specification of techniques and data to be used for such valuations in line with Direction 12 below;(e) Use of overlays to impairment models to ensure expected loss computations reflect potential economic shocks, which are not captured otherwise; and(f) On upgrading of credit facilities in line with Direction 11 below4.2.5 A comprehensive validation policy in respect of models used for classification, recognition and measurement of credit facilities in the licensed bank including clear roles & responsibilities,3", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 2021validation frequency and procedures & methodologies to be used by the bank;4.2.6 Establish a mechanism to segregate non-performing credit facilities from other credit facilities to ensure close follow-up action and to monitor and streamline the recovery process;4.2.7 A well-designed write-off/write down policy established by the Board of Directors delineating the approach, authority, accountability for negligence and inappropriate follow-up, independent review and audit, continuous monitoring, reporting, etc. Such policy shall also aim to recover the maximum salvage value through enforcement of collateral / guarantees, etc; and4.2.8 Ensure transparency and comparability by establishing mechanisms to provide timely, relevant, accurate and useful information of the licensed bank through public disclosures and maintaining adequate data/records and systems to identify, reconcile and report the requirements under the Sri Lanka Accounting Standards and the existing regulatory framework.4.3 CEO and KMPs of the licensed bank shall ensure that Board approved policies, procedures and processes on credit facilities are implemented as intended, and adequate internal controls and validation processes are established to ensure same.4.4 Licensed Bank shall not fund the recovery of any credit facility provided to any borrower by the same bank.5. Classification of 5.1Credit FacilitiesLicensed bank shall classify all credit facilities for the purpose of impairment assessment, risk mitigation and monitoring into performing and non-performing loans and advances as follows:5.1.1 Performing credit facilities shall mean:(a) All the credit facilities classified as Stage 1 under SLFRS 9; and4", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 2021(b) All credit facilities identified as significantly increased credit risk facilities and classified as Stage 2 under SLFRS 9 (under- performing credit facilities).5.1.2 Non-performing credit facilities (NPCF) shall mean all credit facilities where contractual payments of a customer are past due for more than 90 days (the number of days past due shall be calculated starting from the contractual due date of the payment) or has remained in excess of the sanctioned limit for more than 90 days, and any other credit facilities classified as Stage 3 credit facility under SLFRS 9 (facilities classified as NPCF based on potential risk and impaired assets at origination).5.2 A licensed bank shall not consider the value and type of security obtained by the bank against their credit facilities when determining the classification status of a credit facility.5.3 In cases where a borrower has several current accounts with overdraft limits with the bank, the aggregate sanctioned limit and the daily outstanding aggregate balance on all such accounts shall be considered for the purposes of classification of Overdrafts.6. Sub-Categorisation of non- performing Credit Facilities6.1 Licensed bank shall sub-categorise NPCF into the following categories based on the criteria mentioned below:6.1.1 Special mention(a) Based on days past due: All credit facilities where contractual payments are past due or have remained in excess of the sanctioned limit for more than 90 days but less than or equal to 180 days.(b) Based on potential risk: All credit facilities that exhibit potential weaknesses where, if not corrected in a timely manner, may adversely affect repayment by the borrower at a future date, and those that warrant close attention by the licensed bank.5", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "14 September 2021MONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONS No. 13 of 20216.1.2 Substandard(a) Based on days past due: All credit facilities where contractual payments are past due or have remained in excess of the sanctioned limit for more than 180 days but less than or equal to 270 days.(b) Based on potential risk: All credit facilities that exhibit definable weaknesses, either in respect of the business, cash flow or financial position of the borrower, that may jeopardise repayment on existing terms and where there is uncertainty that part or the entire facility will be repaid and involves more than normal risk of loss due to unsatisfactory debt servicing record/financial condition of the borrower, insufficiency of collateral or any other factors which give rise to some doubts as to the ability of the borrower to comply with the present repayment terms.6.1.3 Doubtful(a) Based on days past due: All credit facilities where contractual payments are past due or have remained in excess of the sanctioned limit for more than 270 days but less than or equal to 360 days.(b) Based on potential risk: All credit facilities that exhibit a high risk of partial default or where full collection is improbable and there is a high risk of default and where the outstanding credit facility exhibits more severe weaknesses than those in a substandard category.6.1.4 Loss(a) Based on days past due: All credit facilities where contractual payments are past due or have remained in excess of the sanctioned limit for more than 360 days.(b) Based on potential risk: All credit facilities that are deemed to be uncollectable or are almost certain that such will not be repaid and which are categorised as NPCF but not included under special mention, substandard and doubtful categories6", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 5, "year": 2021}, "type": "Document"}
{"page_content": "14 September 2021MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONS No. 13 of 20217. Significant Increase in Credit Risk / Default Facilities7.1 For the purpose of calculating life-time expected losses under SLFRS 9, at a minimum, if one or more of the following factors/conditions are met, it shall be considered as significant increase in credit risk or as defaulted facilities.7.1.1 Contractual payments of a borrower are past due for more than 30 days (subject to the rebuttable presumption under SLFRS 9).7.1.2 Credit rating of a borrower has been subsequently downgraded to B+ or below under the Sri Lankan National Rating Scale by an External Credit Assessment Institution (ECAI).7.1.3 A two-notch downgrade under the internal rating of the licensed bank. Licensed banks are required to map their internal credit risk ratings with the ratings issued by ECAL For this purpose, licensed banks are required to refer the mapping of external credit ratings given in Banking Act Directions on capital requirements;7.1.4 Reasonable and supportable forecasts of future economic conditions show a direct negative impact on the performance of a customer/group of customers;7.1.5 A significant change in the geographical locations or natural catastrophes that directly impact the performance of a customer/group of customers;7.1.6 The value of collateral is significantly reduced and/or realisability of collateral is doubtful. Licensed banks shall define relevant thresholds/limits and document the same;7.1.7 The borrower is subject to litigation that significantly affects the performance of the credit facility;7.1.8 Frequent changes in the Board of Directors and Senior Management of an institutional customer;7.1.9 Delay in commencement of business operations/projects by more than two years from the originally agreed date;7", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 6, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 20217.1.10 Modification of terms resulting in concessions, including extensions, deferment of payments, waiver of covenants etc.;7.1.11 The borrower is deceased/insolvent;7.1. 12 Licensed bank is unable to contact or find the borrower; and7.1.13 A fall of 50% or more in the turnover and/or profit before tax of the borrower when compared to the previous year for two consecutive years and/or erosion of net-worth of the borrower by more than 25% (other than due to changes in equity structure and dividend policy) when compared to the previous financial year.7.1.14 Restructure and rescheduled credit facilities as per guidance provided in Direction 10 below.7.2 Licensed banks may rebut one or more criteria listed from 7.1.2 to 7.1.14 when determining significant increase of credit risk, subject to the following:7.1.1 The KMP heading the Risk Management Function shall recommend such rebuttal criteria to the Board of Directors providing valid rationale and justifications to ensure that such criteria do not result in significant increase of credit risk to the bank, and Board of Directors shall grant approval or reject the proposal after considering the information provided.7.1.2 Disclose the rebutted criteria if any and the estimated impact of such rebuttal on the respective bank\u2019s impairment provisions and profitability in their audited annual financial statements.8. Impairment 8.1 Licensed banks shall measure the impairment charges for credit Charges for facilities as per the Sri Lanka Accounting Standards andCredit FacilitiesDirections/Guidelines issued by CBSL in this regard from time to time.8.2 The measurement of impairment charges should build upon robust methodologies and result in the appropriate and timely recognition of expected credit losses in accordance with the applicable Sri Lanka Accounting Standards.8", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 7, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 20218.3 At each reporting date, licensed banks shall measure the loss allowance for credit facilities at an amount equal to life-time expected losses, if the credit risk of loans and advances has increased significantly since initial recognition (except for the credit facilities purchased and/or originated as credit-impaired credit facilities).8.4 In respect of purchased or originated credit impaired credit facilities, lifetime expected credit losses shall be measured unless upgraded in line with Direction 11 below.8.5 In principle, lifetime expected credit losses and/or credit impaired credit facilities shall be assessed on an individual basis. However, the licensed bank may perform the assessment on appropriate groups or portfolios on a collective basis for their portfolios.8.6 The aggregate amount of impairment allowances of the licensed bank, regardless of whether such allowancesare determined on a collective or an individual basis, should be adequate and consistent with the objectives of the applicable Sri Lanka Accounting Standards.8.7 Impairment of Stage 1 credit facilities8.7.1 From 01.01.2022, licensed banks shall maintain a minimum Stage1 impairment ratio of 0.5% as a percentage of total Stage 1 credit facilities i.e., Stage 1 Impairment / Stage 1 credit facilities.8.7.2 In instances where a licensed bank does not maintain a minimum Stage 1 impairment ratio of 0.5% as a percentage of total Stage 1 credit facilities such deficit shall be required to be maintained in a special reserve account against equity.8.7.3 Such reserve shall not be used to declare dividends by licensed banks.8.7.4 However, this shall only be used as a minimum value for Stage 1 impairment and licensed banks shall ensure the adequacy of Stage 1 impairment as per the relevant Sri Lanka Accounting Standards and internal policies.9", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 8, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No, 13 of 20218.8 Further Directions on impairment of credit facilities in licensed banks are provided in Annex I.9. Models for 9.1 The CEO and relevant KMPs of the licensed bank under the guidance Calculation of provided by the Board of Directors, shall ensure that the licensed bank: Impairment9.1.1 Develops robust models to determine expected credit losses as per the Sri Lanka Accounting Standards, which should be in line with the licensed bank\u2019s business model and risk profile;9.1.2 Considers all available and relevant internal and external data when estimating expected credit losses, ensuring that the estimates are robust, unbiased and reflective of current exposures;9.1.3 Consists relevant officers who are well trained, competent and have a thorough understanding of the models adopted by the bank;9.1.4 Adheres to rigorous governance and internal control procedures, when obtaining support from external vendors/consultants in respect of model development.9.1.5 Documents the reasons for selecting a specific model as the appropriate mode, if different models are used for different portfolios and instruments and ensure that all credit models are reviewed at least annually;9.1.6 Establishes an effective model validation process to ensure that the credit risk assessment and measurement methods are capable of generating accurate, consistent and unbiased predictive estimates on an ongoing basis; and9.1.7 Desists from making changes in the parameters, inputs and assumptions used for the purpose of profit smoothening. However, if any changes in the credit models are required, the rationale and justification for such change shall be evaluated by the Chief Risk Officer, Integrated Risk Management Committee and approved by the Board of Directors.10", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 9, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 20219.2 In cases where licensed banks incorporated outside Sri Lanka use models developed by their head office or regional offices, such licensed banks shall assess the appropriateness of the credit models in the Sri Lankan context and a local team headed by a KMP shall carry out appropriate validation procedures.10. Re-structured 10.1 Restructured credit facilitiesand Re- 10.1.1 Restructured credit facilities are where the original repaymentscheduledCredit terms have been amended due to a deterioration in credit quality,Facilities while the respective credit facilities remain as performingfacilities as defined under Direction 5.1.1 above.10.1.2 Credit facilities which are restructured up to two times other than upgraded credit facilities as defined under Direction 11 below, shall be classified as Stage 2 credit facilities under SLFRS 9.10.1.3 Credit facilities restructured more than two times other than upgraded credit facilities as defined under Direction 11 below, shall be considered as Stage 3 credit facilities under SLFRS 9.10.2 Rescheduled credit facilities10.2.1 Rescheduled credit facilities are where the original repayment terms have been amended while the respective credit facilities remain as NPCFs as defined under Direction 5.1.2 above.10.2.2 All rescheduled credit facilities, other than upgraded credit facilities as defined under Direction 11 below, shall be considered as Stage 3 credit facilities under SLFRS 9.10.3 Licensed banks shall consider the factors listed under Direction 7.1 above in assessing any deterioration in credit quality. However, such assessment shall not be limited to factors specified in Direction 7.1 and shall ensure adequate provisions are made in respect of restructured and rescheduled credit facilities to commensurate with the significant increase in the credit risk.11", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 10, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 202110.4 Licensed banks shall not grant new credit facilities for repayment of NPCF to the same borrower unless the new credit facility is also classified as NPCF.11. Upgrading of 11.1 Licensed banks may upgrade credit facilities from a higher stage (StageCredit 3 or 2) to a lower stage (Stage 2 or 1) subject to the following:Facilities11.1.1 Upgrading of credit facilities shall be in accordance with a policy approved by the Board of Directors, and the rationale for such upgrading shall be properly documented. Such policy at a minimum shall ensure the following:(a) Settlement of the due payment(i) Credit facilities other than the restructured credit facilities in stage 3 and rescheduled credit facilities shall be upgraded, if due payments are fully settled by the customer and bank is satisfied that the customer is able to service debt service obligations up to a foreseeable future:(b) Restructured credit facilities upgrading from stage 3 and rescheduled credit facilities(i) Licensed bank exercises prudence in upgrading NPCFs/ under-performing credit facilities; and(ii) Upgraded credit facility has exhibited a sustained trend/status/ of improvement to justify the improved classification status.11.1.2 Upgrading of re-scheduled and re-structured credit facilities shall only be carried out by the Risk Management Department and shall be independent from the credit facility review mechanism.12", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 11, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021BANKING ACT DIRECTIONS No. 13 of 202112. Valuation of 12.1 Collateral for Impairment PurposesLicensed bank shall consider the valuation of assets in a prudent manner considering the available reliable market valuations in assessing LGD / cash flow. Such valuations shall appropriately reflect the inherent uncertainty associated with distressed property liquidation (including the time taken for such realisation).12.2 Licensed bank shall substantiate any increase in the valuation with appropriate evidence that such increases are sustainable.12.3Licensed bank shall estimate the net realisable value of the credit risk mitigants or use the forced sale value of the collateral to provide more realistic estimates. Impairment charges shall take into account the updated and realistic valuations of such credit risk mitigants.12.4Assets that can be considered as collateral shall be limited to cash, deposits, property mortgage, guarantees by the Government, CBSL and licensed banks, assignment of life insurance policies, gold articles, assignment of shares, mortgage over motor vehicles, plant, machinery and equipment, debt mortgages quoted debentures, equity shares and any other types of security as specifically approved by the Director of Bank Supervision on a case-by-case basis.12.5Licensed bank shall comply with the following in relation to valuation of collateral:12.5.1 Banking Act Directions issued by CBSL from time to time, on Regulatory Framework on Valuation of Immovable Properties of Licensed Banks.12.5.2 Guidelines issued by the CA Sri Lanka on Valuation of Property, Plant and Equipment, Investment Property and Biological Assets for the purpose of Financial Reporting.13. Recognition 13.1 of Interest IncomeLicensed bank shall recognise the interest income for credit facilities based on the Sri Lanka Accounting Standards.13", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 12, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 13 of 202114 September 202114. Role ofInternal Audit14.1 The Internal audit function shall independently evaluate the effectiveness of the credit risk assessment, measurement systems and processes of the licensed bank and shall ensure the acceptability of credit judgments.14,2 The Internal audit function shall at least annually, validate and evaluate all credit risk assessment models, inputs and assumptions used along with data smoothening, if any.14.3 The Internal audit function shall provide an assurance on the adequacy and effectiveness of back testing in order to ensure that the key drivers have been captured and calibrated accurately.15. Regulatory Reporting15.1 Licensed bank are required to submit the statutory returns introduced for these Directions, as stipulated below, or as stipulated otherwise by the Director of Bank Supervision15.1.1 Monthly Returns - on or before the 15 th day of the following month.15.1.2 Quarterly Returns - on or before the 15th day from the end of a quarter.15.2 Licensed bank shall publish the following Key Performance Indicators based on SLFRS information in quarterly and annual financial statements.15.2.1 Stage 3 Loans (net of Stage 3 impairment) to Total Loans15.2.2 Stage 3 Impairment to Stage 3 Loans.16. Effective Date16.1 These Directions shall be in effect from 01 January 2022.17. Revocation of Directions17.1 The following Directions/Circulars will be revoked from 01 January2022:14", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 13, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 202117.1.1 Banking Act Direction Nos. 3 and 4 of 2008 on Classification of Loans and Advances, Income Recognition and Provisioning dated 08 May 2008.17.1.2 Banking Act Direction Nos. 3 and 4 of 2010 - Amendments to Directions on Classification of Loans and Advances, Income Recognition and Provisioning dated 27 September 2010.17.1.3 Circular No. 04 of 2018 - Guidelines to Licensed Banks on Adoption of Sri Lanka Accounting Standard - SLFRS 9: Financial Instruments dated 31 December 2018. The one-time permission to stagger first day audited additional credit loss provisions from adoption of SLFRS 9, net of any other adjustment on first day impact to retained earnings and net of tax effects, will continue to be in effect until 31 December2021.17.1.4 Circular No. 06 of 2019 - Supplement to Circular No. 04 of 2018 on the Adoption of Sri Lanka Accounting Standards - SLFRS 9: Financial Instruments in Licensed Banks dated 26 April 2019.Chairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka\n15", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 14, "year": 2021}, "type": "Document"}
{"page_content": "\u00a9MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 13 of 2021Annex IGuidance on Impairment Computation for Licensed Banks1. Computation of the Probability of Default (PD) and Loss Given Default (LGD)(i) Licensed bank shall, at a minimum, use five years of data, unless a shorter time horizon provides better estimations and is better suited when calculating PDs and LGDs. Any smoothening of data or inputs must be validated by the Risk Management Department.(ii) Licensed bank shall not use proxies to compute PDs and LGDs, unless the bank is a newly incorporated bank, or the product category was newly introduced by the bank and has a credit history of less than 5 years.(iii) When the licensed bank are unable to compute LGDs due to lack of data or inputs, licensed banks shall use a minimum LGD of 45 per cent for such exposures.(iv) When required to calculate LGD for exposures guaranteed by the Government of Sri Lanka:(a) An LGD of zero may be applied to exposures with a guarantee of the Government provided that the guarantee fully covers the principal and interest and is reported as a liability of the Government.(b) LGD for any other form of assurance provided by the Government other than in item (a) above, shall be computed instead of using an LGD of zero percent.(c) A minimum LGD of 20 per cent shall be applied for Government guarantees denominated in foreign currency.2. Economic Factor Adjustment(i) Licensed bank shall use forecasts and projections published by CBSL when adjusting credit provisioning models to reflect the economic conditions and forecasts, on a consistent basis.(ii) If CBSL forecasts are not available, licensed bank shall use credible alternative sources on a consistent basis and shall maintain relevant documentary evidence.(iii) Board approved policies shall specify the sources to be used and licensed bank shall not cherry pick sources in their favor.16", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 15, "year": 2021}, "type": "Document"}
{"page_content": "14 September 2021MONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 13 of 20213. Use of Banks Internal Credit Rating (ICR) for Impairment Computation(i) A licensed bank may use ICR information as the main basis for expected credit loss calculations only if they comply with the following requirements:(a) Pricing mechanism and operational decision-making process shall be mapped with ICR information;(b) Shall have at least five years of ICR based historical data subject to (i) (a) above; and(c) Board of Directors approved policies shall be in place and ICR inputs and models shall be reviewed and endorsed annually by the Risk Management Department and/or an independent 3rd party.4. Off-Balance Sheet Exposures(i) When converting off-balance sheet exposures for expected credit loss calculations, if historical data is not available, licensed bank shall use the values as per the credit conversion factors specified in the Banking Act Direction on Capital Requirements.\n17", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_13_of_2021.pdf", "page": 16, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 2021CLASSIFICATION, RECOGNITION AND MEASUREMENT OF FINANCIAL ASSETSOTHER THAN CREDIT FACILITIES IN LICENSED BANKSIn the exercise of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act No. 30 of 1988, as amended, the Monetary Board of the Central Bank of Sri Lanka (CBSL) hereby issues the following Directions on Classification, Recognition and Measurement of financial assets other than credit facilities in licensed commercial banks and licensed specialised banks, hereinafter referred to as licensed banks, with a view to further strengthening and harmonising the regulatory framework on classification, recognition and measurement of financial assets other than credit facilities in licensed banks with the Sri Lanka Accounting Standard, \u2018SLFRS 9: Financial Instruments\u2019 (hereinafter referred to as SLFRS 9) and establishing consistent and prudent practices in the banking industry.1. 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 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 and Applicability2.1 All requirements in these Directions shall be applicable to licensed banks in addition to the requirements of the Sri Lanka Accounting Standards.3< Definitions3.1 The following definitions shall be applicable for purposes of these Directions.3.1.1 Financial assets covered by these Directions shall mean all financial assets covered under SLFRS 9, and excludes financial1", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 2021assets covered by the Banking Act Directions No 13 on Classification, Measurement and Recognition of Credit Facilities.3.1.2 Borrower shall include individuals, companies, the Government of Sri Lanka, public corporations, statutory bodies, firms, state owned entities (SOEs), associations of persons and any other entity.3.1.3 Board of Directors shall mean the Board of Directors of locally incorporated licensed banks and in the case of foreign banks, the Head Office/ Regional Monitoring Office.3.1.4 Chief Executive Officer (CEO) and Key Management Personnel (KMPs) shall mean CEO and Officers Performing Executive Functions of licensed banks as determined under the Banking Act.4. Governance Framework for Financial Assets Other than Credit Facilities4.1\n4.2The Board of Directors, CEO and the respective KMPs are responsible for ensuring that licensed banks have an approved business model and policy in place at a minimum in addition to requirements stipulated in Banking Act Directions on Integrated Risk Management Frameworks for licensed banks to facilitate classification, recognition and measurement of financial assets in accordance with the applicable Sri Lanka Accounting Standards and relevant regulatory and supervisory guidance.Such policy at a minimum shall:4.2.14.2.2Identify objectives, definitions, characteristics, criteria and operating policies along with adequate procedures and systems for assessing the business models of financial assets on an on-going basis;The decision-making authorities for business model decisions, level of sales to be considered as infrequent and insignificant, time period for near term selling to be considered for trading2", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 2021purposes, election of fair value option for instruments through profit or loss and through other comprehensive income; and4.2.3 Document and maintain standardised processes, detailed checklists and decision trees in order to assess and identify Solely Payments of Principal and Interest (SPPI) test (contractual cash flows to meet SPPI) features of their products and contracts.4.3 Board of Directors shall ensure transparency and comparability establishing a mechanisms to provide timely, relevant, and useful information of the licensed bank through relevant disclosures and maintaining adequate data/records and systems to identify, reconcile and report requirements under the Sri Lanka Accounting Standards and the existing regulatory framework.4.4 The Board of Directors shall establish a comprehensive validation policy in respect of models used for classification, recognition and measurement of financial assets other than credit facilities in licensed banks including clear roles & responsibilities, validation frequency and procedures & methodologies to be used by the bank;4.5 A Board approved policy shall include clear guidelines on:4.5.1 Staging of Investments (including how to differentiate stage 2 and 3 loans based potential risk criteria);4.5.2 Methodologies for determining the Probability of Default (PD), Loss Given Default (LGD), economic factor adjustment etc. for impairment purposes;4.5.3 Collateral to be considered for impairment along with valuation requirements on such collateral and specification of techniques and data to be used for such valuations;4.5.4 A comprehensive model validation policy including clear roles & responsibilities, validation frequency and procedures & methodologies to be used by the bank;3", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 20214.5.5 Use of overlays to impairments models to ensure expected loss computations do reflect potential economic shocks, which are not captured otherwise; and4.5.6 Guidance on upgrading of Investments in line with Direction 9 below.4.6 CEO and KMPs of the licensed bank shall ensure that Board approved policies and guidelines on Financial Assets are implemented as intended, and adequate internal controls and validation processes are established to ensure the same.5. Classification of Financial Assets (Other than Credit Facilities) and Financial Liabilities\n6. Significant Increase in Credit Risk/ Default of Financial Assets other than Credit Facilities5.1 Licensed banks shall classify Financial Assets (Other than Credit Facilities), and Financial Liabilities as per the Sri Lanka Accounting Standards. A broad summary of classification and subsequent measurement of Financial Assets and Liabilities is given in Annex 1.5.2 If a licensed bank is accounting for its financial liabilities as designated through profit or loss, the licensed bank shall assess and account the changes in value of financial liabilities due to changes in its own credit risk, through other comprehensive income. The licensed bank shall formulate Board approved internal guidelines for this purpose.6.1 For the purpose of calculating life-time expected losses under SLFRS 9, at a minimum, if one or more of the following factors/conditions are met, it shall be considered as a significant increase in credit risk or as defaulted facilities.6.1.1 Contractually obligated payments of a financial asset are past due for more than 30 days (subject to the rebuttable presumption under SLFRS 9);6.1.2 Credit rating of an instrument has been subsequently downgraded to B+ or below under the Sri Lankan National Rating Scale by an External Credit Assessment Institution (ECAI).4", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 20216.1.3 A two-notch downgrade under the internal rating of the licensed bank (if available). Licensed banks are required to map their internal investment ratings with the ratings issued by ECAI. For this purpose, licensed banks are required to refer the mapping of external credit ratings given in Banking Act Directions on capital requirements;6.1.4 Reasonable and supportable forecasts of future economic conditions show a direct negative impact on the performance of portfolios or instruments;6.1.5 A significant change in the geographical locations or natural catastrophes that directly impact the instrument;6.1.6 Frequent changes in the Board of Directors and Senior Management and any Going Concern issues of the issuer;6.1.7 A fall of 50% or more in the turnover and/or profit before tax of the borrower when compared to the previous year for two consecutive years and/or erosion of net-worth of the borrower by more than 25% (other than due to changes in equity structure and dividend policy) when compared to the previous financial year.6.1.8 The issuer is deceased/insolvent;6.1.9 Non-receipt of dividends/returns for a consecutive period of three years (along with a cumulative decline in net asset value of 30 per cent or more); and6.1.10 A continuously declining trend in market prices, with the investment value being below cost for over three years.6.2 Licensed banks may request to rebut one or more criteria listed from 6.1.2 to 6.1.10 when determining significant increase of credit risk, subject to the following:6.2.1 The KMP heading the Risk Management Function shall recommend such rebuttal to the Board of Directors providing valid rationale and justifications to ensure that such criteria do not5", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 2021result in significant increase of credit risk to the bank, and Board of Directors shall grant approval or reject the proposal after considering the information provided.6.2.2 Disclose the rebutted criteria if any and the estimated impact of such rebuttal on the respective bank\u2019s impairment provisions and profitability in their audited annual financial statements.7. Impairment 7.1 Licensed banks shall compute the impairment charges for credit Charges for facilities as per the Sri Lanka Accounting Standards andFinancial Assets.. Directions/Guidelines issued by CBSL from time to time.Other than 7Credit Facilities 7.2 The measurement of impairment allowances should build upon robust methodologies and result in the appropriate and timely recognition of expected credit losses in accordance with the applicable Sri Lanka Accounting Standards.7.3 The aggregate amount of impairment allowances of licensed banks, regardless of whether allowance components are determined on a collective or an individual basis, should be adequate and consistent with the objectives of the applicable Sri Lanka Accounting Standards.7.4 Additional guidance on impairment of licensed banks is provided in Annex IL8. Models for Calculation of Impairment for Financial Assets other than Credit Facilities8.1 The CEO and other relevant KMPs of the licensed bank under the guidance provided by the Board of Directors, shall ensure that the licensed bank:8.1.1 Develops robust models to determine expected credit losses as per the Sri Lanka Accounting Standards, which should be in line withthe licensed bank\u2019s business model and risk profile;8.1.2 Considers all available and relevant internal and external datawhen estimating expected credit losses, ensuring that the estimates are robust, unbiased and reflective of current exposures;6", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 5, "year": 2021}, "type": "Document"}
{"page_content": "9. Reclassification of Financial Assets Other than Credit FacilitiesMONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 20218.1.3 Consist of officers who are well trained, competent and have a thorough understanding of the models adopted by the bank;8.1.4 Adheres to rigorous governance and internal control processes, when obtaining support from external vendors/consultants in respect of model development.8.1.5 Documents the reasons for selecting a specific model as the appropriate mode, if different models are used for different portfolios and instruments and ensure that all credit models are reviewed at least annually;8.1.6 Establishes an effective model validation process to ensure that the credit risk assessment and measurement methods are capable of generating accurate, consistent and unbiased predictive estimates on an ongoing basis; and8.1.7 Desists from making changes in the parameters, inputs and assumptions used for the purpose of profit smoothening. However, if any changes in the credit models are required, the rationale and justification for such change shall be evaluated by the Chief Risk Officer, Integrated Risk Management Committee and approved by the Board of Directors.8.2 In cases where licensed banks incorporated outside Sri Lanka use models developed by their head office or regional office, such licensed banks shall assess the appropriateness of the credit models in the Sri Lankan context and a local team headed by a KMP shall carry out appropriate validation procedures.9.1 Licensed banks may reclassify financial assets under the provisions of the Sri Lanka Accounting Standards, provided the objective of the business model of the licensed bank for its financial assets has changed and its previous model assessment would no longer apply.7", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 6, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021BANKING ACT DIRECTIONS No. 14 of 20219.2In line with the requirements under the Sri Lanka Accounting Standards, such changes in business models and reclassifications shall be approved by the Board of Directors and shall be notified to the Director of Bank Supervision within 7 working days of the date of such approval.10 Upgrading of 10.1Financial Assets other than Credit Facilities10.2Licensed banks shall upgrade Financial Assets from a higher stage in accordance with a policy approved by the Board of Directors, and the rationale for such upgrading shall be properly documented.Licensed banks shall exercise prudence in upgrading Financial Assets and shall ensure that the upgraded asset has exhibited a sustained trend/status of improvement to justify the improved classification status.11 Fair Value 11.1Measurement of Financial Assets other than Credit FacilitiesLicensed banks shall comply with the requirements given in \u2018Sri Lanka Accounting Standard - SLFRS 13: Fair Value Measurement\u2019 when financial instruments are subsequently measured at fair value, and are required to:11.1.1 Use an appropriate valuation technique for which sufficient data is available;11.1.2 Apply the selected valuation techniques consistently (exercising prudence);11.1.3 Maximise the use of relevant observable inputs. In exceptional circumstances, unobservable inputs may be used; and11.1.4 Obtain confirmation from the Chief Risk Officer, with regard to the appropriateness and reliability of inputs under level 3 hierarchy, if such inputs are used in the respective valuation technique.12 Role of 12.1Internal AuditThe Internal audit function shall independently evaluate the effectiveness of the credit risk assessment, measurement systems and8", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 7, "year": 2021}, "type": "Document"}
{"page_content": "14 September 202112.212.313 Regulatory Reporting13.1\n14Effective Date15Revocation ofDirectionsMONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 14 of 2021processes of the licensed bank and shall ensure the acceptability of credit judgments.The Internal Audit function shall at least annually, validate and evaluate all credit risk assessment models, inputs and assumptions used along with data smoothening, if any.The Internal audit function shall provide an assurance on the adequacy and effectiveness of back testing in order to ensure that the key drivers have been captured and calibrated accurately.Licensed banks are required to submit the statutory returns introduced for these Directions, as stipulated below, or as stipulated otherwise by the Director of Bank Supervision.13.1.1 Monthly Submission - on or before the 15th day of the following month13.1.2 Quarterly Submission - on or before the 15th day from the end of a quarter.14.1 These Directions shall be in effect from 01 January 2022.15.1 The following Directions will be revoked from 01 January 2022:15.1.1 Banking Act Directions on Prudential Norms for Classification, Valuation and Operation of the Bank\u2019s Investment Portfolio dated 01.03.2006 issued to licensedcommercial banks and licensed specialised banks.Prof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka9", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 8, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 2021Annex I Classification and Measurement of Financial Assets and Financial Liabilities other thanCredit FacilitiesTable 1 - Classification and Measurement of Financial AssetsBusiness ModelKey CharacteristicsClassification & Subsequent MeasurementDebt Instruments1Held-to-collect- Hold assets to collect contractual cash flows- Meet SPPI test- Infrequent and insignificant salesAmortised CostBoth held to collect and for sale- Both collecting contractual cash flows and sales- More frequent and significant salesFair value through other comprehensive incomeOther business models, including;- Trading- Managing assets on a fair value basis- Maximising cash flows through sale- Neither 6held-to-collecf nor \u2018held to collect and for sale\u2019- Collection of contractual cash flows is incidentalFair value through profit or loss\nEquity and Derivative InstrumentsEquity Instruments- Held for tradingFair value through profit or loss- Not for trading and not elected the irrevocable OCI optionFair value through profit or loss- Not for trading and elected the irrevocable OCI optionFair value through other comprehensive incomeDerivative InstrumentsFair value through profit or loss1 In addition to these key characteristic\u2019s other features of the product such as management compensation, risk management aspects, frequency and significance of sales, etc. must also be considered.10", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 9, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 2021Table 2 - Classification and Subsequent Measurement of Financial LiabilitiesClassification of Financial LiabilitiesSubsequent MeasurementAccounting for Fair Value GainFinancial liabilities held for tradingFair valueThrough profit or lossFinancial liabilities designated at fair valueFair valueThe amount of change in fair value attributable to changes in credit risk in liability presented in other comprehensive income2 and remaining amount shall be presented in income statement.Other financial liabilities at amortised costAmortised Cost-\n2 If that treatment creates or enlarges an accounting mismatch in profit or loss, an entity shall present all gains or losses on that liability (including the effects of changes in the credit risk of that liability) in profit or loss.11", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 10, "year": 2021}, "type": "Document"}
{"page_content": "14 September 2021MONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 14 of 2021Annex IIGuidance on Impairment Computation for Licensed Banks1. Computation of the Probability of Default (PD) and Loss Given Default (LGD)(i) Licensed banks shall, at a minimum, use five years of data, unless a shorter time horizon provides better estimations and is better suited when calculating PDs and LGDs. Any smoothing of data or inputs must be validated by the Risk Management Department.(ii) Licensed banks shall not use proxies to compute PDs and LGDs, unless the bank is a newly incorporated bank or the product category was newly introduced by the bank and has a credit history of less than 5 years.(iii) When the licensed banks are unable to compute LGDs due to lack of data or inputs, licensed banks shall use a minimum LGD of 45 per cent for such exposures.(iv) When required to calculate impairment with respect to exposures denominated in foreign currencies issued by the sovereigns, following shall be considered:(a) Licensed banks shall compute respective Sovereign PD, appropriately linking to an external credit rating scale.(b) A minimum LGD of 20 per cent shall be applied for exposures denominated in foreign currencies issued by the sovereigns.(v) When required to calculate LGD for exposures guaranteed by the Government of Sri Lanka:(a) An LGD of zero may be applied to exposures with a guarantee of the Government provided that the guarantee fully covers the principle and interest and is reported as a liability of the Government.(b) LGD for any other form of assurance provided by the Government other than in item (a) above, shall be computed instead of using an LGD of zero percent.(c) A minimum LGD of 20 per cent shall be applied for Government guarantees denominated in foreign currency.\n12", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 11, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA14 September 2021 BANKING ACT DIRECTIONS No. 14 of 20212. Economic Factor Adjustment(i) Licensed banks shall use forecasts and projections published by the CBSL when adjusting credit provisioning models to reflect the economic conditions and forecasts, on a consistent basis.(ii) If CBSL forecasts arc not available, licensed banks shall use credible alternative sources on a consistent basis and shall maintain relevant documentary evidence.(iii) Board approved policies shall specify the sources to be used and licensed banks shall not cherry pick sources in their favor.\n13", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_14_of_2021.pdf", "page": 12, "year": 2021}, "type": "Document"}
{"page_content": "01 October 2021MONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 15 of 2021MARGIN REQUIREMENTS AGAINST IMPORTSIssued in terms of the powers conferred by Sections 46(1) and 76(J)(1) of the Ranking Act No. 30 of 1988, as amended.Banking Act Directions No. 12 of 2021 dated 08 September 2021 on Margin Requirements Against Imports are hereby revoked.Nivard Ajith Leslie CabraalChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_15_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "09 December 2021\u20ac\nMONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No. 16 of 2021\nRegulatory Framework on Technology Risk Management and Resilience\nfor Licensed Banks\nIn the exercise of the powers conferred by Sections a6(l) and 76(J)(1) of the Banking Act, No. 30\nof 1988, as amended, the Monetary Board hereby issues the following Directions on Regulatory\nFramework on Technology Risk Management and Resilience for licensedtommercial banks and\nlicensed specialised banks, hereinafter referred to as licensed banks, with a view to further\nstrengthening the technology risk managernent and resilience in licensed banks.\n1. Empowerment 1.1 In terms of Section a6(1) of the Banking Act, in order to ensure the\nsoundness of the banking system, the Monetary Board is empowered\nto issue Directions to all licensed commercial banks, regarding the\nmanner in which any aspect of the business of such bank or banks is\nto be conducted.\n1.2 lnterms of Section 76(J)(1) of the Banking Act, the Monetary Board\nis empowered to give Directions to licensed specialised banks or to\nany category of licensed specialised banks, regarding the manner in\nwhich any aspect of the business of such banks is to be conducted.\n2. Scope and\nAppHcability\n3. Regulatory\nFramework on\nTechnology\nRisk\nManagement\nand Resilience\n4. Responsibilities\nof the Board2.1 These Directions shall be applicable to all licensed banks including\noperations conducted through agents and third-party service\nproviders.\nAll licensed banks shall ensure compliance with the requirements\nimposed by the regulatory framework on technology risk\nmanagement and resilience in the Schedule I to these Directions\n(hereinafter referred to as regulatory framework).\nRequirements in the regulatory framework shall be applicable to the\nentire operations of licensed banks including operations conducted\nthrough agents and third-party service providers.\nThe Board of Directors of licensed banks shall establish adequate", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "The Board of Directors of licensed banks shall establish adequate\noversight measures to ensure implementation of the technology risk\nmanagement and resilience requirements specified in the regulatory\nframework by the licensed banks.3.1\n3.2\n4.1", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "09 December 2021MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.16 of202l\n5. Governance\nFramework\n6. Assessment of\nTechnology\nRisk under\nSupervisory\nReview Process\n7. Role of the\nInternal Audit\n8. Steps to Secure\nCompliance8.15.1 Licensed banks shall establish an effective governance framework\napproved by the Board of Directors of the licensed bank in\ncompliance with the requirernents specified in Section 4 of the\nregulatory framework, to ensure prudent management of technology\nrisks.\n6.1 Licensed banks shall ensure technology risk is assessed as a part of\nthe comprehensive assessment of risks in the bank's Internal Capital\nAdequacy Assessment Process (ICAAP) and adequate level of\ncapital is held to meet any potential technology risk.\n7.1 The internal audit function of the licensed banks shall ensure that\ncompliance with regulatory requirements on technology risk\nmanagement is assessed and reported to the Board of Directors of\nthe licensed bank through the Board Audit Committee, at least\nannually.\nLicensed banks shall ensure all new technology initiatives comply\nwith Section 9 of the regulatory framework on requirements based\non information system infrastructure ownership, management, and\nlocation from the date of these Directions.\nLicensed banks shall ensure compliance with all other requirements\nof the regulatory framework as per the timelines set out in Section\nl0 of the regulatory frarnework on implementation and transitional\narrangements.\nLicensed banks designated as Domestic Systemically Important\nBanks (D-SIBs) shall ensure compliance with the requirernents\nspecifically applicable to D-SIBs within 12 months from the date of\nnotification of being designated as a D-SIB or as per Section 10 of\nthe regulatory framework, whichever falls later.\nfi,* i*) U-\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lankn8.2\n8.3", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "3 \n  \n \n \n           \nBanking Act Directions No. 16 of 2021  \nRegulatory Framework on Technology Risk Management and Resilience \nfor Licensed Banks  \n \n \n \n \n \n \n \n \n \nSCHEDULE I", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "4 \n Regulatory Framework on Technology Risk Management and Resilience  \nfor Licensed Banks  \n \n1. Objective  \nThis framework intends to set minimum regulatory requirements on technology risk \nmanagement and resilience for licensed banks in general as well as based on sensitivity \nof data, criticality of information systems, and type of information system infrastructure \nused.  \n \n2. Applicability  \n2.1 Requirements in this framework  shall be applicable to entire operations of licensed \nbanks including operations conducted through  agents and third -party service providers . \n2.2 All information systems and related infrastructure used by licensed banks including \nprimary, disaster recovery, and any other types shall comply with the requirements  \nspecified in this framework .  \n \n3. Definitions  \nFollowi ng definitions shall be applicable  for the purposes of this framework.  \n \n3.1 Data  \n3.1.1 Public data  \nData that is freely available to everyone to use and republish without any restriction.  \n3.1.2 Customer data  \nAny non -public data relating to a past, existing , or potential customer . However, de -\nidentified customer data need not be considered as customer data.  \n3.1.3 De-identified c ustomer data  \nIntentionally altered  customer data that cannot be used alone or in combination with \nany other data to identify the customer to whom the data was originally related to.  \n3.1.4 Confidential non -customer data  \nAny non -public data that do not fall within the definition of customer data a nd can cause \nsignificant financial or reputational loss if used maliciously or leaked, including the \nlicensed bank\u2019s  financial transactions , submissions to the B oard of Directors and \nmanagement, sensitive employee data, and any other data as determined by the licensed \nbank.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "5 \n 3.2 Critical information system  \nAny information system that is essential  to the functioning of the financial system of \nthe country and/or to the functioning of the licensed bank  as identified by the Board of \nDirectors of the licensed bank,  including information systems of the licensed bank and \nrelevant information systems of third -party  service providers and agents .   \n3.3 Third -party service provider  \nA service provider with whom the licensed bank has entered into an outsourcing \narrangement as defined in the Banking Act Direction No. 2 of 2012 on Outsourcing of \nBusiness Operations of a Licensed Commercial Bank and a Licensed Specialised Bank, \nor any succeeding Direction.  \n3.4 Agent  \nAn agent or sub -agent as defined in the Banking Act Di rection No. 2 of 2018 on \nAppointment of Agents of Licensed Banks, or any succeeding Direction.  \n3.5 Accredited certification body  \nA management system certification body accredited for the specified ISO standard by \nthe Sri Lanka Accreditation Board for Conformity Assessment (SLAB) or by an \naccreditation body which is a member of International Accreditation Forum (IAF).  \n3.6 Domestic Systemically Important Bank (D -SIB)  \nAny licensed bank designated as a D -SIB as per the Banking Act Directions No. 10 of \n2019 on Framework for Dealing with Domestic Systemically Important Banks , or any \nsucceeding Direction.  \n3.7 Board of Directors  \nFor licensed banks incorporated in Sri Lanka, this shall mean the Board of Directors of \nthe bank . For licensed banks incorporated outside Sri Lanka, this shall mean the senior \nmost  management level committee in Sri Lanka together with the head office executive \nresponsible for Sri Lanka operations or any appropriate higher -level committee at the \nhead office.  \n3.8 Board Integrated Risk Management Commi ttee (BIRMC)  \nFor licensed banks incorporated in Sri Lanka, this shall mean the integrated risk", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "For licensed banks incorporated in Sri Lanka, this shall mean the integrated risk \nmanagement committee of the Board of Directors of the bank. For licensed banks \nincorporated outside Sri Lanka, this shall mean the local risk management committe e \nor in the absence of such committee head of risk management,  together with the risk \nmanagement function in head office or any appropriate higher -level committee at the \nhead office .", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "6 \n 3.9 Board Audit Committee (BAC)  \nFor licensed banks incorporated in Sri Lanka,  this shall mean the audit committee of \nthe Board of Directors of the bank. For licensed banks incorporated outside Sri Lanka, \nthis shall mean the head of internal audit in Sri Lanka together with the internal audit \nfunction in head office or any appropria te higher -level committee at the head office . \n \n4. Governance Framework  \n \n4.1 Information Security Committee (ISC)  \n4.1.1 Licensed banks shall establish an ISC as the apex management level body responsible \nfor information security and technology resilience of the bank. The Committee shall be \nresponsible for both strategic and operational aspects of information security  and \ntechnology risk management . \n4.1.2 ISC shall be chaired by the Chief Executive Officer (CEO) of the bank. The Board of \nDirectors of the licensed bank shall also appoint one or more deputy chairpersons to \nchair the meetings of ISC when CEO is unable to attend.  \n4.1.3 The Chief Operating Officer/Head of Operations, Chief Information Security Officer \n(CISO), Chief Information Officer (CIO)/ Head of Information Technology, and \nManager of Security Operations Center/Security Operations Center Coordinator shall \nbe the  other ex -officio members of ISC.  Head of Legal, Head of Human Resource \nManagement, and Head of Security shall be required to attend as co -opted members  \nwhenever a matter relating to their areas  is to be discussed. They may be appointed as \npermanent member s at the discretion of the Board of Directors.  Head of Risk \nManagement  and Compliance Officer shall be permanent invitees to ISC.  Head of \nInternal Audit shall be invited to present internal audit findings on information security \nat least on quarterly basis . Participation of any other officers from risk, compliance, or \ninternal audit functions of the bank shall be only on invitation .", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 5, "year": 2021}, "type": "Document"}
{"page_content": "internal audit functions of the bank shall be only on invitation . \n4.1.4 Licensed banks incorporated outside Sri Lanka where  majority of technology related \ndecision s are made  at the head office  shall  appoint a suitable and sufficiently \nempowered  officer from the head office  with seniority equal or higher than the country \nhead of Sri Lankan operations to chair the ISC with the country head as an ex -officio \nmember of ISC.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 5, "year": 2021}, "type": "Document"}
{"page_content": "7 \n 4.1.5 Licensed banks incorporated ou tside Sri Lanka shall appoint the releva nt officer from \nthe head office  to the ISC when any of the officers named in Section  4.1.3 are not in \nthe organization structure of the Sri Lankan branch.  \n4.1.6 ISC shall report to the Board of Directors through BIRMC. ISC shall apprise the \nBIRMC of its proceedings at least on quarterly basis.  \n4.1.7 ISC shall meet at least once in every two months and shall  have a quorum and terms of \nreference approved  by the Board of Dire ctors.  \n \n4.2 Chief Information Security Officer (CISO)  \n4.2.1 Licensed banks shall appoint a CISO as the executive officer responsible for the \nlicensed bank\u2019s information security.  \n4.2.2 CISO shall be a member of the bank\u2019s senior management  team  and shall be within the \nimmediate two layers below the level of CEO in the organizational structure of the \nlicensed bank .  \n4.2.3 CISO shall report to the Chief Executive Officer, or Chief Operating Officer (COO) \nwhen COO has the overall responsibility for the operational activities of th e licensed \nbank, or to a corporate management member who has a role similar to the role of COO \nas mentioned above.  \n4.2.4 D-SIBs shall appoint a dedicated CISO.  \n4.2.5 As a transitional arrangement for the requirement in 4.2. 4, D-SIBs may appoint an \nofficer from the b ank\u2019s existing senior management team to simultaneously function as \nthe CISO in compliance with the requirements in 4.2.6 up to a period of 2 years.  \n4.2.6 Licensed banks that are not D -SIBs may appoint an officer from the bank\u2019s existing \nsenior management team to simultaneously function as the CISO, provided that the \nBoard of Directors resolve that the magnitude of technology and information security \nrisks faced by the licensed bank does not necessitate a dedicated CISO. However, s uch \nan officer shall not be Hea d of Information Technology, Head of Internal Audit, Head", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 6, "year": 2021}, "type": "Document"}
{"page_content": "an officer shall not be Hea d of Information Technology, Head of Internal Audit, Head \nof Risk Management , Compliance Officer, or one of their subordinates.  \n4.2.7 CISO shall be experienced and shall be among the senior most in the licensed bank\u2019s \norganizational hierarchy  to ensure effective  implementation of information security \npolicies and procedures across the licensed bank  and to provide leadership t o \ninformation security function .  \n4.2.8 CISO shall possess  or acquire  eligible qualifications as per requirements in Section  7, \nwithin the timelin es stipulated under  transitional arrangements in Section  10.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 6, "year": 2021}, "type": "Document"}
{"page_content": "8 \n 4.2.9 Licensed banks incorporated outside Sri Lanka and having information security related \ndecision making handled outside of Sri Lanka , shall designate a sufficiently empower ed \nofficer from the head office  as the CISO for Sri Lankan operations. Such an officer is \nexempted from the requirement to possess eligible qualifications as per 4.2. 8, but shall \npossess adequate qualifications in information security as determined by the Head of \nHuman Resources o f the bank\u2019s  head office . \n4.2.10  The Board of Directors of licensed bank shall establish appropriate arrangements to \nfulfill the responsibilities assigned to CISO until a CISO is appointed in accordance \nwith transitional arrangements in Section 10.  \n \n4.3 Identification of critical information systems  \n4.3.1 Board of Directors shall identify information systems falling within the definition of \ncritical information system  provided in 3.2 , in accordance with requirements in 4.3.2 \nand 4.3.3.  \n4.3.2 Critical information sys tems shall normally include the t ransaction processing systems, \ngeneral ledger  systems , payment and settlement related systems, delivery channels , \nsystems used for Anti-Money Laundering (AML)/ Know Your Customer (KYC) \nprocedures, and any other system that is required to ensure uninterrupted conduct of \nbanking business . \n4.3.3 The Board of Directors of a licensed bank may exclude any of the information systems \nmentioned in 4.3.2 other than transaction processing systems , general ledger systems , \nand information  systems connected to LankaSettle System or are required to fulfill the \nbank\u2019s obligations in the LankaSettle  system  from  being identified as critical , if the \nconcerned information system does not fall within the definition of critical information \nsystem i n the opinion of the Board of Directors. Such exclusion shall be based on an \ninternally established rational methodology. All such exclusions shall be reviewed at", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 7, "year": 2021}, "type": "Document"}
{"page_content": "internally established rational methodology. All such exclusions shall be reviewed at \nleast once every two years and documented in sufficient detail explaining  the rationale \nbehin d the exclusion.  \n4.3.4 Licensed banks shall maintain a register recording all the information systems used, \nincluding relevant information systems with third -party service providers  and agents, \nclearly identifying whether the information system is a critical inf ormation system or \nnot and the type of data the information system is exposed to. Licensed banks  may use \nany existing register/inventory of information systems for this purpose.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 7, "year": 2021}, "type": "Document"}
{"page_content": "9 \n 4.4 Fair and ethical use of customer data  \nLicensed bank s shall ensure that custom er data would only be used in ways the \ncustomers would reasonably expect the bank to use such data. The Board of Directors \nshall put in place effective policies and procedures to ensure fair and ethical use of \ncustomer data at all times. Further, licensed banks shall not disclose such data except \nfor as has been provided by law.  \n \n4.5 Reporting to Board of Directors  \nLicensed banks shall establish procedures to regularly report information security and \ntechnology risk profile of the bank  together with any information security incidents to \nthe Board of Directors through BIRMC using both standard risk  indicators and ad -hoc \nreports.  \n \n4.6 Technology risk management  function  \n4.6.1 Licensed banks shall ensure that the bank\u2019s risk management function possess a level \nof maturity in technology risk management that commensurate  with the magnitude of \ntechnology risk faced by the bank. The level of staff and other resources allocated to \nthe risk management function  for technology risk management shall be decided by \nBIRMC in consultation with the head of risk management.  \n4.6.2 The Board of Directors shall ensure technology risk appetite is defined through a \nframework of clearly delineated and meas urable technology risk indicators with \napproved risk tolerance levels.  \n4.6.3 Licensed banks shall assess technology risk as a part of the comprehensive assessment \nof risks in the bank\u2019s Internal Capital Adequacy Assessment Process (ICAAP).  \n4.6.4 Licensed banks shall e nsure stringent product approval process approved by the Board \nof Directors and focused on software quality assurance, internal controls, and risk \nmanagement measures are adhered to, when a new technology driven product or service \nis introduced or when a c hange is made to such product or service.  \n4.6.5 Licensed banks shall ensure that business units responsible for technology driven", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 8, "year": 2021}, "type": "Document"}
{"page_content": "4.6.5 Licensed banks shall ensure that business units responsible for technology driven \nbanking products and services such as payment cards and electronic banking, and \ninformation technology and information security rela ted service delivery functions are \nsubjected to quarterly Risk and Control Self-Assessment (RCSA) process implemented \nand monitored by the risk management function.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 8, "year": 2021}, "type": "Document"}
{"page_content": "10 \n 4.6.6 Licensed banks shall implement adequate technology risk management and monitoring \nmeasures  including RCSA processes for third -party service providers and agents that \ncommensurate with the criticality and sensitivity of services carried out by such third -\nparty service providers and agents as approved by BIRMC of the licensed bank.  \n \n4.7 Internal audi t \n4.7.1 Licensed banks shall ensure that c ompliance with the requirements in this regulatory \nframework and other CBSL Regulations  relating to information security and \ntechnology risk management  is subjected to an internal audit at least annually.  \n4.7.2 BAC shall ensure that the licensed bank is complying with the requirement in 4.7.1 \neven when the internal audit function of the licensed bank is outsourced.    \n \n5. Information Security  \n5.1 Information security training and certification  \n5.1.1 Training and awareness to Board of Directors  \n(i) Licensed banks shall implement a comprehensive  annual training and  \nawareness  program  on information security and technology risk management \nfor Board of Directors , in accorda nce with below requirements .   \n(ii) The objective of such program shall be to enable the Board of Directors to have \neffective oversight on the adequacy and effectiveness of information security \nand technology risk management policies and procedures of the licen sed bank.  \n(iii) Responsibilities of Board of Directors  and Board committees in terms of \nrequirements in this regulatory framework and other applicable Laws and \nRegulations relating to information security and technology risk management \nshall also be covered thro ugh such programs.  \n(iv) Such training shall consist of at least one annual structured training program and \none or more awareness sessions by information security and technology risk \nmanagement experts every year.  \n(v) The Board Secretary of the licensed bank shall e nsure compliance with the", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 9, "year": 2021}, "type": "Document"}
{"page_content": "(v) The Board Secretary of the licensed bank shall e nsure compliance with the \nabove requirements on training and awareness to Board of Directors.  \n5.1.2 Information security awareness training and certification requirement for staff  \n(i) Licensed banks shall ensure that the s taff of the licensed bank, agents, and third -\nparty  service providers exposed to or can potentially be exposed to critical \ninformation systems, customer data , or confidential non -customer data are", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 9, "year": 2021}, "type": "Document"}
{"page_content": "11 \n trained and certified on information security, in accordance with following \nrequirements:   \n(a) Required pers ons shall complete an information security awareness \ntraining program based on the information security policies and \nprocedures of the licensed bank;   \n(b) Such program as per 5.1.2(i)(a) shall commensurate with the \ninformation security responsibilities of the trainee and shall be updated \nregularly and whenever the bank\u2019s information security policies are \nupdated; and  \n(c) Required persons shall complete an internal certification test, based on \nthe information security awareness training, at least annually.  \n(ii) The Board of Directors of a licensed bank may exclude staff of agents and third -\nparty service providers from the requirements in 5.1.2(i), if adequate  and \ncomparable information security awareness measures have been implemented \nby such agents and third -party s ervice providers.  \n \n5.2 User access management  \n5.2.1 Scope  \n(i) Requirements in 5.2.2 and 5.2.3 on user access management shall be applicable  \nto critical information systems and information systems exposed to customer \ndata.  \n(ii) Board of Directors shall decide on the need to a pply the requirements imposed \nby 5.2.2 and 5.2.3 for non -critical information systems exposed to confidential \nnon-customer data in consultation with BIRMC and ISC.  \n(iii) Requirements in 5.2.4 shall be applicable to all information systems as \nspecified.  \n5.2.2 User acce ss and identity management system  \n(i) Licensed bank s shall implement an industry standard user access and identity \nmanagement system(s) to manage all users including privileged users.  \n(ii) Licensed bank s may deviate from the requirement in 5.2.2(i ) and implement \nsuitable compensating controls, for any existing information system when \nimplementation of industry standard user access and identity management \nsystem  is not feasible. All such information systems shall be subjected to user", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 10, "year": 2021}, "type": "Document"}
{"page_content": "system  is not feasible. All such information systems shall be subjected to user \naccess privileg e reviews as per the frequency specified in 5.2.4.(i)(a).", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 10, "year": 2021}, "type": "Document"}
{"page_content": "12 \n 5.2.3 Privileged users  \nPrivileged user access shall be provided only on \u201cneed -to-have\u201d basis and highest level \nof access shall only be provided for a limited time when such access is required.  \n5.2.4 User access  privilege reviews  \n(i) Licensed banks shall conduct user access privilege reviews as follows:  \n(a) At least on monthly basis for critical information systems.  \n(b) At least on quarterly basis for non -critical information systems exposed \nto customer data and confidential  non-customer data. \n(c) At least on annual basis for customers and their authorized \nrepresentatives registered to use any information system of the bank \nincluding electronic delivery channels, using an appropriate \nmethodology in accordance with the operating i nstructions of the linked \naccounts.  \n(d) At least on annual basis for all other information systems.  \n(ii) The objective of user access privilege reviews shall be to establish that all users \nand their user profiles in an information system are having a valid authoris ation \nfor the privileges and status assigned.  \n(iii) Licensed banks shall adopt appropriate methodologies to conduct user access \nprivilege reviews as approved by ISC.  \n(iv) User access privilege reviews shall be conducted independently from the user \naccess management function responsible for the creation, alteration, and \ndeletion of user access in information systems.  \n(v) Risk management department shall conduct a root -cause analysis on \ndiscrepancies identified during u ser access privilege reviews  and suggest \nappropriate internal control enhancements to ISC at least on annual basis.   \n \n5.3 Computer security and u ser activity log management  \n5.3.1 Licensed banks shall implement a computer security and user activity  log management \npolicy adhering to the requirements in 5.3.2 to 5.3.7, to manage computer security and \nuser activity logs of critical information systems and information systems exposed to", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 11, "year": 2021}, "type": "Document"}
{"page_content": "user activity logs of critical information systems and information systems exposed to \ncustomer data. Such policy may be extended to other information systems at the \ndiscretion of the bank\u2019s Board of Directors.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 11, "year": 2021}, "type": "Document"}
{"page_content": "13 \n 5.3.2 The policy shall include types of logs to be maintained, retention period, frequency of \nreview, method of review and tools to be used, event identification and response, and \nresponsibilities for the maintenance and review  of logs.  \n5.3.3 Computer security logs shall include logs generated by security software, operating \nsystems, and applications.   \n5.3.4 Computer security logs maintained shall be adequate to successfully identify and \ninvestigate information security incidents.  \n5.3.5 User act ivity logs maintained shall be adequate to establish accountability without \nrepudiation for any access or modification to customer data or critical information \nsystems.  \n5.3.6 Logs of privileged users shall be given a higher importance and reviewed on near real \ntime basis using appropriate tools and methods.  \n5.3.7 The policy shall be approved by the Board of Directors based on the recommendations \nof BIRMC and ISC.  \n \n5.4 Information classification and labelling  \n5.4.1 All electronically maintained data shall be classified based on i nformation security \nsensitivity and labelled  with assigned classification, as per an information classification \npolicy approved by the Board of Directors.  \n5.4.2 Licensed banks shall establish an appropriate mechanism to effectively determine the \ndata category to  which any piece of data will belong to as per definitions given in 3.1.  \n \n5.5 Data encryption  \n5.5.1 Customer data encryption  \n(i) Customer data shall normally be protected using encryption as recommended in \n5.5.1(ii). This requirement shall be applicable to customer data maintained with \nthe licensed bank, agents, and third -party service providers. However, licensed \nbanks may use alternative controls to protect customer data in accordance with \n5.5.1(iv) when encryption is not feasible or appropriate.  \n(ii) Recommended levels of encryption  \n(a) Data -at-rest encryption  \n  Customer data shall be subjected to database encryption or file level", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 12, "year": 2021}, "type": "Document"}
{"page_content": "Customer data shall be subjected to database encryption or file level \nencryption at rest.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 12, "year": 2021}, "type": "Document"}
{"page_content": "14 \n (b) Data -in-transit encryption  \n  Data -in-transit encryption shall be implemented for customer dat a. \nFurther, whenever a file containing such data is transmitted it shall \nremain encrypted at file level.  \n(c) Full disk encryption for endpoint devices and removable media  \n  Endpoint devices and removable media that store customer data of the \nlicensed ban k, either permanently or temporarily, including such devices \nof third -party service providers and agents shall be subject to full disk \nencryption. The licensed bank may exclude any end point device that is \nusually non-movable  and the risk of data leakage is negl igible, from this \nrequirement based on an exclusion criterion approved by the Board of \nDirectors of the licensed bank.  \n(iii) Types of encryption to be used  \nLicensed bank shall use industry standard encryption methods. Selection of such \nmethods shall be subjected  to the approval of the licensed bank\u2019s Board of \nDirectors on the recommendation of BIRMC and ISC.  \n(iv) Deviations from customer data encryption requirement  \n(a) Licensed banks  may decide to deviate from customer data encryption \nrequirements mentioned in 5.5.1 (ii) for specific scenarios at the \ndiscretion of the bank\u2019s Board of Directors, when it is not feasible or \nappropriate to protect customer data using encryption in the given \nscenario.  \n(b) The Board of Directors shall ensure adequate compensating controls and \nmonitoring measures are enforced to minimise the risks arising due to \ncustomer data not being encrypted , whenever a deviation is approved as \nper 5.5.1(iv)(a).  \n(c) All deviations as per Section 5.5.1(iv)(a) together  with compensating \ncontrols shall be recommende d by the ISC through BIRMC for the \napproval by Board of Directors.  \n(d) All deviations approved as per 5.5.1(iv)(a)  together with associated \ncompensating controls and monitoring measures shall be reviewed at \nleast once in every two years to determine whether data can now be", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 13, "year": 2021}, "type": "Document"}
{"page_content": "least once in every two years to determine whether data can now be \nprotected with encryption or better compensating controls and \nmonitoring mechanisms can be introd uced.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 13, "year": 2021}, "type": "Document"}
{"page_content": "15 \n 5.5.2 Confidential non -customer data encryption  \nEncryption requirements for customer data specified in 5.5.1  shall be applicable  to \nconfidential non -customer data as well, except with respect to categories of confidential \nnon-customer data that will onl y pose negligible adverse impact to the licensed bank if \nsubjected to a data leakage or any other  adverse information security incident  that could \nhave been prevented with encryption as determined by the Board of Directors of the \nlicensed bank.  \n \n5.6 Security Operations Center (SOC)  \n5.6.1 Applicability  \nAll licensed commercial banks, licensed specialised banks that are D -SIBs, and other \nlicensed specialised banks offering electronic delivery channels other than automated \nteller machines (e.g. , internet banking, mobile  apps, customer/third -party integrations, \netc.) shall implement a SOC as per the requirements in this regulatory framework.  \nImplementation of a Data Loss Prevention (DLP) tool as per 5.6.7(iii) is mandatory for \nall licensed  banks.   \n5.6.2 Responsibilities  \nSOC sh all be responsible for the prevention, monitoring and detection, incident \nresponse, forensics, incident reporting, and knowledge sharing of day-to-day \ninformation security threats and incidents.  \n5.6.3 Reporting line  \nThe Board of Directors of the licensed bank shall establish an appropriate line of \nreporting for the SOC. Such a reporting line shall ensure both the bank\u2019s CIO/ Head of \nInformation Technology and CISO has adequate oversight over the operations of SOC \nto carry out their responsibilities effectiv ely, while clearly specifying who has the \nprimary responsibility for the operations of SOC.    \n5.6.4 Operating hours  \nSOC shall be operational on 24 X 7 basis. Licensed banks shall decide on staffing levels \nat different times of the day/week based on activity levels and threat profile.  \n5.6.5 Human resources , artificial intelligence, and automation", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 14, "year": 2021}, "type": "Document"}
{"page_content": "5.6.5 Human resources , artificial intelligence, and automation  \n(i) Staff roles in SOC shall  at least include  security analysts (tier 1), incident \nresponders (tier 2), security experts/threat hunters (tier 3), and SOC manager.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 14, "year": 2021}, "type": "Document"}
{"page_content": "16 \n (ii) Licensed banks shall rationally decide on the exact staffing level required at \neach level and on any other types of staff req uired in the SOC.  \n(iii) Licensed banks  may use artificial intelligence or other automation technologies \ninstead of humans for any of the above roles, except for the role of SOC \nmanager.  \n5.6.6 Processes  \n(i) Clearly defined and documented processes  \nSOC shall have clearly d efined and documented processes for event \nclassification and prioritisation, analysis, remediation and recovery, post \nincident assessment, and forensics. Such processes shall clearly identify the \nsteps to be followed and responsible people for each step.  \n(ii) Defined baseline activity level  \nSOC shall have defined and updated baseline activity levels for users, \napplications, and all infrastructure components to enable effective monitoring \nand detection of suspicious and unusual activities. Baseline activity level s shall \nbe used by SOC to effectively segregate suspicious activity from normal \nactivity.  \n5.6.7 Tools  \n(i) Monitoring and detection tools  \nSOC shall be equipped with monitoring and detection tools that commensurate \nthe magnitude and complexity of the licensed bank\u2019s technology usage. At \nminimum a SOC shall have tools for automated asset discovery, database \nactivity monitoring, vulnerability a ssessment, and intrusion detection.  \n(ii) Security Information and Event Management (SIEM) tool s \nLicensed banks shall equip SOC with industry standard SIEM tools and \nsupportive systems capable of log consolidation, event correlation, incident \nmanagement, forensi cs analysis, and management reporting.  \n(iii) Data Loss Prevention (DLP) tool s \n(a) Licensed banks shall implement industry standard DLP tools to \nminimise the risk of data leakages. Scope of implementation shall cover \nthe entire bank, and any third -party service provi ders and agents exposed \nto customer data.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 15, "year": 2021}, "type": "Document"}
{"page_content": "the entire bank, and any third -party service provi ders and agents exposed \nto customer data.  \n(b) In case of third -party service providers and agents, licensed banks may \nallow them to implement DLP tools as per minimum requirements", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 15, "year": 2021}, "type": "Document"}
{"page_content": "17 \n specified by the licensed bank. Licensed banks shall conduct at least \nannual re views of such implementations by third -party service providers \nand agents to ensure adequate data loss prevention measures are in place.  \n(c) Licensed banks may exempt third -party service providers from the \nrequirement to implement a DLP tool, if there is no da ta leakage risk due \nto the control measures in place when sharing data with the third -party \nservice provider. Such exemption shall be approved by the Board of \nDirectors of the licensed bank based on independent assessments \nprovided by the head of relevant business/operational function, \nCIO/ Head of Information Technology, CISO and Head of Risk \nManagement. All such exemptions shall be reviewed by the Board of \nDirectors at least once in every two years.  \n5.6.8 Threat information and intelligence  \nLicensed banks shall implement mechanisms to obtain threat information and threat \nintelligence from relevant sources. The SOC\u2019s staff, processes, and tools shall be  \ncapable of aggregating, analysing, and operationalising threat information and threat \nintelligence receive d. \n5.6.9 Outsourcing  of SOC  \n(i) The Board of D irectors of a licensed bank may decide to outsource any function \nof a SOC to a third -party service provider.      \n(ii) All decisions to outsource SOC functions shall be made after the Board of \nDirectors evaluating the informa tion security threats posed by such outsourcing , \nincluding threats/vulnerabilities that could arise due to any other products or \nservices provided by the SOC service provider to the licensed bank . Such \nevaluations shal l be based on independent assessments submitted to the Board \nof Directors by CIO/Head of Information Technology, CISO, Head of Legal, \nand Head of Risk Management.  \n(iii) Licensed banks shall ensure that t hird party service providers of SOC services \nto whom the bank\u2019s  non-public data may be exposed possess a certification for", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 16, "year": 2021}, "type": "Document"}
{"page_content": "to whom the bank\u2019s  non-public data may be exposed possess a certification for \nthe latest edition of ISO 27001 - Information security management systems, \nfrom an accredited certification body , for the SOC services provided to the \nlicensed bank.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 16, "year": 2021}, "type": "Document"}
{"page_content": "18 \n (iv) Licensed bank shall have a non-disclosure agreement approved by the Board of \nDirectors of the bank with the third -party service provider of the SOC.  \n(v) All staff allocated by the third -party service providers of SOC to whom the \nbank\u2019s non -public data may be exposed shall be subjected t o enhanced \nbackground checks by the bank or by the third -party service provider of the \nSOC through a specialized background checking service acceptable to the bank.  \n(vi) The rights of the CBSL to examine third party SOCs and their staff as if it is a \nlicensed b ank\u2019s internal SOC shall be ensured through contractual agreements \nbetween the licensed bank and the SOC service provider.  \n(vii) The rights of the Sri Lankan judiciary to request and obtain any information or \ndata relating to the services provided to the license d bank by any SOC service \nprovider located outside Sri Lanka shall be ensured through contractual \nagreements between the licensed bank and the SOC service provider.  \n(viii) Licensed banks shall appoint an officer with sufficient seniority and authority \nas the SOC  Coordinator to coordinate between the licensed bank and the \noutsourced SOC.  \n5.6.10  SOC coverage for information systems operated by agents and third -party service \nproviders  \nLicensed banks shall ensure any critical information systems operated by agents or \nthird -party service providers are covered by a SOC in compliance with the above \nrequirements. In such scenarios the licensed bank shall require the respective agent or \nthird -party service provider to have their own SOC, or subscribe to a third party SOC \nthat fulf ills the applicable requirements specified in 5.6.9, or be covered by the bank\u2019s \nSOC as appropriate. Further, licensed banks shall decide the need for coverage  of SOC  \nfor all non -critical information systems operated by agents and third -party service \nprovi ders based on an internal risk assessment.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 17, "year": 2021}, "type": "Document"}
{"page_content": "provi ders based on an internal risk assessment.  \n \n5.7 Information security incident response and recovery  \n5.7.1 Incident Response Plan (IRP)  \nLicensed banks shall have an up to date and Board of Directors approved IRP, detailing \nprocedures for incident escalation, remedia tion, recovery, and communication with \ninternal and external stakeholders. IRP shall include specific procedures to deal with \ncommonly known types of information security incidents, including but not limited to \ncyber security incidents.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 17, "year": 2021}, "type": "Document"}
{"page_content": "19 \n 5.7.2 Incident response and recovery testing  \nIncident response and recovery capabilities shall be tested at least annually using \nscenarios close to real life as much as possible to determine the licensed bank\u2019s incident \nresponse readiness. Results of the test shall be re ported to the Board of Directors \nthrough BIRMC by ISC.  \n \n5.8 Information security testing  \n5.8.1 Pre-implementation information security testing  \n(i) Scope  \n(a) Critical information systems and information systems exposed to \ncustomer data shall be subjected to  pre-implementation information \nsecurity tests. Any other information system that could potentially make \nany c ritical information system or any information system  exposed to \ncustomer data vulnerable shall also be subjected to pre -implementation \ninformation  security tests.  \n(b) Board of Directors shall decide on the need to conduct pre -\nimplementation information security testing for non -critical information \nsystems exposed to confidential non -customer data in consultation with \nBIRMC and ISC, based on the importa nce of each such information \nsystem.  \n(c) Pre-implementation information security tests shall be conducted prior \nto initial implementation and prior to implementation of modifications. \nMinor modifications could be excluded from pre -implementation \ninformation se curity tests based on an exclusion policy approved by the \nBoard of Directors and approval of ISC at the time of implementation  of \nthe specific  minor  modification  that need  to be excluded.  \n(ii) Following types of pre -implementation tests shall be carried out as applicable \nto the given implementation:   \n(a) Static Application Security Testing (SAST) or source code reviews to \ndetect any malicious or unsafe code;  \n(b) Dynamic Application Security Testing (DAST) to detect application \nlevel vulnerabilities an attacker could ex ploit;", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 18, "year": 2021}, "type": "Document"}
{"page_content": "20 \n (c) Quality assurance testing on computing and networking infrastructure \nhardening to ensure compliance with internal hardening policies; and  \n(d) Infrastructure vulnerability assessments to identify vulnerabilities in \ncomputing and networking infrastructure.  \n(iii) Pre-implementation tests shall be conducted by a team independent of the team \nresponsible for the development and/or implementation of the information \nsystem. Licensed banks shall ensure that qualifying information systems \noperated by agent s or third -party service providers are subjected to pre -\nimplementation tests by a suitable internal team of the agent/third -party service \nor by an external service provider acceptable to the licensed bank.  \n(iv) Licensed banks may adopt suitable alternative secu rity evaluation \nmethodologies when procuring off -the-shelf software if conducting pre -\nimplementation tests as per 5.8.1(ii) is not possible.  \n(v) Licensed banks may rely on an assurance provided by an independent third -\nparty , mutually acceptable to both the lic ensed bank and the information system \nprovider , as an alternative to 5.8.1(ii)(a)  in case of information systems provided \nby external vendors.  \n(vi) Licensed banks shall implement industry standard controls to ensure malicious \ncode will not be injected when sour ce code is moved to production environment \nafter completion of relevant pre -implementation tests.  \n5.8.2 Vulnerability assessments  \n(i) Critical information systems  and information systems exposed to customer data  \nshall be subject to vulnerability assessments at least quarterly.  \n(ii) Vulnerability assessments  shall focus on both infrastructure vulnerabilities and \napplication vulnerabilities.  \n(iii) Vulnerability assessments  shall be performed on production environments.  \n(iv) Vulner ability assessments can be performed by the licensed bank\u2019s internal \ninformation security staff or external experts.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 19, "year": 2021}, "type": "Document"}
{"page_content": "information security staff or external experts.  \n(v) Vulnerabilities identified shall be remediated within a time period approved by \nthe ISC. \n5.8.3 Penetration tests by independent external experts  \n(i) Objective  \n Licensed banks sh all conduct penetration tests by independent external experts  \nto determine: the ability of tested information systems to withstand real -world", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 19, "year": 2021}, "type": "Document"}
{"page_content": "21 \n style attacks; the required level of sophistication and persistence an attacker \nshould possess to successfully compromise the tested information systems; \nability of the bank\u2019s information security, operational , and leadership teams to \ndetect and appropriately respond to such attacks; and any enhancements \nrequired to mitigate such threats in future.  \n(ii) Scope and frequency  \n(a) Critical information systems , information systems exposed to customer \ndata,  and repositories of customer data with the licensed bank, agents, \nand third -party service providers  shall be subjected to penetration te sts \nby independent external penetration testing expe rts.  \n(b) Critical information systems shall be subjected to penetration tests at \nleast annually while all other qualifying information systems and \nrepositories of customer data as per 5.8.3(ii) (a) shall be s ubjected to \npenetration tests at least once in every two years.  \n(c) The Board of Directors of a licensed bank may require the qualifying \nagents and third -party service providers of the licensed bank to conduct \npenetration tests for applicable information syste ms and customer data \nwith them in accordance with these requirements and report to the bank, \ninstead of being included in the scope of the penetration tests \ncommissioned by the bank. The Board of Directors shall make such a \nrequest only after determining t hat the relevant agent or third -party \nservice provider is capable of conducting a penetration test in \naccordance with the requirements stipulated in this framework and after \nensuring adequate oversight is available to ensure objective of \npenetration testin g is achieved.   \n(d) Penetration tests shall be controlled exercises to simulate real -world \nattacks on real systems and data  using tools and techniques similar to \nthose used by actual attackers , to identify  vulnerabilities that can be \nsuccessfully exploited, e ither individually or together with other", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 20, "year": 2021}, "type": "Document"}
{"page_content": "successfully exploited, e ither individually or together with other \nvulnerabilities , within the same information system or across multiple \ninformation systems, to compromise the security of tested information \nsystem.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 20, "year": 2021}, "type": "Document"}
{"page_content": "22 \n (e) Penetration tests shall be conducted on live/production systems under \nnormal business conditions, subject to 5.8.3(ii)(f ) and 5.8.3(viii)(c).  \n(f) Licensed banks subject to the timelines stipulated under transitional \narrangements in Section 10, may initially conduct penetration tests on \nnon-production systems that resemble production systems to the best \npossible extent instead of production systems in order to gain sufficient \nmaturity to conduct penetration tests on production systems. All other \nrequirements on penetration testing shall be fulfilled even when \npenetration tests are conducted on such non -production systems, except  \nwhen deviations are allowed or necessary .  \n(g) Penetration testing shall be conducted without changing any of the \ninformation security measures that are normally in place, in order to \ndetermine the true level of sophistication and persistence required by an \nattacker to penetrate tested information systems or data. However, \nlicensed banks may conduct such exercises with reduced information \nsecurity as separate or supplementary exercises at the discretion of the \nBoard of Directors.  \n(h) Penetration testing shall cove r both external and internal threats and \nvulnerabilities.  \n(i) Penetration test s shall attempt to exploit  vulnerabilities in the \ntechnology layer including software/application vulnerabilities as well \nas vulnerabilities in processing, networking, and storage in frastructure \nof information systems.  \n(j) Both black box penetration testing and gr ay box penetration testing \nusing bank provided login credentials for different user categories \nincluding customers, managerial and operational level business users, \nand third -party users shall be conducted . However, gray box penetration \ntesting using privileged user credentials are not necessary.  \n(k) Penetration tests need not attempt to exploit vulnerabilities that may \nexist in human or physical layers of security.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 21, "year": 2021}, "type": "Document"}
{"page_content": "exist in human or physical layers of security.  \n(l) Scope of each pe netration testing exercise shall be defined and \ndocumented in  a Penetration Test Scope Specification (PTSS).", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 21, "year": 2021}, "type": "Document"}
{"page_content": "23 \n (iii) Leadership team, p roject manage r, and designated point of contact  \n(a) The Board of Directors of the licensed bank shall appoint a leadership \nteam for the effective conduct of each annual penetration testing \nexercise.  \n(b) The leadership team shall have full authority and responsibility  for the \noverall conduct of the penetration testing exercise . \n(c) The leadership team shall ensure that the penetration testing is \nconducted in a manner that will best achieve the objective in 5.8.3(i) , \nwhile ensuring risks are appropriately managed.  \n(d) The leadership team shall possess sufficient business, operational, \ntechnical , and risk management  related knowledge and experience.  \n(e) The leadership team shall mainly comprise of management team \nmembers, preferably drawn from the members and observers of ISC, \nwith adequate authority to make  critical decisions during the test. The \nhighest decision makers in the licensed bank\u2019s incident escalation chain, \nwho are responsible for informing actual security breaches to  external \nparties including law enforcement  authorities and regulators, shall al so \nbe members of the leadership team.  \n(f) The leadership team shall be chaired by the licensed bank\u2019s CEO or a \nmanagement  team  member who is directly reporting to the CEO, \npreferably C hief Operating Officer (COO)/Head of Operations , \nCIO/Head of Information Te chnology , or CISO.  \n(g) The leadership team shall designate one of its members as  the project \nmanager, for the day-to-day project management of the penetration \ntesting exercise.  \n(h) There shall be designated deputies for both chairperson and project \nmanager due t o the critical nature of both the roles.  \n(i) A senior member of the penetration testing service provider with full \ndecision making authority shall be appointed as the designated point of \ncontact for the leadership team. Leadership team may invite such \ndesignat ed point of contact to attend its meetings.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 22, "year": 2021}, "type": "Document"}
{"page_content": "24 \n (iv) Risk management  \n(a) The leadership team shall establish a risk management plan, for each \nannual penetration testing exercise, incorporating appropriate controls, \nprocesses, and procedures to ensure associated ris ks are identified, \nassessed , and treated in accordance with the licensed bank\u2019s risk \nappetite.  \n(b) The risk management plan shall include a comprehensive risk \nassessment and a risk treatment plan detailing risk mitigation strategies \nfor various risk scenarios including but not limited to denial -of-service \nincidents, unexpected system crashes, damage to critical live production \nsystems, and the loss, modification or disclosure of data.  \n(c) The leadership team shall also implement processes to continuously \nmonitor in cident escalation procedures to decide  the triggering of \nactions that would be mandatory in the case of a real incident  but may \nnot be  necessary when the incident  is due to penetration testing \nexercises.  \n(d) The leadership team may order a temporary or comple te cessation of the \npenetration testing exercise, when there is any incident that in the \nopinion of the leadership team requires such cessation.  \n(e) Licensed banks  shall ensure that the number of persons with prior \nknowledge on penetration testing exercise is  kept to a minimum, in order \nto gain the maximum possible learning experience. Accordingly, the \nleadership team shall decide who, among the licensed bank\u2019s employees \nand relevant external parties, will know about  the penetration testing \nexercise until its completion.   \n(f) Licensed banks shall employ a scheme of code names to identify \ninformation systems and data being tested throughout the penetration \ntesting exercise.  \n(g) Licensed banks shall ensure that only penetration testing service \nproviders possessing sufficient compete ncies, qualifications, and \nexperience to conduct penetration tests on banking information systems \nare engaged.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 23, "year": 2021}, "type": "Document"}
{"page_content": "25 \n (h) Penetration testing service provider shall be required to maintain \ncomprehensive logs of the entire penetration testing exercise  to enable \nrecreation of any step executed during the penetration test ing.  \n(i) Licensed banks shall ensure the availability of non -disclosure agreement \nwith the penetration testing service provider.  Licensed banks shall  \nrequire the  penetration testing service p rovider  to ensure that all \nperson nel deployed by the  penetration testing service provider for the \npenetration testing exercise abide by such  non-disclosure agreement.  \n(v) Selection of penetration testing service provider  \n(a) Licensed banks shall employ a transpar ent procurement process with \nadequate due -diligence measures to select the penetration testing service \nprovider.  Such process shall include :  \ni. Obtaining multiple recent references from previous customers of the \nservice provider who are acceptable to the lic ensed bank ; and  \nii. Conducting enhanced background checks for all team members \nassigned by the service provider to the penetration testing exercise \nor requiring the service provider to use a mutually acceptable party \nto conduct such enhanced background checks  and submit to the \nlicensed bank.  \n(b) The penetration testing service providers  selected to conduct tests on \nproduction systems  shall have their processes and procedures externally \nassured and preferably be accredited or certified to provide penetration \ntestin g service s by a recognized body acceptable to the licensed bank.  \n(c) The selection of the external penetration testing service provider shall \nbe approved by the Board of Directors.  \n(d) Licensed banks shall change the penetration testing service provider to \na diffe rent service provider on a frequency decided by the B oard of \nDirectors .  \n(vi) Threat intelligence and designing of threat scenarios  \n(a) Penetration tests shall be threat intelligence -based  exercises.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 24, "year": 2021}, "type": "Document"}
{"page_content": "(a) Penetration tests shall be threat intelligence -based  exercises.  \n(b) The licensed bank and the penetration testing service provider shall \nmutually agree on the  sources of threat intelligence and threat \nintelligence provider(s).", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 24, "year": 2021}, "type": "Document"}
{"page_content": "26 \n (c) Penetration tests shall be based on pre-designed and realistic threat \nscenarios against the licensed bank . Threat scenarios shall include  \nprobable real -life attacks conceptualised from an attacker\u2019s point of \nview .  \n(d) Threat scenarios  of D -SIBs shall normally be designed based on both \ntargeted (bank specific) threat intelligence and generic threat \nintelligence applicable to banking industry. T he Board of Directors of a \nD-SIB may allow the designing of threat scenarios based only on generic \nthreat intelligence applicable to banking industry if obtaining targeted \nthreat intelligence on the bank is not feasible.   \n(e) Threat scenarios  of no n D-SIBs can  be designed based only on generic \nthreat intelligence applicable to banking industry , instead of targeted \nthreat intelligence  at the discretion of the Board of Directors . \n(f) There shall be clearly defined targets to be achieved by the penetration \ntesting ser vice provider , to demonstrate a successful compromise,  for \neach threat scenario.  \n(vii) Penetration Test Scope Specification (PTSS)  \n(a) Every annual penetration testing exercise shall be conducted based on a \nPTSS.  \n(b) PTSS shall clearly identify the information systems a nd data subjected \nto test, threat scenarios to be used, targets to be achieved , and time \nperiod of the test.  \n(c) Penetration testing service provider shall develop the PTSS based on \ninput from the licensed bank and threat intelligence obtained , and submit \nit to the approval of the licensed bank.  \n(d) Licensed bank shall have final authority over the PTSS.  \n(e) Approving authority for PTSS shall be the Board of Directors of the \nlicensed bank.  \n(f) Licensed banks shall ensure that p enetration testing service provider is \ncontra ctually bound to conduct the penetration testing exercise within \nthe limits specified in PTSS.  \n(viii) Approval for penetration tests  \n(a) Commencement of annual penetration tests and finalised PTSS shall be", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 25, "year": 2021}, "type": "Document"}
{"page_content": "(a) Commencement of annual penetration tests and finalised PTSS shall be \napproved by the Board of Directors of the licensed bank, upon", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 25, "year": 2021}, "type": "Document"}
{"page_content": "27 \n determining that the information systems to be tested should be able to \nreasonably withstand the vigor of proposed  tests.  \n(b) The Board of Directors of a licensed bank may exclude any information \nsystem from being tested in  a given annual penetration testing cycle, if \nthe Board of Directors determines that such information system is not \nadequately secured to withstand a penetration test as required by this \nframework. The Board of Directors shall immediately initiate \nremediat ion measures as per 5.8.3(xi) for all such information systems.  \n(c) The Board of Directors may direct the leadership team to conduct a \nmock penetration test on a non -live environment for any of the \ninformation systems selected for penetration testing, prior to the conduct \nof penetration test on the live environment. If such mock penetration test \nsuccessfully compromises an information system, the Board of \nDirectors may remove such information system from being tested in the \nlive environment and directly  initiate remediation measures as per 5.8.3 \n(xi). \n(ix) Execution  of penetration tests  \n(a) Execution of penetration tests on live systems and data shall commence \nonly after PTSS is approved and communicated in writing to the \npenetration testing service provider by the chairperson of the leadership \nteam.  \n(b) Sufficient time, as mutually agreed between the licensed bank and the \npenetration testing service provider, shall be allocated to the execution \nof penetration tests on live systems to allow a realistic and \ncomprehens ive test in which all scenarios are executed and all targets \nare attempted to be achieved. Penetration testing service provider shall \nensure that the penetration tests are executed only during such mutually \nagreed time period.  \n(c) Licensed banks shall ensure t hat penetration testing service provider is \ncontractually bound to fulfill their obligations as per 5.8.3(ix)(a) and (b).  \n(x) Reports of annual penetration testing exercise", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 26, "year": 2021}, "type": "Document"}
{"page_content": "(x) Reports of annual penetration testing exercise  \n(a) Licensed banks shall require the penetration testing service provider to \nsubmit a detai led report on the entire penetration testing exercise \nincluding how requirements of PTSS were achieved. Such report shall", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 26, "year": 2021}, "type": "Document"}
{"page_content": "28 \n also mention whether a compromise was made, what systems and data \nwere compromised, and how the compromise was achieved, on each \ninfor mation system and threat scenario included in the PTSS.  \n(b) Leadership team upon the completion of testing period shall require the \nlicensed bank\u2019s information security and incident response teams to \nprovide reports on their observations on the incidents detec ted and \nresponsive measures carried out during the testing period.   \n(c) Leadership team shall prepare a final report on the penetration testing \nexercise based on the above reports and submit to the Board of Directors \nthrough ISC and BIRMC. Such report shall s ummarise the scope and \noutcome of the penetration testing exercise, leadership team\u2019s \nassessment on bank\u2019s information security and incident response \npreparedness, and proposed remediation measures in consultation with \nCIO/Head of I nformation Technology  and CISO.  \n(xi) Remediation  \n(a) Information systems  and repositories of data  that were compromised \nduring penetration tests or excluded from the penetration testing scope \nshall be remediated immediately.  \n(b) The Board of Directors of the licensed bank shall actively consider \nreplacing or shutting down any information system or repository of data \nthat was excluded from penetration testing or compromised due to any \nform of external penetration testing, if it cannot be adequat ely \nremediated to withstand the penetration tests during next penetration \ntesting exercise. Enhanced and sufficient monitoring and control \nmeasures approved by the Board of Director s shall be implemented \nimmediately, until such a system is improved, replac ed, or shut down.  \n(c) The Board of Directors shall either implement measures as per \n5.8.3(xi)(b) or  immediately implement additional control measures to \neliminate the risks identified, when the compromise was due to internal \npenetration testing.  \n(xii) Internal audit", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 27, "year": 2021}, "type": "Document"}
{"page_content": "penetration testing.  \n(xii) Internal audit  \nAnnual penetration testing process shall be reviewed by the BAC as soon as it \nis completed.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 27, "year": 2021}, "type": "Document"}
{"page_content": "29 \n (xiii) Reporting to Director of Bank Supervision  \n(a) Licensed banks shall submit an executive summary on the penetration \ntesting exercise, approved by the Boar d of Directors of the licensed \nbank , to the Director of Bank Supervision within 60 days from receiving \nthe penetration testing report  from penetration testing service provider . \n(b) Such executive summary  shall indicate number of  systems subjected to \ntests, number of  systems excluded, number of systems compromised, \nwhether adequate remediation measures have already been implemented \nor timeline for the implementation of remediation measures, internal \naudit assurance  on the compliance of penetration testing exerci se with  \nthe requirements in this r egulatory framework,  and a brief profile of the \npenetration testing service provider.  \n5.8.4 Red team exercises by independent external experts  \n(i) Scope and frequency  \n(a) Licensed banks shall conduct red team exercises that simulate real world \nadversary scenarios to gain a holistic understanding of the bank\u2019s \ninformation security capabilities.  \n(b) All critical information systems and information systems identified by \nthe licensed bank\u2019s Board of Directors as per 5.8.4(i)(c) shall  be covered \nunder  red team exercises.  \n(c) The Board of Directors of the licensed bank shall evaluate all non-\ncritical information systems and data repositories to identify any non -\ncritical information systems and repositories of data that could cause \nsubstanti al adverse impact  to the licensed bank due to an information \nsecurity breach and include those within the scope of red team exercises.  \n(d) Red team exercises shall be maximum -effort attempts to compromise \ninformation systems and data by breaching all layers of  information \nsecurity including human, physical, and technology layers.  \n(e) Licensed banks shall conduct red team exercises as an extension of \npenetration tests as per 5.8.3 to human and physical layers of", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 28, "year": 2021}, "type": "Document"}
{"page_content": "penetration tests as per 5.8.3 to human and physical layers of \ninformation security.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 28, "year": 2021}, "type": "Document"}
{"page_content": "30 \n (f) Red team exercises shall be conducted together with penetration testing \nexercises as per 5.8.3 during the cycles the licensed banks will be \nrequired to conduct red team exercises.  \n(g) D-SIBs shall conduct red team exercises at least once in every 2 years \nand licensed banks that are not D -SIBs shall conduct red team exercises \nat least once in every 3 years.  \n(ii) Red Teaming Scope Statement (RTSS)  \n(a) Red teaming exercises shall be conducted based on a RTSS.  \n(b) RTSS shall clearly identify the information systems and data subjected \nto test, staff membe rs of the bank and relevant third -party service \nproviders and agents that will be assessed under red teaming, \nbusiness/operational units and locations that will be assessed under red \nteaming, techniques and methodologies allowed to be used for red \nteaming assessments,  threat scenarios to be used, targets to be achieved, \nand time period of the test.  \n(c) RTSS shall clearly define the limits applicable to red teaming service \nprovider when attempting to breach human and physical layers of \nsecurity. Service provide r shall be allowed to conduct only the tasks \nexplicitly permitted in RTSS.  \n(d) Approving authority for RTSS shall be the Board of Directors of the \nlicensed bank.  \n(e) Licensed banks shall ensure that every red teaming service provider is \ncontractually bound to cond uct the penetration testing exercise within \nthe limits specified in RTSS.  \n(iii) Approval  and procedure for the conduct of red team exercises  \n(a) The scope  including RTSS , service provider (s), commencement,  and \ntime period  for the conduct of red team exercises shall be approved by \nthe Board of Directors of the licensed bank.  \n(b) The Board of Directors shall ensure that the licensed bank has achieved  \na sufficient level of information security maturity with respect to all 3 \nlayer s of security to be tested through red team exercises, prior to the", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 29, "year": 2021}, "type": "Document"}
{"page_content": "layer s of security to be tested through red team exercises, prior to the \ncommencement of red team exercises.  If the Board of Directors \ndetermine the level of information security maturity is inadequate, the", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 29, "year": 2021}, "type": "Document"}
{"page_content": "31 \n Board shall initiate appropriate remediation measures and defer red team \nexercises by a maximum period of 12 months.  \n(c) Licensed banks shall adopt a board approved procedure to conduct red \nteam exercises that is based on the procedural requirements specified in \n5.8.3 with suitable deviations/changes approved by the Board of \nDirectors of the licensed bank.  \n(iv) Remediation  \nThe Board of Directors of the licensed bank shall implement an action plan to \naddress the weakness identified during red team exercises with regard to human \nand physical layers of information security in consultation with suitable experts  \nin addition to re mediation measures as per 5.8.3(xi)  with regard to weaknesses \nin the technology layer .  \n \n6. Information system availability and disaster recovery  \n \n6.1 Scope  \nRequirements specified in 6.2 to 6. 6 shall be  applicable to critical information systems.  \n \n6.2 High availability  \n6.2.1 Licensed banks shall ensure that critical information systems achieve a high level of \nsystem availability.  \n6.2.2 The Board of Directors  on the recommendation of BIRMC  shall establish the system \navailability targets for each critical information sys tem. \n6.2.3 BIRMC  shall ensure that achievement of system availability targets of critical \ninformation systems are monitored and reported to the Board  of Directors . \n \n6.3 Disaster recovery arrangements  \n6.3.1 Licensed banks shall ensure Disaster Recovery (DR) arrangements for critical \ninformation systems comply with Recovery Time Objectives (RTO) and Recovery \nPoint Objectives (RPO) determined by the Board of Directors on the recommendation \nof BIRMC confirming to following minimum requirements:  \n(i) RTO of less than 4 hours for critical information systems of licensed banks that \nare D -SIBs and RTO of less than 6 hours for critical information systems of \nlicensed banks that are not D -SIBs; and  \n(ii) RPO  of zero (i.e. , no data loss during a disaster) or near zero .", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 30, "year": 2021}, "type": "Document"}
{"page_content": "32 \n 6.3.2 Licensed banks shall ensure that RTO and RPO targets determined under 6.3.1 for any \ninformation system are in compliance  with any stringent RTO or RPO targets imposed \non such information systems by any other law or regulation.  \n \n6.4 Disaster recovery activat ion \n6.4.1 The Board of Directors of licensed banks shall establish disaster recovery activation \ntriggers for each critical information system based on recommendations of the BIRMC \nand ISC.  \n6.4.2 Such activation triggers shall ensure that the licensed ba nk is having adequ ate time to \nactivate the DR arrangement in compliance with the RTO target specified in 6.3.   \n \n6.5 Disaster recovery testing  \n6.5.1 Disaster recovery arrangements shall be tested by operating all critical information \nsystems using DR infrastructure for a continuous period of 7 days or more at least once \na year.  \n6.5.2 An annual cycle of DR simulations , in addition to testing of DR infrastruct ure as per \n6.5.1, shall also be implemented to enable the Board of Directors to determine the \nability of the licensed bank to achieve the required RTO and RPO targets under different  \ndisaster  scenarios and take necessary corrective measures where required . \n \n6.6 Backup and recovery policies  \nLicensed banks shall ensure backup and recovery policies and procedures applicable to \ncritical information systems are properly documented  and approved by the Board of \nDirectors. Such policies shall be in line  with industry b est practices applicable to critical \ninformation systems  and shall provide for off -line and off -site backups or suitable \nalternative mechanisms that will achieve the objectives of maintaining such backups . \n \n7. Staff Competency Requirements  \nLicensed banks shal l ensure at least a minimum number of staff with eligible \nqualifications are employed in information security, technology risk management, and \ninternal audit functions as required by 7.1 to 7.5.  \n \n7.1 Recognized qualifications", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 31, "year": 2021}, "type": "Document"}
{"page_content": "internal audit functions as required by 7.1 to 7.5.  \n \n7.1 Recognized qualifications  \nAcademic and professional qualifications as per tables 1 and 2 below from institutes \nspecified in 7.1.1 and 7.1.2 are recognized as eligible qualifications.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 31, "year": 2021}, "type": "Document"}
{"page_content": "33 \n 7.1.1 Academic qualifications  \nMasters and Bachelors level degree programs awarded by a university or degr ee \nawarding institute recognised by the University Grants Commission of Sri Lanka, or \nMasters and Bachelors level degree programs accredited by an accreditation body \nsupported by the Institute of Electrical and Electronics Engineers (IEEE).  \n7.1.2 Recogni sed enti ties for professional qualifications  \nProfessional qualifications from following professional bodies:  \n(i) ISACA;  \n(ii) (ISC)2; and  \n(iii) Global Information Assurance Certification (GIAC).  \n7.1.3 In the event of discontinuation of any of the recogni sed professional qualifications,  any \nsucceeding or alternative professional qualification by the same or succeeding \nprofessional body shall be considered as an eligible qualificatio n. \n7.1.4 Licensed banks incorporated outside Sri Lanka and having information security \noperations handled outside  Sri Lanka may designate similar international qualifications \nas determined by the Head of Human Resources of the head office as alternative \nqualifications for staff located outside Sri Lanka.  \n \n7.2 Competency requirements for CISO  \nCISO of a licensed bank that is required to set up a SOC shall possess at least one \nqualification from eligible qualifications listed in 7.4. \n \n7.3 Minimum number of qualified staff  \nLicensed banks shall employ staff members possessing at least one eligible \nqualification for both analyst/executive and managerial levels of information security \noperations, risk management, and internal audit functions. Minimum number of staff \nrequired fo r each function and eligible qualifications shall be as per 7.4. In case of \noutsourced services, third party service provider\u2019s staff members allocated to the bank \nwith eligible qualifications shall count towards this requirement.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 32, "year": 2021}, "type": "Document"}
{"page_content": "34 \n 7.4 Eligible qualifications and minimum number of qualified staff  \n7.4.1 CISO and managerial level  \nTable 1: Eligible qualifications and minimum number of qualified staff for CISO \nand managerial level  \nNo. Qualification/  \nBank Category  CISO  Information \nSecurity \nOperations  \n(including \nSOC)  Risk \nManagement  Internal \nAudit  \n1. Eligible qualifications:  \n1.1 (ISC)2 Certified \nInformation Systems \nSecurity Professional \n(CISSP)  X X X X \n1.2 GIAC Strategic \nPlanning, Policy, and \nLeadership (GSTRT)  X    \n1.3 GIAC Informati on \nSecurity Professional \n(GISP)  X X X X \n1.4 ISACA Certified \nInformation Systems \nAuditor (CISA)  X   X \n1.5 ISACA Certified \nInformation Security \nManager (CISM)  X  X  \n1.6 ISACA Certified in \nRisk and Information \nSystems Control \n(CRISC)  X  X  \n1.7 Masters Degree in \nInformation Security \nor Masters Degree in \nComputer \nScience/Information \nTechnology \nspecialising in \nInformation Security  X X X X \n2. Minimum number of staff with an eligible qualification:  \n2.1 D-SIBs 1 2 1 2 \n2.2 Non D -SIBs required \nto setup a SOC  1 1 - 1 \n2.3 Non D -SIBs not \nrequired to setup a \nSOC  -* - - - \n* No mandatory qualification requirement for CISOs of banks not required to \nsetup a SOC.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 33, "year": 2021}, "type": "Document"}
{"page_content": "35 \n 7.4.2 Analyst/executive level  \nTable 2: Eligible qualifications and minimum number of qualified staff for \nanalyst/executive level  \nNo. Qualification/  \nBank Category  Information \nSecurity \nOperations  \n(including \nSOC)  Risk \nManagement  Internal \nAudit  \n1. Eligible qualifications:  \n1.1 (ISC)2 Systems Security \nCertified Practitioner (SSCP)  X X X \n1.2 ISACA CSX Practitioner \nCertificate (CSXP)  X X X \n1.3 GIAC Security Essentials \n(GSEC)  X X X \n1.4 Bachelors Degree in \nInformation Security or \nBachelors  Degree in Computer \nScience/Information \nTechnology specialising in \nInformation Security  X X X \n1.5 Relevant managerial level \nqualification  X X X \n2. Minimum number of staff with an eligible qualification:  \n2.1 D-SIBs  5 1 3 \n2.2 Non D -SIBs required to setup \na SOC  2 1 2 \n2.3 Non D -SIBs not required to \nsetup a SOC  1 - 1 \n \n7.5 Continuous Professional Development (CPD) requirement  \n7.5.1 Staff possessing eligible professional qualifications  \nStaff members possessing an eligible professional qualification must complete CPD \nrequirements of the professional qualification or 20 CPD hours annually, whichever is \nhigher. Staff members possessing eligible academic qualifications shall complete at \nleast 20 CPD hours by completing CPD qualifying programs offered by relevant \neligible professional qualifications listed above.  \n7.5.2 Other staff  \nAll other staff employed in information security operations, technology/information \nsecurity risk management, and infor mation security audit shall complete at least 20 \nCPD hours annually by completing CPD programs approved by the BIRMC on the \nrecommendation of ISC.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 34, "year": 2021}, "type": "Document"}
{"page_content": "36 \n 7.5.3 Staff members possessing eligible qualifications but failing to fulfill CPD requirements \nshall not be consi dered when determining the number of staff with eligible \nqualifications.  \n \n8. Compliance with International Standards  \n8.1 The licensed bank shall implement following standards by International Organization \nfor Standardization (ISO) and obtain certification or assu rance as outlined below:  \nTable 3: Mandatory ISO standards  \nNo. Standard  Scope  Certification/Assurance  \n \n8.1.1 Latest edition \nof ISO/IEC \n27001,  \nInformation \nsecurity \nmanagement \nsystems  ISO/IEC 27001 scope shall \ninclude business/operational \nunits, locations, and \ntechnology infrastructure \nassociated with critical \ninformation systems and \ninformation systems exposed \nto customer  data and \nconfidential non -customer \ndata.  \n \nAll applicable requirements \nimposed by this regulatory \nframework  and other CBSL \nRegulations  shall be followed \nduring the implementation of \nthe standard.  \n D-SIBs:  \nCertification from an \naccredited certification \nbody.   \n \nNon D -SIBs: \nCertification from an \naccredited certification \nbody; or assurance from \nan external auditor \napproved by the CBSL, if \nthe Board of Directors \nresolve that the licensed \nbank\u2019s information \nsecurity risk is minimal \nand does not require \naccredited certification . \n \nAssurances shall be \nrevie wed at least once \nevery two years.  \n8.1.2 Latest edition \nof ISO/IEC \n27035, \nInformation ISO/IEC 27035 scope shall \ninclude business/operational \nunits, locations, and \ntechnology infrastructure Assurance from the \ninternal audit function of \nthe licensed bank through \nBAC  or external", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 35, "year": 2021}, "type": "Document"}
{"page_content": "37 \n No. Standard  Scope  Certification/Assurance  \n \nsecurity \nincident \nmanagement  \n associated with critical \ninformation systems and \ninformation systems exposed \nto customer  data and \nconfidential non -customer \ndata.  \n \nAll applicable require ments \nimposed by this regulatory \nframework and other CBSL \nregulations shall be followed \nduring the implementation of \nthe standard.  certification/assurance \nfrom a suitable party \napproved by the Board of \nDirectors of the licensed \nbank.  \n \nAssurances shall be \nreviewed at least once \nevery two years.  \n8.1.3 Latest edition \nof ISO/IEC \n22301,  \nBusiness \ncontinuity \nmanagement \nsystems  \n  ISO/IEC 22301 scope shall \ninclude business/operational \nunits, processes, and \ninfrastructure required for the \navailability of critical \ninformation systems.  \n \nAll applicable requirements \nimposed by this regulatory \nframework  and other CBSL \nregulations  shall be  followed \nduring the implementation of \nthe standard.  Assurance from the \ninternal audit function of \nthe licensed bank through \nBAC  or external \ncertification/assurance \nfrom a suitable party \napproved by the Board of \nDirectors of the licensed \nbank . \n \nAssurances shall be \nreviewed at least once \nevery two years.  \n8.1.4 Latest edition \nof ISO/IEC \n20000,  Service \nmanagement  \n  ISO/IEC 20000 scope shall \ninclude information \ntechnology and information \nsecurity related service \ndelivery functions associated \nwith critical information Assurance from the \ninternal audit function of \nthe licensed bank through \nBAC  or external \ncertification/assurance  \nfrom a suitable party", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 36, "year": 2021}, "type": "Document"}
{"page_content": "38 \n No. Standard  Scope  Certification/Assurance  \n \nsystems and information \nsystems exposed to customer \ndata and confidential non -\ncustomer data.  \n \nAll appl icable requirements \nimposed by this regulatory \nframework  and other CBSL \nregulations  shall be followed \nduring the implementation of \nthe standard.  approved by the Board of \nDirectors of the licensed \nbank . \n \nAssurances shall be \nreviewed at least once \nevery two years.  \n \n8.2 In the event of discontinuation of any of the above standards by  the International \nOrganization for Standardization , the Board of Directors of the licensed bank shall  \nimplement relevant succeeding standard  or identify and implement an alternative \nstandard if there is no succeeding standard . \n \n9. Requirements based on informati on system infrastructure ownership, \nmanagement, and location  \n \n9.1 Determination of information system infrastructure  ownership, management, and \nlocation  \n9.1.1 Determinants  \nThe ownership and/or management of information system infrastructure shall be \ndetermined by th e party having ownership and/or responsibility for management of \nprocessing, storage, networking , and other fundamental computing resources of an \ninformation system. Location will be determined by the place in which all the above \ncomponents are located.  \n9.1.2 Criterion to determine ownership  \nInformation system infrastructure shall be considered as \u2018bank ow ned\u2019 only if the \nlicensed bank  holds ownership of all the components referred in 9.1.1  pertaining to an \ninformation system. All other ownership arrangements shall be considered as \u2018third -\nparty service provider owned\u2019.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 37, "year": 2021}, "type": "Document"}
{"page_content": "39 \n 9.1.3 Criterion to determine management  \nInformation system infrastructure shall be considered as \u2018bank managed\u2019 only if the \nlicensed bank\u2019s employees are managing all the components referred in 9.1.1  pertaining \nto an information system. All other management arrangements shall be considered as \n\u2018third -party service provider  managed\u2019.  \n9.1.4 Criterion to determine location  \nInformation system infrastructure shall be considered as \u2018located in Sri Lanka\u2019 only if \nall the components referred in 9.1.1  pertaining to an information system are in Sri \nLanka. All other a rrangements shall be considered as \u2018 located outside Sri Lanka \u2019. \n9.1.5 Accordingly, following  models will be considered within this regulatory framework  \nand requirements in 9.2 to 9.9 shall  be applicable based on the model used:  \n(i) Bank owned and managed, located in Sri Lanka;  \n(ii) Bank owned and managed, located outside Sri Lanka;  \n(iii) Bank owned, third -party service provider  managed, and located in Sri Lanka;  \n(iv) Bank owned, third -party service provider  managed, and located outside Sri \nLanka;  \n(v) Third-party service provider  owned and located in Sri Lanka; and  \n(vi) Third-party service provider  owned and located outside Sri Lanka.  \n \n9.2 Bank owned and managed, located in Sri Lanka  \nNo additional requirements are  applicable to this model.  \n \n9.3 Bank owned and managed, located outside Sri Lanka  \n9.3.1 Use of this model is  normally  allowed for licensed banks incorporated outside Sri Lanka \nwhen utilising information system infrastructure owned and managed by the head \noffice.  \n9.3.2 Locally incorporated licensed banks shall not utilise this model , except to facilitate \noperations of any branc h or business unit located outside Sri Lanka where use of \ninformation system infrastructure located outside Sri Lanka is essential . \n9.3.3 Licensed banks incorporated outside Sri Lanka utilising this model shall ensure the", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 38, "year": 2021}, "type": "Document"}
{"page_content": "9.3.3 Licensed banks incorporated outside Sri Lanka utilising this model shall ensure the \navailability of multiple , fully independ ent telecommunications links, individually \ncapable of serving full workload, with both primary and DR sites from Sri Lanka and \nbetween the primary and DR sites.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 38, "year": 2021}, "type": "Document"}
{"page_content": "40 \n 9.3.4 Licensed banks incorporated outside Sri Lanka that are D -SIBs shall ensure that a fully \ntested DR arrangement complying with the requirements specified in Section  6 of this \nregulatory framework is available in Sri Lanka, when this model is utilized for critical \ninformation systems.  \n \n9.4 Bank owned, third -party service provider  managed, and  located in Sri Lanka  \nLicensed banks may utilise this model subject to compliance with  requirements \nspecified in 9.8 and 9.9. \n \n9.5 Bank owned, third -party service provider  managed, and located outside Sri Lanka  \n9.5.1 Licensed banks incorporated outside Sri Lanka may  utilise this model subject to \ncompliance with requirements in 9.3, 9.8 and 9.9, if this is the model mandated  by the \nhead office of such licensed bank .  \n9.5.2 Locally incorporated licensed banks shall not utilise this model , except to facilitate \noperations of a ny branch or business unit located outside Sri Lanka where use of \ninformation system infrastructure located outside Sri Lanka is essential . \n \n9.6 Third-party service provider  owned and located in Sri Lanka  \n9.6.1 Licensed banks may utilise this model subject to compliance with requirements in  9.8 \nand 9.9. \n9.6.2 Licensed banks implementing this model for critical information systems shall also \ncomply with the following:  \n(i) Third -party service provider  owned information syste m infrastructure shall \npossess a certification for the latest edition of ISO 22301 - Business continuity \nmanagement systems, from an accredited certification body; and  \n(ii) Availability of a fully tested DR arrangement, complying with the requirements \nspecified  in Section 6 of this  regulatory framework, either with the licensed \nbank  or with a different third -party service provider. Such DR arrangement shall \nbe available prior to the commencement of live operations using this model.  \n(iii) Licensed banks may exclude any  non-essential component/service utilizing", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 39, "year": 2021}, "type": "Document"}
{"page_content": "(iii) Licensed banks may exclude any  non-essential component/service utilizing \nthird -party service provider owned infrastructure and used by a critical \ninformation system from DR requirements as per 9.6.2(ii), if non -availability of \nsuch component/service either on standalone basis or togeth er with other such \ncomponents/services will not adversely impact the functioning of the country's \nfinancial system or the functioning of the licensed bank.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 39, "year": 2021}, "type": "Document"}
{"page_content": "41 \n  \n9.7 Third-party service provider  owned and located outside Sri Lanka  \n9.7.1 Licensed banks may utilise this model subject to compliance with requirements \nspecified in 9.6. \n9.7.2 Licensed banks implementing this model for critical information systems shall also \ncomply with the following, in addition to requirements specified in 9.6.2 : \n(i) Licensed banks that are locally incorporated and licensed banks incorporated \noutside Sri Lanka that are designated as D-SIBs shall ensure DR arrangement \nas per Section 9.6.2(ii) is located in Sri Lanka;  and \n(ii) Availability of multiple fully independent telecommunications links, \nindividually capable of serving full workload, with both primary and DR sites \nfrom Sri Lanka and between the primary and DR sites.  \n \n9.8 Requirements for using information system infrastructure managed or owned by \nthird -party service provider s for any information system  \n9.8.1 Approval of the Board of Directors of the licensed bank based on a recommendation \nfrom the BIRMC of the bank.  \n9.8.2 Information system infrastructure managed or owned by third -party service providers \nlocated outsid e Sri Lanka shall only be in locations approved by the licensed bank\u2019s \nBoard of Directors, having satisfied themselves over the adequacy and effectiveness of \nlegal and regulatory environment in such locations to protect the interests of the \nlicensed bank, its customers, the CBSL, and Sri Lankan judiciary . \n \n9.9 Requirements for using information system infrastructure managed or owned by \nthird -party service provider s for critical information systems and for information \nsystems exposed to customer data or confidential non -customer data  \n9.9.1 Information system infrastructure managed or owned by third -party  service providers  \nshall possess a certification for the latest edition of ISO 27001 - Information security \nmanagement systems, from an accredited certification  body.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 40, "year": 2021}, "type": "Document"}
{"page_content": "management systems, from an accredited certification  body.  \n9.9.2 In the event the third -party service obtained is cloud computing, the cloud computing \nservice provider shall possess a  certification for the latest edition of ISO 27017 \u2013 \nSecurity controls for cloud services, from an accredited certification body.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 40, "year": 2021}, "type": "Document"}
{"page_content": "42 \n 9.9.3 Customer consent  \n(i) Explicit customer consent shall be obtained, for exposing customer data to third -\nparty service providers, prior to entering into a new business relationship with \neither new or existing customer, when a licensed bank is utilising information \nsystem infrastructure managed or owned by third -party service providers for \ninformation systems exposed to customer data. If information system \ninfrastructure is located outside Sri Lanka, customer\u2019s consent shall also be \nobtained for  their data to be located outside of Sri Lanka.  \n(ii) If any information system exposed to customer data is already utilising \ninformation system infrastructure managed or owned by third -party service \nproviders , licensed bank shall inform of such arrangement to a ll customers \nwhose data are stored or processed in such information systems . Licensed banks \nshall seek the explicit consent of the customers whose data are stored or \nprocessed in an information system  utilizing information system infrastructure  \nowned and m anaged by the bank, whenever such an information system is \nmigrated to information system infrastructure managed or owned by third -party \nservice providers . \n(iii) Any customer who fails to respond when consent is requested as per 9.9.3(ii) \nshall be given at least  3 reminders, at monthly or longer intervals through the \npreferred communication method registered with the bank.  \n(iv) Licensed banks may migrate data of existing or past  customers who have failed \nto respond even after 3 reminders as per 9.9.3 (iii), to informat ion system \ninfrastructure  managed or owned  by third -party service providers . \n(v) Information about the third -party  service provider\u2019s  involvement together with \nassociated risks and benefits shall be communicated to customers in languages \npreferred by them when  requesting customer consent.  \n9.9.4 Licensed banks shall ensure the following through contractual agreements with the", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 41, "year": 2021}, "type": "Document"}
{"page_content": "9.9.4 Licensed banks shall ensure the following through contractual agreements with the \nthird -party service provider:  \n(i) The rights of the CBSL to examine the third -party service provider and its staff \nassociated with the services prov ided to the licensed bank, as if it is a licensed \nbank\u2019s internal function;  \n(ii) Third -party service provider to make available any information or data \nrequested by the Director of Bank Supervision concerning the services provided \nto the licensed bank;", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 41, "year": 2021}, "type": "Document"}
{"page_content": "43 \n  \n(iii) The rig hts of the Sri Lankan judiciary to request and obtain any information or \ndata relating to the services provided to the licensed bank either directly or \nthrough the licensed bank;  \n(iv) Third -party service provider to facilitate smooth transfer of data and system s at \nthe end of the contract or whenever demanded by the licensed bank;  \n(v) All customer data and confidential non -customer data available with the third -\nparty service provider are permanently deleted within a pre-agreed  time period \nat the end of the contract; and  \n(vi) Third -party service providers to facilitate internal auditing requirements and \ninformation security testing requirements including red team exercises as \nrequirements in this regulatory framework.  \n \n10. Implementation and transitional arrangements  \n10.1 Licensed banks shall ensure  all new initiatives comply with the requirements in Section \n9 from the date of issue of this regulatory framework.  \n10.2 Licensed banks shall ensure compliance with all other requirements i n this regulatory \nframework as per table 4 below.  \n10.3 Licensed banks that are D -SIBs shall ensure compliance with the requirements \nspecifically applicable to D -SIBs within 12 months from the date of notification of \nbeing designated as a D -SIB or as per 10.1 and 10.2, whichever falls later.  \n10.4 The Board  of Directors of licensed banks shall monitor the progress made by the \nlicensed bank  in achieving the timelines  for compliance on quarterly basis from the date \nof issue of this regulatory framework and take necessary  measures to ensure compliance \nwith the given timeline.  \nTable 4: Timelines for compliance  \n \nNo. Ref. Requirement  Date for \nCompliance  \n1. General deadline  \n(All requirements without extended deadlines)  31.12.2022  \n2. Extended deadlines  \n2.1 4.2.1  Appointment of a chief information security officer \n(CISO)  01.01.2024  \n2.2 4.2.1 &", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 42, "year": 2021}, "type": "Document"}
{"page_content": "2.1 4.2.1  Appointment of a chief information security officer \n(CISO)  01.01.2024  \n2.2 4.2.1 & \n4.2.4  Appointment of a dedicated CISO for D -SIBs  01.01.202 6", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 42, "year": 2021}, "type": "Document"}
{"page_content": "44 \n No. Ref. Requirement  Date for \nCompliance  \n2.3 4.2.7 & \n7.2 Qualifications for CISO  31.12.2024  \n2.4 5.1 Information security training and certification  31.12.2023  \n2.5 5.2.2  User access and identity management system  31.12.2024  \n2.6 5.3 Computer security and user activity log management  31.12.2024  \n2.7 5.5.1  Customer Data encryption   \n2.7.1 5.5.1 (ii) \n(a)   Data -at-rest encryption  31.12.2025  \n2.7.2 5.5.1(ii) \n(b)   Data -in-transit encryption  31.12.2024  \n2.7.3 5.5.1(ii) \n(c)   Full disk encryption for removable media  31.12.2023  \n2.7.4 5.5.1(ii) \n(c)   Full disk encryption for endpoint devices  31.12.2026  \n2.8 5.5.2  Confidential non -customer data encryption  31.12.2025  \n2.9 5.6 Security Operations Center (SOC)  31.12.2024  \n2.10 5.8.1  Pre-implementation information security testing  31.12.202 3 \n2.11 5.8.3  Penetration tests by independent external experts \u2013 on \nnon-production systems  31.12.2023  \n2.12 5.8.3  Penetration tests by independent external experts \u2013 on \nproduction systems  31.12.2025  \n2.13 5.8.4  Red team exercises by independent external experts  31.12.2026  \n2.14 6 Information System Availability and Disaster \nRecovery  31.12.2024  \n2.15 7 Staff competency requirements  31.12.2024  \n2.16 8 Compliance with international standards   \n2.16.1 8.1.1 ISO/IEC 27001, Information security management \nsystems  31.12.2024  \n2.16.2 8.1.2 ISO/IEC 27035, Information security incident \nmanagement  31.12.2025  \n2.16.3 8.1.3 ISO/IEC 22301, Business continuity management \nsystems  31.12.2024  \n2.16.4 8.1.4 ISO/IEC 20000, Service management  31.12.2025  \n2.17 9 Requirements based on information system \ninfrastructure ownership, management, and location - \nCompliance for existing arrangements  31.12.2024", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_16_of_2021.pdf", "page": 43, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA19 January 2021 BANKING ACT DIRECTIONS No. 01 of 2021RESTRICTIONS ON DISCRETIONARY PAYMENTS OF LICENSED BANKSThe Monetary Board of the Central Bank of Sri Lanka, 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 COVID-19 outbreak and the importance of maintaining appropriate levels of liquidity and capital buffers in the licensed banks, hereby issues these Directions on restrictions on discretionary payments of licensed banks.1. Empowerment1.1 In terms of Sections 46(1) and 76J(1) of the Banking Act No. 30 of 1988, as amended, in order to ensure the soundness of the banking system, the Monetary Board is empowered to issue Directions to all or any licensed bank, regarding the manner in which any aspect of the business of such bank or banks is to be conducted.2. Scope ofApplication2.1 These Directions shall be applicable to every licensed bank incorporated or established 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 Payments3.1 Every licensed bank incorporated or established in Sri Lanka shall defer payment of cash dividends until the financial statements for the year 2020 are finalised and audited by its External Auditor.3.2 Every licensed commercial bank incorporated outside Sri Lanka shall defer repatriation of profits not already declared for financial years 2019 and 2020 until the financial statements for the year 2020 are finalised and audited by its External Auditor.1", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_1_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA19 January 2021 BANKING ACT DIRECTIONS No. 01 of 20213.3 Licensed banks shall give due consideration to the requirements of the Banking Act Directions No. 01 of 2016 on Capital Requirements under Basel III for Licensed Banks, expected assets growth, business expansion and the impact of COVID-19 pandemic when deciding on payments of cash dividends and profit repatriation.3.4 Licensed banks, shall until 30 June 2021;(a) refrain from buying-back of its own shares;(b) refrain from increasing management allowances and payments to Board of Directors;(c) exercise prudence and refrain to the extent possible from incurring non-essential expenditure such as advertising, business promotions, gift schemes, entertainment, sponsorships, travelling and training etc.; and(d) exercise extreme due diligence and prudence when incurring capital expenditure, if any.Chairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka\n2", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_1_of_2021.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA25 January 2021BANKING ACT DIRECTIONSNo. 02 of 2021FORWARD SALES AND PURCHASES OF FOREIGN EXCHANGE BY LICENSED COMMERCIAL BANKSIssued in terms of the powers conferred by Section 46(1) of the Banking Act No. 30 of 1988, as amended.In view of the need to avoid excess volatility in the foreign exchange market and the impact on banks\u2019 risk management, licensed commercial banks are hereby informed to refrain from entering into forward contracts of foreign exchange for a period of three months with immediate effect.\u2022ProfW D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_2_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "ffi\nMONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nJ{ January 20zt nlNxtNG lct DutnCtIOttS No.03 of 2021\nAMENDMENTS TO DIRECTIONS ON CAPITAL REQUIREMENTS UNDER BASEL\nIII FOR LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nBanking Act Directions No. 1 of 2016 on Capital Requirements under Basel III for licensed\ncommercial banks and licensed specialised banks are hereby amended bi replacing the following\nDirections.\nSCHEDULE I\nAppendix IV\nPART III(A) _ COMPUTATTON OF RISK WEIGHTED AMOUNT FOR CREDIT RISK\nWeb Based\nReturn CodeAssets Risk\nWeight\n(o/\"l\n20.3.r.1.r.2 Foreign Claims on Central Government\nAll foreign claims on Government of Sri Lanka\n(The revised risk weight is applicable for the year 2021 only)10\n20.3.1.9.0.0 Claims Secured by Residential Property\nThe amount must agree with the sum of the claims secured by\nresidential property that qualify for regulatory capital purposes\nand claims secured by residential property that do not qualify for\nregulatory capital purposes.\n(WBRC 20.3.1.9. 1.0 to 20.3.1.9.2.0)\nThe exposures secured by mortgages on commercial real estates\nshall be excluded from here.\n20.3.1.9.1.0 Claims that Qualiff for Regulatory Capital Purposes\na) Subjdct to conditions below, residential housing loans fully\nsecured by a primary mortgage over such residential property\nthat is or will be occupied by the borrower, or rented.\nb) The claims should strictly meet the following qualiffing\ncriteria to be able to use the preferential risk weight:\no A margin of at least 25oh onthe forced sale value of the\nproperty based on the latest valuation report;35", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_3_of_2021a.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "89 January202lMONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nBANKING ACT DIRECTIONS No.03 of202l\no Valuation of properfy: valuation of property is carried\nout by an external independent valuer or current intemal\nassessment of the value of the properties subject to the\nconditions stated in the Directions on Classtfication of\nLoans and Advances, Income Recognition and\nProvisioning issued under Banking Act.\nc) Mortgages other than primary mortgages will qualifi, for the\nsame risk weight, subject to the above conditions, if:\n. The mortgage is with the same bank\no The purpose of the loan is for residential purposes.\n20.3.1.9.2.0 Claims that do not Qualiff for Regulatory Capital Purposes\nPerforming claims that do not meet the criteria given above.100\nf. W D Lakshman\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka\nl", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_3_of_2021a.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA April23 2021 BANKING ACT DIRECTIONS No. 06 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\u2019 risk management, requires the licensed commercial banks and National Savings Bank to suspend the purchase of Sri Lanka International Sovereign Bonds until further notice.Prof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n1", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_6_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "Name of Bank :\n.\nin FC \nvalue in Rupee \nEquivalentCapital Interest Counter-party Amount, in \nFC valueExchange \nrate, first \nleg (Sold \nat) Exchange \nrate, \nsecond leg \n(Buy at) \nTotal 0 0 0 0Othe \nChar\ngesRepayment Risk Mitigation, SWAP arrangementsRating of \nCounterpa\nrty \n(Lender)/I\nnstrumentAmount \nBorrowed, in FC \nvalueOutstanding Amount\nPurpose of borrowingWhether \nincluded \nfor Tier \nII capital \n(Yes/No)Date of \nBorrowingDate of \nMaturityMonthly\u00a0Statement of Foreign Borrowings\nPeriod: \nAmount in '000\nName of Counterparty   (Lender) CountryBusine\nss Unit \n(DBU/\nOBU)Nature of Transactions (Product/Instrument) (/1)Currency \nType (/2)Rate of \nInterest,\n%", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_8_of_2021.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n16 June  2021                              BANKING ACT DIRECTIONS             No. 09 of 2021                                                                                                         \n1 \n \n \nRECOVERY PLANS  \n FOR LICENSED COMMERCIAL BANKS  AND LICENSED SPECIALISED BANKS  \n \nIn terms of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act No. 30 of \n1988, as amended, the Monetary Board hereby issues these Direc tions on the requirement of \nmaintain ing Recovery Plans (RCP)  for licensed commercial banks and licens ed specialised \nbanks (hereinafter referred to as licensed banks) .  \n \n1. Empowerment   1.1 \n \n \n In terms of Section s 46(1)  and 76J(1 ) of the Banking Act , the \nMonetary Board is empowered to issue Directions to all \nlicensed bank s, regarding the manner in which any aspect of \nthe business of such bank or banks is to be conducted . \n2. Scope of  \nApplication  \n 2.1 \n \n \n \n2.2 \n \n RCP shall identify the full range of recovery options available \nto a licensed bank  to deal with shocks to capital, liquidity and \nall other aspects that may arise from institution -specific \nstresses, market -wide stresses, or a combination of both.   \nEach licensed bank shall have an RCP in place and the RCP \nshall include the following:  \n(a) Scope of RCP formulated considering the natur e, scale, \ncomplexity,  and interconnectedness of the licensed bank.  \n(b) Entities of the banking g roup covered under the recovery \nframework.  \n  \n3. Critical Functions \nand Critical Shared \nServices  \n 3.1 \n \n3.2 Critical functions and critical shared services shall be clearly \nidentified and defined in RCP.  \nCritical functions and critical shared services shall be \norganised in a way that ensures the continuous availability of \nshared services to the entire bank under the possible recovery \nand reso lution options.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n16 June  2021                              BANKING ACT DIRECTIONS             No. 09 of 2021                                                                                                         \n2 \n \n4. Recovery Triggers  \nand Indicators  \n \n \n \n \n \n \n \n \n \n \n \n \n5. Recovery Options  \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 4.1 \n \n \n \n \n \n \n \n \n \n \n \n \n \n5.1 \n \n \n \n \n \n \n \n \n \n \n \n \n5.2 \n \n Each li censed bank shall identify recovery indicators, recovery \ntriggers, recovery actions and conditions for activation of \nresolution measures.  \n(a) The recovery plan shall include appropriate indicators, \ntriggers,  and procedures to ensure the timely \nimplementation of recovery actions . \n(b) Identified indicators and triggers shall comprise a range of \nquantitative and qualitative triggers.  \n(c) Quantitative indicators and triggers should be set at levels \nabove  the associated supervisory requirements , wherever \napplicable.  \n(d) In addition to such trig gers, early warning indicators shall \nbe used to identify negative trends for monitoring.  \n \nAn RCP shall identify the full range of credible and flexible \nrecovery options available to a bank to deal with shocks to \ncapital, liquidity and all other aspects that may arise from \ninstitution -specific stresses, market -wide stresses , or a \ncombination of both, and shall include the following as a \nminimum:  \n(a) The anticipated impact or result of the opt ion in terms of \ncapital, l iquidity  and/or any other area, if any . \n(b) Time and resources required to implement the option.  \n(c) Potential impediments  to implement ation of  the option.  \n(d) Actions being taken to remedy the impediments.  \n(e) Details on costs of implementation.  \n(f) Details on option\u2011specific communication planning.  \nRecovery options of a bank shall be capable of being executed \nwithin a reasonable timeframe and sustainabili ty and viability \nof the options must be evaluated intensely.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n16 June  2021                              BANKING ACT DIRECTIONS             No. 09 of 2021                                                                                                         \n3 \n \n \n \n \n \n \n6. Board of Directors \nand Management  \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 5.3 \n \n \n5.4 \n \n \n \n6.1 \n \n \n \n \n \n6.2 \n \n \n \n6.3 \n \n \n6.4 \n \n \n \n6.5 \n \n \n \n \n RCP shall take into account any legal, reputational , and \noperational impediments on recovery and  formulate  processes \nto ensure timely implementation of recovery options.  \nEach l icensed bank  shall appropriately include Business \nContinuity Planning (BCP) arrangements when  formulating \nRCPs.  \n \nEach licensed bank shall appoint a member of the senior \nmanagement to oversee its RCP process and shall put in place \na robust governance structure and sufficient resources to \nsupport RCP process. The roles and responsibilities of each \nperson involved in RCP process should be clearly assigned \nwithin the bank and  specified in RCP.  \nRCP shall be approved or endorsed by the Board of Directors \nfor a locally incorporated  licensed bank and the regional/  \nglobal head office for a licensed bank incorporated outside Sri \nLanka.  \nRCP shall be a dynamic process and be updated at least \nannually and must be integrated with the existing risk \nmanagement framework and processes.  \nClear responsibilities of key management personnel, \nrespective departments / divisions,  and other relevant off icers  \nfor formulating, maintaining/regularly reviewing, executing,  \nand activating the RCP shall be assigned  and documented.  \nLicensed banks incorporated outside Sri Lanka shall inter alia \ninclude the following in their RCP:  \n(a) The manner in which the local ope rations are integrated to \nthe recovery and resolution framework of the parent bank . \n(b) Brief description of the submissions made to the home \nregulator on RCP, if any .", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n16 June  2021                              BANKING ACT DIRECTIONS             No. 09 of 2021                                                                                                         \n4 \n \n \n \n \n \n \n \n \n \n7. Management \nInformation and \nCommunication \nPlanning  \n \n \n \n \n \n \n \n \n \n \n \n8. Regulatory \nSubmissions  \n \n \n \n \n  \n \n \n \n \n \n \n \n7.1 \n \n \n \n7.2 \n \n \n \n \n \n \n7.3 \n \n \n \n8.1 \n \n \n \n8.2 \n \n (c) A copy of the written undertaking supported by a \nresolution of the Board of Directors of the  head office or \nparent body, under section 3 (2) (c) (i) of the Banking Act  \nNo. 30 of 1988 as amended , stating that such bank as the \ncase may be, shall on demand by the Central Bank, provide \nfunds as may be necessary to meet all obligations incurred \nin or in connection with its business in Sri Lanka.  \n \nEach licensed bank shall maintain information within the \nprevailing management information systems that are capable \nof producing information necessary for recovery process of the \nbank.  \nEach licensed bank shall  maintain up to date information  on \nfollowing arears, but not limited to : \n(a) List of depositors including, account number, deposit type, \ndeposit balance, contact details and any other relevant \ndetails.  \n(b) Information on all contracts of the licensed bank.  \n(c) Information on intra -group transactions.  \nA communication plan shall be in place to ensure timely \ncommunication with internal and external stakeholders on \nRCP.  \n \nCommencing 2022, licensed banks with assets above Rs. 1 \nTrillion shall formulate and submit RCPs  to Director of Bank \nSupervision (DBS) annually, by 30 June of each year or \nwhenever the recovery plan is significantly amended.  \nCommencing 2022, licensed banks with assets below Rs. 1 \nTrillion shall maintain RCPs from 30 June 2022 and such", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD  \nCENTRAL BANK OF SRI LANKA  \n16 June  2021                              BANKING ACT DIRECTIONS             No. 09 of 2021                                                                                                         \n5 \n \n  \n \n \n \n \n \n \n \n \n \n \n \n \n9. Interpretations   \n \n8.3 \n \n \n \n8.4 \n \n \n \n \n \n \n9.1 \n \n \n \n \n \n9.2 \n \n \n \n \n9.3 \n \n \n \n \n RCPs will be su bject ed to review during the statutory \nexamination of the respective bank.  \nLicensed banks shall immediately inform the Director of Bank \nSupervision when a bank reaches a trigger point activating  \nRCP actions or when a licensed bank is experiencing  a high \nlevel of stress.  \nA model format providing a broad template for licensed banks \nto draft RCPs is attached in  Schedule I.  However, a fair d egree \nof variation in the depth  and presentation of RCPs is expected, \nbased on the size, banking business model, complexity,  \ninterconnectedness, risk profile and systemic importance of \neach bank.  \n \nCritical functions shall mean activities performed for third \nparties where failure would lead to disruption of services vital \nfor the functioning of the real economy and for financial \nstability due to size or market share, external and internal \ninterconnectedness, and complexity or cross -border activities \nof the banking group.  \nCritical s hared services shall mean activities performed within \nthe firm  or outsourced to third parties, where failure would lead \nto the inability to perform critical functions and, therefore, to \ndisruption of services vital for the functioning of the real \neconomy o r for financial stability.  \nThird parties shall include all entities or individuals that have \nentered into a business relationship with the licensed  bank.  \n \n \n Chairman of the Monetary Board and  \n                 Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "6 \n  \n \n \nBanking Act Directions No. 09 of 2021  \nRecovery Plans for Licensed Commercial Banks and Licensed Specialised \nBanks  \n \n \n \n \n \n \n \n \n \nSCHEDULE I", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 5, "year": 2021}, "type": "Document"}
{"page_content": "7 \n Template for  Recovery Plans of Licensed Banks  \n \n1. Executive Summary  \n(a) Summary of key elements in the Recovery Plan (RCP) . \n \n2. Introduction  \n(a) Objectives of the RCP  and to provi de a broad outline of the RCP.  \n(b) Linkages between the sections of RCP.  \n \n3. Scope of the RCP  \n(a) The Scope of RCP to be defined co nsidering the banking business model, risk profile , \nscale, complexity,  and interconnectedness of the licensed bank.   \n(b) The entities of the Group covered under the recovery framework including an \norganisational structure.  \n(c) Description of the licensed bank and other entities  covered  by RCP . \n \n4. Material Changes  \n(a) List of all material changes since the last recovery plan submission  / major update to be \nsummarised and presented under this section (Not applicable in the first submission) . \n \n5. Critical Functions and Critical Shared Services  \n(a) Identification of  the core business lines  critical functions and critical shared services of \nthe licensed bank.  \n(b) Description of  how c ritical functions and shared services are to be organised  in a way \nthat ensures the continuous availability of shared services . \n(c) Description of the impact on critical shared services of implementing the option and \nassessment of how the continuity of operations can be maintained if the recovery option \nis implement ed. \n(d) Description of any measures necessary to maintain continuous access to relevant \nfinancial market infrastructures to preserve the continuous functioning of the bank's \noperational processes (including infrastructure and IT services)", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 6, "year": 2021}, "type": "Document"}
{"page_content": "8 \n 6. Governance Framework  \n(a) Describe bank \u2019s/group\u2019s governance arrangements and governance structure  in relation \nto RCP .  \n(b) RCP shall be approved or endorsed by the Board of Directors for a locally  incorporated \nlicensed bank and the regional/global head office for a licensed bank incorporated \noutside Sri Lanka.  \n(c) The roles and responsibilities of each person involved in the Governance process of the \nRCP should be clearly assigned under this section.  \n(d) Clear responsibilities of key management personnel, business units an d executives for \nformulating, maintaining/regularly reviewing, executing,  and activating the RCP shall \nbe assigned and documented.  \n(e) Licensed Banks incorporated outside Sri Lanka shall  include their arrangements with \nthe parent bank  including the following:  \n\u2212 The manner in which the local operations are integrated to the recovery and \nresolution framework of the parent bank;  \n\u2212 Brief description of the submissions made to the home regulator on RCP, if any;  \n\u2212 A copy of the written undertaking supported by a resolutio n of the Board of \nDirectors of the head office or parent body.  \n \n7. Recovery Triggers1 and Strategy/ Options  2 \n(a) List and describe all identified recovery triggers and possible recovery options3. \n(b) The risks associated with each of the recovery options and the anticipated impact or \nresult of the option in terms of capital and/or liquidity.  \n(c)  Description of the expected impact of implementing the option on the capacity of the \nbank to perform critical functions as well as on its core business lines, franchise \nvalue/reputation and business model.  \n(d) Time and resources required to implement the option.  \n \n1 Recovery triggers shall cover a range of customised qualitative and quantitative factors, such as, c apital and \nliquidity ratios , reductions  in revenue and profitability , withdrawal of deposits and other funding, rise in public", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 7, "year": 2021}, "type": "Document"}
{"page_content": "debt, adverse GDP forecasts, changes in market interest rates, requests from counterparties for early redemption \nof liabilities, difficulties in raising funds  at current market rates, adverse court  decisions  etc. \n \n2 Recovery options are defined as the measures that a bank can take in order to restore its  financial position in a \ncrisis / high stress situation . \n \n3 When identifying recovery options , a bank should consider a range of severe  macroeconomic and financial stress \nscenarios relevant to the bank specific conditions in line with the nature of its business,  size and  \ninterconnectedness to the financial system .", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 7, "year": 2021}, "type": "Document"}
{"page_content": "9 \n (e) Details on costs of implementation.  \n(f) An analysis of any material im pediments to the effective and efficient  execution of the \nRCP and respective strategies to overcome them.  \n(g) Details on option\u2011specific communication planning.  \n(h) Description of the main assumptions relating to the feasibilit y of the option and its \nimpact including the  impact of the option on external stakeholders . \n \n8. Recovery Indicators  \n(a) In this section licensed  bank may list and explain the recovery plan indicators (both \nqualitative and quantitative recovery plan indicators  to be considered ). \n(b) Early warning indicators can be used by banks  to identify potential stress situations and  \nfor monitoring.  \n(c) Procedures to ensure the timely implementation of recovery actions  to be included in \nthis section.  \n(d) Licensed banks s hould e xplain how recovery indicators are monitored . \n \n9. Implementation Strategy  \n(a) Details of any preparatory measures the licensed bank  has taken or plans to take, to \nimplement the RCP. The RCP is expected to be carried out promptly  and effectively in  \nsituations of financial stress  to avoid  to the maximum extent possible, any si gnificant \nadverse effects.  \n(b) How Business Continuity Planning ( BCP) arrangements are linked to the \nimplementation of RCP . \n(c) Overview of preparatory measures that could be taken for the successful \nimplementation of the option, including specific follow -up actions.  \n \n10. Additional Material Information  \n(a) Include any other  inform ation that may be m aterial to the licensed bank when carrying \nout the RCP.  \n11. Undertaking of the Board of Directors and Management  \n(a) The signatures of the Board of Directors claiming the overall responsibility of RCP and \nfor reviewing RCP.  \n(b) The signatures of respective Key Management  Personnel on the role played and the \naccountability towards the RCP.", "metadata": {"source": "data\\CBSL\\2021\\Banking_Act_Directions_No_9_of_2021.pdf", "page": 8, "year": 2021}, "type": "Document"}
{"page_content": "18 June 2021MONETARY BOARD CENTRAL BANK OF SRI LANKABANKING ACT ORDERNo. 01 of 2021BANKING (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 Foreign Currencies1.1 The foreign currencies set out in the Schedule below in this Order aredetermined as the Designated Foreign Currencies under the Banking (Off-Shore Banking Business Scheme) Order.1.2 The Schedule in this Order, replaces the Schedule in the Banking (Off-Shore Banking Business Scheme) Order No. 01 of 2011, dated27.10.2011.Chairman of the Monetary Board andGovernor of the Central Bank of Sri LankaScheduleDesignated Foreign Currencies1. Australian Dollar9. Norwegian Kroner2. Canadian Dollar10. Pound Sterling3. Chinese Renminbi11. Singapore Dollar4. Danish Kroner12. Swedish Kroner5. Euro13. Swiss Franc6. Hongkong Dollar14. Thai Baht7. Japanese Yen15. United States Dollar8. New Zealand Dollar", "metadata": {"source": "data\\CBSL\\2021\\bsd_act_order_1_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA24 August 2021MONETARY LAW ACT ORDERNo. 02 of 2021MAXIMUM INTEREST RATES ON FOREIGN CURRENCY DEPOSITSOF LICENSED COMMERCIAL BANKS AND THE NATIONAL SAVINGS BANKIssued under Section 104(l)(a) of the Monetary Law Act, No. 58 of 1949, as amended.Considering the anomalies in the interest rates offered and paid by licensed commercial banks on the rupee and foreign currency deposits, 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 Act1.1 In terms of Section 104(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.2. Maximum interest rates on FCY deposits2.1 The maximum interest rates that may be offered or paid by a licensed commercial bank and the National Savings Bank on all foreign currency (FCY) deposits shall not exceed an Annual Effective Rate (AER) of up to 5 per cent.2.2 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.3. Regulatory Reporting and Disclosure3.1 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 return on \u2018Rates of Interest\u2019, and(ii) make arrangements to inform and display the interest rates offered to customers on FCY deposit products.4. Implementation4.1 These Orders shall be effective from the date of the Order and shall be applicable for new FCY deposits, existing FCY savings deposits and at the renewal of FCY term deposits.Prof. W D LakshmanChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\bsd_act_order_2_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "13 September 2021 CIRCULAR No. 10 of 2021MONETARY BOARD CENTRAL BANK OF SRI LANKAEXTENSION OF DEBT MORATORIUM FOR COVID-19 AFFECTED BUSINESSES AND INDIVIDUALS IN THE TOURISM INDUSTRYWith a view to meeting the challenges faced by businesses and individuals engaged in tourism sector due to the ongoing COVID-19 pandemic, the Central Bank of Sri Lanka (CBSL) requests licensed commercial banks and licensed specialised banks, (hereinafter referred to as licensed banks), to extend the debt moratorium granted for tourism sector under Circular No. 08 of 2020 dated 26 August 2020 (hereinafter referred to as the Scheme) for another nine months commencing 1 October 2021 as specified below. However, licensed banks may offer any additional options to borrowers, on the request of the borrower, in a way that the overall benefits to borrowers 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.A. The following provisions of the Circular No. 08 of 2020 have been amended and other provisions of the Circular No. 08 of 2020 will remain unchanged:1. General Terms and Conditions1 (i) (b) Employees of eligible businesses and members of eligible associations who are affected by COVID-19. In the case of such employees and members, the registration of the business or the association with the relevant institutions referred in (a) above shall be considered sufficient.1 (iii) Debt moratorium refers to moratorium for both capital and interest for a further period of nine months commencing 1 October 2021 to 30 June 2022.1 (iv) Eligible borrowers who wish to avail the moratorium shall make a request seeking such moratorium to the relevant licensed bank on or before 15 October 2021. Licensed banks are requested to accept any request submitted after 15 October 2021, if the reasons for delay in making such request are acceptable. Any eligible borrower who has the capacity to", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_10_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "for delay in making such request are acceptable. Any eligible borrower who has the capacity to service the loan repayment is expected to service such loan repayments instead of requesting for this extension.1", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_10_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "13 September 2021 CIRCULAR No. 10 of 2021MONETARY BOARD CENTRAL BANK OF SRI LANKA2. Structuring the debt moratorium2 (i) Licensed banks shall convert the capital and interest falling due during the moratorium period commencing from 1 October 2021 to 30 June 2022 into a term loan. Licensed banks shall amalgamate the capital and interest falling due during the previous moratorium granted with the capital and interest falling due during 1 October 2021 to 30 June 2022.2 (ii) Licensed banks may commence recovery of such converted loan once the extended moratorium period is over.2(v) Licensed banks shall waive off the accrued and unpaid penal interest as at 1 October 2021, if any, on performing loans considered under this Circular. Penal interest shall not be accrued and charged during the moratorium period.3. Reporting RequirementLicensed banks shall continue to report the details of moratorium availed by borrowers to the Director of Bank Supervision as at 30th of each month, within 15 working days as per the reporting format prescribed under Circular No. 08 of 2020.B. The following new provisions are included in this Circular:I. Alternatively, licensed banks may restructure the existing credit facilities over a longerperiod, considering the repayment capacity of the borrower and an acceptable revival plan. In this case, the licensed bank and the borrower shall agree on terms and conditions including a concessionary interest rate, considering the prevailing low interest rates.2. In the case where an eligible borrower has expressed his/her willingness to settle the existing credit facilities or amounts fallen due during the moratorium period, instead of opting for moratorium under this Circular, 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.3. Licensed banks shall suspend all types of recovery actions", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_10_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "interest of lease facilities, if any.3. Licensed banks shall suspend all types of recovery actions against non-performing facilities until 30 June 2022, provided that such facilities have been classified as non-performing on or after 01 April 2020. Further, licensed banks shall take all the2", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_10_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "13 September 2021 CIRCULAR No. 10 of 2021MONETARY BOARD CENTRAL BANK OF SRI LANKAprecautions 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.4. Licensed banks shall account for the concession granted under this scheme as per guidelines issued by CBSL to licensed banks on adoption of Sri Lanka Accounting Standards - SLFRS 9: Financial Instruments. Licensed banks shall identify tourism sector as a risk elevated sector and provide accordingly. Licensed banks may seek advice from the Institute of Chartered Accountants of Sri Lanka (CASL) and Auditors for additional guidance/clarification in this regard.5. 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.6. 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 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), CBSL 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.7. Licensed banks shall circulate this Circular to all branches within 3 days and provide necessary internal guidelines/circulars within 7 days.Chairman of the Monetary Board and Governor of the Central Bank of", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_10_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "within 7 days.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka3", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_10_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT30 September 2021 CIRCULAR No. 11 of 2021SUPPLEMENTARY CIRCULAR TO BANKING ACT DIRECTIONS ON CLASSIFICATION, RECOGNITION AND MEASUREMENT OF CREDIT FACILITIES AND OTHER FINANCIAL ASSETS IN LICENSED BANKSThe Central Bank of Sri Lanka, subsequent to the issuance of new Banking Act Directions No. 13 and 14 of 2021 on Classification, Recognition and Measurement of Credit Facilities and Classification, Recognition and Measurement of Financial Assets Other than Credit Facilities in Licensed Banks, respectively, hereby issues this Circular to licensed banks, to be effective from 01 January 2022, with a view to establishing consistent practices on the adoption of Sri Lanka Accounting Standards - SLFRS 9: Financial Instruments by licensed banks amidst COVID-19 outbreak.(1) Licensed banks, with the approval of the Board of Directors, shall include clear guidelines on staging of loans and advances for impairment purposes in the related policies, amidst the extraordinary circumstances caused by the COVID-19 outbreak.(2) In the case where direct temporary restrictions on economic activities are/were in place due to COVID-19 outbreak, licensed banks may continue to exercise prudent judgment, on case-by-case basis, to determine whether to classify credit facilities as Stage 3 facilities or not:(a) considering the borrower\u2019s inability to revive the business and generate sufficient cash flows to repay the exposure once the restrictions on economic activities are removed; and(b) if a facility has been restructured more than twice due to adverse economic consequences of the COVID-19 outbreak and/or the Easter Sunday Attack.(3) Licensed banks may consult CA Sri Lanka and Auditors in order to obtain further guidance in respect of computing Probability of Default for exposures denominated in foreign currencies issued by the sovereigns.(4) These instructions shall also be applicable to all credit facilities considered under concessions", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_11_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "These instructions shall also be applicable to all credit facilities considered under concessions provided as per the Circulars issued by the Central Bank of Sri Lanka from time to time for COVID-19 affected Businesses and Individuals, including the Tourism sector.1", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_11_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "(5) Circular No. 09 of2020 issued on 28 October 2020 as Amendments to Circular No. 04 of 2018 on Guidelines to Licensed Banks on the Adoption of Sri Lanka Accounting Standards - SLFRS 9: Financial Instruments will be revoked from 01 January 2022.Director of Bank Supervision\n2", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_11_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA05 October 2021CIRCULARNo. 12 of 2021CONCESSIONS FOR LEASE FACILITIES OBTAINED BYBUSINESSES AND INDIVIDUALS IN PASSENGER TRANSPORTATION SECTORThe Central Bank of Sri Lanka (CBSL), with a view to meeting the challenges faced by businesses and individuals providing public and private passenger transportation service including tourism sector, amidst COVID-19 pandemic, requests licensed commercial banks and licensed specialised banks, (hereinafter referred to as licensed banks) to extend the concessions granted under Circular No. 03 of 2021 dated 10 March 2021 on concessions for lease facilities obtained by businesses and individuals in passenger transportation sector as follows:(i) accommodate the lease facilities obtained by COVID-19 affected businesses and individuals providing passenger transportation services to tourism sector, under Circular No. 10 of 2021 dated 13 September 2021, and(ii) accommodate the lease facilities obtained by other COVID-19 affected businesses and individuals engaged in passenger transportation services under Circular No. 08 of 2021 dated 01 September 2021.Licensed banks shall make necessary arrangements to implement (i) and (ii) above, expeditiously.Nivard Ajith Leslie CabraalChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_12_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA3-1 December 2021 CIRCULAR No. 13 of 2021DEFERMENT OF RECOVERY ACTIONS AGAINST BORROWERS AFFECTED BY COVID-19 PANDEMICThe Central Bank of Sri Lanka, with a view to meeting the challenges faced by businesses and individuals due to the ongoing COVID-19 pandemic, requests licensed commercial banks and licensed specialised banks, (herein referred to as licensed banks) to suspend all types of recovery actions, including parate execution and forced repossession of leased assets as follows:1. Licensed banks shall extend the suspension of all recovery actions stipulated in the Circular No.8 of 2021 dated 01 September 2021 on Concessions for COVID-19 Affected Businesses and Individuals up to 31.03.2022.2. The requirement to suspend all recovery actions stipulated in the Circular No. 10 of 2021 dated 13 September 2021 on Extensions of Debt Moratorium for COVID-19 Affected Businesses and Individuals in the Tourism Industry up to 30.06.2022 shall remain unchanged.\nNivard Ajith Leslie CabraalChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_13_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "wMONETARY BOARD CENTRAL BANK OF SRI LANKA13 January 2021 CIRCULAR No. 01 of 2021SUSPENSION OF RECOVERY ACTIONS AGAINST SMALL AND MEDIUM ENTERPRISE (SME) PADDY MILLERSConsidering the Government initiatives to support the SME Paddy Millers amidst COVID 19 pandemic for the upcoming harvesting seasons, licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks), are required to suspend recovery actions against SME Paddy Millers for a period of six months commencing from 1 January 2021 as specified below.(1) In the case where a licensed bank has commenced or given notice of recovery action under the provisions of the Recovery of Loans by Banks (Special Provisions) Act, No. 4 of 1990 or Mortgage Act No. 06 of 1949 as amended or Finance Leasing Act No. 56 of 2000 or any other relevant Act in this regard, such recovery actions shall be suspended on condition that the concerned licensed bank and the borrower reach a debt re-payment agreement.(2) Licensed banks shall defer passing new resolutions under the above Acts, for recovery of loans and advances. In instances where resolutions for recovery have already been passed, auctioning of assets will be suspended until 30.06.2021.(3) In instances where there are on-going litigations in courts relating to recovery, borrowers will be permitted to enter into an agreement by submission of affidavit to Courts agreeing to comply with the requirements set out in (1) above.(4) Licensed banks shall suspend any other legal or recovery action until 30.06.2021.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_1_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT25 January 2021 CIRCULAR No. 02 of 2021Amendments to Circular No. 04 of 2018 on Guidelines to Licensed Banks on the Adoption of Sri Lanka Accounting Standard - SLFRS 9: Financial InstrumentsThe Central Bank of Sri Lanka, having considered the current exceptional circumstances, latest Budget proposal on International Sovereign Bonds and with a view to establishing consistent practices on the adoption of Sri Lanka Accounting Standard - SLFRS 9: Financial Instruments by licensed banks, hereby issues the amendment to the Annex I of the Circular No. 04 of 2018 on Guidelines to Licensed Banks on the Adoption of Sri Lanka Accounting Standard - SLFRS 9: Financial Instruments.Guideline 2.5 (c) shall be inserted immediately after Guideline 2.5 (b) as follows:2.5 (c) However, it is permitted to apply a minimum LGD of 10 per cent when computing expected losses for the year 2021.Director of Bank Supervision", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_2_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "10 March 2021 CIRCULAR No. 03 of 2021MONETARY BOARD CENTRAL BANK OF SRI LANKACONCESSIONS FOR LEASE FACILITIES OBTAINED BYBUSINESSES AND INDIVIDUALS IN PASSENGER TRANSPORTATION SECTORWith a view to meeting the challenges faced by businesses and individuals engaged in passenger transportation sector due to the ongoing COVID-19 pandemic, the Central Bank of Sri Lanka (CBSL) requests licensed commercial banks and licensed specialised banks, (hereinafter referred to as licensed banks), to provide concession for lease facilities obtained by COVID-19 affected businesses and individuals engaged in passenger transportation services (hereinafter referred to as the Scheme) for six months commencing from 1 April 2021 as specified below.Accordingly, this Circular is issued to give effect to the Scheme in a consistent manner across all licensed banks.1 . Period of deferment of lease installments1.1 Licensed banks shall defer the lease installments for a period not exceeding 6 months commencing from 1 April 2021 or a shorter period as applicable, considering the financial difficulties faced by the eligible borrowers.1.2 The lease installment (both capital and interest) shall be deferred on the request made by affected borrowers.2 . Deadline for submission of the application2.1 Eligible borrowers may request on or before 19 April 2021, for deferring the lease instalments in writing or through electronic means. Licensed banks shall expeditiously communicate the concessions, deadline and application format for submission to all eligible borrowers via printed and/or electronic means including email and SMS.2.2 Licensed banks shall accept any request submitted after 19 April 2021, if the reasons for delay in making such request is acceptable.1", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_3_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "10 March 2021 CIRCULAR No. 03 of 2021MONETARY BOARD CENTRAL BANK OF SRI LANKA3 Eligible borrowers3.1 Businesses and individuals engaged in providing public passenger transportation, private passenger transportation such as school transport service, office transport service, taxis including three wheelers, etc. and providing passenger transportation services to tourism sector.3.2 Licensed banks may request the eligible borrower to submit necessary documentation to ensure that the vehicle is used to provide passenger transportation to the sectors referred in 3.1 above.4 Eligible credit facilitiesPerforming lease facilities including lease facilities under moratorium as at 31 March 2021 obtained by eligible borrowers referred to under paragraph 3 above.5 Structuring of the concession5.1 Extending the existing tenure of lease facilities(a) Licensed banks shall extend the existing tenure of lease facilities eligible for deferment by the respective period of deferment.(b) Licensed banks may charge an interest rate for the deferred period only on the lease instalments falling due during the deferred period, not exceeding the latest auction rate for 364-days Treasury Bills, available as at 01 April 2021, plus 1 per cent per annum.(c) Such interest shall be recovered from April 2023 along with the existing lease installment falling due during this period. In the case where, the remaining tenure of the lease facility ends before April 2023, financial institutions may commence recovery of such interest at the completion of the remaining tenure of the lease facility.(d) Once the remaining tenure of the existing lease facility is over, borrowers shall commence repayment of the deferred installments referred to in paragraph 5.1(a) above.2", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_3_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "10 March 2021 CIRCULAR No. 03 of 2021MONETARY BOARD CENTRAL BANK OF SRI LANKA5.2 Recovery of amounts due on the moratorium(a) Considering that the use of public and private transportation is gradually returning to normalcy due to reopening of schools (monthly payments being collected uninterruptedly by many transport providers), offices, airport, etc., potential impact of the extended debt moratoriums on the licensed banks, and the ongoing vaccination program, licensed banks shall commence recovery of installments falling due in relation to the moratorium granted during 01 April 2019 to 31 March 2020, 01 April 2020 to 30 September 2020 and 01 October 2020 to 31 March 2021 (hereinafter referred to as moratoriums), as applicable, during the deferred period of the existing lease facility referred to in paragraph 5.1(a) above.(b) Once the deferred period of the existing lease facility (referred to in paragraph 5.1(a) above) is over, the repayment of the installments due on the moratoriums shall be deferred until the remaining tenure including the deferred period of the existing lease facility is over.(c) For such deferred period of the installments due on the moratoriums, interest shall accrue at a rate not exceeding the latest auction rate for 364-days Treasury Bills, available as at 01 April 2021, plus 1 per cent per annum.(d) Such interest shall be recovered immediately after completing the payment of interest referred to in 5.1(b) and (c) above along with the installments on the existing lease facility and deferred installments relating to moratoriums, as applicable.(e) Once the remaining tenure including the deferred period of the existing lease facility is over, borrowers shall commence repayment of the deferred installments relating to the moratoriums referred to in paragraph 5.2(b) above.5.3 If the borrower submits a written request to settle the lease instalments falling due during the deferred period including the dues of moratoriums and interest for the", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_3_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "falling due during the deferred period including the dues of moratoriums and interest for the deferred period, early, licensed banks shall facilitate such requests. In such case, licensed bank and the borrower shall agree on the structure, interest rate and the tenure. The interest rate shall be in line with the current market rate.3", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_3_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "10 March 2021 CIRCULAR No. 03 of 2021MONETARY BOARD CENTRAL BANK OF SRI LANKA5.4 Licensed banks may offer any additional options to borrowers, on the request of the borrower, in a way that the overall benefits to borrowers are not less than the benefits offered under this Circular. In such case, licensed banks shall clearly explain the interest computation under all options including the structure proposed in this Circular to the borrower, prior to approving such concession.5.5 Licensed banks shall waive off the penal interest accrued and unpaid as at 01 April 2021, if any. Penal interest shall not be accrued and charged during the period of deferment.5.6 Licensed banks shall not levy excessive fees or charges in relation to granting of the concessions.5.7 In the case of declined requests, licensed banks shall clearly mention the reason for such decline.6 Accounting considerations on the deferment of lease installmentsLicensed banks shall account for the deferment of lease installments as per Sri Lanka Accounting Standards and any additional guidance provided by CA Sri Lanka (CASL) on Financial Reporting implications due to the outbreak of COVID-19. Licensed banks may seek advice from CASL and Auditors for additional guidance/clarification in this regard.7 Reporting requirementLicensed banks shall report the details of deferment of lease installments availed by their borrowers to the Bank Supervision Department as at the 30th of each month, within 15 working days, commencing 01 May 2021, as per the attached format.Prof. V D LakshmanChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka4", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_3_of_2021_e.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "CIRCULAR NO. 03 OF 2021 ON CONCESSIONS FOR LEASE FACILITIES OBTAINED BY BUSINESSES AND INDIVIDUALS IN PASSENGER TRANSPORTATION SECTOR Report on Eligible Borrowers Availing Concessions under the above CircularName of the bank:As at:Total No. of Requests received: All Amounts in Rs. 000\nSerial No.Name of the Eligible Business/ Individual who has requested for deferment of lease InstallmentsRequest considered for deferment of lease installmentsReasons for declining the request for deferment of lease installmentsType of passenger transportation (Please select the appropriate type from the given drop/down list)Amount of capital outstanding as at 01.04.2021Approved Period of deferment (in Months)Amount of lease installments falling due during the deferred period commencing 01.04.2021Interest to be accrued for the period of deferment at 364-days T-bill + 1% (Existing facility)Interest to be accrued for the period of deferment at 364- days T-bill +1% (Moratorium)*Commencement of repayment of the existing lease installments and dues moratorium*YesNOPendingApplicable interest rateAmount of interest to be accruedApplicableInterest rateAmount of interest to be accruedAgreed date of the commencement of repayment of the existing loanActual date of the commencement of repayment of the existing loanAgreed date of the commencement of repayment of dues of Moratorium*Actual date of the commencement of repayment of dues of Moratorium* 1234S67B91011121314151617IB\nTotal* - Moratorium granted during 01 April 2019 to 31 March 2020, 01 April 2020 to 30 September 2020 and 01 October 2020 to 31 March 2021Please email the position as at as at the 30th of each month, within 15 working days, commencing 01 May 2021 to bsddb@cbsl.lk with a copy todbsd@cbsl.lk", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_3_of_2021_e.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA19 March 2021CIRCULARNo. 04 of 2021EXTENSION OF DEBT MORATORIUM FOR COVID-19 AFFECTED BUSINESSES AND INDIVIDUALS IN THE TOURISM INDUSTRYWith a view to meeting the challenges faced by businesses and individuals engaged in tourism sector due to the ongoing COVID-19 pandemic, the Central Bank of Sri Lanka (CBSL) requests licensed commercial banks and licensed specialised banks, (hereinafter referred to as licensed banks), to extend the debt moratorium granted for tourism sector under Circular No. 08 of 2020 dated 26 August 2020 for another six months commencing 1 April 2021 as specified below. However, licensed banks may offer any additional options to borrowers, on the request of the borrower, in a way that the overall benefits to borrowers are not less than the benefits offered under this Circular. The aforementioned extension is granted in order to provide adequate time for borrowers to come up with proposals for a long-term arrangement. Therefore, borrowers shall submit acceptable plans to licensed banks for restructuring of credit facilities over a long period of time, prior to the expiry of the extended moratorium period. Such plans shall be assessed on case-by-case basis by licensed banks. Accordingly, this Circular is issued to give effect to the Scheme in a consistent manner across all licensed banks.The following provisions of the Circular No. 08 of 2020 have been amended and other provisions of the cited Circular will remain unchanged:1. General Terms and Conditions1 (iii) Debt moratorium refers to moratorium for both capital and interest for a further period of six months commencing 1 April 2021 to 30 September 2021.1 (iv) Eligible borrowers who wish to avail the moratorium shall make a request seeking such moratorium to the relevant licensed bank on or before 19 April 2021. Licensed banks are requested to accept any request submitted after 19 April 2021, if the reasons for delay in making such request is acceptable.", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_4_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "submitted after 19 April 2021, if the reasons for delay in making such request is acceptable. Any eligible borrower who has the capacity to service the loan repayment is expected to service such loan repayments instead of requesting for this extension.1", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_4_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKA19 March 2021 CIRCULAR No. 04 of 20212. Structuring the debt moratorium2 (i) Licensed banks shall convert the capital and interest falling due during the moratorium period commencing from 1 April 2021 to 30 September 2021 into a term loan. Licensed banks may amalgamate the capital and interest falling due during the previous moratorium granted with the capital and interest falling due during 1 April 2021 to 30 September 2021, except for EMI loans for which the interest rate for the moratorium period is capped at 7 per cent per annum.2 (ii) Licensed banks may commence recovery of such converted loan once the extended moratorium period is over.2(v) Licensed banks shall waive off the accrued and unpaid penal interest as at 1 April 2021, if any, on credit facilities considered under this Circular. Penal interest shall not be accrued and charged during the moratorium period.Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n2", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_4_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_5_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_5_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_5_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_5_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_5_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "electronic means. Licensed banks shall expeditiously communicate the concessions, deadline, and application format for submission to3", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_5_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_5_of_2021_e.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "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\u2019 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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_6_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_6_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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.", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_6_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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\u2019 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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_7_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "Machines (CRMs), and mobile banking vehicles.PrtrfrWTDL aksh m anChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_7_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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,", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_8_of_2021_e.pdf", "page": 4, "year": 2021}, "type": "Document"}
{"page_content": "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\n1", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_9_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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\u2019sMoody\u2019sFitch 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%\n2", "metadata": {"source": "data\\CBSL\\2021\\bsd_circular_no_9_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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\u2019 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", "metadata": {"source": "data\\CBSL\\2021\\bsd_directions_no_4_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n17 February 2021        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 01 of 2021  \n \n1 \n \nAmendm ents to Frequently Asked Questions No. 0 5 of 2020  on Monetary Law Act Order No. 3 \nof 2020 - Maximum Interest Rates on Mortgage -backed Housing Loans  \n \n1. What are the key purposes/expectations of this Order?  \n\uf0a7 Support the expansion of home ownership of the Sri Lankan general public.  \n\uf0a7 Provide an additional stimulus to the domestic construction sector and its supply chains.  \n \n2. Who are eligible to obtain housing loans under the terms of this Order ? \nSalaried employees  serving  in confirmed service in the  public and private sectors , obtaining new \nmortgage -backed housing loans from a licensed bank under the terms of this Order , with effect from  \n10 December 2020.  \n \n3. What other conditions are to be met to be eligible to obtai n housing loans under the terms of \nthis Order ? \n\uf0a7 The same property to be developed/purchased is to be mortgaged to the bank.  \n\uf0a7 Such mortgage i s to be only a primary mortgage.  \n\uf0a7 If a condominium property is purchased out of this loan, then the bank and customers are to enter \ninto an arrangement to convert the property to a primary mortgage when the construction is \ncompleted.  \n \n4. What are the terms of repayment for housing loans obtained under the terms of this Order ? \n\uf0a7 Tenure of repayment:  \no Will be from the date borrowed up to the period where the salaried employee is expected to \nretire from such employment.  \no Employees are to provide banks a confirmation from their respective employer regarding the \nretirement date/age, as applicable.  Please note that  is an update to the \u2018Frequently Asked Questions (FAQs)\u2019  No. 05 of 2020 dated \n22.12.2020 issued in relation to the Monetary Law Act Order No. 3 of 2020 on Maximum Interest \nRates on Mortgage -backed Housing Loans  and has been compiled  based on regulations issued by", "metadata": {"source": "data\\CBSL\\2021\\bsd_frequently_asked_questions_no_1_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "Rates on Mortgage -backed Housing Loans  and has been compiled  based on regulations issued by \nthe Central Bank of Sri Lanka up to 17.02.2021.  \nThe responses herein are subject to changes based on future regulations and/or amendments, if any.", "metadata": {"source": "data\\CBSL\\2021\\bsd_frequently_asked_questions_no_1_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n17 February 2021        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 01 of 2021  \n \n2 \n \n\uf0a7 Rate of interest:  \no Interest duri ng the first 5 years will be fixed at a rate of 7% per annum.  \no Interest during the period after the first 5 years will vary based on the Average Weighted \nPrime Lending Rate (AWPR) as the applicable rate is AWPR plus 1% per annum.  \no The interest rate variance after the fixed 5 years will take place every 6 months based on the \naverage monthly  AWPR for the banking sector published by the Central Bank of Sri Lanka \nduring the immediately preceding 6 months.  \n \n5. Will customers be allowed to o btain a housing loan  under the terms specified in this Order to \nsettle existing housing loans at the same or any other bank?  \nNo. \n \n6. For what purposes can the housing loan under this Order be utilized?  \n\uf0a7 Housing  loans under the terms of this Order can be obtained for  the following purposes provided \nthat the facility is secured by primary mortgage over the same property:  \no purchase of land for construction of a house,  \no purchase of a house,  \no construction of a house, or  \no renovation  of an existing house.  \n\uf0a7 However, this scheme is not intended for commercial scale real estate developers.  \n \n7. Can borrowers settle housing loans obtained under the terms of this Order without a pre -\nsettlement cost?  \nYes, but only if the facility is settled in full at end of the first 5 years where the rate of interest remains \nfixed  at 7% per annum.  \n \n8. Is there a minimum or maximum limit on the amount permitted to be borrowed under the \nterms specified in this Order?  \nNo.  \nThe amount will depend on the  respective bank\u2019s assessment/evaluation over the borrower\u2019s income, \nrepayment capacity, value of property offered as the primary mortgage and any other factors based \non the bank\u2019s internal policy and/or business decision.", "metadata": {"source": "data\\CBSL\\2021\\bsd_frequently_asked_questions_no_1_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n17 February 2021        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 01 of 2021  \n \n3 \n \n \n9. Will a bank consider other incom e (non -related to salary) of the borrower as a source of income \nfor repayment?  \nAt the discretion of the respective bank , based on their internal policy and/or business decision , the \nbank may consider other income of the borrower  as an additional source of income for repayment.  \n \n10. Will a bank grant a joint housing loan under the terms of this Order for two individuals to \npurchase/ develop the same property, when both are eligible for housing loans and both expect \nto obtain the loan?  \nYes, if both parties are sal aried employees in the public and/or private sector  and t he housing loan is \nsecured by primary mortgage over the same property.  \n \n11. What if only one of the joint borrowers is a salaried employee in the public/private sector?  \nSuch requests can be considered favourably, however, only at the discretion of the respective bank \nbased on their internal policy and/or business decision.  \n \n12. Are borrowers  allowed to mortgage another (alternative) property and obtain a loan to build a \nhouse or purchase land at some other place?   \nNo, housing loans granted under the terms of this Order is limited only to develop/purchase the same  \nproperty that is offered as a primary mortgage to the bank.  \n \n \n13. Will a bank grant a housing loan under the terms of this Order to purchase/ develop  properties \nowned by the spouse of salaried employees?  \nYes, a joint loan secured by primary mortgage over the same property  can be considered by the bank.  \n \n14. Can the  Non-executive  Directors  of companies with monthly fixed remuneration as resolved by \nthe company, apply for a housing loan under this Order?  \nNon-executive Directors  are not considered as employees of the company and there is no retirement", "metadata": {"source": "data\\CBSL\\2021\\bsd_frequently_asked_questions_no_1_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "Non-executive Directors  are not considered as employees of the company and there is no retirement \nage for such positions. Therefore, such positions are not covered by this Order.", "metadata": {"source": "data\\CBSL\\2021\\bsd_frequently_asked_questions_no_1_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \nBANK SUPERVISION DEP ARTMENT  \n \n17 February 2021        FREQUENTLY ASKED QUE STIONS  (FAQs)                No. 01 of 2021  \n \n4 \n \n15. Will a bank grant an additional housing loan (2nd loan) under the terms of this Order, for the \nsame property,  which is purchased with bank funds, mortgaging the same property?  \nHousing loans cannot be granted under the terms of this Order based on mortgages other than the \nprimary mortgages.  \n \n \n16. Can a borrower apply for second loan for a new property with  a primary mortgage?  \nConsidering the objectives of this Order (i.e., need to support the expansion of home ownership of \ngeneral public and to provide an additional stimulus to the domestic construction sector and its supply \nchains), there is no restriction  in this Order to grant a second loan for a new property with a primary \nmortgage provided that other requirements under the Order are met.  \n \n \n17. Can a borrower apply for  an additional loan for property /land  already pledge d as a primary \nmortgage for the purpo se of constructing a house or for extension of the existing house?  \nSince the  bank  has already granted a loan on the property before the date of this Order, granting an \nadditional loan on the same property may depend on the current valuation of the property . If the \ncurrent valuation is adequate to cover the additional loan  banks may accommodate such request.  \nAccordingly, customers may obtain an additional loan from the same bank . However, if the current \nvaluation is inadequate to cover the additional loan, banks may decline such request.   \n \n18. What if the existing housing loans are repaid at a much higher interest rate compared to the \nterms specified under this Order? Can the interest  rate of such existing housing loans be \nreduced?  \nConsidering the cost of funds, market interest rates and other relevant factors based on their internal", "metadata": {"source": "data\\CBSL\\2021\\bsd_frequently_asked_questions_no_1_of_2021_e.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "policy and/or business decision, the respective bank may reduce the interest rate of an existing \nhousin g loan  at their discretion.  However , such housing loans will not fall under this scheme.  \n \n--------------------------  These FAQs were last updated on 17.02.2021  ----------------------------", "metadata": {"source": "data\\CBSL\\2021\\bsd_frequently_asked_questions_no_1_of_2021_e.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_monetary_law_act_order_1_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_monetary_law_act_order_1_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_monetary_law_act_order_1_of_2021_e.pdf", "page": 2, "year": 2021}, "type": "Document"}
{"page_content": "Please Email to;\u2022 Economic Research Department, Money & Banking Division - money&banking@cbsl.lk\u2022 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", "metadata": {"source": "data\\CBSL\\2021\\bsd_monetary_law_act_order_1_of_2021_e.pdf", "page": 3, "year": 2021}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2021\\bsd_monetary_law_act_order_4_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "30 December 2021MONETARY BOARI)\nCENTRAL BANK OF SRI LAIIKA\nMONETARY LAW ACT ORDER No.03 of2021\nMAXIMUM INTEREST RATES ON FOREIGN CURRENCY DEPOSITS\nOF LICENSED COMMERCIAL BANKS AND THE NATIONAL SAVINGS BANK\nIssued under Section 10a(l)(a) of the Monetary Law Act, No. 58 of 1949, as amended.\nConsidering the current and expected macroeconomic developments and the prevailing interest\nrates on foreign culrency deposits of licensed banks, the Monetary Board hereby issues an Order\non maximum interest rates to be paid in respect of foreign currency deposit products of licensed\ncommercial banks and the National Savings Bank.\n1. Empowerment\nunder the\nMonetary Law\nAct\n2. Maximum\ninterest rates on\nFCY deposits\n3. Basis of\ncalculation1.1\n2.1\n2.2\n3.1\n3.2In terms of Section 10a(1)(a) of the Monetary Law Act, the Monetary\nBoard may from time to time fix the maximum rates of interest which\nlicensed commercial banks and licensed specialised banks may pay\nupon various classes of deposits.\nThe maximum interest rates that shall be offered or paid by a licensed\ncommercial bank and the National Savings Bank on foreign currency\n(FCY) deposits are as follows;\n(D with a maturity of less than or equal to one year shall be based\non the simple average of the primary market yields of 364-days\nTreasury Bills determined at auctions held during the last\ncalendar month of the previous quarter less 150 basis points, or\n5 per cent, whichever is higher and;\n(ii) with a maturity of more than one year shall be determined based\non the market behaviour.\nIn the case of Special Deposit Accounts in FCY, the additional interest\nrate that can be offered or paid shall be over and above the interest\nrate applicable in 2.1 above.\nThe auctions for calculating the above average rate, shall be selected\nbased on the auction date falling within the corresponding calendar\nmonth, and not the settlement date.\nThe maximum interest rates for the forthcoming quarter shall be", "metadata": {"source": "data\\CBSL\\2021\\bsd_monetary_law_act_order_No_3_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "month, and not the settlement date.\nThe maximum interest rates for the forthcoming quarter shall be\ncomputed on the last working day of the current quarter.", "metadata": {"source": "data\\CBSL\\2021\\bsd_monetary_law_act_order_No_3_of_2021_e.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "30 December 2021MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nMONETARY LAW ACT ORDER No.03 of202l\n4. SWAP Cost\n5. Regulatory\nReporting and\nDisclosure\n6. Implementation 6.1\n7. Revocation 7.t4.1Considering recent excessive volatility observed in the USD/LKR\ndomestic swap market, and to ensure orderly conduct of the same,\nlicensed banks are hereby instructed to execute USD/LKR swap\ntransactions, subject to a maximum USD interest rate of 10 per cent\nper annum. Accordingly, the USD/LKR swap points shall be pro-\nrated based on the above benchmark USD interest rate for the\nrespective tenors until further notice.\nEvery licensed commercial bank and the National Savings Bank shall;\n(i) submit details of the interest rates offered on FCY deposit\nproducts in accordance with the weekly retum on 'Rates of\nInterest', and\n(ii) make arrangements to inform and display the interest rates\noffered to customers on FCY deposit products.\nThese Orders shall be effective from 31.12.2021 and shall be\napplicable for new FCY deposits, existing FCY savings deposits and\nat the renewal of FCY term deposits.\nMonetary Law Act Order No. 02 of 2021 dated 24.08.202I on\nMaximum Interest Rates on Foreign Currency Deposits of Licensed\nCommercial Banks and the National Savings Bank is hereby\nrescinded.\n+^N>J C-J-\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lankn5.1", "metadata": {"source": "data\\CBSL\\2021\\bsd_monetary_law_act_order_No_3_of_2021_e.pdf", "page": 1, "year": 2021}, "type": "Document"}
{"page_content": "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\u2019 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", "metadata": {"source": "data\\CBSL\\2021\\Investments in Sri Lanka International Sovereign Bonds by Licensed Commercial Banks and National Savings Bank.pdf", "page": 0, "year": 2021}, "type": "Document"}
{"page_content": "05 December 2022MONETARY BOARI)\nCENTRAL BAIIK OF SRI LANKA\nBAI{KING ACT DETERMINATION No.01 of2022\nANNUAL LICENCE FEE OF\nLICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS\nDetermination made by the Monetary Board of the Central Bank of Sri Lanka under\nSections 8 and 76D (6) of the Banking Act, No. 30 of 1988, as amended.\nIn terms of Sections 8O and 76D (6) of the Banking Act No. 30 of 1988, the Monetary Board\nhas determined that every licensed commercial bank and licensed specialised bank shall pay the\nlicence fee in respect of the calendar year 2023 to the Central Bank of Sri Lanka on or before\n3l't January 2023, based on the total assets of such bank as per regulatory reporting as at the end\nof 2022, as set out in the Table below.\nAnnual licence fee for theyear 2023\nTotal Assets\nas at the end2022 @s. Bn)Licence Fee\n(Rs. Mn)\nAbove 2,000 38.0\nAbove 1,000 to 2,000 35.0\nAbove 500 to 1,000 28.5\nAbove 200 to 500 2s.0\nAbove 125 to 200 18.s\nAbove 75 to 125 t2.5\n25 to 75 6.5\nLess than 25 J.J\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Determination_No_1_of_2022.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_01_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_02_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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.\n42.Dr. P Nandalal Weerasinghe Chairman of the Monetary Board and the Governor of the Central Bank of Sri Lanka2", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_02_of_2022_e.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_03_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_03_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "Annex I: List of HS Codes Subject to Margin RequirementNoHS code10304412030449303045140304615030462603046970304748040299909040310100403901104051012040620130406301404069015060311160604901708011190180801199019080211902008023190210802809022080410102308041020240805101025080521102608061027080620280808102908083030080940310810503208109090330811203408119035081320360813303708134090NoHS code3808135039081400400901214109012242090220194309022093440902209945100490461104124711041948110422491104235011042951110430521105105311052054110710551107205611081457110900581806205918063160180632611806906219021163190219641902206519023066190240671904106819042069200799702008117120081910722008192073200819907420083090NoHS code7520086076200870772008977820089910792008999080200911108120091190822009128320094984200969852009718620097987200981882009899089200990902202109122029192220299109322029930942202994095220299519622029959972202996198220299699922029970100220299911012202999910222030010103220300201042203009010522041010622042110722051010822071010922082011022083011122084010NoHS code11222085011322086011422087011522089010116240210117240220201182402205011924022060120240319201212403199012224039190123240399901243303001012533030021126330300221273303002912833041012933042013033043013133049113233049913333051013433052013533053013633059013733061013833069013933071014033072014133073014233074914333079090144340119201453401201014634013020147340290101483405102", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_03_of_2022_e.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "NoHS code149 340520150 34053015134054010152 34054090153 340590154 34060015538070010156 38140010157 38140090158 381900159 3926202016039262090161401519162 401590163 401691164 401694165 40169510166 40169590167 40169990168420100169 420211170420212171 420219172 420221173420222174 420229175 420231176 420232177 420239178 420291179 420292180 420299181 420310182 42032118342032918442033018542034018642050010187 42050090188430400NoHS code189441911190441990191 442090192 4421919019344219990194 480300195 48181010196 48181090197 481820198 48183019948185090200 48189020201 48189090202 570110203 57019090204 57022010205 570231206 570232207 570241208 570249209 570292210 570299211570320212 570330213 57039090214 57049090215 570500216 610120217610130218 610190219 610210220 610220221 610230222610290223 610310224 610322225 610323226 610329227 610331228 610332NoHS code229 610333230610339231610341232610342233 610343234 610349235 610413236610419237610422238 610423239610429240 610431241 610432242610433243 610439244 610442245 610443246 610444247610449248610452249610453250 610459251 610461252 610462253610463254 610469255 610510256 610520257610590258 610610259 610620260610690261610721262 610729263 610791264 610799265 610831266610832267 610839268 610891No HS code269610892270 610899271 610910272610990273611011274611012275611019276611020277 611030278 611090279 611120280 611130281 611190282 611211283611212284 611219285 611231286 611239287 611241288611249289611300290 611420291 611430292 611490293 611510294 611529295 611530296611594297 611595298 611596299 611599300 611610301 611691302611692303 611693304611699305 611710306 6117801030761178020308 6201113", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_03_of_2022_e.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "No HS code309620112310 620113311 620119312 620192313 620193314 620199315620211316620212317620213318 620219319 620291320620292321620293322 620299323 620311324 6203129032562031990326 62032290327 6203239032862032990329 62033133062033290331 6203339033262033990333620341334 62034290335 62034390336 6203491133762034990338 6204129033962041390340 62041990341 62042290342 6204239034362042990344 620431345 620432903466204339034762043990348620441No HS code34962044219350 62044290351 62044390352 62044419353 62044490354 62044990355 62045290356 6204539035762045990358 620461359 62046219360 62046290361 6204639036262046919363 6204699036462052090365 62053090366 62059090367 62061090368620620369 62063090370 62064019371 620640903726206909037362072290374 62082190375 62082290376 62082990377 62089190378 620920379 620930380 620990381 621010382 621020383621030384 621040385 621050386 621111387 621112388 621120No HS code389 62113290390621133903916211399039262114219393 62114292394 62114299395 62114319396 62114392397 621143993986211491939962114992400 62114999401 62132090402 6213909040362141090404 62144090405 62149090406 621510407621520408 621590409621600410 630110411630120412 630130413 630140414630190415 6302104166302219041763022290418 63022990419 63023190420 63023290421 63023990422630240423 6302519042463025990425 63026090426 63029190427 63029390428 63029990No HS code429 630312430 630319431 630391432 630392433630399434 630411435 63041990436 630420437630491438630492904396304939044063049990441 63051010442 63051090443630520444 630532445 630533446 630539447 630590448 630612449630619450630622451630629452 630630453 630640454630690455 630710456630720457 630790458 63079090459 640110460 64019946164021246264021910463 64021919464640220465 640291466 640299467640312468640319104", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_03_of_2022_e.pdf", "page": 3, "year": 2022}, "type": "Document"}
{"page_content": "No HS code469 64031919470640320471 640340472 640351473 640359474 640391475 640399476640411477 640419478 640420479 640510480 640520481 640590482 650100483650200484650400485 65050010486 65050090487 65061090488 6506911048965069190490 65069910491 65069990492650700493660110494 660191495 660199496 670300497 670411498 670419499670420500 670490501 691110502 6912001050369120090504 69139090505 701310506701322507 701328508 701333No HS code509 701337510701341511701342512 701349513 701391514 70139990515 701810516701820517 701890518732111519732112520 732119521 732181522 732182523 732189524732310525732391526 732392527 732393528 732394529 732399530 73241010531 73241090532 732421533 732429534 732490535 74181090536 741820537 76151020538 76151090539 76152090540 821000541821110542 821191543 821192544 821194545 82121010546 82121090547 82122090548 821300No HS code549 821410550 821420551 821490552 821510553 821520554 821599555 830300556830621557 830629558 830630559 841451560 841459561 84151021562 8415102256384151023564 84151024565 84151029566 84151032567 84151033568 84151034569 84151035570 84151039571 84158190572 84158290573 84158390574 84159019575 84159029576 84181090577 84182190578 84182920579 84182990580 84231020581 845011105828450113158384501132584 8450113358584501134586 84501139587 84501141588 84501142No HS code58984501143590 84501144591 84501149592 84501210593 84501231594 84501232595 84501233596 84501234597 84501239598 84501910599 84501931600 84501932601 84501933602 84501934603 84501939604850811605 850940606 850980607851010608 851020609 851030610 85131010611 85131090612851610613 851621614 851629615 851631616 851632617851633618851640619 851650620 851660106218516609062285167162385167262485167910625 85167920626 85167990627 851680628 8517115", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_03_of_2022_e.pdf", "page": 4, "year": 2022}, "type": "Document"}
{"page_content": "No HS codeNoHS code NoHS code No HS code629 85171210 669 85392290 709 920590749 95049090630 85171220670853929 710920600 75095051063185171290 671 85392910 711 920710 751 950590632 85171867285392990712 920790 752 95062910633 85258090 673 85393110 713 920890 753 95062920634852712 67485393190714 94012090 754 95062990635 852713675 85393271594013090 755 950631636 852719676 85393971694017190 756 950651637 852721 677 853941 717 94019090 757 950659638 852729 678 853949 718 94032090758 950661639 852791 679 853950 719 94039090 759950662640 852792 680 853990 720 94051010 760950669641 852799 681 900410721 94051020 761950691642 85285990 682 900490 722 94051090 762 950699643852869683900510723 94052010763 950720644 85287120684900580 724 9405202076495079064585287190 685 91011172594052090 765 950890646 85287210 686 91011990 726 940530 766 960340647 85287231 687910121727 94054010 767 96040064885287232 688910129 72894054020 768 96050064985287233689 910191 729 94054030 769 961310650 85287234 690 910199 730 94054040 770 96132065185287235 691 91021173194054090 771 961390652 85287236 692 910212 732 94055010 772 96151165385287239 693 910219 733 94055020 773961519654 85287241 694 910221 734 94055090 774 96159065585287249695910229735 940560775 96161010656 85287291 696 910291 736 940591 776 9616109065785287299 697 910299 737 940592 777 96170090658 85287320698910511 738 94059910778 96180065985287390 699 910519 739 94059990 779 96200066085291010 700 910521 740 9503001066185291030 701 910529 741 95030030662 85291090702910700 742 95030050663 852990 703 920110 743 95030070664 853910 704 920120 744 95030080665 85392110 705 920190 745 9503009066685392190 706 920210 746 950420667 8539221070792029074795044066885392220 708 920510 748 9504506", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_03_of_2022_e.pdf", "page": 5, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_4_of_2022.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_4_of_2022.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "13 May 2022\n5. Treatment of Other Comprehensive Income (OCI)6. LiquidityCoverage Ratio (LCR) and Net Stable Funding Ratio (NSFR)6 \u25a0MONETARY 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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_4_of_2022.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_4_of_2022.pdf", "page": 3, "year": 2022}, "type": "Document"}
{"page_content": "22 Jtne2022CENTRAL BANK OF SRI LANKA\nBANK SI'PERVISION DEPARTMENT\nBANKING ACT DIRECTIONS No.05 of2022\nSUSTAINABLE FINANCE ACTIVITIES OF LICENSED BANKS\nThe Central Bank of Sri Lanka (CBSL), having considered the importance trf committing to\nachieving the Sustainable Development Goals of United Nations and the need to transit towards\na green, inclusive, and balanced economy in Sri Lanka, published the Road Map for Sustainable\nFinance in Sri Lanka in 2019. The Road Map provides a broader direction to financial\nregulators and financial institutions to effectively manage environmental, social and\ngovemance (ESG) risks associated with projects they finance and promote assistance to\nbusinesses that are greener, climate-friendly, and socially inclusive.\nThe Road Map, required to establish a classification and measurement system for sustainable\nactivities, i.e., a taxonomy, for Green Finance activities in Sri Lanka with the support of all\nstakeholders. The Sri Lanka Green Finance Taxonomy was published by CBSL on 06 May\n2022.\nConsidering the national importance ofpromoting sustainable financing initiatives and the need\nfor providing a govemance and risk management framework for licensed banks in respect of\nsustainable finance activities, the Monetary Board hereby issues the following Directions on\nSustainable Finance activities in licensed commercial banks and licensed specialised banks,\nhereinafter referred to as licensed banks, with a view to facilitating a sustainable economy and\npromoting the sustainable finance practices of licensed banks, in line with Sustainable Finance\nRoad Map of CBSL.\n1. Empowerment 1.1 In terms of Section a6(1) of the Banking Act, in order to ensure\nthe soundness of the banking system, the Monetary Board is\nempowered to issue Directions to all licensed commercial banks,\nregarding the manner in which any aspect of the business of such\nbanks is to be conducted.\n1.2 In terms of Section 76J (l) of the Banking Act, the Monetary", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_5_of_2022.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "banks is to be conducted.\n1.2 In terms of Section 76J (l) of the Banking Act, the Monetary\nBoard is empowered to give Directions to licensed specialised\nbanks or to any category oflicensed specialised banks, regarding\nthe manner in which any aspect of the business of such banks is\nto be conducted.", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_5_of_2022.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "22 June2022CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\nBANKING ACT DIRECTIONS No.05 o12022\n2. Applicability\n3. Sustainable\nFinance\nInitiatives\n4. Identified\nPriority\nSectors3.1\n3.2\na1J.J2.1 These Directions shall be applicable to all licensed banks.\nLicensed banks shall identif,z and develop appropriate guidelines to\nconduct its business activities in a sustainable manner.\nLicensed banks shall develop innovative financial solutions to\nsupport sustainable initiatives.\nLicensed banks shall consider raising funds via instruments such as\ngreen/sustainable bonds and allocate such funding to invest in/fund\nsustai nable activities.\nThe following sectors/activities are identified as priority sectors to\nprovide sustainable lending facilities by licensed banks:\nIdentified Sectors Prioritized Sub Sectors\nAgriculture, forestry and\nloggingSustainable agriculture,\nforestry development\nManufacturing Energy saving machinery/\nequipment\nElectric power generation,\ntransmission and distributionRenewable energy projects\nTransportation and storage All forms of sustainable\ntransport and storage\nWater supply, sewerage and\nwaste managementWater supply/management\nprojects, Waste management\nprojects\nConstruction Green construction proj ects\nSustainable Tourism an(\nrecreationAll sustainable tourism an(\nrecreational activities\nOther Sectors Gas, steam and air\nconditioning supply, Financial\nServices, Information and\ncommunications technology,\nSustainable Women\nEmpowerment initiatives etc.4.1", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_5_of_2022.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "22 Jtne2022CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\nBANKING ACT DIRECTIONS No.05 of2022\n4.2Licensed banks shall consider the applicable environmental/climate\nadaptation and mitigation aspects, social imfact, regulations,\ncertifications, and relevant external and internal guidelines on\nsustainable activities granting funding to above priority sectors and\nreporting above information.\nLicensed banks shall ensure the compliance with the requirements\nof the Sri Lanka Green Finance Taxonomy when identifying the\nabove priority sectors and activities.\nBoard of Directors (BOD) and senior management shall ensure\neffective and efficient overseeing of the Sustainable Finance\nactivities and a BOD approved policy at a minimum shall include\nthe following:\n(a) clear roles and responsibilities of BOD and senior\nmanagement on overseeing of the bank's environmental and\nsocial risks and sustainable business activities;\n(b) identify main risks for the licensed bank on environmental\naspects and green and climate financing activities;\n(c) ensuring that sustainable financing activities and identified\nenvironmental risks are addressed in the bank's overall risk\nmanagement framework;\n(d) policies and processes to assess, monitor, review and report\nsuch risks;\n(e) parameters and metrics for measuring the progress of\nsustainable finance initiatives; and\n(f) appropriate internal controls to be in place.\nThe Chief Executive Officer and relevant Key Management\nPersonnel of licensed banks under the guidance provided by BOD\nshall ensure:4.3\n5.1 5.Governance\nFramework for\nSustainable\nFinance\nInitiatives\n5.2", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_5_of_2022.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "22 Jane2022CENTRAL BANK OF SRI LANKA\nBANK SUPERVISION DEPARTMENT\nBANKING ACT DIRECTIONS No.05 of2022\n6.1 6.Risk\nManagement(a) policies, tools, metrics, operational procedures and controls\nimplemented by the bank in respect of sustaiRable finance are\nreviewed and updated regularly (at least annually) and\nintegrated with other relevant policies and procedures of the\nbank;\n(b) adequate resources, skills and expertise are allocated to the\nmanagement of sustainable finance activities;\n(c) clear articulation of the roles and responsibilities of business\nunits and functions in managing risks associated with\nsustainable finance; and\n(d) BOD is informed in a timely manner on material issues,\nrelating to sustainable financing and business practices.\nLicensed banks shall identify and evaluate the risks stemming from\nassociated climate, environmental and other green financing\nactivities considering the nature, scale, complexity, and\ninterconnectedness of its operations and assess the magnitude and\nmateriality of such risks.\nLicensed banks shall incorporate ESG risk management to the\nentire decision-making processes, including environmental and\nsocial policies, risk assessment, environmental and social\ncovenants.\nA11 material risks, defined in Direction 6.1 above, shall be\nconsidered in the Pillar II assessment under Capital requirements\nfor the licensed banks.\nLicensed banks shall identi$, how risks identified in Direction 6.1\nwill affect its business model and assess the potential impact on the\nbank.6.2\n6.3\n6.4", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_5_of_2022.pdf", "page": 3, "year": 2022}, "type": "Document"}
{"page_content": "22 June2022CENTRAL BANK OF SRI LANKA\nBANK SUPERYISION DEPARTMENT\nBANKING ACT DIRECTIONS No.05 of2022\n6.5\n6.6\n7.1Licensed banks shall implement effective risk management\npractices and intemal controls to mitigate risks\"in Direction 6.1\nabove.\nLicensed banks may conduct scenario analysis and stress testing to\nassess the impact of potential/alternative climate related risks and\ngreen fi nancing activities.\nLicensed banks are expected to build capacity on Sustainable\nFinance activities going forward providing adequate training to\nstaff members.\nLicensed banks are expected to develop and provide new innovative\nsustainable finance solutions to customers.\nLicensed banks shall develop expertise in environmental stress\ntesting and scenario analysis, whilst obtaining appropriate external\nexpertise on environment and climate related risk aspects.\nLicensed banks shall disclose the following information related to\nsustainable finance practices in their annual reports:\n(a) Al overview on bank's sustainable finance policies and\nactivities;\n(b) Identified sustainable finance related risks and associated\nmitigation measures; and\n(c) A statement on banks approach towards sustainable finance\nactivities and way forward.\nLicensed banks are encouraged to disclose environmental and\nsocial impact generated from business activities using\nintemationally recognized reporting frameworks, such as Global\nReporting Initiative (GRD and recommendations ofthe Task Force\non Climate-related Financial Disclosures (TCFD).7. Capacify\nBuilding and\nInnovation\n8. Disclosures and\nReporting7.2\n7.3\n8.1\n8.2", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_5_of_2022.pdf", "page": 4, "year": 2022}, "type": "Document"}
{"page_content": "22 Jtne2022CBNTRAL BANK OF SRI LANKA\nBANK ST]PERVISION DEPARTMENT\nBANKING ACT DIRECTIONS No.05 of2022\n8.3 Licensed banks shall submit the information required as per Annex\nI to the Bank Supervision Department within 30 days from the end\nofeach quarter.\nDr. P Nandalal Weerasinfhe r )\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_5_of_2022.pdf", "page": 5, "year": 2022}, "type": "Document"}
{"page_content": "22 June2022CENTRAL BANK OF SRI LANKA\nBANK SI]PER\\'ISION DEPARTMENT\nBANKING ACT DIRECTIONS No.05 of2022\nAnnex I\nQuarterly Statement on Sustainable Financing Activities of Licensed Banks\nAs at .. .. ....\nName of the Licensed Bank -\nEmail to Bank Supervision Department, Database - bsddb@obs1.lk, within 30 days from the end of each quarter\nISectorSub Sector\n(Identify as defined in Sri\nLanka Green Finance\nTaxonomy for applicable\nfacilities)No. of\nCredit\nFacilitiesValue of\nOutstanding\nCredit\nFacilities as\nat Q... XXNo of\nNew\nCredit\nF acilities\ngranted\nduring\nQ....XXValue of\nthe new\nCredit\nFacilities\ngranted\nduring\nQ...XX\nIAgriculture,\nForestry and\nLoggingSustainable Asriculture\nForestrv and Lossins\nOther Sustainable Activities\n2Manufacturing Energy saving\nmachinerv/eouioment\nOther Sustainable\nManufacturing\nJElectric power\ngeneration,\ntransmission\nand distributionRenewable energy proiects\nOther Sustairable Activities\n4Transportation\nand storageAll forms of sustainable\nTransportation and storage\n5Water supply,\nsewerage and\nwaste\nmanagementWater supply/management\noroiects\nWaste management projects\nOther Sustainable Activities\n6Construction Green construction proj ects\nOther Sustainable Activities\n1Sustainable\ntourism and\nrecreationAll sustainable tourism and\nrecreation activities\n8Other Sectors Gas, steam and air\nconditionins supply\nFinancial Services\nInformation and\ncommunications technolosy\nSustainable Women\nempowerment initiatives, if\nnot covered under any other\na{ea\nOther Sustainable Lending\n(Please SpecifV)\nTotal", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_5_of_2022.pdf", "page": 6, "year": 2022}, "type": "Document"}
{"page_content": "0 tt Juty 2022MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nBA}[KING ACT DIRECTIONS No.06 of2022\nADDENDUM TO THE BANKING ACT DIRECTION NO. 8 OF 2011\nCUSTOMER CHARTER OF LICENSED BANKS\nACCESSIBILITY TO BANKING SERVICES FOR CUSTOMERS\nWITH SPECIAL NEEDS\nIssued in terms of the powers confered by Sections 46(l) and 76(JX1) of the Banking Act, No. 30 of\n1988, as amended.\nThe Monetary Board of the Central Bank of Sri Lanka hereby issues the following addendum to the\nBanking Act Direction No. 08 of 2011, on Customer Charter of Licensed Banks, with a view to further\nstrengthening the financial consumer protection measures for customers with special needs.\nAccordingly, paragraph 7 of the Annexure to Banking Act Direction No. 08 of 201 1 on Customer Charter\nof Licensed Banks, is expanded as follows:\nSpecial attention and care\nThe customers such as elderly, disabled or customers with low financial literacy (hereinafter\nreferred as customers with special needs) have the right to receive special attention to facilitate\nthem to have a fair access to banking services.\nAccordingly, licensed banks shall implement comprehensive policies and procedures to ensure\nimproved access to banking services for customers with special needs, including but not limited\nto the Guidelines provided in Schedule 1.\nLicensed banks shall expedite the implementation of such measures at branches to avoid\ninconvenience to concerned customers.1\n7.1\n7.2\n7.3\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_6_of_2022.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "2 \n SCHEDULE 1 \nGUIDELINES FOR LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED \nBANKS TO IMPROVE ACCESSIBILITY TO BANKING SERVICES FOR CUSTOMERS \nWITH SPECIAL NEEDS \n1. Introduction \n1.1 These guidelines set minimum requirements for licensed banks to facilitate accessible banking \nservices for customers with special needs and improve financial consumer protection, and \nfinancial inclusion of such customers.  \n1.2 In the context of these guidelines, \u201ccustomers with special needs\u201d refer to individuals who \nrequire additional assistance to perform banking transactions and/or to obtain banking services \ndue to physical, or medical conditions including, but not limited to visual impairments, hearing \nimpairments, loss of limb/s, etc. and due to old age.  \n2. General Guidelines \n2.1 Improve Accessibility to Banking Services  \n(i) Licensed banks shall ensure that customers with special needs have fair access to banking \nservices and products, in a similar manner to any other customer.  \n(ii) In this regard, licensed banks shall provide the following to ensure accessible banking services \nto individuals with special needs. \n(a) Licensed banks shall ensure that all newly opened physical service outlets such as bank \nbranches, mobile banking units, and self-service machines including Automated Teller \nMachines (ATMs) and Cash Deposit Machines (CDMs) are accessible to customers with \nspecial needs including customers using wheelchairs, crutches, walkers, etc.  \n(b) Digital banking channels including internet banking and mobile banking apps to be \ncompatible with international accessibility standards accommodating options such as \nscreen magnifiers, screen readers, text to speech and providing text transcript to allow", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_6_of_2022.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "3 \n audio information accessible, etc., where applicable. In this regard, licensed banks are \nexpected to streamline their apps and website to be compatible with the in-built, standard \naccessibility features of devices (mobile phones, laptops, tabs, etc.) used by customers \nwith special needs. \n(c) Licensed banks are required to establish quality control/assurance function or a similar \narrangement to ensure that banking products and services are accessible friendly for \ncustomers with special needs. \n2.2 Special Attention and Due Care  \n(i) Licensed banks may consider flagging bank accounts of customers with special needs enabling \nthe bank staff to recognize such customers and pay special attention and due care when \nproviding banking services to such customers. \n(ii) Licensed banks shall provide special training to relevant staff at bank branches and other service \noutlets to equip them to provide cordial and effective service to customers with special needs. \n(iii) Licensed banks shall ensure that the customers with special needs have access to obtain \nassistance from bank staff in case the customer believes that such assistance is necessary for \nthem to perform/obtain banking services.  \n(iv) Licensed banks shall maintain a customer care hotline/electronic media (live chat) to assist \ncustomers with special needs in resolving their complaints/issues and make customers aware of \nsuch facilities. \n2.3 Ensure Fair Treatment  \n(i) Licensed banks shall ensure fair treatment to all customers, including those with special needs. \nAccordingly, licensed banks shall review their internal policies and procedures that hinder fair \naccess to banking services by customers with special needs. \n(ii) Licensed banks shall not deny the provision of banking services to customers based on their age \nor special needs, nor enforce any additional terms and conditions (including any requirement", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_6_of_2022.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "or special needs, nor enforce any additional terms and conditions (including any requirement \nthat prevent such customer from obtaining banking services from a branch other than the branch", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_6_of_2022.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "4 \n where the respective account is opened) which may place such customers in a disadvantageous \nposition. \n(iii) Licensed banks may consider using biometric authentication options such as fingerprint readers \nto verify the identity of such customers whose identity cannot be verified due to not being able \nto place a valid signature.  \n(iv) Licensed banks are encouraged to promote a diverse and inclusive culture to create a welcoming \nenvironment for individuals with special needs and ensure zero tolerance for discrimination on \nany grounds. \n3. Specific Guidelines to Improve Banking Experience for Customers with Visual \nImpairments \n3.1 Facilitate Informed Decision Making: Licensed banks shall ensure that the customers with \nvisual impairment have access to adequate information on the banking products and services at \nthe point of onboarding and, thereafter, with respect to, but not limited to, the features, terms \nand conditions of the products or services for informed decision making.  \n3.2 Banks may consider allocating dedicated staff to assist customers with special needs and make \navailable the key documents in accessible friendly electronic media to make informed decisions. \n3.3 Accessibility and Visibility Options:  Licensed banks shall formulate a plan with timelines to \nprovide customers the option to opt for high visibility versions of various documents such as \nbank statements, mandates, various applications with larger fonts and high contrast colours for \nthe benefit of elderly customers and those with partial visual impairment.  \n3.4 Licensed banks shall consider accessibility features for visually impaired customers as \nimportant when procuring new Automated Teller Machines (ATMs), Cash Deposit Machines \n(CDMs) and other self-service machines (SSMs) with a view to making use of Brail keypads \nand audio input/output facilities therein to provide access to banking services for visually", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_6_of_2022.pdf", "page": 3, "year": 2022}, "type": "Document"}
{"page_content": "and audio input/output facilities therein to provide access to banking services for visually \nimpaired customers. In this regard, banks shall introduce such machines to facilitate the visually \nimpaired customers and replace existing incompatible ATM machines with new machines, in \nan orderly manner in the future.", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_6_of_2022.pdf", "page": 3, "year": 2022}, "type": "Document"}
{"page_content": "5 \n 3.5 Licensed banks shall establish above machines strategically in consultation with other banks to \nensure that at least one such machine is generally available in each locality catering to the needs \nof visually impaired cusotmers. \n3.6 Licensed banks shall ensure that no additional conditions are enforced on visually impaired \ncustomers, such as forcing to open joint accounts, restricting banking services to the branch at \nwhich such customers have opened their  bank accounts. \n4. Implementation  \n4.1 Licensed banks shall implement comprehensive policies and procedures to ensure improved \naccess to banking services for customers with special needs, including but not limited to the \nGuidelines, with a view to addressing any practical difficulties faced by such customers in \nobtaining banking services.  \n4.2 Licensed banks shall not levy any additional charge or fee to the customers who avail such \naccessibility options obtaining banking services. \n4.3 Considering the additional resources involved in implementing certain requirements, banks are \npermitted to stagger the implementation, with a view to achieving full compliance by \n31.12.2022.", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_6_of_2022.pdf", "page": 4, "year": 2022}, "type": "Document"}
{"page_content": "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.\nDepositors1. 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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_7_of_2022.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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\n2", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_7_of_2022.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "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\u2019 systems. \u2018Sri 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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_7_of_2022.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_7_of_2022.pdf", "page": 3, "year": 2022}, "type": "Document"}
{"page_content": "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.", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_8_of_2022.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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\n2", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Directions_No_8_of_2022.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "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\n1. 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.\u2014Dr. 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", "metadata": {"source": "data\\CBSL\\2022\\Banking_Act_Order_No_1_of_2022.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "llMarch2022MONETARY BOARD\nCENTRAL BANK OF SRI LANKA\nMONETARY LAW ACT ORDER No.01 of 2022\nAMENDMENT TO THE MAXIMUM INTEREST RATES ON LENDING PRODUCTS\nOF LICENSED BANKS\nIssued under Section I 04(1)0) of the Monetary Law Act, No. 58 of 1949, as amended.\nThe Central Bank of Sri Lanka has adopted monetary policy tightening measures in the recent\npast including an increase of policy interest rates to dampen the possible build-up of underlying\ndemand pressures in the economy, which would, in turn, help ease pressures in the external sector,\nthus promoting greater macroeconomic stability. Consequently, considering the increase in\noverall market interest rates, the Monetary Board hereby issues an amendment to the Monetary\nLaw Act Order No. 02 of 2020 on the Maximum Interest Rates on Lending Products of Licensed\nBanks.\nAccordingly, Order 2.1 of the Cited Order is replaced as follows and Order 2.2 is deleted.\n2. Interest Rates on\nLKR\ndenominated\nloans and\nadvances2.1 Commencing 14 March 2022, the maximum interest rates that\nshall be charged by licensed commercial banks and licensed\nspecialised banks for the credit card advances, pre-alranged\ntemporary overdrafts and pawning advances are given below:\n(D 20 per cent per annum on credit card advances commencing\nfrom the next billing cycle.\n(iD l8 per cent per annum on pre-affanged temporary overdrafts.\n(iii) 12 per cent per annum on the money lent for pawning\nadvances collateralised by personal articles made of gold\naccepted as a pledge, for all new pawning advances and\nexisting pawning facilities that are renewed.\nh'/,wJul-\nNivard Ajittr Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2022\\bsd_act_order_1_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "llMarch2022MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nMONETARY LAW ACT ORDER No.02 of 2022\nAMENDMENT TO THE MAXIMUM INTEREST RATES ON FOREIGN CURRENCY\nDEPOSITS OF LICENSED COMMERCIAL BANKS AND THE NATIONAL SAVINGS\nBANK\nIssued under Section 10a(1)(a) of the Monetary Law Act, No. 58 of l94i,as amended.\nConsidering the recent monetary policy tightening measures, the expected macroeconomic\ndevelopments and the prevailing interest rates on foreign culrency deposits of licensed banks, the\nMonetary Board hereby issues an amendment to the Monetary Law Act Order No. 03 of 2021 on\nMaximum Interest Rate on Foreign Currency Deposits of Licensed Commercial Banks and the\nNational Savings Bank, removing the existing maximum interest rate limits imposed on foreign\ncuffency deposits of licensed commercial banks and the National Savings Bank.\nAccordingly, Orders 2 and 3 of the cited Order are deleted.\nA;u ^sJ cJ<-\nNivard Ajith Leslie Cabraal\nChairman of the Monetary Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2022\\bsd_act_order_2_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "a,\\ April2022MONETARY BOARI)\nCENTRAL BANK OF SRI LANKA\nMONETARY LAW ACT ORDER No.03 of2022\nINTEREST RATES ON LENDING AND DEPOSIT PRODUCTS OF\nLICENSED BANKS\n(1) The Central Bank of Sri Lanka (CBSL) having considered the tight monetary policy measures\nadopted thus far hereby revokes Order 2. 1 of the Monetary Law Act drder No. 02 of 2020dated\n21 August 2020 as amended by the Order 2.1 of the Monetary Law Act Order No. 01 of 2022\ndated 11 March 2022, effective as follows.\n(i) Credit card advances, cofllmencing from the next billing cycle.\n(ii) A11 new pre-alranged temporary overdrafts and existing pre-alranged temporary\noverdrafts that are renewed/extended.\n(iii) All new pawning advances and existing pawning advances that are renewed.\n(2) Licensed banks shall adjust the deposit rates adequately, in line with the tight monetary policy\nmeasures adopted by CBSL, to attract deposits into the banking system.\nMrs.TMJYPFernando\nSenior Deputy Governor\nCentral Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2022\\bsd_act_order_3_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\bsd_act_order_4_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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 \u201cSix-Month Road Map for Ensuring Macroeconomic and Financial System Stability\u201d 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.", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_1_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "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", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_1_of_2022_e.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "No. 01 of 2022MONETARY BOARDCENTRAL BANK OF SRI LANKA24 March 2022CIRCULAR\n4. 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", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_1_of_2022_e.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "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\u2019s 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\u2019s 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", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_1_of_2022_e.pdf", "page": 3, "year": 2022}, "type": "Document"}
{"page_content": "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\nNotes: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", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_1_of_2022_e.pdf", "page": 4, "year": 2022}, "type": "Document"}
{"page_content": "07 July 2022 CIRCULAR No. 02 of 2022MONETARY BOARDCENTRAL BANK OF SRI LANKACONCESSIONS TO AFFECTED BORROWERS AMIDST THE PREVAILING EXTRAORDINARY MACROECONOMIC CIRCUMSTANCESWith a view to meeting the challenges faced by businesses and individuals engaged in various economic sectors due to the prevailing extraordinary macroeconomic circumstances, the Central Bank of Sri Lanka (CBSL), requests licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks) to provide the following concessions, to affected borrowers, on a need basis.These concessions are granted to devise suitable repayment arrangements based on the new repayment capacities of the borrower, on a case-by-case basis, while preserving banking sector stability by preventing any elevated strain on the financial system. Accordingly, this Circular is issued to provide broad guidelines with prudential requirements for consistent implementation across all licensed banks. Licensed banks may consider implementing these concessions through the Post COVID-19 Revival Units which have already been established in terms of the Circular No. 01 of 2022 issued on 24 March 2022.1 Concessions for performing credit facilities1.1 Licensed banks are required to provide appropriate concessions (i.e., grace period for capital or interest or both capital and interest or part of the capital or interest, re-structuring of credit facilities, or any other concession) for performing credit facilities of individuals or businesses (hereinafter referred to as borrowers) whose income or business has been adversely affected by the current macroeconomic conditions including those borrowers who were already subject to COVID-19 moratoriums. These concessions are expected to be provided to affected borrowers in all economic sectors, including but not limited to tourism, transportation, and Micro, Small and Medium scale Enterprises (MSME) engaged in business sectors such as manufacturing, services,", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "and Medium scale Enterprises (MSME) engaged in business sectors such as manufacturing, services, agriculture, and construction on a case-1", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 0, "year": 2022}, "type": "Document"}
{"page_content": "07 July 2022 CIRCULAR No. 02 of 2022MONETARY BOARD CENTRAL BANK OF SRI LANKAby-case basis, for a period of six months from the date of this Circular, based on the new repayment capacity/ viability of the borrower.1.2 In the case of regular installment loans, the licensed banks shall devise a mechanism to structure the repayment plan not exceeding the contracted instalment value of the existing credit facility or facilities, with an extended tenure, to match with the repayment capabilities of the borrowers. In the case of other credit facilities, the licensed banks shall devise a suitable mechanism to structure the repayment plan.1.3 In the case of Rupee facilities considered for the concessions, the interest rate applicable for the concessionary period (including the recovery period) shall not exceed the latest contracted rate of interest or the Standard Lending Facility Rate applicable on the date of this Circular (15.5%), whichever is higher, and shall be charged only on the amount considered for the concession. In the case of foreign currency facilities, licensed banks may charge a concessionary rate of interest rate as mutually agreed with the customer.2 Applicability of Concessions for Credit Facilities Granted under Refinance/Interest Subsidy Schemes2.1 Licensed banks shall seek necessary guidelines from the relevant agencies, and government authorities with regard to extending these concessions for credit facilities granted under various refinance or interest subsidy schemes, introduced by the government or other agencies.3 Facilitating Early Settlements3.1 In the case where any borrower wishes to fully settle any of the existing credit facilities, such borrower shall be given the opportunity to do so, without charging any additional fee, such as early settlement charges. In the case of lease facilities, recovery of future interest shall also be waived off.2", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 1, "year": 2022}, "type": "Document"}
{"page_content": "07 July 2022 CIRCULAR No. 02 of 2022MONETARY BOARD CENTRAL BANK OF SRI LANKA3.2 Licensed banks may also consider providing rebates for such early settlements, on a case- by-case-basis.3.3 Any borrower who is willing for an early settlement of credit facilities shall make a request to the respective licensed bank on or before 30.09.2022.4 Concessions for Non-performing Credit Facilities4.1 Licensed banks may consider providing appropriate concessions, including reschedulment for existing non-performing credit facilities over a longer period, on a case-by-case basis, considering the future repayment capacity/viability of such individuals and businesses/ projects.4.2 Licensed banks shall devise a suitable mechanism to structure the repayment plan.4.3 In the case of Rupee facilities, interest rate applicable for concessions granted to non- performing credit facilities, shall not exceed the latest contracted rate of interest or the current Standard Lending Facility Rate applicable as at the Circular date (15.5%), whichever is higher . In the case of foreign currency facilities, licensed banks may charge a concessionary rate of interest rate as mutually agreed with the customer.14.4 Licensed banks shall suspend recovery actions including parate execution and forced repossession of leased assets against all credit facilities that have been classified as non-performing on or after 01.01.2020, until 31.12.2022 in order to enable the borrowers to arrange timely repayments.4.5 In the case of recovery actions against SME paddy millers, banks may suspend recoveryactions including parate execution against any non-performing credit facilities, until 31.12.2022, provided that an agreement is reached between the borrower and the licensed bank on diverting sales proceeds of the upcoming harvesting season directly to the banks", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "1 The explanation on non-performing loans provided in the attached Guidelines of CASL states that \u201cthe revisedinterest rate cannot exceed 14.5%\u201d. However, licensed banks should adhere with Section 4.3 of this Circular.3", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 2, "year": 2022}, "type": "Document"}
{"page_content": "07 July 2022 CIRCULAR No. 02 of 2022MONETARY BOARD CENTRAL BANK OF SRI LANKAvia a suitable mechanism to settle the existing pledge loans in full and/ or existing non-performing credit facilities (pail or full settlement).4.6 In case where a licensed bank has commenced or given notice of recovery action under the provisions of the Recovery of Loans by Banks (Special Provisions) Act, No. 04 of 1990 or Mortgage Act. No. 06 of 1949, as amended, or Finance Leasing Act, No. 56 of 2000, or any other relevant Act, in this regard, such recovery actions shall be suspended until 31.12.2022, on condition that the concerned licensed bank and the borrower reach a debt repayment agreement.4.7 Licensed banks shall defer passing new resolutions under the above Acts, for recovery of such loans and advances until 31.12.2022, on condition that the concerned licensed bank and the borrower reach a debt repayment agreement. In instances where resolutions for recovery actions have already been passed, auctioning of assets shall be suspended until 31.12.2022.4.8 In instances where there are on-going litigations in Courts relating to recovery, the borrower shall enter into an agreement in the Courts to avail these concessions.4.9 However, willful defaulters, defaults due to diversion of funds, defaults due to mismanagement and/ or frauds in the business and unviable projects shall not be considered for any of the above concessions.4.10 Licenced banks may continue the routine collection procedure/ recovery follow up without excessively contacting, visiting, or forcing the borrower.5 Reporting to the Credit Information Bureau5.1 Licensed banks shall not decline new loan applications from borrowers solely based on adverse CRIB records.5.2 Licensed banks shall develop a reporting modality, in consultation with CRIB, to report concessions granted to affected borrowers, if necessary.4", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 3, "year": 2022}, "type": "Document"}
{"page_content": "July07 2022 CIRCULAR No. 02 of 2022MONETARY BOARDCENTRAL BANK OF SRI LANKA6 Accounting Treatment and Impairment6.1 Licensed banks shall adhere to Sri Lanka Accounting Standards and the attached Guidelines read with the Addendum issued by the Institute of Chartered Accountants of Sri Lanka (CASL) with regard to accounting for the facilities considered for concessions.6.2 Licensed banks may seek advice from CASL and Auditors for additional guidance/ clarifications in this regard.7 Transparency of the Concessions7.1 Eligible borrowers may request for the above concessions on or before 31 July 2022 in writing or through electronic means.7.2 Licensed banks shall make the decision on whether to accept or decline the request made by the borrower within one month of the receipt of the request and duly inform the borrower of such decision.7.3 In the case of a rejection of request, licensed banks shall inform the borrower the reasons for such rejection and shall advise the borrower by and through the same letter that there is an opportunity for the borrower to appeal against such rejection to the Director, Financial Consumer Relations Department of the Central Bank of Sri Lanka.7.4 Licensed banks shall ensure that the borrowers are made aware of the structure of the deferment or restructuring of credit facilities and the applicable interest rate prior to approval and the consent of the borrower shall be obtained in writing or through electronic means.\n5", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 4, "year": 2022}, "type": "Document"}
{"page_content": "07 July 2022 CIRCULAR No. 02 of 2022MONETARY BOARDCENTRAL BANK OF SRI LANKA8 Reporting RequirementLicensed banks shall report the details of concessions availed by their borrowers to the Bank Supervision Department, as at each month end, within 15 working days, commencing from 31 July 2022. A reporting format will be issued in due course.\n'DrTPNandalal WeerasinglyeChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n6", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 5, "year": 2022}, "type": "Document"}
{"page_content": "CA \u00a9THE INSTITUTE OF CHARTERED ACCOUNTANTS OF SRI LANKA28th June 2022Letter 01 - CASLMrs. V. A. A. N. De Silva,Director Bank Supervision,Central Bank of Sri Lanka,P O Box 590,Colombo 01.Dear Ms. De Silva,Re: Clarifications on Accounting TreatmentsWe refer to your letter dated 13th June 2022 on the above heading. At the outset, I wish to extend my appreciation to the Central Bank of Sri Lanka (CBSL) for referring the \"Draft Guidelines to the licensed banks on providing concessions to affected borrowers\" and requesting to clarify the accounting treatment as per SLFRS 9 - Financial Instruments.Please find below the clarification you sought as per the recommendation made by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka).Issue 1: Interest RecognitionCA Sri Lanka does not provide any specific additional guidance on interest recognition and modification since specific provisions are available in SLFRS 9 - Financial Instruments.Please refer to SLFRS 9.5.4.1, SLFRS 9.5.4.2, SLFRS 9.5.4.3, SLFRS 9.3.3.2 and SLFRS 9.B3.3.6.Accordingly, Interest income can be recognised by the banks by using the Effective Interest Rate (EIR) applied to the gross carrying amount or the net carrying amount considering the stage into which that loan belongs at the time of the modification. In the event of modification (after the test of 10% assessment), the interest will be recognised based on the initial contractual rate while in the case of derecognition (due to substantial modification), interest will be recognized based on the new contractual rate. Thus, modification gain or loss has to be charged to profit or loss.Issue 2: Assessment of impairment and staging for performing facilities and non-performingAs per the draft guideline, Banks would do their own assessment of granting concessions to affected borrowers\u2019 considering the prevailing extraordinary macroeconomic conditions. Accordingly, CA Sri Lanka recommends the banks to carryout assessment of Significant Increase of", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 6, "year": 2022}, "type": "Document"}
{"page_content": "Accordingly, CA Sri Lanka recommends the banks to carryout assessment of Significant Increase of Credit Risk (SICR) within Banks' own assessment (the internal risk management, policies, and methodologies) taking into the consideration of the number of restructurers/ re-shedulements, number of counts for the assessment of SICR, staging the loans into stages 1 to 2 and 2 to 3 in line with the standard as well as the CBSL Directive 13 and 14 and relevant sections of SLFRS 9. The proposed restructure/ reschedulement should not be excluded from the count.The relevant sections of SLFRS 9 - Financial Instruments are provided in SLFRS 9.5.5.9 - SLFRS 9.5.11.Further, CA Sri Lanka recommends the banks to revise their existing risk management considerations to assess SICR considering the prevailing economic conditions and potential deterioration without continuing to use the existing policies which were built on pre COVID trends and factors when economic factors had not deteriorated significantly.In addition to that, the following considerations are to be placed on performing loans and non-performing loans by banks.The Institute of Chartered Accountants of Sri Lanka | 30A, Malalasekera Mawatha, Colombo 7, Sri Lanka.Tel: +94 (0) 11 2352000 | Fax: +94 (0) 11 2588783 | E-mail: technical@casrilanka.orghttps://casrilanka.com", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 6, "year": 2022}, "type": "Document"}
{"page_content": "CA|\u00aeTHE INSTITUTE OFCHARTERED ACCOUNTANTS OF SRI LANKAFor Performing Loans:\u2022 It is a rebuttable presumption that the current economic condition together with the requirement of further moratorium would indicate the Significant Increase in Credit Risk (SICR).\u2022 It is necessary to consider the financial strength of the borrower.\u2022 It is necessary to consider number of restructures including previous moratoriums into the account of the proposed restructure.\u2022 The increased economic uncertainty about potential future economic scenarios and their impact on credit losses may require banks to explicitly consider additional economic scenarios when measuring ECLs [SLFRS 9.B5.5.42].\u2022 Existing ECL models use historical experience to derive links between changes in economic conditions and customer behaviour, and ECL parameters such as loss rates, probabilities of default and loss given default. These historical relationships are unlikely to remain stable in times of increased economic uncertainty.For Non-Performing Loans:A staging issue would not arise since the category of loans is already in stage 3. However, if the bank is extending the repayment plan based on its own assessment, that could result in additional impairment, given that the revised interest rate cannot exceed 14.5% and recovery action cannot be taken until 31st December 2022.Issue 3: Recommendation on section 6. 2As per CBSL draft guideline, section 6.2 has been drafted as \"Licensed banks are required to provide a minimum impairment charge of 2.0% on top of existing Stage 1 or 2 impairments for credit facilities that are considered as modifications\". Due to the ambiguity of the wording, CA Sri Lanka is to seek clarification from CBSL on the wording relating to this requirement. Nevertheless, CA Sri Lanka commented section 6.2 of the proposed guideline under two scenarios as below:Scenario 01:Based on assessment of SICR/default if the loans to be restructured/ rescheduled are moved to stage 2 from 1 or Stage 3 from", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 7, "year": 2022}, "type": "Document"}
{"page_content": "if the loans to be restructured/ rescheduled are moved to stage 2 from 1 or Stage 3 from stage 2 the impairment against such loans will increase compared to existing impairment against the respective loans. If such increase is 2% higher than existing impairment such increase to be considered as normal change in impairment and recognized in the Profit or Loss statement.Scenario 02:If the banks are required to record additional 2% over and above the increase recorded as per scenario 1 even after stage shifting, Accounting Standards does not permit recording such impairment.This explanation is provided purely based on the limited facts and information provided by you and as such the Institute of Chartered Accountants of Sri Lanka takes no responsibility if the explanation would have been different had more information been available. Further, the application of the Sri Lanka Accounting Standards requires exercise of judgement, therefore, the ultimate responsibility for the recognition, measurement, presentation and disclosures of any transaction rests with the preparers of the financial statements. In providing this clarification. We have exercised due care and diligence and therefore we believe that the clarification given herewith is appropriate.Thank you,Yours sincerely,THE INSTITUTE OF CHARTERED ACCOUNTANTSOF SRI LANKAManil JayesingheCHAIRMAN - ACCOUNTING STANDARDS COMMITTEEThe Institute of Chartered Accountants of Sri Lanka | 30A, Malalasekera Mawatha, Colombo 7, Sri Lanka.Tel: +94 (0) 11 2352000 | Fax: +94 (0) 11 2588783 | E-mail: technical@casrilanka.orghttps://casrilanka.com", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 7, "year": 2022}, "type": "Document"}
{"page_content": "CA \u00a9THE INSTITUTE OF CHARTERED ACCOUNTANTS OF SRI LANKALetter 02 - CASL6th July 2022Mrs. V. A. A. N. De Silva, Director Bank Supervision, Central Bank of Sri Lanka, P O Box 590, Colombo 01.Dear Ms. De Silva,Re: Clarifications on Accounting TreatmentsThis is in reference to the letter that CA Sri Lanka sent to Bank Supervision at the Central Bank of Sri Lanka on 28th June 2022 about the aforementioned subject.Hereby we need to clarify that re-profiling of performing loans where the quantum of the loan repayment is not less than what was there before the re-profiling would not generally cause a Significant Increase of Credit Risk. However, it is necessary to evaluate the condition of the underlying business if these loans have been under moratorium.This explanation is provided purely based on the limited facts and information provided by you and as such the Institute of Chartered Accountants of Sri Lanka takes no responsibility if the explanation would have been different had more information been available. Further, the application of the Sri Lanka Accounting Standards requires exercise of judgement, therefore, the ultimate responsibility for the recognition, measurement, presentation and disclosures of any transaction rests with the preparers of the financial statements. In providing this clarification. We have exercised due care and diligence and therefore we believe that the clarification given herewith is appropriate.Thank you,Yours sincerely,THE INSTITUTE OF CHARTERED ACCOUNTANTSOF SRI LANKA\nManil JayesingheCHAIRMAN - ACCOUNTING STANDARDS COMMITTEE\nThe Institute of Chartered Accountants of Sri Lanka | 30A, Malalasekera Mawatha, Colombo 7, Sri Lanka.Tel: +94 (0) 11 2352000 | Fax: +94 (0) 11 2588783 | E-mail: technical@casrilanka.orghttps://casrilanka.com", "metadata": {"source": "data\\CBSL\\2022\\bsd_circular_no_2_of_2022_e.pdf", "page": 8, "year": 2022}, "type": "Document"}
{"page_content": "MONETARY BOARDCENTRAL BANK OF SRI LANKA3 / January 2023 BANKING ACT DETERMINATION No. 01 of 2023DEFINITION OF LIQUID ASSETS UNDER SECTIONS 86 AND 76J (1) OF THE BANKING ACT, NO. 30 OF 1988, AS AMENDEDIn terms of Sections 86 and 76J( 1) of the Banking Act, No. 30 of 1988, the Monetary Board has determined below mentioned assets shall be treated as liquid assets in the computation of the Statutory Liquid Asset Ratio of the Licensed Commercial Banks and Licensed Specialised Banks, respectively:(i) Qualifying non-financial corporate debt securities; and(ii) Qualifying non-financial common equity shares.(i) and (ii) are as defined in Banking Act Directions No 01 of 2015 on Liquidity Coverage Ratio under Basel III Liquidity Standards for Licensed Commercial Banks and Licensed Specialised Banks.Dr. PNSndaiai WeerasingheChairman of the Monetary Board andGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2023\\Banking_Act_Determination_No_1_of_2023.pdf", "page": 0, "year": 2023}, "type": "Document"}
{"page_content": "18 May 2023MONETARY BOARDCENTRAL BANK OF SRI LANKABANKING ACT DIRECTIONSNo. 04 of 2023MARGIN REQUIREMETNS 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.Banking Act Directions No. 03 of 2022 dated 19 May 2022 on Margin Requirements Against Imports and Banking Act Directions No. 02 of 2023 dated 17 February 2023 on Amendment to the Banking Act Directions No. 03 of2022 on Margin Requirements Against Imports are hereby revoked with immediate effect.Dr. P Nahdalal WeerasingheChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2023\\Banking_Act_Directions_No_04_of_2023_e.pdf", "page": 0, "year": 2023}, "type": "Document"}
{"page_content": "No. 01 of 2023 February02 2023MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSRESTRICTIONS 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 capital position 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 levels to ensure sustainability 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.1.2In terms of Section 76 J (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 of Application2.1These 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 Payments3.1Licensed banks shall give due consideration to the requirements of the Banking Act Direction No. 01 of2016 on Capital Requirements under Basel III for Licensed Banks, expected assets growth, business expansion and the potential impact of the prevailing macroeconomic conditions when deciding on payments of cash dividends and repatriation of profits for the year 2022.", "metadata": {"source": "data\\CBSL\\2023\\Banking_Act_Directions_No_1_of_2023_e.pdf", "page": 0, "year": 2023}, "type": "Document"}
{"page_content": "No. 01 of 2023 February02 2023MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONS3.2 Licensed banks shall inform the Director of Bank Supervision, the Board approved detailed assessment carried out in deciding the payments of cash dividends and repatriation of profits for the year 2022, prior to payment of such dividend/repatriation of profits.3.3 Licensed banks shall defer payment of cash dividends and repatriation of profits for the year 2023, until the financial statements/interim financial statements for the year 2023 are finalized and audited by its External Auditor.3.4 Licensed banks shall adhere to the following with immediate effect, until 31 December 2023.(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 such as advertising, business promotions, gift schemes, entertainment, sponsorships, travelling, contesting for awards/trophies, 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.3.5 Licensed banks shall form a Board level Sub Committee to operate during the years 2023 and 2024, entrusting the responsibility of evaluating and approving, non-essential and/or non-urgent expenditure and/or capital expenditure to be incurred by the bank, if any.4. Effective Date 4.1These Directions shall be implemented with immediate effect.Dr. P Nandalal WeerasingheChairman of the Monetary Board and the Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2023\\Banking_Act_Directions_No_1_of_2023_e.pdf", "page": 1, "year": 2023}, "type": "Document"}
{"page_content": "17 February 2023MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSNo. 02 of 2023AMENDMENT TO THE BANKING ACT DIRECTIONS NO 03 OF 2022 ON MARGIN 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 provisions of the Banking Act Directions No 03 of 2022 on Margin Requirements Against Imports shall be applicable to the newly added 64 HS Codes specified in Annex I, with immediate effect.The existing list of the HS Codes subject to Margin Requirement remains unchanged.Dr. P Nandalal WeerasingheChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2023\\Banking_Act_Directions_No_2_of_2023_e.pdf", "page": 0, "year": 2023}, "type": "Document"}
{"page_content": "Annex 1NoNew HS code10403202570321357032945703315570339662012076201308620140962019010620220116202301262024013620290148517131015851713901685171410178517149018852581 (except for television cameras)19852582 (except for television cameras)20852583 (except for television cameras)NoNew HS code21852589 (except for television cameras)2285395123.853952249401319025940139902694019190279401999028940391902994039990309405111031940511903294051910339405199034940521103594052190369405291037940529903894053139940539409405411041940541204294054130NoNew HS code439405419044940542104594054220469405429047940549104894054920499405493050940549905194055010529405502053940550905494056155940569569508215795082258950823599508246095082561950826629508296395083064950840", "metadata": {"source": "data\\CBSL\\2023\\Banking_Act_Directions_No_2_of_2023_e.pdf", "page": 1, "year": 2023}, "type": "Document"}
{"page_content": "April25 2023MONETARY BOARDCENTRAL BANK OF SRI LANKA BANKING ACT DIRECTIONSNo. 03 of 2023AMENDMENTS TO THE BANKING ACT DIRECTIONS NO 01 OF 2023 ONRESTRICTIONS ON DISCRETIONARY PAYMENTS OF LICENSED BANKSIn the exercise of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act, No. 30 of 1988, as amended, the Monetary Board of the Central Bank of Sri Lanka hereby issues the following amendments to the Banking Act Directions No 01 of 2023 on Restrictions on Discretionary Payments of Licensed Banks.Direction 3.4 (b) shall be replaced with the following:3.4 (b)(i) Refrain from increasing management allowances to the Chief Executive Officer and Key Management Personnel and payments to Board of Directors, unless in the case of management allowances, the increase is recommended by the Board Human Resources and Remuneration Committee and approved by the Board of Directors, giving due consideration to:(a) the expected assets growth;(b) compliance with requirements of the Banking Act Direction No. 01 of 2016 on Capital Requirements under Basel III for Licensed Commercial Banks and Licensed Specialised Banks;(c) compliance with minimum prudential liquidity ratios, viz., Statutory Liquid Assets Ratio, Liquidity Coverage Ratio and Net Stable Funding Ratio at all times; and(d) whether the cost of the proposed management allowances is within the budgetary allocation of the bank for 2023.3.4 (b)(ii) Licensed banks shall inform the Director of Bank Supervision, the detailed assessment carried out by the Board of Directors in deciding on increasing allowances to the Chief Executive Officer and Key Management Personnel, 14 days prior to effecting such decision along with the certified copies of extracts of minutes of the respective meeting/s.Dr. P Na nd a l ai Weerasinghe Chairman of the Monetary Board and the Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2023\\Banking_Act_Directions_No_3_of_2023_e.pdf", "page": 0, "year": 2023}, "type": "Document"}
{"page_content": "25 August 2023No. 01 of 2023MONETARY BOARDCENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDERMAXIMUM INTEREST RATES ON RUPEE DENOMINATED LENDING PRODUCTSIssued under Section 104( 1 )(b) of the Monetary Law Act, No. 58 of 1949, as amended.The Central Bank of Sri Lanka (CBSL) has adopted several policy measures in the recent past such as reduction of policy interest rates and the statutory reserve ratio, thereby facilitating a reduction in market interest rates. Despite the considerable easing of monetary conditions, interest rates on lending products of certain financial institutions continue to remain excessive and are not in line with the current monetary policy stance, posing challenges for individuals and businesses. Accordingly, the Monetary Board hereby issues an Order on the interest rates applicable on Sri Lanka Rupee (LKR) denominated lending products of licensed commercial banks (LCBs) and licensed specialised banks (LSBs), hereinafter referred to as licensed banks.1. Empowerment under the1.1 In terms of Section 104(1 )(b) of the Monetary Law Act,Monetary Law Actthe Monetary Board may from time to time fix the maximum rates of interest which licensed banks may charge for different types of loans or other credit operations.2. Interest rates on LKR2.1 Every licensed bank shall reduce the followingdenominated lendingproduct-wise lending rates at least to the levels outlinedproductsherein, with immediate effect:(i) Interest rates on pawning facilities to 18 per cent per annum;(ii) Interest rates on pre-arranged temporary overdrafts to 23 per cent per annum; and,(iii) Interest rates on credit card advances to 28 per cent per annum commencing the next billing cycle.1", "metadata": {"source": "data\\CBSL\\2023\\bsd_act_order_1_of_2023_e.pdf", "page": 0, "year": 2023}, "type": "Document"}
{"page_content": "25 August 2023\n3. MonitoringMONETARY BOARDCENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDER No. 01 of 20232.2 Every licensed bank shall reduce the annual nominal interest rates applicable for all new and existing LKR denominated lending products, excluding credit facilities mentioned in Order 2.1 above and any other categories of lending products that may hereafter be determined by the Monetary Board, by at least 250 basis points by 31.10.2023 and further 100 basis points by 31.12.2023 in comparison to the interest rates that prevailed as at 31.07.2023.2.3 However, if the annual nominal interest rate applicable to any LKR denominated lending products as at the date of this Order or anytime thereafter is 13.5 per cent or lower, it shall not be mandatory to give effect to the reduction required under Order 2.2 above. Further, in cases where the applicable annual nominal interest rate as at the date of this Order or anytime thereafter is 13.5 per cent or less, the licensed bank shall not increase the interest rates of such lending products from the level maintained as at the date of this Order.2.4 Every licensed bank shall reduce the penal interest rates charged on all lending products, including credit facilities already granted, to a level not exceeding 200 basis points per annum, for the amount in excess of an approved limit or in arrears, during the overdue period, with immediate effect.3.1 All licensed banks shall ensure the accuracy of interest rate data submitted to CBSL and maintain internal documented records electronically or manually, in relation to the reductions in interest rates in respect of each loan product to which these Orders apply.2", "metadata": {"source": "data\\CBSL\\2023\\bsd_act_order_1_of_2023_e.pdf", "page": 1, "year": 2023}, "type": "Document"}
{"page_content": "25 August 2023\n4. ImplementationMONETARY BOARDCENTRAL BANK OF SRI LANKAMONETARY LAW ACT ORDER No. 01 of 20233.2 Compliance with the requirements of these Orders will also be monitored through the Average Weighted Lending Rate (AWLR) of each licensed commercial bank.4.1 These Orders shall be effective from the date of the Order.Dr. P Nandalal WeerasinglieChairman of the Monetary Board and Governor of the Central Bank of Sri Lanka\n3", "metadata": {"source": "data\\CBSL\\2023\\bsd_act_order_1_of_2023_e.pdf", "page": 2, "year": 2023}, "type": "Document"}
{"page_content": "MONETARY BOARD CENTRAL BANK OF SRI LANKAApril 2023 CIRCULAR No. 01 of 2023CESSATION OF ICRA LANKA LTD AS AN ACCEPTABLE CREDIT RATING AGENCYConsequent to the cessation of the business operations of ICRA Lanka Ltd in Sri Lanka with effect from 31.01.2023 as informed by the Securities and Exchange Commission of Sri Lanka, it has been decided to discontinue the recognition of ICRA Lanka Ltd as an eligible/acceptable credit rating agency for regulatory purposes pertaining to licenced commercial banks and licensed specialised banks (hereinafter referred to as \u201clicensed banks\u201d).Accordingly, licensed banks are requested to take appropriate measures in this regard.Dr. P Nandalal Weerasinghe //Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2023\\bsd_circular_no_1_of_2023_e.pdf", "page": 0, "year": 2023}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA \n13 June 2024 BANKING ACT DETERMINATION No. 01 of 2024 \nSTATUTORY LIQUIDITY RATIOS OF LICENSED BANKS \nIssued under Sections 21(1) and 76(H) of the Banking Act, No. 30 of 1988, amended by the \nBanking (Amendment) Act, No. 24 of 2024 \nIn terms of Sections 21(1) and 76H of the Banking Act, No. 30 of 1988, as amended, thc \nCentral Bank of Sri Lanka has determined that every licensed commercial bank and licensed \nspecialised bank (hercinafter referred to as licensed banks) shall maintain Liquidity Coverage \nRatio (LCR) and Net Stable 'unding Ratio (NSFR) as the statutory liquidity ratios of such \nbanks, at all times, in accordance with \u201cBasel I1I: International Framework for Liquidity Risk \nMeasurement, Standards and Monitoring\u201d, \u201cBasel IlI: The Liquidity Coverage Ratio and \nLiquidity Risk Monitoring Tools\u201d and \u201cBasel III: The Net Stable Funding Ratio\u201d, issued \nhitherto by the Basel Committee on Banking Supervision. \n1. Empowerment 1.1 In terms of Section 21(1) of the Banking Act, No.30 of \nunder the Banking 1988, as amended, every licensed commercial bank (LCB) \nAct shall, at all times maintain liquid assets that are required to \nmeet its liabilities as may, from time to time, be determined \nby the Central Bank and comply with the requirements on \nliquidity having regard to the developments in the \nregulatory requirements, and the Central Bank shall, as far \nas practicable, adopt international standards applicable on \nliquidity requirements of such LCB. \ni3 In terms of Section 76(H) of the Banking Act No.30 of \n1988, as amended, the provisions of Section 21 of the \nBanking Act shall mutatis mutandis apply to a licensed \nspecialised bank (L.SB) as they apply to an LCB.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "13 June 2024 \n2. Minimum LCR and \nNSFR \nRequirements \n3. Regulatory \nReporting \\ e } \n\\)~\"r: 2 \nCENTRAL BANK OF SRI LANKA \nBANKING ACT DETERMINATION No. 01 of 2024 \n2.1 Every licensed bank shall maintain, LCR of 100% as \n22 \n3.1 \n32 \n33 prescribed in Schedule I hereto, in respect of Rupee \nLiquidity Minimum Requirement for local currency \noperations and All Currency Liquidity Minimum \nRequirement for the overall operations, at all times. \nEvery licensed bank shall maintain NSFR of 100%, as \nprescribed in Schedule II hereto, at all times. \nEvery licensed bank shall submit the following returns on a \nmonthly basis, on or before the fifteenth day of the \nfollowing month as per the formats and guidelines given in \nAppendices I to III to the Schedule I hereto, via the Web- \nbased Off-site Surveillance System. \n(i) Return for LCR LKR (BSD-MF-19-R1 to BSD-MF- \n19-R4) \n(ii) Return for LCR All Currency (BSD-MF-19-A1 to \nBSD-MF-19-A4) \n(iii) Return on LCR by significant foreign currency \nEvery licensed bank shall submit a return on NSFR on a \nquarterly basis, within one month after the end of each \nquarter, as per the formats and guidelines given in \nAppendices 1 and 1l to the Schedule II hereto, via Web- \nbased Off-site Surveillance System (BSD-QF-32-1A, BSD- \nQF-32-2A, BSD-QF-32-3A and BSD-QF-32-3B). \nEvery Licensed bank shall submit the return on early \nwarning indicators on a daily basis, via the Web-based Off- \nsite Surveillance System (BSD-DF-01-EW).", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "13 June 2024 \n4. Liquidity \nMonitoring Tools S - 2 \nCENTRAL BANK OF SRI LANKA \nBANKING ACT DETERMINATION No. 01 of 2024 \n4.1 Every licensed bank shall monitor its liquidity position \nusing the monitoring tools stated below and document \nprocesses for application of such tools. In addition, every \nlicensed bank shall monitor the liquidity position relative to \nits size and the nature of the business operations. \n@ \n(i) \n(iif) \n(iv) Contractual Maturity Mismatch: Develop a metric \nto identify contractual maturity mismatch profile, i.e., \nthe gaps between the contractual inflows and \noutflows of liquidity for defined time bands to assess \nthe potential liquidity needs. \nConcentration of Funding: Develop a metric to \nmitigate the funding concentration risk that may arise \nfrom significant counterparties, \nproducts/instruments, currencies, etc. \nLCR by Significant Foreign Currency: Develop a \nmetric to monitor LCR in each significant currency \non an ongoing basis in order to capture potential \ncurrency mismatches. For this purpose, significant \ncurrencies shall be determined internally based on the \nbank\u2019s volume of transactions in such currencies and \nits ability to raise funds in foreign currency markets. \nAvailable Unencumbered Assets: Develop a metric \nto provide data on the volume and key characteristics \nof all available unencumbered assets which have the \npotential to be used as collateral for raising additional \nfunding from the secondary market and/or central \nbanks.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "TT \no \nCENTRAL BANK OF SRI LANKA \n13 June 2024 BANKING ACT DETERMINATION No. 01 of 2024 \n5. Discontinuation of 5.1 \nrequirements on \nStatutory Liquid \nAssets Ratio \n6. Revocation 6.1 \n6.2 All regulatory requirements relating to Statutory Liquid \nAssets Ratio by licensed banks are hereby discontinued. \nThe following Directions are hereby revoked with effect \nfrom the appointed date of the Banking (Amendment) Act, \nNo.24 of 2024. \n(@ \n(i) \n(iif) Banking Act Directions No. 01 of 2015 on Liquidity \nCoverage Ratio under Basel III Liquidity Standards \nfor Licensed Commercial Banks and Licensed \nSpecialised Banks, dated 31.03.2015. \nBanking Act Directions No. 08 of 2018 on Net \nStable Funding Ratio under Basel III Liquidity \nStandards for Licensed Commercial Banks and \nLicensed Specialised Banks, dated 21.11.2018. \nBanking Act Directions No. 09 of 2018 on \nAmendments to the Banking Act Directions on \nLiquidity Coverage Ratio Under Basel III Liquidity \nStandards for Licensed Commercial Banks and \nLicensed Specialised Banks, dated 21.11.2018. \nThe discontinuation/revocation effected by 5.1 and 6.1 \nabove shall not affect: \n(i) \n(i) Any offence committed or any penalty or liability \nincurred under those Directions prior to the \nrevocation; and \nAny action or proceeding pending or incomplete on \nthe date of revocation, and such action, or \nproceeding may be carried on and completed as if", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "} \n\\n.. /\u2018 \nCENTRAL BANK OF SRI LANKA \n13 June 2024 BANKING ACT DETERMINATION No. 01 of 2024 \nthose instructions, Directions, Determinations, \nCirculars and Orders continue to be in force. \n7. Effective Date 7.1 These Determinations shall be effective from the appointed \ndate of the Banking (Amendment) Act, No 24 of 2024. \nChairman of the Governing Board and \nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 4, "year": 2024}, "type": "Document"}
{"page_content": "6 \n  \n \n \n \n \nSCHEDULE I  \nBASEL  III LIQUIDITY  STANDARDS                                   \nON LIQUIDITY  COVERAGE  RATIO", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 5, "year": 2024}, "type": "Document"}
{"page_content": "7 \n CONTENTS  \n1. INTRODUCTION  ................................ ................................ ................................ ..................  8 \n2. THE  REGULATORY  FRAMEWORK  ................................ ................................ ..................  8 \n2.1 Objective  of LCR: ................................ ................................ ................................ ............  8 \n2.2 Scope  of application  ................................ ................................ ................................ ........  9 \n2.3 LCR  computation ................................ ................................ ................................ .............  9 \n2.4 Definition  of High  Quality  Liquid  Assets  (HQLA)  ................................ .........................  9 \n2.5 Categories  of HQLA  ................................ ................................ ................................ ...... 10 \n2.6 Total  net cash outflows  ................................ ................................ ................................ .. 11 \n2.7 Appendices  ................................ ................................ ................................ ....................  11", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 6, "year": 2024}, "type": "Document"}
{"page_content": "8  1. INTRODUCTION  \n1.1 The global financial crisis that began in 2007 revealed that certain banks even  with \nadequate capital levels experienced severe stress due to lack of prudent liquidity  risk \nmanagement practices and due to sudden evaporation of liquidity from the market  \nresulting  from withdrawals of credit lines  by market participants.  \n1.2 The Basel Committee on Banking Supervision (BCBS) issued the Basel III rules on  \nliquidity risk measurement, standards and monitoring on 16.12.2010. Two minimum  \nstandards, viz., the Liquidity Coverage Ratio and the Net Stable Funding Ratio, were  \nprescribed by BCBS. In January 2013, the Basel Committee's oversight body, the  Group \nof Central Bank Governors and Heads of Supervision (GHOS) endorsed the  Basel  III \nLiquidity  Rule  on LCR  as the global  minimum  standard for  liquidity  risk. \n1.3 LCR is expected to improve the banking sector\u2019s ability to absorb shocks arising from  \nfinancial and economic stress, thus, reducing the risk of spillover from the financial  \nsector to the real economy. LCR is one of the Basel Committee's key reforms to  \nstrengthen global liquidity regulations with the goal of promoting a more resilient  \nbanking  sector.  \n1.4 Basel III Liquidity Standards mainly focus on internationally active banks. However,  \nregulators have adopted these standards for other banks too with a view to further  \nstrengthen ing liquidity  risk management , be in line with international  best practices  and \nfacilitat ing entity  rating,  Sovereign  rating  and international  fund-raising  activities.  \n2. THE  REGULATORY  FRAMEWORK  \n2.1 Objective  of LCR:  \nLCR  intends  to: \na) promote short -term resilience of the liquidity risk profile of banks ensuring that  \nbanks have adequate stock of unencumbered high -quality liquid assets  that can  be \nconverted easily and immediately into cash in secondary market to meet their", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 7, "year": 2024}, "type": "Document"}
{"page_content": "converted easily and immediately into cash in secondary market to meet their  \nliquidity needs for a period of 30 calendar days under a liquidity stress scenario;  \nand \nb) improve the  ability of the  banking sector to absorb shocks arising from financial \nand economic stress, whatever the source, thus reducing the risk of spillover from \nthe financial  sector to the  real economy.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 7, "year": 2024}, "type": "Document"}
{"page_content": "9  2.2 Scope  of application  \nLCR framework shall be applicable to banks on a standalone (\u201cSolo\u201d) basis  including  \noverseas  operations  through  branches  and for the banks   incorporated  in Sri Lanka, the \nscope will be extended to the consolidated (\u201cGroup\u201d)  level.  \n \n2.3 LCR  computation  \nThe computation  of LCR  shall be  based on  the following  formula.  \n \n \n2.4    Definition  of High -Quality  Liquid  Assets  (HQLA)  \n2.4.1.  HQLA  are assets  that satisfy  the following  conditions:  \na) can be easily  and immediately  converted  into cash  at little  or no  loss of  value,  \nb) can be readily  sold or used as collateral  to obtain  funds  in a range  of stress  \nscenarios,  and \nc) are unencumbered,  i.e., without  legal, regulatory  or operational  impediments.  \n \n2.4.2.  Characteristics  of HQLA  \nIn determining  HQLA,  banks  shall  consider  the fundamental  characteristics  and market  \nrelated characteristics  of such assets.  \na) Fundamental  characteristics  \ni) Low credit and market risk : Assets that are less risky tend to have high  \nliquidity.  High  credit  standing  of the issuer  and a low degree  of subordination \nincreases an asset\u2019s liquidity. Low duration, low volatility,  low inflation risk \nand denomination in a convertible currency with low  foreign  exchange  risk \nenhance an asset\u2019s  liquidity.  \nii) Ease and certainty of valuation : An asset\u2019s liquidity increases if market  \nparticipants are more likely to agree on its valuation. The pricing  formula      of \na HQLA must be easy to calculate and should not depend on strong  \nassumptions. The inputs into the pricing formula must also be publicly  \navailable. In practice, this should rule out the inclusion of most structured  or \nexotic  products.  LCR  =  Stock of  high-quality  liquid assets  *100  \nTotal  net cash  outflows over the  next 30  calendar days", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 8, "year": 2024}, "type": "Document"}
{"page_content": "10  iii) Low correlation with risky assets : The stock of HQLA should not be  \nsubject to highly correlated risk. For example, assets issued by financial  \ninstitutions are more likely to be illiquid in times of liquidity stress in the  \nbanking  sector.  \niv) Listed on a developed and recognised exchange market : Being listed  \nincreases  an asset\u2019s transparency.  \nb) Market  related  characteristics  \ni) Active and sizable market : The asset should have an active  outright sale or  \nrepurchase agreement (repo) market at all times, i.e., a large number of  \nmarket participants and a high trading volume. There should be historical  \nevidence of market breadth such as price impact per unit of liquidity and  \nmarket depth such as units of the asset that can be traded for a given price  \nimpact.  \nii) Presence of committed market makers : Quotes should be available for  \nbuying  and/or selling  a high-quality  liquid asset.  \niii) Low market concentration : A diverse group of buyers and sellers in an  \nasset\u2019s  market increases the  reliability  of its liquidity.  \niv) Capital  flight  towards  quality  assets : Historically,  the market  should  have \nshown tendencies  to move into these types of assets in a systemic  crisis.  \n2.5 Categories  of HQLA  \nHQLA  are categorised  into two broad  categories.  Assets  to be included  in each            category \nare those  that the bank  is holding on  the first  day of the stress  period,  irrespective  of \ntheir residual maturity.  \na) Level 1 assets:  Include cash in hand, qualifying Central Bank  reserves and  \nqualifying marketable securities that attract a 0% risk weight under the Basel I II \nCapital  Adequacy  Framework.  \nb) Level 2 assets: Include Level 2A assets and Level 2B assets up to a maximum of  \n40% of total HQLA.  \ni) Level 2A assets: Include qualifying investments in gilt  unit trusts, subject to \na 15% haircut.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 9, "year": 2024}, "type": "Document"}
{"page_content": "11   \n \nii) Level 2B assets: Include qualifying non - financial  common equity shares,  \nsubject to  a 50% haircut.  Level 2B assets  are limited to a  maximum of 15%  \nof total HQLA.  \nAssets to be included in each category with the applicable factors and limitations are  \nindicated  below.  \nItem  Factor  \nStock  of HQLA  \nA. Level  1 assets   \n\u2022 Cash  in hand   \n100%  \u2022 Qualifying  Central  Bank  balances  and reserves  in excess  of the \nStatutory  Reserves Ratio (SRR)  \n\u2022 Qualifying  marketable  securities  with a 0% risk weight  \nB. Level  2 assets  (maximum  of 40% of HQLA)   \nLevel  2A assets   \n\u2022 Qualifying  marketable  securities  with a 20% risk weight  \n         85% \u2022 Qualifying  investments  in gilt unit  trust backed by government  of \nSri Lanka  securities  \nLevel  2B assets  (maximum  of 15% of HQLA)   \n\u2022 Qualifying non -financial common equity shares           50% \nTotal  value  of stock  of HQLA  \n \n2.6 Total  net cash  outflows  \n2.6.1 Total net cash outflows are defined as the total expected cash outflows minus total \nexpected  cash inflows  for the subsequent  30 calendar  days.  Total  expected  cash outflows \nare calculated by multiplying the outstanding balances of various categories  or types of \nliabilities and off -balance sheet commitments by the rates at which they are   expected to \nrun off or be drawn down. Total expected cash inflows are calculated by  multiplying the \noutstanding balances of various  categories of contractual  receivables  by the rates at \nwhich they are expected to flow in up to an aggregate cap of 75% of the  total expected \ncash outflows.  \n2.6.2 Banks shall not double count items, i.e., if an asset is included as part of the \u201cstock of  \nHQLA\u201d  (i.e. numerator), the associated  cash inflows cannot  be counted as  \u201ccash  \ninflows\u201d  (i.e. part of the  denominator).  \n \n2.7 Appendices  \nThe Reporting formats for Rupee Liquidity Requirement (BSD -MF-19-RR) and All", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 10, "year": 2024}, "type": "Document"}
{"page_content": "12  Currency  Liquidity  Requirement  (BSD -MF-19-AR) along  with the Guidelines  for \ncalculation  of LCR  and Mapping of  notations  of the Credit  Rating Agencies  for \nclassification  of assets for  LCR  are given below . \n2.7.1 Appendix  I - Reporting  formats  for both Rupee  Liquidity  Requirement  and All Currency  \nLiquidity  Requirement.  \n2.7.2 Appendix  II - Guidelines  for calculation  of Liquidity  Coverage  ratio.  \n2.7.3 Appendix  III - Mapping of notations of the Credit Rating Agencies  for classification  of \nassets for LCR.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 11, "year": 2024}, "type": "Document"}
{"page_content": "13   \nAppendix  I of Schedule I  \n \nReporting Formats for Rupee Liquidity Requirement ( BSD -MF-19-R1 to BSD -MF-19-R4)  \nReporting Formats for All -Currency Liquidity Requirement ( BSD -MF-19-A1 to BSD -MF-19-A4)  \nMonthly  Financial  Return (LKR'000)  \nName  of the Bank:  \nAs at: \n \nPart  I - Calculation  of LCR  \nWeb -based  \nReturn  Code  Item  Amount  \n19.1.1.0.0.0  Total  Stock of  HQLA =  19.2.0.0.0.0  of Part II  \n19.1.2.0.0.0  Total  Cash Outflows  = 19.3.0.0.0.0 of  Part III  \n19.1.3.0.0.0  Total  Cash  Inflows  = 19.4.0.0.0.0  of Part IV   \n19.1.4.0.0.0  Net Cash Outflows  = 19.1.2.0.0.0 - MIN(19.1.3.0.0.0, 75%*19.1.2.0.0.0)   \n19.1.5.0.0.0  Liquidity  Coverage  Ratio,%  = (19.1.1.0.0.0/19.1.4.0.0.0)*100   \n \nPart  II - Calculation  of High -Quality  Liquid  Assets  (HQLA)  \nWeb -based  \nReturn  Code  Asset  Amount  Factor  Weighted  \nAmount  \n19.2.0.0.0.0  Total  stock  of HQLA     \n19.2.1.0.0.0  Total  Adjusted  Level 1  Assets     \n19.2.1.1.0.0  Level 1  Assets     \n19.2.1.1.1.0  Cash in  hand   100%   \n19.2.1.1.2.0  Qualifying  central  bank  balances  and reserves  in excess  of \nStatutory  Reserve  Ratio   100%   \n19.2.1.1.3.0  Qualifying  marketable  securities  with a 0% risk weight     \n19.2.1.1.3.1  Issued  by sovereigns   100%   \n19.2.1.1.3.2  Guaranteed  by sovereigns   100%   \n19.2.1.1.3.3  Issued  or guaranteed  by central banks   100%   \n19.2.1.1.3.4  Issued or guaranteed by BIS, IMF, ECB and European  \nCommunity  or MDBs   100%   \n19.2.1.2.0.0  Adjustments     \n19.2.1.2.1.0  Add: Market value of level 1 securities pledged for secured  \nfunding   100%   \n19.2.1.2.2.0  Add:  Amounts  extended  through  secured  lending   100%   \n19.2.1.2.3.0  Less: Market value of level 1 securities received for  \nsecured  lending   100%   \n19.2.1.2.4.0  Less:  Amounts raised  through  secured  funding   100%   \n19.2.2.0.0.0  Total  Adjusted  Level 2A  Assets     \n19.2.2.1.0.0  Level 2A  Assets", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 12, "year": 2024}, "type": "Document"}
{"page_content": "19.2.2.0.0.0  Total  Adjusted  Level 2A  Assets     \n19.2.2.1.0.0  Level 2A  Assets     \n19.2.2.1.1.0  Qualifying  marketable  securities  with a 20% risk weight:     \n19.2.2.1.1.1  Issued  or guaranteed  by sovereigns   85%  \n19.2.2.1.1.2  Issued  or guaranteed  by central banks   85%  \n19.2.2.1.1.3  Issued  or guaranteed  by Public  Sector  Enterprises   85%  \n19.2.2.1.1.4  Issued  or guaranteed  by MDBs   85%", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 12, "year": 2024}, "type": "Document"}
{"page_content": "14   \n     \n19.2.2.1. 2.0 Qualifying  investments  in gilt unit trust backed  by \nGovernment  of Sri Lanka  (GOSL)  securities   85%  \n19.2.2.2.0.0  Adjustments     \n19.2.2.2.1.0  Add: Market value of level 2A securities pledged for  \nsecured  funding   85%  \n19.2.2.2.2.0  Add:  Amounts  extended  through  secured  lending   85%  \n19.2.2.2.3.0  Less:  Market value  of level  2A securities  received  for \nsecured  lending   85%  \n19.2.2.2.4.0  Less:  Amounts raised  through  secured  funding   85%  \n19.2.3.0.0.0  Total  Adjusted  Level 2B  Assets     \n19.2.3.1.0.0  Level  2B Assets     \n19.2.3.1. 1.0 Qualifying  non-financial  common  equity  shares   50%  \n19.2.3.2.0.0  Adjustments     \n19.2.3.2.1.0  Add: Market value of level 2B securities pledged for  \nsecured  funding   50%  \n19.2.3.2.2.0  Add:  Amounts  extended  through  secured  lending   50%  \n19.2.3.2.3.0  Less: Market value of level 2B securities received for  \nsecured  lending   50%  \n19.2.3.2.4.0  Less:  Amounts raised  through  secured  funding   50%  \n \nPart  III - Calculation  of Total Cash  Outflows  \nWeb -based  \nReturn  Code  Item  Amount  Factor  Weighted  \nAmount  \n19.3.0.0.0.0  Total  cash  outflows     \n19.3.1.0.0.0  Deposits     \n19.3.1.1.0.0  Demand, savings and term deposits (less than 30 days  \nmaturity)     \n19.3.1.1.1.0  Retail  customers   10%  \n19.3.1.1.2.0  Small and medium enterprises   10%  \n19.3.1.2.0.0  Term  deposits  with residual  maturity  greater  than 30 days  0%  \n19.3.2.0.0.0  Unsecured  wholesale  funding     \n19.3.2.1.0.0  Operational  deposits  generated  by clearing,  custody  and \ncash management  activities   25%  \n19.3.2.2.0.0  Cooperative  banks  in an institutional  network  (qualifying  \ndeposits  with the  centralised institution)   25%  \n19.3.2.3.0.0  Non-financial  corporates,  sovereigns,  central  banks,  \nMDBs  and Public  Sector  Enterprises   40%  \n19.3.2.4.0.0  Other  legal  entity  customers   100%   \n19.3.3.0.0.0  Secured  funding transactions", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 13, "year": 2024}, "type": "Document"}
{"page_content": "19.3.3.0.0.0  Secured  funding transactions     \n19.3.3.1.0.0  Backed  by Level  1 assets   0%  \n19.3.3.2.0.0  Backed  by Level  2A assets   15%  \n19.3.3.3.0.0  Backed  by Level  2B assets   50%  \n19.3.3.4.0.0  Backed  by all other  assets   100%   \n19.3.4.0.0.0  Undrawn  portion  of committed  (irrevocable)  facilities  \nand other contingent  funding  obligations     \n19.3.4.1.0.0  Committed  (irrevocable)  credit  & liquidity  facilities", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 13, "year": 2024}, "type": "Document"}
{"page_content": "15   \n     \n19.3.4.1.1.0  Undrawn committed credit & liquidity facilities to retail \nand small and medium enterprises   5%  \n19.3.4.1.2.0  Undrawn  committed  credit  facilities  to non-financial  \ncorporates,  sovereigns,  CBs, PSEs  and MDBs   10%  \n19.3.4.1.3.0  Undrawn  committed  liquidity  facilities  to non-financial  \ncorporates,  sovereigns,  CBs, PSEs  and MDBs   30%  \n19.3.4.1.4.0  Undrawn  committed  liquidity  facilities  to banks  subject  to \nprudential  supervision   40%  \n19.3.4.1.5.0  Undrawn  committed  credit  facilities  to other  financial  \ninstitutions   40%  \n19.3.4.1.6.0  Undrawn  committed  liquidity  facilities  to other  financial  \ninstitutions   100%   \n19.3.4.1.7.0  Undrawn  committed  credit  & liquidity  facilities  to other  \nlegal entities   100%   \n19.3.4.2.0.0  Other  contingent  funding  obligations     \n19.3.4.2.1.0  Unconditionally  revocable  \"uncommitted\"  credit  and \nliquidity  facilities   0%  \n19.3.4.2.2.0  Trade  Finance  related  obligations  (including  guarantees  \nand letters  of credit)   5%  \n19.3.4.2.3.0  Guarantees  unrelated  to trade  finance  obligations   0%  \n19.3.4.2.4.0  Other  contractual  cash outflows   100%   \n19.3.5.0.0.0  Additional  requirements     \n19.3.5.1.0.0  Net derivative  cash outflows   100%   \n19.3.5.2.0.0  Any other contractual  cash outflows   100%   \n \nPart  IV - Calculation  of Total  Cash  Inflows  \nWeb -based  \nReturn  Code  Item  Amount  Factor  Weighted  \nAmount  \n19.4.0.0.0.0  Total  cash  inflows     \n19.4.1.0.0.0  Maturing secured lending transactions backed by the  \nfollowing  collateral     \n19.4.1.1.0.0  Backed  by Level  1 assets   0%  \n19.4.1.2.0.0  Backed  by Level  2A assets   15%  \n19.4.1.3.0.0  Backed  by Level  2B assets   50%  \n19.4.1.4.0.0  Margin  lending  backed by  non-Level 1 or  non-Level 2  \ncollateral   50%  \n19.4.1.5.0.0  Backed  by all other  assets   100%   \n19.4.2.0.0.0  Committed  facilities     \n19.4.2.1.0.0  Credit  facilities   0%", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 14, "year": 2024}, "type": "Document"}
{"page_content": "19.4.2.0.0.0  Committed  facilities     \n19.4.2.1.0.0  Credit  facilities   0%  \n19.4.2.2.0.0  Liquidity  facilities   0%  \n19.4.2.3.0.0  Other  contingent  funding  facilities   0%  \n19.4.3.0.0.0  Other inflows by counterparty which are maturing within  \n30 days     \n19.4.3.1.0.0  Retail and small and medium enterprises   50%  \n19.4.3.2.0.0  Non-financial  wholesale  counterparties   50%  \n19.4.3.3.0.0  Central  Banks,  Banks  and Financial Institutions   100%   \n19.4.4.0.0.0  Operational  deposits   0%  \n19.4.5.0.0.0  Other  cash  inflows     \n19.4.5.1.0.0  Net derivative  cash inflows   100%   \n19.4.5.2.0.0  Other  contractual  cash inflows   50%", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 14, "year": 2024}, "type": "Document"}
{"page_content": "Appendix II of Schedule I   \n16  Guidelines  for Calculation  of Liquidity  Coverage  Ratio  \nWeb -based  \nReturn  Code  Item  \n19.2.0.0.0.0  Total  stock  of HQLA  \n19.2.1.0.0.0  Total  Adjusted  Level 1  Assets  \n19.2.1.1.0.0  Level 1  Assets  \n19.2.1.1.1.0  Cash in hand  \nAll cash  (coins  and bank  notes)  held by the bank  that is  immediately  available  to meet  obligations.  \n19.2.1.1.2.0  Qualifying  central  bank  balances  and reserves  in excess  of Statutory  Reserve  Ratio  (SRR)  \nCentral  Bank  balances  and reserves  in excess  of SRR  maintained  which  can be drawn  down  in times  of \nstress.  The balance  held at CBSL  which  represents  part of the capital  held in foreign  currency  \nshould  not be included,  since it  is part  of capital.  \n19.2.1.1.3.0  Qualifying  marketable  securities  with  a 0% risk weight  and shall  satisfy  all of  the following:  \n(i) Traded  in large,  deep  and active  repo or cash  markets  characterized  by a low level of  concentration;  \n(ii) Have  a proven  record  as a reliable  source  of liquidity  in the markets  (repo  or sale) even  during  stressed  \nmarket conditions;  \n(iii) Not an obligation  of a financial institution  or any of its affiliated  entities;  \n(iv) At the mark  to market  value;  \n(v) Excluding  securities  pledged  for secured  funding/ repo  irrespective  of the maturity;  \n(vi) Including  securities  received  for secured  lending/  reverse  repo maturing  over 30 days.  \n19.2.1.1.3.1  Issued  by sovereigns  \nGovernment  of Sri Lanka  - rupee  claims.  Foreign  Sovereigns  - where  the sovereign  attracts  an \nExternal  Credit Rating  between AAA  to AA -. \n19.2.1.1.3.2  Guaranteed  by sovereigns  \nGovernment  of Sri Lanka  - rupee  claims.  Foreign  Sovereigns  - where  the sovereign  attracts  an \nExternal  Credit Rating  between AAA  to AA -. \n19.2.1.1.3.3  Issued  or guaranteed by  central  banks  (CBs)", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 15, "year": 2024}, "type": "Document"}
{"page_content": "19.2.1.1.3.3  Issued  or guaranteed by  central  banks  (CBs)  \nCentral  Bank  of Sri Lanka  - all claims.  Foreign  Central  Banks  - where  the sovereign  attracts  an \nExternal  Credit  Rating  between AAA  to AA -. \n19.2.1.1.3.4  Issued  or guaranteed by  BIS, IMF, ECB and  European  Community  or MDBs  \n Issued or guaranteed by Bank for International Settlements (BIS), the International Monetary Fund  \n(IMF), the European Central Bank (ECB), European Community (EC) and the following eligible  \nMultilateral Development  Banks (MDBs)  \n* The World  Bank  Group  comprising  of the International  Bank  for Reconstruction  and Development  \n(IBRD)  and the International  Finance  Corporation (IFC)  \n* The Asian  Development Bank  (ADB)  \n* The African  Development  Bank  (AFDB)  \n* The European  Bank  for Reconstruction  and Development  (EBRD)  \n* The Inter -American  Development  Bank  (IADB)  \n* The European  Investment Bank  (EIB)  \n* The European  Investment Fund  (EIF)  \n* The Nordic  Investment  Bank  (NIB)  \n* The Caribbean Development Bank  (CDB)  \n* The Islamic Development  Bank  (IDB)  \n* The Council  of Europe Development Bank  (CEDB)  \n* The International  Finance  Facility  for Immunization  (IFFIm)", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 15, "year": 2024}, "type": "Document"}
{"page_content": "17  19.2.1.2.0.0  Adjustments  \n19.2.1.2.1.0  Add:  Market value  of level  1 securities  pledged  for secured  funding  \nMarket  value  of the Level 1  asset collateral extended  on secured  funding or  repo transactions that  \nmature within  30 days.  \n19.2.1.2.2.0  Add: Amounts extended  through secured  lending  \nAmounts extended through secured lending or reverse repo transactions maturing within 30 days, in  \nwhich the bank has extended cash and obtained collateral in the form of Level 1 (where collateral  \nobtained  not re-used).  \n19.2.1.2.3.0  Less:  Market value  of level 1  securities  received  for secured  lending  \nMarket  value  of the Level  1 asset  collateral  (where  collateral  obtained  not re-used)  received  on secured  \nlending  or reverse  repo transactions  maturing  within  30 days,  in which  the bank  has extended  cash and \nobtained  collateral  in the form  of Level  1. \n19.2.1.2.4.0  Less: Amounts  raised  through secured  funding  \nAmounts  raised  through  secured  funding  or repo  transactions  conducted  that mature  within  30 days and \nare backed by  Level  1 assets.  \n19.2.2.0.0.0  Total  Adjusted  Level 2A  Assets  \n19.2.2.1.0.0  Level 2A  Assets  \n19.2.2.1.1.0  Qualifying  marketable  securities  with  a 20%  risk weight  and shall  satisfy  all of the following  \nconditions:  \n(i) Traded  in large, deep  and active  repo or cash  markets characterised by  a low  level  of concentration;  \n(ii) Have a proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed  \nmarket conditions (i.e. A maximum decline of price or increase in haircut not exceeding 10% over a  30-\nday period  of significant  liquidity  stress );  \n(iii) Not an obligation  of a financial institution  or any of its affiliated  entities;  \n(iv) At the mark  to market  value;  \n(v) Excluding  securities  pledged  for secured  funding/  repo irrespective  of the maturity;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 16, "year": 2024}, "type": "Document"}
{"page_content": "(v) Excluding  securities  pledged  for secured  funding/  repo irrespective  of the maturity;  \n(vi) Including  securities  received  for secured  lending/  reverse  repo maturing  over 30 days.  \n19.2.2.1.1.1  Issued  or guaranteed by  sovereigns  \nGovernment of Sri Lanka - foreign claims. Foreign  Sovereigns - where  the sovereign  attracts  an \nExternal  Credit  Rating  between  A+ to A-. \n19.2.2.1.1.2  Issued  or guaranteed by  CBs \nForeign  Central Banks  - where  the sovereign attracts  an External Credit Rating  between  A+ to  A-. \n19.2.2.1.1.3  Issued  or guaranteed by  Public  Sector  Enterprises  (PSEs)  \nDomestic  and foreign  PSEs  - where  PSE attracts  an External  Credit Rating  between  AAA  to AA-. \n19.2.2.1.1.4  Issued  or guaranteed by  MDBs  \nMDBs  other  than MDBs  listed  above  in 19.2.1.1.3.4  where  MDB  attracts  an External  Credit  Rating  \nbetween  AAA  to AA -. \n19.2.2.1. 2.0 Qualifying  investments  in Gilt Unit  Trust  (GUT)  backed  by GOSL  securities,  subject  to: \n(i) GUTs  should  be open ended  mutual funds;  \n(ii) Underlying  investment  portfolio  of GUTs  should  always  be Sri Lanka  Government  Securities;  \n19.2.2.2.0.0  Adjustments  \n19.2.2.2.1.0  Add:  Market value  of level 2A  securities  pledged  for secured  funding  \nMarket  value  of the Level  2A asset  collateral  extended  on secured  funding  or repo transactions  that \nmature within  30 days.  \n19.2.2.2.2.0  Add:  Amounts extended  through  secured  lending  \nAmounts extended through secured lending or reverse repo transactions maturing within 30 days, in  \nwhich the bank has extended cash and obtained collateral in the form of Level 2A (where collateral  \nobtained  not re-used).", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 16, "year": 2024}, "type": "Document"}
{"page_content": "18  19.2.2.2.3.0  Less:  Market value  of level 2A  securities  received  for secured  lending  \nMarket  value  of the Level  2A asset  collateral  (where  collateral  obtained  not re-used)  received  on \nsecured  lending  or reverse  repo transactions  maturing  within  30 days,  in which  the bank  has extended  \ncash and obtained  collateral  in the form  of Level  2A. \n19.2.2.2.4.0  Less: Amounts  raised through  secured  funding  \nAmounts  raised  through  secured  funding  or repo transactions  that mature  within  30 days and are \nbacked by  Level  2A assets . \n19.2.3.0.0.0  Total  Adjusted  Level 2B  Assets  \n19.2.3.1.0.0  Level  2B Assets  \n19.2.3.1. 1.0 \n(i) \n(ii) \n(iii) \n(iv) \n \n \n(v) \n(vi) Qualifying  non-financial  common  equity  shares  that satisfy  all of the following  conditions:  \nNot issued by a financial institution or any of its affiliated entities;  \nTraded at recognized stock exchange and centrally cleared;  \nTraded in large, deep and active repo or cash markets characterised by a low level of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or sale) even during stressed \nmarket conditions (i.e., maximum decline of share price or increase in haircut not exceeding 40% over \na 30 day period of significant liquidity stress) ; \nExcluding securities pledged for secured funding/ repo irrespective of the maturity;  \nIncluding securities received for secured lending/ reverse repo maturing over 30 days.  \n19.2.3.2.0.0  Adjustments  \n19.2.3.2.1.0  Add:  Market value  of level 2B  securities  pledged  for secured  funding  \nMarket  value  of the Level  2B asset  collateral  extended  on secured  funding  or repo transactions  that \nmature within  30 days.  \n19.2.3.2.2.0  Add:  Amounts extended  through secured  lending  \nAmounts  extended  through  secured  lending  or reverse  repo transactions  maturing  within  30 days,  in", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 17, "year": 2024}, "type": "Document"}
{"page_content": "which  the bank  has extended  cash and obtained  collateral  in the form  of Level  2B (where  collateral  \nobtained  not re-used).  \n19.2.3.2.3.0  Less:  Market value  of level 2B securities  received  for secured  lending  \nMarket  value  of the Level  2B asset  collateral  (where  collateral  obtained  not re-used)  received  on \nsecured  lending  or reverse  repo transactions  maturing  within  30 days,  in which  the bank  has extended  \ncash and obtained  collateral  in the form  of Level  2B. \n19.2.3.2.4.0  Less: Amounts  raised  through  secured  funding  \nAmount  raised  through  secured  funding or  repo transactions that  mature  within  30 days and are backed  \nby Level  2B assets  \n19.3.0.0.0.0  Total  cash outflows  (Capital and  accrued  interest  if any)  \n19.3.1.0.0.0  Deposits (including dormant deposits, collateralised customer deposits against lending, margin deposits  \nand insured deposits  under  the Sri Lanka Deposit  Insurance  Scheme)  \n19.3.1.1.0.0  Demand,  savings  and term  deposits  (less than  30 days  maturity)  \n19.3.1.1.1.0  Retail  customers  \nDeposits placed with a bank by a natural person.  \n19.3.1.1.2.0  Small and medium enterprises  \n \nDeposits placed with a bank by small and medium enterprises (SME). The total amount of deposits placed \nwith the bank by an SME shall not exceed Rs. 250 million.  \n \nQualifying criteria to be classified as an SME are as follows:  \n(i) The annual turnover of the SME shall not exceed Rs.1 billion at the time of obtaining the \ndeposit/granting the facility;  \n(ii) The annual turnover should be based on latest available audited financial statements or certified by \na Chartered Accountant or an Approved Accountant acceptable to the Department of Inland", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 17, "year": 2024}, "type": "Document"}
{"page_content": "19  Revenue. In the case of draft financial statements, the turnover certified by a Chartered Accountant \nor an Approved Accountant should be obtained within the year;  \n(iii) The criterion (ii) above shall be applicable if the total amount of deposits placed with the bank by \nthe SME or the total exposure (including off -balance sheet exposure) to the SME is greater than \nor equal to Rs. 50 million. Otherwise banks may adopt their  own internal mechanism to verify the \nannual turnover of the SME.  \n19.3.1.2.0.0  Term  deposits  with  residual maturity  greater  than  30 days  \n \nCash outflows related to retail term deposits with a residual maturity or withdrawal notice period of \ngreater than 30 days will be excluded from total expected cash outflows if the depositor has no legal \nright to withdraw deposits within 30 days or if early withdrawal results in a significant penalty that is \nmaterially greater than the loss of interest.  \nIf a bank allows a depositor to withdraw such deposit without applying the corresponding penalty, or \ndespite a clause that says depositor has no legal right to withdraw, the entire category should be treated \nas demand deposits regardless of the remaining m aturity.  \n19.3.2.0.0.0  Unsecured  wholesale  funding  \n \nWholesale deposits and other general obligations that are raised from legal entities (incorporated \ncompanies excluding SME). Wholesale deposits also include dormant deposits, collateralised customer \ndeposits against lending, margin deposits and insured dep osits under the Sri Lanka Deposit Insurance \nand Liquidity Support Scheme. ln case of other general obligations, they shall not be collateralised by \nlegal rights to specifically designated assets owned by the borrowing institution in the case of \nbankruptcy,  insolvency, liquidation or resolution. Obligations related to derivative contracts are \nexplicitly excluded from this definition.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 18, "year": 2024}, "type": "Document"}
{"page_content": "explicitly excluded from this definition.  \n19.3.2.1.0.0  Operational  deposits  generated  by clearing,  custody  and cash  management  activities  \nFinancial and non -financial customer deposits placed with a bank, in order to facilitate their access and  \nability to use payment and settlement systems or make payments. These services must be provided  under \na legally binding agreement in addition to the account mandate to institutional customers (e.g.  Vostro  \nAccounts  and collection  accounts).  \n19.3.2.2.0.0  Cooperative  banks  in an institutional  network  (qualifying  deposits  with  the centralized  institution)  \nGroup of legally autonomous banks with a statutory framework of cooperation with common strategic  \nfocus and brand where specific functions are performed by central institutions. (e.g., Samurdhi banks,  \nrural banks, sanasa saving  societies, cooperative societies).  \n19.3.2.3.0.0  Non-financial  Corporates,  Sovereigns,  CBs,  MDBs  and PSEs  \nAll deposits  and other  extensions  of unsecured  funding  from  non-financial  corporate  customers,  \nsovereigns,  CBs,  MDBs  and PSEs not held specifically  for operational  purposes.  \n19.3.2.4.0.0  Other  legal  entity  customers  \nDeposits  and other  funding  from  other  institutions  (including  banks,  security  firms,  insurance  \ncompanies, etc.), fiduciaries, beneficiaries, conduits and special purpose vehicles, affiliated entities of  \nthe bank  and other  entities  that are not specifically  held for operational purposes  and not included  in the \nprior  categories.  \n19.3.3.0.0.0  \n19.3.3.1.0.0  \n \n \n19.3.3.2.0.0  \n \n \n     19.3.3.3.0.0  \n \n19.3.3.4.0.0  Secured  Funding  Transactions  \nBacked by Level  1 assets  \nAmounts  raised  through  secured  funding  or repo transactions  not conducted  with the bank's  domestic  \ncentral bank  and that mature within 30 days and  are backed by  Level  1 assets.  \nBacked  by Level 2A  assets", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 18, "year": 2024}, "type": "Document"}
{"page_content": "Backed  by Level 2A  assets  \nAmounts  raised  through  secured  funding  or repo transactions  not conducted  with the bank's  domestic  \ncentral bank  and that mature within 30 days and  are backed by  Level  2A assets.  \nBacked  by Level 2B  assets  \nAmounts  raised  through  secured  funding  or repo transactions  not conducted  with the bank's  domestic  \ncentral bank  and that mature within 30 days and  are backed by  Level  2B assets.  \nBacked  by all other  assets  \nAmounts  raised  through  secured  funding  or repo transactions  not conducted  with the bank's  domestic  \ncentral bank  and that mature within  30 days and  are backed  by other  assets  (non-HQLA).", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 18, "year": 2024}, "type": "Document"}
{"page_content": "20  19.3.4.0.0.0  Undrawn  portion  of committed  (irrevocable)  facilities  and other  contingent  funding  obligations  \n19.3.4.1.0.0  \n19.3.4.1.1.0  \n \n \n19.3.4.1.2.0  \n19.3.4.1.3.0  \n19.3.4.1.4.0  \n19.3.4.1.5.0  \n19.3.4.1.6.0  \n19.3.4.1.7.0  Committed  (irrevocable)  credit  & liquidity  facilities  \nUndrawn  committed  credit  & liquidity  facilities  to retail  and small  and medium enterprises  \nIn the case of an SME, the maximum exposure (including off -balance sheet exposure) of the lending bank \nto the SME shall not exceed Rs. 250 million.  \nUndrawn  committed  credit  facilities  to non-financial  corporates,  sovereigns,  CBs,  PSEs  and MDBs  \nUndrawn  committed  liquidity  facilities  to non-financial  corporates,  sovereigns,  CBs,  PSEs  and MDBs  \nUndrawn  committed  credit  & liquidity  facilities  to banks  subject  to prudential  supervision  \nUndrawn  committed  credit  facilities  to other  financial  institutions  \nUndrawn  committed  liquidity  facilities  to financial  institutions  \nUndrawn  committed  credit  & liquidity  facilities  to other  legal  entities  \n19.3.4.2.0.0  Other  contingent  funding  obligations  \nOther  contingent  funding  liabilities  such as guarantees,  Letter  of Credit  (LC),  recoverable  credit  and \nliquidity  facility.  \n     19.3.4.2.1.0  Unconditionally  revocable  \"uncommitted\"  credit  and liquidity  facilities  \nBalances  of undrawn  credit  and liquidity  facilities  where  the bank  has the right  to unconditionally  \nrevoke  the undrawn portion  of these  facilities  (e.g.,  Overdraft  and credit card undrawn  portion).  \n19.3.4.2.2.0  Trade  Finance  related  obligations  (including  guarantees  and letters  of credit)  \nTrade  finance  instruments  consist  of trade -related  (import  - export  related)  obligations  directly  \nunderpinned  by the movement  of goods or  the provision of  services.  \n19.3.4.2.3.0  Guarantees  unrelated  to trade  finance  obligations", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 19, "year": 2024}, "type": "Document"}
{"page_content": "19.3.4.2.3.0  Guarantees  unrelated  to trade  finance  obligations  \nThe outstanding  amount  of guarantees  unrelated  to trade  finance  obligations.  \n19.3.4.2.4.0  Other  contractual  cash  outflows  \nAny other  contractual  cash outflows  within  the next 30 calendar  days should  be captured  in this \nstandard,  such as outflows  to cover  unsecured  collateral  borrowings,  uncovered  short  positions,  \ndividends  or contractual  interest  payments  as to what comprises  the amounts  included  in this line. \n19.3.5.0.0.0  Additional  requirements  \n19.3.5.1.0.0  Net derivative  cash  outflows  \nBanks  should  calculate,  in accordance  with their existing  valuation  methodologies,  expected  contractual \nderivative cash inflows and outflows. Cash flows may be calculated on a net basis (i.e.,  inflows can \noffset outflows) by counterparty. The sum of all net cash outflows should be reported here.  The sum of \nall net cash inflows should be reported in net derivative cash inflows. Where derivative  payments are \ncollateralised by HQLA, cash outflows should be calculated net of any corresponding  cash or collateral  \ninflows  that would  result,  all other  things  being  equal,  from  contractual  obligations  for cash or collateral \nto be provided to the bank, if the bank is legally entitled and operationally capable  to re-use the collateral  \nin new cash raising  transactions  once  the collateral  is received.  This is in line with  the principle  that \nbanks  should  not double  count liquidity  inflows  and outflows.  \n19.3.5.2.0.0  Any other  contractual  cash outflows  \nIncluding  any amount  required  to be installed  in the central  bank  reserves  within  30 days,  any other  \ncontractual cash outflows.  \n19.4.0.0.0.0  Total  cash  inflows  \n19.4.1.0.0.0  \n19.4.1.1.0.0  \n \n \n \n19.4.1.2.0.0\n  \n \n \n19.4.1.3.0.0  Maturing  secured  lending  transactions backed  by the following  collateral  \nBacked by Level 1 assets", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 19, "year": 2024}, "type": "Document"}
{"page_content": "Backed by Level 1 assets  \nAmounts extended through secured lending or reverse repo transactions maturing within 30 days, in  \nwhich the bank has extended cash and obtained collateral in the form of Level 1 (where collateral  \nobtained  not re-used).  \nBacked  by Level 2A  Assets  \nAmounts extended through secured lending or reverse repo transactions maturing within 30 days, in  \nwhich the bank has extended cash and obtained collateral in the form of Level 2A (where collateral  \nobtained  not re-used).  \nBacked  by Level  2B Assets", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 19, "year": 2024}, "type": "Document"}
{"page_content": "21   \n \n \n19.4.1.4.0.0  \n \n \n \n19.4.1.5.0.0  Amounts extended through secured lending or reverse repo transactions maturing within 30 days, in  \nwhich the bank has extended cash and obtained collateral in the form of Level 2B  (where collateral  \nobtained  not re-used).  \n \n Margin  lending  backed by  non-Level 1  or non-Level 2  collateral  \n Amounts  extended  through  collateralised  loans  extended  to customers  for the purpose  of taking  \n leveraged  trading  positions  (\u201cmargin  loans\u201d)  made  against non -HQLA  collateral.  \n \n Backed  by all other  assets  \nAmounts  extended  through  such transactions  (other  than those  reported  in 19.4.1.4.0.0)  in which  the \nbank  has obtained collateral  in another  form  than Level  1 or Level  2 assets.  \n19.4.2.0.0.0  \n \n \n19.4.2.1.0.0  \n19.4.2.2.0.0  \n19.4.2.3.0.0  Committed  facilities  \nCommitted credit, liquidity or other contingent funding facilities that the bank holds in other  institutions  \nfor its own purpose.  \nCredit facilities  \nLiquidity facilities  \nOther contingent funding facilities  \n19.4.3.0.0.0  \n19.4.3.1.0.0  \n \n \n \n \n19.4.3.2.0.0\n  Other inflows by counterparty which are maturing within 30 days  \nRetail and small and medium enterprises  \nAll payments (including interest payments and instalments) from retail customers and small and medium \nenterprises on performing facilities that is contractually due within the 30 -day horizon. In the case of an \nSME, the maximum exposure (including off -balance s heet exposure) of the lending bank to the SME \nshall not exceed Rs. 250 million.  \nNon-financial wholesale counterparties  \nAll payments  (including  interest  payments  and installments)  from  non-financial  wholesale  \ncounterparties  on performing  facilities that  is contractually  due within  the 30 -day horizon.  \n19.4.3.3.0.0  Central  Banks,  Banks and  Financial  Institutions", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 20, "year": 2024}, "type": "Document"}
{"page_content": "19.4.3.3.0.0  Central  Banks,  Banks and  Financial  Institutions  \nAll payments  (including  interest  payments  and installments)  from  central  banks,  banks  and financial  \ninstitutions  on performing  facilities  that is contractually  due within the  30-day horizon.  \n19.4.4.0.0.0  Operational  deposits  \nDeposits held at other financial institutions for operational purposes such as clearing, custody and cash  \nmanagement purposes. Also includes deposits held at centralised institution of network of co -operative  \nbanks.  These  services  must  be provided  under  a legally  binding  agreement  to institutional  customers  \n(e.g.,  Nostro  Accounts,  collection  accounts,  cash items  in process of  collection).  \n19.4.5.0.0.0  \n19.4.5.1.0.0  Other  cash  inflows  \nNet derivative cash inflows  \nBanks  should  calculate,  in accordance  with their existing  valuation  methodologies,  expected  contractual \nderivative cash inflows and outflows. Cash flows may be calculated on a net basis (i.e.,  inflows can \noffset outflows) by counterparty. The sum of all net cash inflows should be reported here.  The sum of \nall net cash outflows should be reported in net derivative cash outflows. Where derivatives  are \ncollateralised by HQLA, cash inflows should be calculated net of any corresponding cash or  contractual  \ncollateral  outflows  that would  result,  all other  things  being  equal,  from  contractual  obligations for cash \nor collateral to be posted by the bank, given these contractual obligations would  reduce the stock of \nHQLA.  This is in line  with the  principle that  banks  should  not double count  liquidity  inflows  and \noutflows.  \n19.4.5.2.0.0  Other  contractual  cash  inflows  \n \nAny other contractual cash  inflows  to be captured.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 20, "year": 2024}, "type": "Document"}
{"page_content": "22   \n                                                                                                                                           Appendix III of Schedule I  \n \n  \nMapping  of Notations  of the Credit  Rating  Agencies  for classification  of assets  for \nLCR  \n \nFitch  \nRating  \nLanka  Lanka \nRating \nAgency \nLimited  \n  \nStandard  \nand Poor\u2019s   \nMoody\u2019s   \nFitch  \nRatings  Rating  \nScale for  \nLCR  \nAAA  (lka)  AAA  AAA  Aaa AAA  AAA  \nAA+  (lka)  AA+  AA+  Aa1 AA+  AA+  \nAA (like)  AA AA Aa2 AA AA \nAA- (lka)  AA- AA- Aa3 AA- AA- \nA+ (lka)  A+ A+ A1 A+ A+ \nA (lka)  A A A2 A A \nA- (lka)  A- A- A3 A- A- \nBBB+  (lka)  BBB+  BBB+  Baa1  BBB+  BBB+  \nBBB  (lka)  BBB  BBB  Baa2  BBB  BBB  \nBBB - (lka)  BBB - BBB - Baa3  BBB - BBB - \nBB+  (lka)  BB+  BB+  Ba1 BB+  BB+  \nBB (lka)  BB BB Ba2 BB BB \nBB- (lka)  BB- BB- Ba3 BB- BB- \nB+ (lka) B+ B+ B1 B+ B+ \nB (lka)  B B B2 B B \nB- (lka) &  \nLower  B- & Lower  B- & Lower  B3 & Lower  B- & Lower  B- & Lower", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 21, "year": 2024}, "type": "Document"}
{"page_content": "23  [Limited Sharing]   \n \n \n \n \n \nSCHEDULE  II \n \n \nBASEL III LIQUIDITY STANDARDS  \nON NET STABLE FUNDING  RATIO", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 22, "year": 2024}, "type": "Document"}
{"page_content": "24  [Limited Sharing]  \nBASEL  III - NET  STABLE  FUNDING  RATIO  \n \n1.0 Implementation  of Net Stable  Funding  Ratio  \n1.1 Basel Committee on Banking Supervision (BCBS) publication in December 2010 on \nliquidity,  \u201cBasel  III: International  framework  for liquidity  risk measurement,  standards \nand monitoring\u201d  introduced  two minimum  standards  namely  Liquidity  Coverage  Ratio \n(LCR) and Net Stable Funding Ratio (NSFR).  \n1.2 The objective  of NSFR  is to reduce  funding  risk over a longer  time horizon  by requiring \nLBs to fund their activities with sufficiently stable sources of funding.  \n \n2.0 Net Stable Funding  Ratio  \n2.1 NSFR is defined as the amount of available stable funding relative to the amount of \nrequired stable funding. The amount of available and required stable funding are \ncalibrated  to reflect  the presumed  degree  of stability  of liabilities  and liquidity  of assets. \nThe computation of NSFR shall be based on the following formula.  \n \n \n \n \n2.2 Available  Stable Funding  \nAvailable Stable Funding (ASF) is defined as the portion of capital and liabilities \nexpected to be reliable over the time horizon of one year. ASF factors such as 100%, \n90%, 50% and 0% are assigned according to presumed degree of stability of funding.  \n2.3 Required  Stable  Funding  \nRequired Stable Funding (RSF) is a function of liquidity characteristics and residual \nmaturities of various assets held and those of its off -balance sheet (OBS) exposures. \nRSF factors such as 0%, 5%, 10%, 15%, 50%, 65%, 85%, and 100% are assigned to \ndifferent asset categories accordingly.  NSFR  = available  amount  of stable  funding  *100 \nrequired amount of stable funding", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 23, "year": 2024}, "type": "Document"}
{"page_content": "25  [Limited Sharing]  \n2.4 Off-balance  Sheet  Exposures  (OBS)  \nMany potential OBS exposures do not require immediate funding but can lead to \nsignificant liquidity drain over a longer time horizon. NSFR assigns RSF factors to \nvarious  OBS  exposures  in order  to ensure  that banks  hold stable  funding  for the portion \nof OBS  exposures  that may be expected  to require  funding  within  any one-year horizon.  \n2.5 Definitions on various components including High Quality Liquid Assets of Level 1, \nLevel 2A and Level 2B assets of NSFR mirror those outlined in  Schedule I of this \nBanking Act Determination  on Liquidity Coverage Ratio, unless otherwise  specified.  \n2.6 Unencumbered assets under NSFR have the meaning of free of legal, regulatory, \ncontractual or other restrictions on the ability of the bank to liquidate, sell, transfer or \nassign the asset.  \n2.7 Encumbered  Assets  \n(a) Assets on the balance sheet that are encumbered for one year or more receive a \n100% RSF factor.  \n(b) Assets  encumbered  for a period  of between  six months  and less than one year that \nwould, if unencumbered, receive an RSF factor lower than or equal to 50% receive \na 50% RSF factor.  \n(c) Assets  encumbered  for a period  of between  six months  and less than one year that \nwould,  if unencumbered,  receive  an RSF factor  higher  than 50% retain  that higher \nRSF factor.  \n(d) Where assets have less than six months remaining in the encumbrance period, \nthose assets may receive the same RSF factor as an equivalent asset that is \nunencumbered.  \n \n3.0 Reporting  Formats  \n3.1 The reporting  formats  and instruction  guidelines  for computation  of Net Stable  Funding \nRatio are given as follows:  \nAppendix I: Reporting Formats for Net Stable Funding Ratio \nAppendix  II: Guidelines  for computation  of Net Stable  Funding  Ratio", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 24, "year": 2024}, "type": "Document"}
{"page_content": "26  [Limited Sharing]  \n        Appendix  I of Schedule II  \nREPORTING  FORMATS  FOR  THE  NET  STABLE  FUNDING  RATIO  \nPart  I: Computation of NSFR  \nWeb -based \nReturn  Code  Item  Amount \nRs. \u2018000 \n32.1.1.0.0.0  Total  Available  Stable  Funding   \n32.1.2.0.0.0  Required  Stable  Funding \u2013 On Balance  Sheet  Assets   \n32.1.3.0.0.0  Required  Stable  Funding \u2013 Off -balance  Sheet  Items   \n32.1.4.0.0.0  Total  Required  Stable  Funding   \n32.1.5.0.0.0  NSFR", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 25, "year": 2024}, "type": "Document"}
{"page_content": "27  [Limited Sharing]  \nPart  II: Total Available  Stable Funding  \nWeb -based \nReturn  Code  Item  Unweighted \nAmount  ASF \nFactor  Weighted \nAmount  \n32.2.0.0.0.0  Total  Available Stable  Funding     \n32.2.1.0.0.0  Liabilities  and capital  assigned  a 100% \nASF factor     \n32.2.1.1.0.0  Total regulatory capital before capital \ndeductions  (excluding  Tier 2 instruments \nwith residual maturity of less than one \nyear)   100%   \n32.2.1.2.0.0  Any other capital instrument with \neffective  residual  maturity  of one year or \nmore   100%   \n32.2.1.3.0.0  Secured  and unsecured  borrowings  and \nliabilities with effective residual \nmaturities of one year or more     \n32.2.1.3.1.0  Net deferred  tax liabilities   100%   \n32.2.1.3.2.0  Minority  interest   100%   \n32.2.1.3.3.0  Other  liabilities   100%   \n32.2.2.0.0.0  Liabilities  assigned  a 90%  ASF  factor     \n32.2.2.1.0.0  Non-maturity  deposits  and term deposits \nwith residual maturity of less than one \nyear provided by retail customers and \nSmall and Medium Enterprises (SME)   90%  \n32.2.3.0.0.0  Liabilities  assigned  a 50%  ASF  factor     \n32.2.3.1.0.0  Funding with residual maturity of less \nthan one year provided  by non-financial \ncorporate customers   50%  \n32.2.3.2.0.0  Operational  deposits   50%  \n32.2.3.3.0.0  Funding with residual maturity of less \nthan one year from sovereigns, Public \nSector  Entities  (PSEs),  and Multilateral \nDevelopment Banks (MDBs)   50%  \n32.2.3.4.0.0  Other funding with residual maturity \nbetween  six months  and less than one year \nnot included in the above categories, \nincluding funding provided by central \nbanks and financial institutions     \n32.2.3.4.1.0  Net deferred  tax liabilities   50%  \n32.2.3.4.2.0  Minority  interest   50%  \n32.2.3.4.3.0  Other  liabilities   50%", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 26, "year": 2024}, "type": "Document"}
{"page_content": "28  [Limited Sharing]  \n32.2.4.0.0.0  Liabilities  assigned  a 0% ASF  factor     \n32.2.4.1.0.0  All other liabilities and equity not included \nin the above categories including other \nfunding with residual maturity of less than \nsix months from central banks and financial \ninstitutions   0%  \n32.2.4.2.0.0  Other  liabilities  without  a stated maturity     \n32.2.4.2.1.0  Net deferred  tax liabilities   0%  \n32.2.4.2.2.0  Minority  interest   0%  \n32.2.4.2.3.0  Other  liabilities   0%  \n32.2.4.3.0.0  NSFR derivative liabilities net of NSFR \nderivative assets (if NSFR derivative \nliabilities are greater than NSFR derivative \nassets)   0%  \n32.2.4.4.0.0  \u201cTrade date\u201d payables arising from \npurchases  of financial  instruments,  foreign \ncurrencies and commodities   0%", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 27, "year": 2024}, "type": "Document"}
{"page_content": "29  [Limited Sharing]  \nPart  III (a): Required  Stable  Funding  \u2013 On Balance  Sheet  Assets  \nWeb -based \nReturn \nCode  Item  Unweighted \nAmount  RSF \nFactor  Weighted \nAmount  \n32.3.0.0.0.0  Required  Stable  Funding  \u2013 On Balance \nSheet Assets     \n32.3.1.0.0.0  Assets  assigned  a 0% RSF  factor     \n32.3.1.1.0.0  Cash  in hand  0%  \n32.3.1.2.0.0  Central  bank  reserves  (Statutory  Reserve \nRatio (SRR) including excess SRR)   0%  \n32.3.1.3.0.0  All claims  on central  banks  with residual \nmaturities of less than six months   0%  \n32.3.1.4.0.0  \"Trade  date\u201d  receivables  arising  from  sales  of \nfinancial instruments, foreign currencies and \ncommodities   0%  \n32.3.2.0.0.0  Assets  assigned  a 5% RSF  factor     \n32.3.2.1.0.0  Unencumbered  Level  1 assets     \n32.3.2.1.1.0  Qualifying  marketable securities     \n32.3.2.1.1.1  Issued by  sovereigns   5%  \n32.3.2.1.1.2  Guaranteed by  sovereigns   5%  \n32.3.2.1.1.3  Issued  or guaranteed  by central  banks   5%  \n32.3.2.1.1.4  Issued or guaranteed by BIS, IMF, ECB and \nEC or eligible MDBs   5%  \n32.3.2.2.0.0  20% of derivative  liabilities   5%  \n32.3.3.0.0.0  Assets  assigned a 10%  RSF  factor     \n32.3.3.1.0.0  Unencumbered  loans  to financial  institutions \nwith residual maturities of less than six \nmonths   10%  \n32.3.4.0.0.0  Assets  assigned a 15%  RSF  factor     \n32.3.4.1.0.0  Unencumbered  Level  2A assets     \n32.3.4.1.1.0  Qualifying  marketable  securities     \n32.3.4.1.1.1  Issued  or guaranteed  by sovereigns   15%  \n32.3.4.1.1.2  Issued  or guaranteed  by central  banks   15%  \n32.3.4.1.1.3  Issued  or guaranteed  by PSEs   15%  \n32.3.4.1.1.4  Issued  or guaranteed  by MDBs   15%  \n32.3.4.1.2.0  Qualifying non -financial corporate debt \nsecurities  (including  commercial  paper  and \npromissory notes) and covered bonds   15%  \n32.3.4.1.3.0  Qualifying investments in gilt unit trust \nbacked  by Government  of Sri Lanka  (GOSL) \nsecurities   15%", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 28, "year": 2024}, "type": "Document"}
{"page_content": "30  [Limited Sharing]  \n32.3.4.2.0.0  All other  unencumbered  loans  to financial \ninstitutions  with residual  maturities  of less \nthan six months   15%  \n32.3.5.0.0.0  Assets  assigned a 50%  RSF  factor     \n32.3.5.1.0.0  Unencumbered  Level  2B assets     \n32.3.5.1.1.0  Qualifying non -financial corporate debt \nsecurities  (including  commercial  paper  and \npromissory notes)   50%  \n32.3.5.1.2.0  Qualifying  non-financial  common  equity \nshares   50%  \n32.3.5.1.3.0  Residential mortgage -backed  securities \n(RMBS)  with a credit  rating  of at least AA  50%  \n32.3.5.2.0.0  HQLA  encumbered  for a period  of six \nmonths  or more  and less than one  year  50%  \n32.3.5.3.0.0  Unencumbered  loans  to financial  institutions \nand central banks with residual maturity \nbetween six months and less than one year   50%  \n32.3.5.4.0.0  Deposits  held at other  financial  institutions \nfor operational purposes   50%  \n32.3.5.5.0.0  All other non HQLA not included in the \nabove  categories  with residual  maturity  of \nless than one year   50%  \n32.3.6.0.0.0  Assets  assigned a 65%  RSF  factor     \n32.3.6.1.0.0  Qualifying unencumbered residential \nmortgages  with a residual  maturity  of one \nyear or more   65%  \n32.3.6.2.0.0  Other qualifying unencumbered loans not \nincluded in the above categories, excluding \nloans  to financial  institutions,  with a residual \nmaturity of one year or more   65%  \n32.3.7.0.0.0  Assets  assigned an 85% RSF  factor     \n32.3.7.1.0.0  Cash,  securities  or other  assets  posted  as \ninitial margin for derivative contracts   85%  \n32.3.7.2.0.0  Other  unencumbered  performing  loans   85%  \n32.3.7.3.0.0  Unencumbered  securities  that are not in \ndefault and do not qualify as HQLA   85%  \n32.3.7.4.0.0  Physical  traded  commodities,  including  gold  85%  \n32.3.8.0.0.0  Assets  assigned a 100% RSF  factor     \n32.3.8.1.0.0  All assets  that are encumbered  for a period  of \none year or more   100%", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 29, "year": 2024}, "type": "Document"}
{"page_content": "31  [Limited Sharing]  \n32.3.8.2.0.0  NSFR derivative assets net of NSFR \nderivative  liabilities  if NSFR  derivative \nassets  are greater  than NSFR  derivative \nliabilities   100%   \n32.3.8.3.0.0  All other  assets not  included  in above   100%   \n \nPart  III (b): Required  Stable  Funding  \u2013 Off Balance  Sheet  Items  \n \nWeb -based \nReturn \nCode  Item  Unweighted \nAmount  RSF \nFactor  Weighted \nAmount  \n32.4.0.0.0.0  Required  Stable  Funding  \u2013 Off Balance \nSheet Items     \n32.4.1.0.0.0  Irrevocable and conditionally revocable \ncredit  and liquidity  facilities  to any client   5%  \n32.4.2.0.0.0  Other  contingent  funding  obligations \nincluding products and instruments     \n32.4.2.1.0.0  Unconditionally  revocable  credit  and \nliquidity facilities   0%  \n32.4.2.2.0.0  Trade  finance  related  obligations  including \nguarantees and letters of credit   5%  \n32.4.2.3.0.0  Guarantees  unrelated  to trade  finance \nobligations   0%  \n32.4.3.0.0.0  Non-contractual  obligations     \n32.4.3.1.0.0  Potential  requests  for debt repurchases  of the \nbank\u2019s own debt or that of related conduits, \nsecurities  investment  vehicles  and other  such \nfinancing facilities   5%  \n32.4.3.2.0.0  Structured products where customers \nanticipate  ready  marketability,  such as \nadjustable rate notes and variable rate \ndemand notes (VRDNs)   5%  \n32.4.3.3.0.0  Managed  funds  that are marketed  with the \nobjective of maintaining a stable value   5%  \n32.4.4.0.0.0  Any other  obligations   5%", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 30, "year": 2024}, "type": "Document"}
{"page_content": "32  [Limited Sharing]  \nAppendix  II of Schedule II  \n \nGuidelines  for Computation  of NSFR  Return  \n \nWeb -based  \nReturn  Code  Item  \n32.2.0.0.0.0  Total  Available Stable  Funding  \n32.2.1.0.0.0  Liabilities  and capital  assigned  a 100%  ASF  factor  \n32.2.1.1.0.0  Total regulatory capital before capital deductions (excluding Tier 2 \ninstruments with residual maturity of less than one year)  \nTotal  amount  of regulatory  capital,  before  the application  of capital  deductions, as \ndefined in the Banking Act Directions No. 01 of 2016 on Capital Requirements  \nunder  Basel  III excluding  the value  of Tier 2 instruments  with \nresidual maturity  of less than one  year.  \n32.2.1.2.0.0  Any other capital instrument with effective residual maturity of one  year or \nmore  \nTotal  amount  of any capital  instrument  not included  above  that has an effective \nresidual maturity of one year or more, but excluding any instruments with explicit \nor embedded options that, if exercised, would reduce the expected maturity to \nless than one year. Value of Tier 2 instruments, with effective residual  maturity  \nof one year or more,  that is not captured  under  32.2.1.1.0.0  is \neligible  under  this. \n32.2.1.3.0.0  Secured and unsecured borrowings and liabilities with effective residual \nmaturities of one year or more  \nTotal amount of secured and unsecured borrowings and liabilities (including term \ndeposits) with effective residual maturities of one year or more. Cash flows  \nfalling  below  the one-year horizon  but arising  from  liabilities  with a final maturity \ngreater than one year do not qualify for the 100% ASF factor. If a bank allows a \ndepositor to withdraw a term deposit without applying a significant  penalty  that \nis materially  greater  than the loss of interest,  or despite a clause that says depositor \nhas no legal right to withdraw, the entire category should be treated as demand \ndeposits regardless of the remaining maturity.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 31, "year": 2024}, "type": "Document"}
{"page_content": "deposits regardless of the remaining maturity.  \nNet deferred  tax liabilities  (if deferred  tax liabilities  are greater  than deferred  \ntax assets)  should  be treated  according  to the nearest  possible  date on which", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 31, "year": 2024}, "type": "Document"}
{"page_content": "33  [Limited Sharing]  \n such liabilities could be realised; and minority interest, should be treated \naccording to the term of the instrument, usually in perpetuity.  Based on that \nthese  liabilities  are assigned  either  a 100%  ASF factor  if the effective  maturity \nis one year or greater under 32.2.1.3.0.0, 50% if the effective maturity is \nbetween  six months  and less than one year  under  32.2.3.4.0.0  or 0% otherwise  \nunder  32.2.4.2.0.0.  \n32.2.2.0.0.0  Liabilities  assigned a  90%  ASF  factor  \n32.2.2.1.0.0  Non-maturity deposits and term deposits with residual maturity of less \nthan one year provided by retail customers and SME  \nNon-maturity  deposits  and/or  term deposits  with residual  maturity  of less than \none year provided by retail customers and SME. In the case of SME, the total \namount of deposits placed with the bank by an SME shall not exceed Rs. 250 \nmillion.  \nQualifying  criteria  to be classified as  an SME  are as follows:  \n(i) The annual  turnover  of the SME  shall  not exceed  Rs. 1 billion  at the time \nof obtaining the deposit/granting the facility;  \n(ii) The annual turnover  should be based on latest available audited financial \nstatements or certified by a Chartered Accountant or an Approved \nAccountant acceptable to the Department of Inland Revenue.  In the case of \ndraft  financial  statements,  the turnover  certified by a Chartered Accountant \nor an Approved Accountant should be obtained within the year;  \n(iii) The criterion (ii) above shall be applicable if the total amount of deposits \nplaced with the bank by the SME or the total exposure (including off -\nbalance sheet exposure) to the SME is greater than or equal  to Rs. 50 \nmillion.  Otherwise  banks  may adopt  their own internal mechanism to verify \nthe annual turnover of the SME.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 32, "year": 2024}, "type": "Document"}
{"page_content": "34  [Limited Sharing]  \n32.2.3.0.0.0  Liabilities  assigned  a 50%  ASF  factor  \n32.2.3.1.0.0  Funding with  residual  maturity of  less than  one year provided  by non - \nfinancial corporate customers  \nBoth  secured  and unsecured  funding  with a residual  maturity  of less than one \nyear provided  by non-financial  corporate  customers.  \n32.2.3.2.0.0  Operational  deposits  \nFinancial and non -financial customer deposits placed with a bank, in order to  \nfacilitate their access and ability to use payment and settlement systems or make \npayments (e.g. Vostro accounts and collection accounts).  \n32.2.3.3.0.0  Funding  with  residual  maturity  of less than  one year  from  sovereigns, \nPSEs, and MDBs  \nFunding  with residual  maturity  of less than one year provided  by sovereigns,  \nPSEs,  and MDBs.  \n32.2.3.4.0.0  Other funding with residual maturity between six months and less than \none year  not included  in the above  categories,  including  funding  provided \nby central banks and financial institutions  \nSecured and unsecured other funding with residual maturity between six months \nand less than one year not included in the above categories, including funding  \nprovided  by central  banks  and financial  institutions.  Refer  Banking  Act \nDirections  No. 1 of 2016  of Capital  Requirements  under  Basel  III for indicative \nlist of financial  institutions.  Net deferred  tax liabilities  and minority  interest  \nshall be  treated  as instructed  in 32.2.1.3.0.0.  \n32.2.4.0.0.0  Liabilities  assigned  a 0% ASF  factor  \n32.2.4.1.0.0  All other liabilities and equity not included in the above categories \nincluding other funding with residual maturity of less than six months from \ncentral banks and financial institutions  \nLiabilities  and equity  categories  not included  in the above  categories,  including \nother  funding  with residual  maturity  of less than six months  provided  by central \nbanks and financial institutions.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 33, "year": 2024}, "type": "Document"}
{"page_content": "35  [Limited Sharing]  \n32.2.4.2.0.0  Other  liabilities  without  a stated  maturity  \nThis category may include short positions and open maturity positions.  Net \ndeferred  tax liabilities  and minority  interest  shall  be treated  as instructed  in \n32.2.1.3.0.0.  \n32.2.4.3.0.0  NSFR derivative liabilities net of NSFR derivative assets (if NSFR \nderivative liabilities are greater than NSFR derivative assets)  \nNSFR derivative liabilities net of NSFR derivative assets, if NSFR derivative \nliabilities are greater than NSFR derivative assets. i.e. ASF = 0% * MAX \n((NSFR derivative liabilities - NSFR derivative assets), 0).  \n**Derivative liabilities are calculated based on the replacement cost for \nderivative  contracts  (obtained  by marking  to market),  where  the contract  has a \nnegative value. When an eligible bilateral netting ( refer Banking Act \nDirections on Leverage Ratio under Basel III for Licensed Commercial Banks \nand Licensed Specialised Banks for eligibility criteria ) contract is in place, the \nreplacement cost for the set of derivative exposures covered by the contract \nwill be the net replacement cost. In calculating NSFR derivative liabilities, \ncollateral posted in the form of variation  margin  in connection  with derivative  \ncontracts  must  be deducted  from the negative replacement cost.  \nNSFR  derivative  liabilities  = (derivative  labilities)  \u2013 (total  collateral  posted  as \nvariation  margin  on derivative  liabilities).  \n32.2.4.4.0.0  \u201cTrade date\u201d payables arising from purchases of financial instruments, \nforeign currencies and commodities  \n\u201cTrade  date\u201d  payables  arising  from  purchases  of financial  instruments,  foreign \ncurrencies and commodities that (i) are expected to settle within the standard \nsettlement  cycle  or period  that is customary  for the relevant  exchange  or type \nof transaction,  or (ii)  have  failed  to, but  are still expected  to settle.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 34, "year": 2024}, "type": "Document"}
{"page_content": "of transaction,  or (ii)  have  failed  to, but  are still expected  to settle.  \n32.3.0.0.0.0  Required  Stable  Funding  \u2013 On Balance  Sheet  Assets  \n32.3.1.0.0.0  Assets  assigned  a 0% RSF  factor  \n32.3.1.1.0.0  Cash  in hand  \nAll cash (coins  and bank  notes)  held by the bank  that is immediately  available \nto meet obligations.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 34, "year": 2024}, "type": "Document"}
{"page_content": "36  [Limited Sharing]  \n32.3.1.2.0.0  Central  bank  reserves  (SRR  including  excess)  \nCentral  bank  balances  and reserves  including  excess  of SRR.  The balance  held \nat central  bank  which  represents  part of the capital  held in foreign  currency  \nshould  not be included,  since  it is part of capital.  \n32.3.1.3.0.0  All claims  on central  banks  with  residual  maturities  of less than  six months  \nAll claims  on central  banks  with residual  maturities  of less than six months.  \n32.3.1.4.0.0  \"Trade date\" receivables arising from sales of financial instruments, \nforeign currencies and commodities  \nTrade date receivables arising from sales of financial instruments, foreign \ncurrencies and commodities that (i) are expected to settle within the standard \nsettlement  cycle  or period  that is customary  for the relevant  exchange  or type \nof transaction,  or (ii)  have  failed to,  but are still expected  to, settle.  \n32.3.2.0.0.0  Assets  assigned  a 5% RSF  factor  \n32.3.2.1.0.0  Unencumbered  Level  1 assets  \n32.3.2.1.1.0  \n \n \n \n \n \n(i) \n \n \n(ii) \n \n \n(iii) \n(iv) Qualifying  marketable  securities  \nMarketable  securities  with a 0% risk weight  under  the Banking  Act Directions \nNo. 01 of 2016 on Capital Requirements under Basel III and that shall satisfy \nthe following:  \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale) even during stressed market conditions;  \nNot an obligation of a  financial  institution  or any  of its  affiliated entities;  \nAt the mark  to market value.  \n32.3.2.1.1.1  Issued by sovereigns  \nGovernment of Sri Lanka - all rupee claims. Foreign Sovereigns - where the \nsovereign attracts an External Credit Rating between AAA to AA-. Refer \nBanking  Act Directions  No. 01 of 2016  on Capital  Requirements  under  Basel", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 35, "year": 2024}, "type": "Document"}
{"page_content": "Banking  Act Directions  No. 01 of 2016  on Capital  Requirements  under  Basel  \nIII for mapping  of notations  of the  credit  rating  agencies  in Sri  Lanka.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 35, "year": 2024}, "type": "Document"}
{"page_content": "37  [Limited Sharing]  \n32.3.2.1.1.2  Guaranteed  by sovereigns  \nGovernment of Sri Lanka - all rupee claims. Foreign Sovereigns - where the \nsovereign attracts an External Credit Rating between AAA to AA -. \n32.3.2.1.1.3  Issued  or guaranteed  by central  banks  \nCentral  Bank  of Sri Lanka  - all claims.  Foreign  Central  Banks  - where  the \nsovereign attracts an External Credit Rating between AAA to AA -. \n32.3.2.1.1.4  \n \n \n \n \n \n \n \n* \n \n \n* \n* \n* \n* \n* \n* \n* \n* \n* \n* \n* Issued  or guaranteed  by BIS, IMF,  ECB  and EC or MDBs  \nIssued or guaranteed by Bank for International Settlements (BIS), the \nInternational Monetary Fund (IMF), the European Central Bank (ECB), \nEuropean Community (EC) and the following eligible MDBs:  \nThe World Bank Group comprising of the International Bank for \nReconstruction and Development (IBRD) and the International Finance \nCorporation (IFC)  \nThe Asian Development Bank (ADB) \nThe African  Development  Bank  (AFDB)  \nThe European  Bank  for Reconstruction  and Development  (EBRD) \nThe Inter -American Development Bank (IADB)  \nThe European  Investment  Bank  (EIB) \nThe European Investment Fund (EIF) \nThe Nordic Investment Bank (NIB)  \nThe Caribbean  Development  Bank  (CDB) \nThe Islamic Development Bank (IDB)  \nThe Council  of Europe  Development  Bank (CEDB)  \nThe International  Finance  Facility  for Immunization  (IFFIm)  \n32.3.2.2.0.0  20% of  derivative  liabilities  \n20% of derivative  liabilities  (i.e. negative  replacement  cost amounts  before \ndeducting variation margin posted).", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 36, "year": 2024}, "type": "Document"}
{"page_content": "38  [Limited Sharing]  \n32.3.3.0.0.0  Assets  assigned a 10%  RSF  factor  \n32.3.3.1.0.0  Unencumbered loans to financial institutions with residual maturities of \nless than six months  \nUnencumbered loans to financial institutions with residual maturities of less \nthan six months,  where  the loan is secured  against  Level  1 assets  and where  the \nbank  has the ability  to freely  rehypothecate  the received  collateral  for the life \nof the  loan.  \n32.3.4.0.0.0  Assets  assigned a  15%  RSF  factor  \n32.3.4.1.0.0  Unencumbered  Level  2A assets  \n32.3.4.1.1.0  \n \n \n \n \n \n(i) \n \n \n(ii) \n \n \n \n \n \n(iii) \n(iv) Qualifying  marketable  securities  \nMarketable  securities  with a 20% risk weight  under  the Banking  Act Directions \nNo. 01 of 2016 on Capital Requirements under Basel III and that shall satisfy \nthe following conditions:  \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale)  even  during  stressed  market  conditions  (i.e. A maximum  decline  of price \nor increase in haircut not exceeding 10% over a 30 -day period of significant \nliquidity stress);  \nNot an obligation of a  financial institution or  any of its affiliated entities;  \nAt the mark  to market value.  \n32.3.4.1.1.1  Issued  or guaranteed  by sovereigns  \nGovernment  of Sri Lanka  \u2013 all foreign  claims  \nForeign Sovereigns - where the sovereign attracts an External Credit Rating  \nbetween A+ to A -. \n32.3.4.1.1.2  Issued  or guaranteed  by central  banks  \nForeign  Central  Banks  - where  the sovereign  attracts  an External  Credit  Rating \nbetween A+ to A -. \n32.3.4.1.1.3  Issued  or guaranteed  by PSEs  \nDomestic  and foreign  PSEs  - where PSE  attracts  an External  Credit  Rating \nbetween AAA to AA -.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 37, "year": 2024}, "type": "Document"}
{"page_content": "39  [Limited Sharing]  \n32.3.4.1.1.4  Issued  or guaranteed  by MDBs  \nMDBs other than MDBs listed above in 32.3.2.1.1.4 where MDBs attracts an \nExternal Credit Rating between AAA to AA -. \n32.3.4.1.2.0  \n \n \n \n(i) \n(ii) \n(iii) \n \n \n(iv) \n \n \n \n \n \n(v) \n \n \n(i) \n(ii) \n \n \n \n(iii) Qualifying  non-financial corporate debt securities (including commercial \npaper and promissory notes) and covered bonds  \nShall  satisfy  the following  conditions:  \nNot issued  by a financial  institution  or any of its affiliated  entities; \nWith an External Credit Rating of at least AA -; \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale)  even  during  stressed  market  conditions  (i.e. A  maximum  decline  of price \nor increase in haircut not exceeding 10% over a 30 -day period of significant \nliquidity stress);  \nAt mark  to market  value.  \nIn case of commercial paper  and promissory  notes:  \nThe issuer should be  a non-financial institution.  \nAll existing facilities obtained by the issuer from the investee bank should be \n\"performing\"  in terms  of the Banking Act Directions on Classification, \nRecognition and Measurement of Credit Facilities in Licensed Banks . \nCommercial  Paper/Promissory  Notes  should  be backed  by an approved  standby  \ncredit line supporting the issue to the full  redemption value from another \nlicensed bank.  \n32.3.4.1.3.0  \n \n \n(i) \n(ii) Qualifying  investments  in Gilt Unit  Trust  (GUT)  backed  by GOSL \nsecurities, subject to:  \nGUTs  should be  open ended mutual funds  \nUnderlying  investment  portfolio  of GUTs  should  always  be Sri Lanka \nGovernment Securities", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 38, "year": 2024}, "type": "Document"}
{"page_content": "40  [Limited Sharing]  \n32.3.4.2.0.0  All other  unencumbered  loans  to financial  institutions  with  residual  \nmaturities of less than six months  \nAll other  unencumbered  loans to  financial  institutions  with residual  maturities  \nof less than six months  not included  above  in 32.3.3.1.0.0.  \n32.3.5.0.0.0  Assets  assigned a 50%  RSF  factor  \n32.3.5.1.0.0  Unencumbered  Level  2B assets  \n32.3.5.1.1.0  \n \n \n \n(i) \n(ii) \n(iii) \n \n(iv) \n \n \n \n \n \n(v) \n \n \n(i) \n(ii) \n \n \n \n(iii) Qualifying  non-financial corporate debt securities (including commercial \npaper and promissory notes)  \nShall  satisfy  the following  conditions:  \nNot issued  by a financial  institution  or any of its affiliated  entities; \nWith an External Credit Rating between A+ and BBB -; \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale)  even  during  stressed  market  conditions  (i.e. A maximum  decline  of price \nor increase in haircut not exceeding 20% over a 30 -day period of significant \nliquidity stress);  \nAt mark  to market  value.  \nIn case of commercial paper  and promissory  notes:  \nThe issuer should be  a non-financial institution;  \nAll existing facilities obtained by the issuer from the investee bank should be \n\"performing\"  in terms  of the Banking Act Directions on Classification, \nRecognition and Measurement of Credit Facilities in Licensed Banks ; \nCommercial  Paper/Promissory  Notes  should  be backed  by an approved  standby \ncredit  line, supporting  the issue  to the full redemption  value  from  another  \nlicensed  bank.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 39, "year": 2024}, "type": "Document"}
{"page_content": "41  [Limited Sharing]  \n32.3.5.1.2.0  \n \n \n(i) \n(ii) \n(iii) \n \n \n(iv) Qualifying  non-financial  common  equity  shares  \nShall  satisfy  the following  conditions:  \nNot issued  by a financial institution  or any of its affiliated  entities; \nTraded at recognised  stock exchange and centrally cleared;  \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale) even during stressed market conditions (i.e., maximum decline of share \nprice  or increase  in haircut  not exceeding  40% over a 30-day period  of \nsignificant  liquidity  stress).  \n32.3.5.1.3.0  \n \n \n \n(i) \n \n \n(ii) \n(iii) \n \n \n(iv) \n \n \n \n \n \n(v) Residential mortgage backed  securities (RMBS)  with a credit rating of at \nleast AA  \nShall  satisfy  the following  conditions:  \nNot issued by and the underlying assets have not been originated by the bank \nor any of its affiliated entities;  \nAn External Credit Rating  of AA  or higher;  \nTraded in large, deep and active repo or cash markets characterised by a low \nlevel of concentration;  \nHave a proven record as a reliable source of liquidity in the markets (repo or \nsale)  even  during  stressed  market  conditions  (i.e., A maximum  decline  of price \nor increase in haircut not exceeding 20% over a 30 -day period of significant \nliquidity stress);  \nThe underlying asset pool is restricted to residential mortgages and cannot \ncontain  structured  products;  the underlying  mortgages  are \u201cfull recourse\u2019\u2019  loans \n(i.e. in the case of foreclosure the mortgage owner remains liable for any \nshortfall  in sales  proceeds  from  the property)  and have  a maximum  loan-to- \nvalue  ratio (LTV)  of 80% on average at  issuance.  \n32.3.5.2.0.0  HQLA encumbered for a period of six months or more and less than one \nyear \nAny HQLA  that are encumbered  for a period  of between  six months  and less \nthan one  year.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 40, "year": 2024}, "type": "Document"}
{"page_content": "42  [Limited Sharing]  \n32.3.5.3.0.0  Unencumbered  loans  to financial  institutions  and central  banks  with \nresidual maturity between six months and less than one year \nUnencumbered loans to financial institutions and central banks with residual  \nmaturities  between  six months and  less than one year.  \n32.3.5.4.0.0  Deposits held at other financial institutions for operational purposes \nDeposits  placed  in order  to facilitate  their access  and ability  to use payment  and \nsettlement  systems  or make  payments  (e.g. Nostro  Accounts  and collection  \naccounts).  \n32.3.5.5.0.0  All other non HQLA not included in the above categories with residual  \nmaturity of less than one year  \nOther  non HQLA  not included  in the above  categories  that have  a residual \nmaturity  of less than one year,  including  loans  to non-financial  corporate \nclients, loans to retail customers and SME, and loans to sovereigns and PSEs. In \nthe case of an SME, the maximum exposure (including off balance sheet  \nexposure) of the lending bank to the SME shall not exceed Rs. 250 million.  \n32.3.6.0.0.0  Assets  assigned a 65%  RSF  factor  \n32.3.6.1.0.0  Qualifying  unencumbered  residential  mortgages  with  a residual  maturity \nof one year or more  \nUnencumbered residential mortgages with a residual maturity of one year or \nmore that would qualify for a 50% or lower risk weight according to the \nBanking  Act Directions  No. 01 of 2016  on Capital  Requirements  under  Basel  \nIII. \n32.3.6.2.0.0  Other qualifying unencumbered loans not included in the above categories, \nexcluding loans to financial institutions, with a residual maturity of one \nyear or more  \nOther unencumbered loans not included in the above categories, excluding \nloans  to financial  institutions,  with a residual  maturity  of one year or more  that \nwould qualify  for a risk weight lower than 50% according to the Banking Act \nDirections No. 01 of 2016 on Capital Requirements under Basel III.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 41, "year": 2024}, "type": "Document"}
{"page_content": "43 \n [Limited Sharing]  \n32.3.7.0.0.0  Assets  assigned an 85% RSF  factor  \n32.3.7.1.0.0  Cash,  securities  or other  assets  posted  as initial  margin  for derivative \ncontracts  \nCash,  securities  or other  assets  posted  as initial  margin  for derivative  contracts and  \ncash or other  assets  provided  to contribute  to the default  fund of a central  \ncounterparty  (CCP).  \n32.3.7.2.0.0  Other  unencumbered  performing  loans  \nOther unencumbered performing loans with risk weight equal or greater than to 50% \naccording to the Banking Act Directions No. 01 of 2016 on Capital Requirements  \nunder  Basel  III and having  residual  maturities  of one year or \nmore,  excluding  loans  to financial  institutions.  \n32.3.7.3.0.0  Unencumbered  securities  that are not in default  and do not qualify  as HQLA  \nUnencumbered  securities  that are not in default  and do not qualify  as HQLA  \nwith a remaining  maturity  of one  year or  more  and exchange -traded equities.  \n32.3.7.4.0.0  Physical  traded  commodities,  including  gold \nPhysical  traded  commodities,  including  gold.  \n32.3.8.0.0.0  Assets  assigned a 100% RSF  factor  \n32.3.8.1.0.0  All assets  that are encumbered  for a period of one  year  or more  \nAll assets  that are encumbered  for a period  of one year  or more.  \n32.3.8.2.0.0  NSFR derivative assets net of NSFR derivative liabilities, if NSFR derivative \nassets are greater than NSFR derivative liabilities  \nNSFR derivative assets net of NSFR derivative liabilities, if NSFR derivative assets \nare greater than NSFR derivative liabilities.  \n**Derivative assets are calculated first based on the replacement cost for derivative \ncontracts (obtained by  marking to market) where the contract has a positive value. \nWhen an eligible bilateral netting ( refer Banking Act Directions on Leverage Ratio \nunder Basel III for Licensed Commercial Banks and Licensed Specialised Banks for", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 42, "year": 2024}, "type": "Document"}
{"page_content": "under Basel III for Licensed Commercial Banks and Licensed Specialised Banks for \neligibility criteria ) contract is in place, the replacement cost for the set of derivative \nexposures  covered  by the contract  will be the net replacement  cost. In \ncalculating  NSFR  derivative  assets,  collateral  received  in connection  with \nderivative contracts may not offset the positive replacement cost amount, regardless \nof whether or not netting is permitted, unless it is received in the form of cash \nvariation margin and meets the conditions as specified. ( refer Banking Act Directions", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 42, "year": 2024}, "type": "Document"}
{"page_content": "44 \n [Limited Sharing]  \non Leverage Ratio under Basel III for Licensed Commercial Banks and Licensed \nSpecialised Banks for conditions on cash variation ). \n32.3.8.3.0.0  All other  assets not  included  in above  \nAll other  assets  not included  in the above  categories,  including  non-performing loans, \nloans to financial institutions with a residual maturity of one year or more, non -\nexchange -traded equities, fixed assets, items deducted from regulatory  capital,  \nretained  interest,  insurance  assets,  subsidiary  interests  and defaulted  securities.  \n32.4.0.0.0.0  Required  Stable  Funding  \u2013 Off Balance  Sheet  Items  \n32.4.1.0.0.0  Irrevocable and conditionally revocable credit and liquidity facilities to any \nclient  \nBalances  of undrawn  credit  and liquidity  facilities  that are contractually  \nirrevocable  (committed)  or conditionally  revocable  agreements  to extend  funds in \nfuture.  \n32.4.2.0.0.0  Other  contingent  funding  obligations,  including  products  and instruments  \nbelow  \n32.4.2.1.0.0  Unconditionally  revocable  credit  and liquidity  facilities  \nBalances  of undrawn  credit  and liquidity  facilities  where  the bank  has the right to  \nunconditionally  revoke  the undrawn  portion  of these  facilities  (e.g.,  overdraft  \nand credit  card undrawn portion).  \n32.4.2.2.0.0  Trade finance -related obligations (including guarantees and letters of credit)  \nTrade finance instruments consist of trade -related (import - export related) \nobligations  directly  underpinned  by the movement  of goods  or the provision  of \nservices.  Report  up to uncovered  exposure  if such facilities  are backed  by \nmargin  deposits.  \n32.4.2.3.0.0  Guarantees  unrelated  to trade  finance  obligations  \nThe outstanding  amount  of guarantees  unrelated  to trade  finance  obligations.  \n32.4.3.0.0.0  Non-contractual  obligations  \n32.4.3.1.0.0  Potential  requests  for debt repurchases  of the bank\u2019s  own debt or that of related", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 43, "year": 2024}, "type": "Document"}
{"page_content": "conduits, securities investment vehicles and other such financing facilities.  \n32.4.3.2.0.0  Structured products where customers anticipate ready marketability, such as \nadjustable rate notes and variable rate demand notes (VRDNs).  \n32.4.3.3.0.0  Managed funds that are marketed with the objective of maintaining a stable  value.  \n32.4.4.0.0.0  Any other  obligations  \nOther  off-balance  sheet  exposures  not covered  above.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_1_of_2024_e.pdf", "page": 43, "year": 2024}, "type": "Document"}
{"page_content": "28 June2024CENTRAT BAI\\K OF SRI LAI\\KA\nBANKING ACT DETERMINATION No.02 of2024\nAMENDMENTS TO THE BANKING ACT DETERMINATION NO. 01 OF\n2019 ON ASSESSMENT OF FITNESS AND PROPRIETY OF CHIEF EXECUTIVE\nOFFIC ER AI\\D O FFIC ER\"-,HilHil:::' \n\"UT IVE FUN C TI ONS IN\nBanking Act Determination No. 01 of 2AI9 dated 19.12.2019 on Assessment of Fitness and\nPropriety of Chief Executive Officer and Officers Performing Executive Functions in Licensed\nBanks is hereby amended by replacing the Determinations 3.1 and 3.3 as given below.\n3. Information\nto be\nfurnished\nand\ndeadline\nfor\nsubmission3.1 The person proposed to be appointed or nominated as Chief\nExecutive Officer (CEO) or Officer Performing Executive\nFunctions of a licensed bank shall submit the original\nAffidavit as given in Schedule I hereto, for the assessment of\nfitness and propriety, before such person is appointed or\nnominated to the designated post of a licensed bank.\n3.3 The Company Secretary shall complete Schedule II hereto.\nThe Chairman and CEO shall complete Schedule III hereto,\nwith respect to CEO and Officers Performing Executive\nFunctions of a licensed bank, respectively, and forward the\nAffidavit, Schedule II and Schedule III.\nMrs.KMANDaulagala\nChief Executive Officer/ Senior Deputy Governor of the\nCentral Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "2 \n Schedule I   \n \nAffidavit to be submitted by Chief Executive Officer and O fficers Performing Executive \nFunctions proposed to be appointed/nominated in  Licensed Commercial Banks  and \nLicensed Specialised Banks (hereinafter referred to as licensed banks) in  terms of section s \n42(2), 44A and 76H of the Banking Act   \nNo. 30 of 1988 (as amended ) \n \nAFFIDAVIT  \n \nI \u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 (full name), \nholder of National Identity Card No.1 \u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 and Passport No. \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026of\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026 \n(address), being a [Buddhist / Hindu/ Muslim/ Christian / Catholic/other\u2026\u2026\u2026.... (please \nspecify)] do hereby [solemnly, sincerely and truly declare and make oath / affirm  (please specify \nas appropriate)] as follows:  \n1 I am the [affirmant / deponent] above named . \n2 I state that I have been proposed to be appointed /nominated  as the \n\u2026\u2026\u2026\u2026...\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026... (designation) of \n\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026 (name of bank) which is a licensed commercial \nbank/licensed specialised bank under the Banking Act No. 30 of 1988, (as amended ). \n3 I state that I possess the following academic and/or professional qualification/s in \nBanking, Finance, Economics, Accounting, Business Administration, Information \nTechnology, Risk Management, Law or any other relevant discipline  as may be \ndetermined by the Central Bank of Sri Lanka according to the mandate /business model  \nof the bank.  \n \nQualifications  Relevant \nDiscipline  Country  Name of the \nInstitution  Year of \nCompletion  \nAcademic  \n(i) \n     \n(ii) \n     \n \n1 Not applicable for expatriates .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "3 \n Professional  \n(i)     \n(ii)     \n \n4 I state that I possess the following effective experience in Banking, Finance, Economics, \nAccounting, Business Administration, Information Technology , Risk Management, Law  \nor any other relevant discipline as  may be determined by the Central Bank  of Sri Lanka , \naccording to the mandate /business model  of the bank.  \nDescript\nion Name of the \nInstitution/ \nOwn \nBusiness  Designati\non \n/Position  Nature of \nAppointment\n*  Work \nSpeciali\nzation  Date of \nAppointment \n(dd/mm/ \nyyyy)  Service Period \n(dd/mm/ yyyy \nto dd/mm/y \nyyy) \nCurrent Positions  \nDirectorships  \n       \n       \nOther Positions  \n       \n       \nPrevious Positions  \nDirectorships  \n       \n       \nOther Positions  \n       \n       \n* New Appointment/  Promotion/ Contract Basis/ Renewal of Contract/ Lateral Move / Other (Please \nSpecify)  \n5 I state that there is a finding/no finding by any regulatory or supervisory authority, \nprofessional association, any Commission of Inquiry, tribunal or other body established \nby law in Sri Lanka or outside Sri Lanka, to the effect that I have committed or have been \nconnected with the commission of any act which involves fraud, deceit, dishonesty or \nany other improper conduct.  \n6 I state that I am subject/ not subject to any proceedings, inquiry or investigation \nconsequent upon being served with notice of a charge involving fraud, deceit, dishonesty \nor other similar criminal activity, by any court, tribunal, regulatory authority, supervisory \nauthority, professional association, commission of inquiry, or any other body established \nby law, in Sri Lanka or outside Sri Lanka.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "4 \n 7 I state that I have been convicted /not been convicted by any court in Sri Lanka or outside \nSri Lanka, in respect of a crime committed in connection with financial management or \nof any offence involving moral turpitude.  \n8 I state that I am/am not an undischarged insolvent or have been/not been declared a \nbankrupt in Sri Lanka or outside Sri Lanka.  \n9 I state that I have failed/not failed to satisfy any judgment or order of any court whether \nin Sri Lanka or outside Sri Lanka, to repay a debt2. \n10 I state that I have been/not been declared by a court of competent jurisdiction in Sri Lanka \nor outside Sri Lanka, to be of unsound mind.  \n11 I state that I have been/ not been removed or suspended by an order of a regulatory or \nsupervisory authority, from serving as a Director /Chief Executive Officer/Officer \nPerforming Executive Functions or any other officer in a licensed bank or any other \nfinancial institution or corporate body, in Sri Lanka or outside Sri Lanka.  \n12 I state that I have been/not been a Director, Chief Executive Officer or have held/ not held  \nany other position of authority in any bank or financial institution \u2013 \n(i) whose licence has been suspended or cancelled; or  \n(ii) which has been wound up or is being wound up, or which is being compulsorily \nliquidated;  \nwhether in Sri Lanka or outside Sri Lanka.  \n13 I state that to the best of my knowledge I am a fit and proper person to be \nappointed /nominated  as the \u2026\u2026\u2026\u2026....\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. \n(designation) of a licensed commercial bank/licensed specialised bank in terms of the \nprovisions of the Banking Act, No. 30 of 1988 (as amended ). \n14 I state that I am not prevented by any written law from being appointed to the above post.  \n15 I state that the information given in Annex I is to the best of my knowledge and belief, \ntrue and complete.  \n \n \n \n \n \n \n \n \n2 Please refer 3(i ii) of the \u201cGuidance to Duly Complete the Affidavit  and Declaration\u201d .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "5 \n The averments contained \nherein were read over to the \n[affirmant/deponent] who \nhaving accepted same as \ntrue, affirmed/swore to and \nplaced his/her signature at \n\u2026\u2026\u2026. on this \u2026\u2026\u2026 day \nof \u2026\u2026\u2026 (Month, Year)  \n \n  \n \n \n  \nBefore me  \n \nJUSTICE OF THE PEACE \n/ COMMISSIONER FOR \nOATHS  \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Affix stamps \nas applicable", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 4, "year": 2024}, "type": "Document"}
{"page_content": "6 \n Annex I \nDeclaration to be submitted by Chief Executive Officer and O fficers Performing \nExecutive Functions of Licensed Banks  \n \n \n \n \n \n \n \nDECLARATION  \n \nName of the Bank:  \n    Personal Information, Qualifications and Business Transactions  \n1. Personal Details  \n1.1 (i) Name with Initials:  \n(ii) Title: Mr/Mrs/Ms/Dr/Prof/Other (Please \nspecify)  (iii) Age as at date of signing the  \naffidavit: (dd/mm/yyyy)  \n(iv) Date of Birth: (dd/mm/yyyy)  (v) Sex: \n(vi) Civil Status:  (vii) Nationality:   (viii) Citizenship3: \n(ix) Local/expatriate:  \n1.2 Contact  \nDetails  Permanent Address:  \nResidential Address:  \n(i) Telephone  Mobile   \nFixed \nline  \nFax  \n(ii) E- mail Personal   \nOfficial   \n1.3 \n (i) Proposed Post/Designation in the bank:  (ii) Proposed date of appointment to the \nPost/Designation (dd/mm/yyyy)  \n1.4 (i) Details of Appointment of Chief Executive Officer/Officers Performing Executive Functions  \nNew \nAppointment   Contract Basis   Lateral \nMove   \n \n3 A Dual Citizen is required to state whether he/she should be considered as local or expatriate.  Passport Size \nPhoto  \n \n(Taken within last \n6 months)", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 5, "year": 2024}, "type": "Document"}
{"page_content": "7 \n Promotion   Renewal of \nContract   Other \n(Please \nspecify)   \n1.5 1.5.1 Details of close relations in terms of Section 86 of the Banking Act, No. 30 of 1988  (as \namended ) \n(i) Full name of the Spouse:  \n(ii) NIC No:  (iii) Passport No:  \n1.5.2 Details of dependent children  \n(i) Full Name  (ii)  NIC No:  (iii)  Passport No:  \n   \n \n2. Additional qualifications, in addition to the above information : \nSpecial Assignments / \nConsultancy/Advisory/Audit \nServices  Name of the \nInstitution  Description  Service Period \n(dd/mm/yyyy to \ndd/mm/yyyy)  \n(i)     \n(ii)     \n \n3. Details of direct  all and/or indirect share ownership in entities, presently held.  \nName of the \nInstitution/s  Voting/Non -\nvoting  No. of Shares  For Indirect \nHoldings, Name \nof the \nInstitution of \nDirect Holding  Percentage \nHolding  \nDirect  Indirect  Direct  Indi\nrect \n     \n     \n \n4. Business Transactions  \n4.1 I state that I have/do not have deposits with the licensed bank, its subsidiaries4 or associate \ncompanies5 (If yes, please state name/s of the institution/s ). \n4.2 I state that I currently have (had) the following business transactions during the two years \nimmediately preceding the appointment, with the licensed bank, its  subsidiaries, associate \n \n4 \u2018Subsidiary\u2019 as defined in Section 17(3) of the Banking Act No.30 of 1988  (as amended ). \n \n5 \u2018Associate\u2019 as defined in Section 46(1) of the Banking Act No.30 of 1988  (as amended ).", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 6, "year": 2024}, "type": "Document"}
{"page_content": "8 \n companies and affiliated companies/entities, and other related parties6 of the licensed \nbank .  \nName of the \nInstitution/s  Date of \nTransacti\non \n(dd/mm/y\nyyy) Amount as at \ndd/mm/yyyy  \n(Rs. mn)  Classification \n(Performing/ \nNon-\nperforming)  Type \nand \nValue \nof \nCollate\nral \n(Rs.mn)  % of Bank\u2019s \nRegulatory \nCapital / \nRelevant \nEntity\u2019s \nCapital  Limit  Outstandi\nng \nBorrowings7 \n      \nInvestments8 \n      \n \n4.3 I state that I am the Guarantor for the following business transactions.  \nType of \nTransaction  Name of the \nInstitution/s  Date of Transaction \n(dd/mm/yyyy)  Amount as at \ndd/mm/yyyy (Rs.mn)  \n    \n \n5. Appointments, Shareholdings and Business Transactions of Close Relations  \n5.1 I state that my close relations9 are presently employed as directors, chief executive \nofficers, or officers performing executive functions of the following licensed banks, their \nsubsidiaries, associate companies, affiliated companies/entities, and other related parties \nof the licensed bank, and other financial institutions as defined in the Central Bank of Sri \nLanka Act No.16 of 2023.   \nName of the Close Relation  Name of the Institution  Position  \n   \n   \n \n5.2 I state the following details of all direct and/or indirect share ownerships in entities, \npresently held by my close relations.  \n \n \n6 \u2018Related Parties\u2019 as defined in the Banking Act Direction s No, 11 of 2007 and 12 of 2007 on Corporate  Governance \nof Licensed Banks in Sri Lanka (as amended ). \n7 Shall include on -balance sheet and off -balance sheet borrowings .  \n8 Shall include debt instruments . \n9 Close Relations as defined in the Section 86 of the Banking Act No.30 of 1988 (as amended ).", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 7, "year": 2024}, "type": "Document"}
{"page_content": "9 \n Name of the \nInstitution/s  Voting/Non -\nvoting  No. of Shares  For Indirect Holdings, \nName of the Institution \nof Direct Holding  Percentage \nHolding  \nDirect  Indirect  Direct  Indi\nrect \n     \n     \n \n5.3 I state that my close relations  currently have  (had) the following business during the two \nyears immediately preceding the appointment, with the licensed bank, its subsidiaries, \nassociate companies affiliated companies/entities, and other related parties of the licensed \nbank . \nName of \nthe Close \nRelation  Name of the \nInstitution  Date of \nTransaction \n(dd/mm/yy)  Amount as at \ndd/mm/yyyy (Rs.mn)  Type and \nValue of \nCollateral \n(Rs mn)  % of \nBank\u2019s \nRegulat\nory \nCapital  \nLimit  Outstanding  \nBorrowings8 \n      \n      \nInvestments9 \n      \n      \n \n6. Other Information  \n6.1 I state that I am subject to /not subject to supervision or regulation of regulatory \nauthority/ies, supervisory authority/ies established outside Sri Lanka ( if the answer is \ngiven in the affirmative, p lease specify the regulatory/ supervisory Authority ). \n6.2 I state that the following information of the inquiries/investigations to which I have been \nsubject  to, conducted by the regulatory authority, supervisory authority, professional \nassociation, commission of inquiry, financial institution as defined in the Central Bank \nof Sri Lanka Act No.16 of 2023, or any other body established by law in Sri Lanka or \noutside Sri Lanka, if any:  \nYear  Name of the Institution  Subject Matter  Current Status  \n    \n    \n \n7. Any other explanation/information in regard to the information furnished above and other \ninformation considered relevant for assessing the suitability of the proposed person .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 8, "year": 2024}, "type": "Document"}
{"page_content": "10 \n DECLARATION:  \nI state that I am aware of the provisions of the Banking Act  No.30 of 1988  (as amended ) and \nDirection and Determination issued thereunder , on assessment of fitness and propriety of my \nposition and confirm that the above information is to the best of my knowledge and belief true \nand complete. I undertake to keep the licensed bank fully informed, as soon as possible, of all \nsubsequent events, which are relevant to the information provided above.  \nDate: ____________             ______________________________  \n     Signature of the Chief Executive Officer/ Officer Performing \nExecutive Functions of the  Licensed Bank", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 9, "year": 2024}, "type": "Document"}
{"page_content": "11 \n Guidance to Duly Complete the Affidavit  and Declaration  \n to be submitted by the Chief Executive Officers (CEOs) and  Officers Performing \nExecutive Functions of Licensed Banks  \nThis guidance is issued to ensure that sufficient and accurate information is provided by banks \nfor assessing the fitness and propriety of CEOs and Officers Performing Executive Function s \nprior to their appointment s to the respective position s.  \n \n1. Purpose of Obtaining the Affidavit  and Declaration  \n \n(i) The purpose of obtaining affidavits and declarations of CEOs and Officers \nPerforming Executive Functions of Licensed Banks is to enable the Bank \nSupervision Department of the Central Bank of Sri Lanka to assess their fitness \nand propriety  of such officers to hold the respective position in terms of the \nprovisions of the Banking Act No.30 of 1988  (as amended ).  \n(ii) Accordingly, the Bank Supervision Department requires comprehensive \ninformation to evaluate the qualifications, experience, integrity and compliance \nwith the requirements specified in the Banking Act, to assess the suitability of \nCEOs, and Officers Performing Executive Functions prior  to appointment of such \nperson to the respective positions of respective bank.  \n(iii) The Affidavit and Declaration submitted by the persons proposed to be \nappointed/nominated shall  be the legally  binding document in the event of any \ndispute /controversy.  \n2. Affidavit  \n(i) It is preferable that the Affidavit is prepared as a fresh document, based on the \nformat provided by the Bank Supervision Department, so as to avoid inclusion of \nunnecessary words. However, if the given format is filled, all alterations, erasures \nand interlineations should be initialed by the Commissioner for Oaths/Justice of \nthe Peace immediately after all s uch amendments.  \n(ii) All blank spaces should be completed appropriately.  \n(iii) Appropriate words should be used based on the religion of the officer. If the", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 10, "year": 2024}, "type": "Document"}
{"page_content": "(iii) Appropriate words should be used based on the religion of the officer. If the \nofficer refrains/objects to disclose his/her religion, a confirmation should be \nsubmitted by the officer stating that:  \n\u2022 He/she is an atheist or belongs to a religion not mentioned in this Affidavit; or  \n\u2022 He/she objects to disclosing his/her religion.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 10, "year": 2024}, "type": "Document"}
{"page_content": "12 \n (iv) Strike -out the irrelevant word(s). If the irrelevant words are stricken out, the \nCommissioner for Oaths/Justice of the Peace should place his initials immediately \nafter all such amendments.  If the answer is given in the affirmative, provide \nrelevant information.  \n(v) If the person is a foreigner and signs the Affidavit while overseas:  \n\u2022 Signature of the person should be attested by a Commissioner for Oaths or an \nequivalent in the country in which he places his signature.  \n\u2022 Attestation should be made in front of the diplomatic , consular officer of Sri \nLanka in the country where the Officer resides or in terms of the laws applicable \nin such country.  \n(vi) Affix a stamp for the value applicable as at the date of signing the Affidavit, if \napplicable.  \n(vii) If the affidavit is executed in Sri Lanka, the same shall be attested by a \nCommissioner for Oaths/Justice of the Peace immediately after placing the \nsignature of the person at \u2018Before me.\u2019  \n(viii) CEOs and Officers Performing Executive Functions shall submit Terms of \nappointment (including designation, date of appointment, duties, responsibilities \nand remuneration package).  \n3. Declaration  \n(i) All sections of the Declarations  should be : \n- duly completed  and irrelevant sections, if any,  should be stated as Not \nApplicable/ Nil/None. \n- signed and dated.  \n(ii) If there is no comment it should be state as Not Applicable/ Nil/None. \n(iii) Officers Performing Executive Functions shall request the  Credit Information \nBureau of Sri Lanka to send their credit report directly to the Director of Bank \nSupervision via email to dbsd@cbsl.lk .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 11, "year": 2024}, "type": "Document"}
{"page_content": "13 \n Schedule II  \nTo be filled by the Company Secretary  \n \n1. Corporate Information  \nRecommendation of the Nomination Committee/Appointing Authority  \nName of the Licensed Bank   \nFull Name of the person proposed to \nbe appointed/ nominated as CEO or \nOfficer Performing Executive \nFunctions  \n  \nAssessment Criteria  (Please specify the \nspecific knowledge/skills considered by \nthe Nomination Committee and the  \nAppointing Authority)   \nRecommendation  (Please attach minutes \nof the resolution/decis ion of the \nNomination Committee and the \nAppointing Authority)   \n \n2. Remarks of the Board of Directors  \n(1) Any other explanation / information regarding the details furnished above.  \n(2) Submitted to the Board of Directors of the Bank /Approval has been granted by \nthe Board of Directors for above proposed appointment  or nomination at the \nmeeting dated\u2026\u2026\u2026\u2026(dd/mm/yyyy)  \n3. I state that the affidavit has been completed in terms of Sections  42, 44A  (with respect to \nlicensed commercial banks), and 76H (with respect to licensed specialised banks) of the \nBanking Act , No. 30 of 1988  (as amended ) and the Directions and Determinations, issued \nthereunder.  \nName:  \nSignature of the Company Secretary and the  Official Stamp : \nDate :", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 12, "year": 2024}, "type": "Document"}
{"page_content": "14 \n Schedule  III \n \nFor Chief Executive Officer (Local Licensed banks) - To be filled by the Chairperson  \n \nFor Chief Executive Officer/Country Head (Branch of Foreign Banks) - To be filled by the \nRegional Head  \n \nFor Officers Performing Executive Functions - To be filled by the Chief Executive Officer  \n \nDeclaration:  \n(1) Any other explanation / information regarding the details furnished above and other \ninformation considered relevant for assessing the suitability of the Chief Executive \nOfficer/Officer Performing Executive Functions of the licensed bank.  \n(2)  I confirm that, in terms of Section 44A/ Section 76H read with Section 44A of the \nBanking Act, No. 30 of 1988, the officer referred to above is fit and proper to be appointed \nas the Chief Executive Officer/an Officer Performing Executive Functions of \n\u2026\u2026\u2026\u2026 \u2026\u2026\u2026\u2026\u2026\u2026\u2026 (Name of Bank)  \n \nDate:        \n  \n \n \n \n Signature of the Chairperson / \nRegional Head / Chief Executive \nOfficer and the official stamp", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_2_of_2024.pdf", "page": 13, "year": 2024}, "type": "Document"}
{"page_content": "11 September2024CENTRAL BANK OF SRI LAIYKA\nBAIIKING ACT DETERMINATION No.03 of 2024\nMINIMUM NUMBER OF MT'IMBERS OF BOARDS OF DIRECTORS\nOF SELECTED LICENSED BAI\\KS\nIn the exercise of the powers conferred by Sections a2Q3) and76Tof the_Banking Act, No. 30 of\n1988, as amended, the Central Bank of Sri Lanka hereby determines the minimum number of members\nof the Board of Directors of Bank of Ceylon, People's Bank, National Savings Bank and Pradeshiya\nSanwardhana Bank, with a view to facilitating the effective functioning of the Board and Board Sub\nCommittees with sufficient number of directors of aforementioned licensed commercial banks and\nlicensed specialised banks (hereinafter referred to as licensed banks).\n1. Empowerment 1.1 In terms of Sections 42(13) and 76H of the Banking Act, No. 30 of\n1988, as amended, notwithstanding anything to the contrary in any\nother written law, the Central Bank shall, from time to time, determine\nthe number of mernbers of the Board of Directors of a licensed bank\nwhich number shall not be less than seven (7) in any case.\n2.1 The Board of Directors of the following licensed banks shall be\nconstituted with the minimum number of members as given in Table I\nbelow, subject to a maximum number of thirteen (13).\nTable 1: Minimum Number of Members of the Board of Directors\nLicensed Bank Minimum Number of Directors\nBank of Ceylon 10\nPeople's Bank l0\nNational Savings Bank 9\nPradeshiya Sanwardhana Bank 92. Minimum\nNumber of\nDirectors\n3. Effective Date of\nCompliance3.1 The above licensed banks are required to comply with the requirement\nstipulated in Determination2.l by 01 Jme2025.\n/\nhto-*a-----s-4trr.pffi\"\nChairman of the Governing Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_3_of_2024.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \n  BANKING  ACT  DETERMINATION     01 Octo ber 2024 No. 04 of 202 4 \n      \n1 \n  APPROVED SECURITIES FOR  ACCOMMODATION  GRANTED  TO \nRELATED PARTIES  OF LICENSED BANKS  \n \nThe Central  Bank  of Sri Lanka  (CBSL),  with a view  to mitigating  potential  conflicts  of interest  \nand preventing  the extension of  more favo urable  treatment to related parties of licensed \ncommercial banks and  licensed  specialised  banks  (hereinafter  referred  to as licensed  banks),  \nand thereby  ensuring  the  safety  and soundness  of the banking  sector,  by virtue  of the powers  \nconferred  by Sections  47(3),  (4), (5), (6) and (11B),  and 76K of the Banking  Act No. 30 of 1988,  \nas amended,  hereby  issues   this Determination on  Approved Securities for Accommodation \nGranted to Related  Parties  of Licensed Banks. \n \n1. Related Parties  1.1 The \u201crelated parties\u201d of licensed banks  for the purpose of this \nDetermination , are as follows : \n(a) a director of a licensed bank;  \n(b) close relations of such director;  \n(c) a concern in which a director of a licensed bank has a \nsubstantial interest, being an interest acquired either before \nor after the appointment as a director of such licensed bank;  \n(d) a concern in which a close relation of a director of a licensed \nbank has a substantial interest;  \n(e) a chief executive officer or an officer performing executive \nfunctions of a licensed bank in respect of any \naccommodation granted other than accommodation granted \nto such officer under a scheme applicable to the employees \nof such licensed bank;  \n(f) a shareholder of a licensed bank having material interest, \nwhether individual or a concern;  \n(g) a subsidiary or an associate company of the licensed bank;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_4_of_2024.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \n  BANKING  ACT  DETERMINATION     01 Octo ber 2024 No. 04 of 202 4 \n      \n2 \n (h) a holding company of the licensed bank including its \nsubsidiaries, excluding the parent bank and subsidiaries of a \nbank incorporated outside Sri Lanka;  \n(i) a director of a subsidiary or an associate company of the \nlicensed bank;  \n(j) a director of a holding company of the licensed bank and its \nsubsidiaries;  \n(k) a close relation of a person specified in Determinations  1.1 \n(e) and (f)  above ; \n(l) a concern, whose director or partner is a director of such \nbank;  \n(m) a concern in which a material shareholder of a licensed bank \nhas substantial interest ; and  \n(n) a concern in which a close relation of an individual material \nshareholder has substantial interest . \n \n2. Approved \nSecurities in \nrespect of \nAccommodation \ngranted  to \nRelated Parties  2.1 The Central Bank  of Sri Lanka  has approved the following \nsecurities to be obtained by a licensed bank  in granting \naccommodation to related parties of such bank referred to in \nDetermination  1.1 above as the case may be:  \n(a) Guarantees, provided that the accommodation granted would \nnot exceed 100 per cent of the Guarantee ; \n(i) Sri Lanka Government Guarantees provided that such \nGuarantees are reported as liabilities in the financial \nstatements of the Government of Sri Lanka (GOSL)  \n(ii) Bank Guarantees  \n(iii) Guarantees of international financial institutions such as \nWorld Bank (WB), International Monetary Fund (IMF), \nInternational Finance Corporation (IFC), Asian", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_4_of_2024.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \n  BANKING  ACT  DETERMINATION     01 Octo ber 2024 No. 04 of 202 4 \n      \n3 \n Development Bank (ADB),  United States Agency for \nInternational Development (USAID)  \n(b)  Government or Central Bank Securities provided that the \naccommodation granted would not exceed 90 per cent of the \nface value or market value, whichever is lower of such \nsecurities;  \n(c) Cash deposits in any licensed bank (including deposits of \nthird parties in the lending bank subject to obtaining consent \nof such party) held under lien to the order of the lending bank \nprovided that the accommodation granted would not exceed \n90 per cent of such cash deposits;  \n(d)  Gold provided that the accommodation granted would not \nexceed 70 per cent of the market value of such gold;  \n(e)  Immovable property held on freehold basis and on which a \nprimary mortgage has been taken by the lending bank \nprovided that the accommodation granted would not exceed \n80 per cent of the forced sale value of such property;  \n(f)  Immovable property held on freehold basis and on which a \nsecondary mortgage has been taken by a lending bank, \nsubject to a primary mortgage also being obtained by the \nsame bank provided that the total accommodation granted \non the primary mortgage and the secondary mortgage does \nnot exceed 80 per cent of the forced sale value of such \nproperty;  \n(g) Immovable property held on leasehold basis provided that , \n(i) the lease has been granted by a statutory body;  \n(ii) the unexpired period of the lease to be at least 10 years \nmore than the tenor of the accommodation ; \n(iii) there is no prohibition on the mortgage of the leasehold \nrights contained in the Deed of Lease, or if the Deed of", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_4_of_2024.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \n  BANKING  ACT  DETERMINATION     01 Octo ber 2024 No. 04 of 202 4 \n      \n4 \n Lease requires the prior approval of the Lessor for the \nmortgage of the leasehold rights such approval has been \nobtained from the Lessor;  \n(iv) a primary mortgage has been taken on the leasehold \nrights by the lending bank;  and \n(v) accommodation granted does not exceed 60 per cent of \nthe forced sale value of such  leasehold  property.  \n(h)  Mortgage over vehicles provided that the accommodation \ngranted shall not exceed the applicable loan to value ratios \nspecified in the Banking Act Directions on Loan to Value \nRatios for Credit Facilities granted in respect of Motor \nVehicles , for the time being in force;  \n(i)  Shares of Public Companies quoted on the Colombo Stock \nExchange provided that the accommodation granted would \nnot exceed 50 per cent of the market value of such shares \nand provided further that the licensed bank shall assess the \nmarket value of such share s on a semi -annual basis;  \n(j)  Unsubordinated Corporate Debentures of a third -party \nconcern having an issuer rating between AAA and BBB - \nissued by an acceptable credit rating agency provided that \nthe accommodation granted would not exceed 50 per cent of \nthe market value of such debentures;  \n(k) Life Insurance Policies issued in Sri Lanka and assigned to \nthe lending bank provided that the accommodation granted \nwould not exceed 75  per cent of the surrender value of such \npolicy;  \n(l)  Mortgage Stock in -Trade provided that the accommodation \ngranted would not exceed 30  per cent of the market value of \nsuch stock -in-trade;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_4_of_2024.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \n  BANKING  ACT  DETERMINATION     01 Octo ber 2024 No. 04 of 202 4 \n      \n5 \n (m) Pledge of non -perishable goods of  commercial nature which \nare readily marketable, excluding all manufactured foods \nand other items with a limited shelf life provided that the \naccommodation granted would not exceed 40  per cent  of the \nmarket value of such goods;  \n(n)   Lease -backed trust certificates/lease receivables provided \nthat \u2013  \n(i) the total accommodation granted on the lease backed \ntrust certificate/lease receivables shall not exceed 50 per \ncent of the value of such lease-backed trust \ncertificates/lease receivables ; \n(ii) the total accommodation granted on the lease -backed \ntrust certificate/lease receivables shall not exceed 50 per \ncent of the aggregate amount of the total outstanding \naccommodation granted to the individual company ; \n(iii) lease-backed trust certificate/lease receivables shall be \nbased on unencumbered (performing) lease portfolio ; \n(iv) Lease-backed trust certificates/lease receivables shall \nbe mortgaged to the lending bank ; and  \n(v) the lending bank should be a registered establishment \nunder the Finance Leasing Act No. 56 of 2000.  \n(o)  Corporate Guarantee s of a third -party concern , provided that \nthe accommodation granted would not exceed;  \n(i) 80% of the Guarantee of a concern with an External \nCredit Rating between AAA to AA - issued by an \nacceptable credit rating agency . \n(ii) 60% of the Guarantee of a concern with an External \nCredit Rating between A+ to BBB - issued by an \nacceptable credit rating agency .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_4_of_2024.pdf", "page": 4, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \n  BANKING  ACT  DETERMINATION     01 Octo ber 2024 No. 04 of 202 4 \n      \n6 \n  2.2 In the case of a concern, whose director or partner is a director of \nsuch licensed bank, in addition to approved securities mentioned \nin Determination  2.1 above , accommodation  may be granted  with \nthe Loan     Agreement  between  the borrower  and the licensed  bank  \nprovided  that a specific condition is included in such loan \nagreement that the borrower undertakes to provide approved \nsecurities as specified in Determination  2.1 above , in the event of \na deterioration of the credit quality depicting a significant increase \nin credit risk to the licensed bank , within 90 calendar days . \nDeterioration of credit quality shall mean downgrading of the \nborrower to Stage 3 in terms of the Banking Act Directions No.  \n13 of 2021 on \u201cClassification, Recognition and Measurement of \nCredit Facili ties in Licensed Bank s\u201d.  \n \n3. Interpretations  3.1    For the purpose of this Determination:  \n(a) Acceptable credit rating agency shall mean a credit rating \nagency that has been recognized as an acceptable External \nCredit Assessment Institution by the Central Bank of Sri \nLanka for the purpose of Banking Act Directions No. 01 of \n2016 on \u201cCapital Requirements under Basel III for Licensed \nCommercial Banks and Licensed Specialised Banks \u201d and \nother related regulatory requirements pertaining to licensed \nbanks , as amended . \n(b) Forced sale value shall be determined on a valid valuation \nreport as specified in the Banking Act Directions issued by \nthe Central Bank  of Sri Lanka  from time to time, on \n\u201cRegulatory Framework on Valuation of Immovable \nProperties of Licensed Banks \u201d.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_4_of_2024.pdf", "page": 5, "year": 2024}, "type": "Document"}
{"page_content": "0L October 2024CENTRAL BAI\\K OF SRI LAI\\KA\nBANKING ACT DETERMINATION No.04 of2024\n4. Regulatory\nSubmissions\n5. Revocation4.1 Licensed banks shall submit the details of related party\ntransactions to the Director of Bank Supervision in line with this\nDetermination as at the end of each quarter commencing\n31.12.2024, within one month in the reporting'format specified by\nthe Central Bank of Sri Lanka.\n5.1 The following Determinations are hereby revoked:\n(a) Banking Act Determination dated 11.02.2005 made by the\nMonetary Board of the Central Bank of Sri Lanka under\nSections 47(3), (4), (5) and (6) of the Banking Act No. 30\nof 1988, as amended, by Banking (Amendment) Act No 02\nof2005.\n(b) Banking Act Determination No. 03 of 2009 dated\n02.09.2009 on Lease-backed Trust Certificates/Lease\nReceivables as an Approved Security for Accommodation\nto any Director or Close Relation of a Director or any\nConcern in which the Director has Substantial Interest.\nttl\".-,a,A-ldA-:\nDr. P Nan&fafm-eerasinghe v\nChairman of the Governing Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Determination_No_4_of_2024.pdf", "page": 6, "year": 2024}, "type": "Document"}
{"page_content": "14 Jwe2024CENTRAL BANK OF SRI LANKA\nBA.NKING ACT DIRECTIONS No.02 of2024\nOFF'.SHORE BANKING BUSINESS OF I,ICENSED COMMERCIAL BANKS\nIn terms of the Banking (Amendment) Act, No. 24 of 2024,the demarcatioi of Domestic Banking\nUnit and Off-shore Banking Unit is eliminated, and off-shore banking business is identified as a\npermissible activity thatalicensed Commercial Bank (LCB) may carry out. In view of the above,\nthe Central Bank of Sri Lanka (CBSL) hereby issues these Directions on Off-shore Banking\nBusiness of LCBs, with a view to facilitating the conduct of off-shore banking business with the\nimplementation of the Banking (Amendment) Act, No.24 of 2024.\n1. Empowerment 1.1 In terms of Section a6(1) of the Banking Act No. 30 of 1988, as\namended, the CBSL may issue Directions to LCBs, regarding the\nmanner in which any aspect of the business of such bank or banks\nis to be conducted.\n2. Authorised\nBusinesses under\nOff-shore\nBanking\nBusiness2.1In terms of Section 6 (b) and item (aa) of the Schedule II of the\nBanking Act No. 30 of 1988, as amended, an LCB is permitted to\nconduct off-shore banking business.\nAn LCB shall carry on off-shore banking business only in\ndesignated foreign currencies.\nAn LCB may subject to these Directions, and such otheg terrns and\nconditions, conduct all or any of the following off-shore banking\nbusiness:\n(a) accept savings, time and demand deposits in any designated\nforeign currency, provided that, in the case of time deposits\nthe value of such deposits shall not be less than 10,000.00\nUnited States dollars or its equivalent in any other designated\nforeigu curency or such higher amount as maybe determined\nby CBSL;\n(b) borrowings;2.2\n2.3", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_02_of_2024_e1.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "3. Eligible\nCustomers for\nthe Purpose of\ncarrying on Off-\nshore Banking\nBusiness\n4. Transactions\nPermitted Under\nOff-shore\nBanking Business(c) extend accommodations; and\n(d) engage in any other transaction authorised by CBSL.\n2.4 [n accepting any contingent liability under 2.3 (c) above, an LCB\nshall engage only in the following transactions:\n(a) establish, open or advise letters of credit;\n(b) issue or renew guarantees, indemnities or similar undertakings;\nand\n(c) acceptances.\n3.1 An LCB may, subject to these Directions, engage in off-shore\nbanking business specified in Direction 2 with any one or more of\nthe following:\n(a) a non-resident, subject to Direction 5.1;\n(b) GBSL;\n(c) an LCB;\n(d) a BOI Company, subject to Direction 5.1;\n(e) any resident, being an exporter of goods and services from Sri\nLanka, or any resident, being a local supplier of imported\naccessories to such exporter and is settled in foreign currency\nby such exporter, with the prior approval of CBSL on a case-\nby-case basis; and\n(f) any other resident approved by CBSL in the interest of the\nnational economy, subject to such conditions as CBSL may\nimpose.\nFunds from an account maintained for the purpose of off-shore\nbanking business, shall not be withdrawable by cheque.\nAn account maintained by a customer as per Direction 3.1 shall\nonly be:\n(a) credited with inward remittances; and\n(b)lcredited or debited; as the case may be with transactions\npermitted under the provisions of Foreign Exchange Act, No.\n12 of 2017,with respect to off-shore banking business.4.t\n4.2", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_02_of_2024_e1.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "5. Granting of\nAccommodation\nunder Off-shore\nBanking Business\n6. Maintenance\nRecordsof 6.1\n7. Other\nRequirements\n8. Interpretations 8.15.1An LCB shall ensure to:\n(a) source foreign currency to grant accommodation under off-\nshore banking business shall not exert undue pressure to the\ndomestic foreign exchange market;\n(b) grant accommodation to eligible customers where LCB is\nsatisfied that the customer has the capacity to repay such\naccommodation in a designated foreign crrrency;\n(c) implement prudent policies and procedures for granting of\naccommodation and timely recovery of such\naccommodation; and\n(d) report to CBSL the details of accommodation granted under\noff-shore banking business on a quarterly basis, as per the\nreporting format given at Annexure I.\n6.2Every LCB shall have appropriate procedures to identifu the\naccounts that are maintained for the purpose of off-shore banking\nbusiness.\nEvery LCB shall duly maintain records, management information\nand other documents in relation to off-shore banking business.\n7.1 An LCB may maintain equity including earnings and retained\nprofits of off-shore banking business in designated foreign\ncurrency, subject to adherence with the relevant regulatory and\nlegal requirements.\nFor the purpose ofthese Directions:\n(a) ooOff-shore Banking Business\" shall have the same meaning\nas given in section 86 ofthe Banking Act, No. 30 of 1988 (As\namended).\n(b) \"Off-shore Banking Business\" means the provision ofbanking\nbusiness by a LCB in any designated foreign currency to\neligible customers as determined by CBSL, from time to time.\n(c) \"BOI Company\" means a company with which an agreement\nhas been entered into by the Board of Investments of Sri\nLanka under Section 17 of the Board of Investment of Sri", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_02_of_2024_e1.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "9. Discontinuation\nof Regulatory\nReporting\nRequirements\nl0.Effective DateLankA Law No. 04 of 1978, as amended, and which have\nbeen granted approval to transact business under oflshore\nbanking business.\n(d) \"Residenf'and oNon-resident\" shall have the same meaning\nas Section 86 of the Banking Act, No. 30 of 1988, as\namended.\n(e) \"Designated Foreign Currencies\" rieans the foreign\ncurrencies that are set out in the Banking (Off-shore Banking)\nOrder No. 0 1 of 2024 dated I 5.06 .2024 and any subsequent\namendments, thereto.\n9.1 From the effective date of these Directions, the reporting\nrequirements specified' in Schedule I of these Directions, are\nhereby revoked.\n10.1 These Directions shall be effective from the appointed date ofthe\nBanking (Amendment) Act, No 24 of 2024,on15.06.2024.\n/.-->Dr. P Nandalal Weerasinghe t/\nChairman of the Governing Board and\nGovernor of the Central Bankof Sri Lanka", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_02_of_2024_e1.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "Details of Accomodation Granted Under Off-shore Banking Business rs rt ..,......", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_02_of_2024_e1.pdf", "page": 4, "year": 2024}, "type": "Document"}
{"page_content": "Schedule I: Discontinuations of Finnet Returns\nBSD-MF-O1-BF: Balance\nSheetBalance Sheet - Foreign Currency Banking\nUnit (FCBU) Operations\nBSD-MF-02-PF: Profit &\nLossProfit & Loss- Foreign Currency Banking\nUnit(FCBU) Operations\nBSD-MF-04-LF: Statutory\nLiquid Asset RatioStatutory Liquid Asset Ratio-Foreign\nCurrency Banking Unit (FCBU) Operations\nBSD-AF-01-BF: Balance\nSheetBalance Sheet - Foreign Currency Banking\nUnit (FCBU) Operations\nBSD-AF-02-PF: Profit &\nLossProfit & Loss- Foreign Currency Banking\nUnit @CBU) Operations", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_02_of_2024_e1.pdf", "page": 5, "year": 2024}, "type": "Document"}
{"page_content": "25 M*ch2024CENTRAL BANK OF SRI LANIKA\nBANKING ACT DIRECTIONS No.01 of2024\nLARGE EXPOSURES OF LICENSED BANKS\nThe Central Bank Sri Larka, having considered the possible adverse implications to the\nfinancial system stability due to large exposures of licensed commercial banks and licensed\nspecialised banks (hereinafter referred to as licensed banks) hereby issues these Directions on\nlarge exposures of licensed banks with a view to mitigating the potential credit concenkation risks\nin order to ensure safety and soundness and preserve public confidence in the banking sector. The\nCentral Bank of Sri Lanka is empowered by the Central Bank of Sri Lanka Act, No. 16 of 2023\nto issue exposure caps as a macroprudential instrument to mitigate or eliminate identified\nsystemic risks.\n1. Empowerment 1.1 In terms of Section 46(1) of the Banking Ac| No. 30 of 1988,\nas amended, to ensure the soundness of the banking system,\nthe Central Bank is empowered to issue Directions to all\nlicensed commercial banks, regarding the manner in which\nany aspect of the business of such bank or banks is to be\nconducted.\n1.2 In terms of Section 76J(l) of the Banking Act, No. 30 of\n1988, as amended, the Central Bank is empowered to issue\nDirections to licensed specialised banks or to any category of\nlicensed specialised banks, regarding the manner in which\nany aspect ofthe business of such banks is to be conducted.\n2. Scope 2.1 These Directions shall be applicable to every licensed bank\nincorporated in Sri Lanka and every licensed bank\nincorporated or established outside Sri Lanka.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "3. Effective Date of 3.1 Licensed banks shall implement these Directions on a\nCompliance standalone basis commencing 01.01.2026.\n3.2 Licensed banks shall implement these Directions on\nconsolidated basis commencing 0 1.0 1.2030.\n4. Applicability 4.1 Limits on large exposures are applicable to any single\ncompariy, public corporation, firm, association ofpersons, or\nan individual; or\n4.2 in aggregate to:\n(D an individual, his close relations or to a company or firm\nin which he or his close relations have a substantial\ninterest: or,\n(ii) a group of connected borrowers if at least one of the\nfollowing criteria is satisfied:\n(a) Control relationship: A company and one or more of\nthe following:\na. its subsidiaries;\nb. its holding company;\nc. its associate companies;\nd. a subsidiary of its holding company;\ne. a company in which such company or its\nsubsidiary, or its holding company, or a\nsubsidiary of its holding company, has a\nsubstantial interest;\nf. an individual having a substantial interest in such\ncompany and the close relations of such\nindividual; or,\ng. any other company, in which such company\nhaving direct or indirect control, that may satisff\none or more of the following criteria:\ni. control over the voting rights of another\ncompany, pursuant to a voting agreement with\nother shareholders;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "5. Large Exposure 5.1\n6. Maximum Limit on\nLarge Exposures6.1ii. frequent interchange of key management\npersonnel among such company and another\ncompany; or,\niii.significant influence by such company on\nanother company as identified through the\n' consolidated financial statements of such\ncompanies as per applicable Sri Lanka\naccounting standards.\n(b) Economic Interdependence: Licensed banks shall\nassess the economic interdependencies for all\ninstances where the total exposure to a borrower\nexceeds l|Yo of Tier 1 capital. In establishing\nconnectedness based on economic interdependence,\nlicensed banks shall consider, at a minimum, the\nfollowing criteria:\na. where 50 per cent or more of one borrower's\nincome/furnover per annum is derived from\ntransactions with another borrower; or,\nb. where 50 per cent or more of one borrower's\nproduction input per annum is obtained from\nanother borrower; or,\nc. where one borrower has fully guaranteed the\nexposure of another borrower.\nLarge exposures shall mean those exposures of a licensed\nbank to an individual borrower or a group of connected\nborrowers, which is equal to or in excess of 10 per cent of the\nTier I capital.\nMaximum limit on large exposures of a licensed bank to an\nindividual borrower or to a group of connected borrowers\nreferred to in Directions 4.1 and 4.2, respectively, shall not\nexceed 25 per cent of the licensed bank's Tier I capital at all\ntimes.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "7.1 7.Aggregate Limit of\nLarge Exposures\n8. Exclusions of\nExposures from\nMaximum Limits\ngiven in Directions\n6 andTThe sum total ofthe large exposures as atany given date to\nany category of borrowers referred to in Directions 4.1 and\n4.2, shall not exceed 55 per cent of the total exposures of the\nlicensed bank to all borrowers as at the end of the\nimmediately preceding quarter.\nRupee denominated securities issued by the Government of\nSri Lanka.\nRupee denominated securities issued by the Central Bank of\nSri Lanka.\nBoth Rupee and foreign currency denominated exposures\nsecured against the following collaterals:\n(D cash;\n(ii) gold, subject to a loan to value ratio of equal to or less\nthanT0o/o;\n(iii) guarantees issued by a Multilateral Agency, such as\nWorld Bank, Asian Development Bank, Intemational\nFinancial Corporation, International Development\nAssociation or any other Agency acceptable to the\nGoverning Board of the Central Bank of Sri Lar*a;\n(iv) guarantees including counter guarantees issued by a\nbank incorporated within or outside Sri Lanka other than\nthe bank taking the exposure, subject to the following:\n(a) The amount of exposure that shall be excluded from\nthe computation of large exposures being 80 per\ncent in the event the credit rating of the bank that\nprovides the guarantee is in the rank of Afu{ to AA-\nor equivalent, or 50 per cent in the event the bank's\ncredit rating is in the rank of A+ to A- or equivalent.\n(b) The total exposures backed by guarantees\nconsidered for exclusion shall not exceed 100% of\nTier 1 capital base.8.1\n8.2\n8.3", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "8.4Rupee denominated exposures secured against the following\ncollaterals, provided that such collateral is pledged for at least\nuntil the maturity of the exposure:\n(i) Rupee denominated securities issued by the\nGovernment of Sri Lanka or the Central Bank of Sri\nLanka;\n(ii) Rupee denominated treasury guarantees, or any other\nRupee denominated guarantees issued by the\nGovernment of Sri Lanka that are reported as liabilities\nin the financial statements of the Government of Sri\nLanka.\nBalances maintained in NOSTRO current accounts held with\nother financial institutions for operational purposes such as\nclearing and cash management excluding any balances\naccumulated due to customer driven activities.\nExposures deducted from the Tier 1 capital in terms of\nBanking Act Directions No. 0l of 2016 on Capital\nRequirements under Basel III for Licensed Commercial\nBanks and Licensed Specialised Banks.\nIntraday and overnight interbank exposures, except for the\nrevolving ovemight placements.\nExposures to qualifuing central counterparties (QCCPs)\nrelated to clearing activities.\nExposure of a licensed bank incorporated outside Sri Lanka\nif such exposures are funded directly through funds raised\nfrom its Head Office and/or any branchlregional office of\nsuch bank operating outside Sri Lanka.\nLicensed banks shall comply with these Directions within\none year in instances where the exposure to a borrower is\nrequired to be revised due to a reduction in the applicable\nexposure limit.8.5\n8.6\n8.7\n8.8\n8.9\nq.l9.Review of\nExposures", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 4, "year": 2024}, "type": "Document"}
{"page_content": "10. Governance\nFramework for\nMonitoring Large\nExposures9.2 In the event a merger or an acquisition between institutional\nborrowers results in existing exposures exceeding the\napplicable maximum limits, the licensed banks shall reduce\nsuch exposures to be within the applicable maximum limits\nbefore the expiry of3 years on a staggeredbasis as approved\nby the Board of Directors, from the date.of such merger or\nacquisition.\n10.1 The Board of Directors shall commence implementing\nmeasures from the date of issuance of these Directions to\nensure availability of a strong governance framework for\nmonitoring of large exposures? as follows:\n(i) establish necessary policies, procedures, processes,\nsystems and internal controls to ensure compliance\nwith these Directions;\n(ii) ascertain a comprehensive bank-wide view of\nsignificant sources of concentration risk taking into\nconsideration the on-balance sheet and off-balance\nsheet exposures;\n(iii) establish internal concentration thresholds, reflecting\nthe bank's risk appetite, risk profile and capital\nstrength which shall be regularly communicated to\nand understood by relevant staff; and,\n(iv) conduct effective oversight, review and monitoring\nof all large exposures and to regularly report any\nconcerns to the Board of Directors.\n10.2 Licensed banks shall maintain adequate documentation to\ndemonstrate the basis of determining the connected groups of\nborrowers due to control relationship and/or economic\ninterdependence at all circumstances.\n10.3 Licensed banks shall conduct periodic internal reviews on\ncompliance with these Directions at least on a quarterly basis.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 5, "year": 2024}, "type": "Document"}
{"page_content": "11. Transitional\nArrangement for\nExisting Borrowers10.4 Licensed banks shall implement necessary measures to\ncommunicate the salient requirements of these Directions to\nthe existing/prospective borrowers.\n11.1 In the event the exposures to any category of existing\nborrowers referred to in Directions 4.1 and 4.2 as at\n01.01.2026, exceed the maximum limit sgecified in Direction\n6, licensed banks shall comply on a staggered basis in line\nwith the transitional iurangement in Table 1, subject to\nDirections ll.2 to 11.3.\nTable l: Transitional Arrangement for Complying with\nMaximum Limit on Large Exposures\nLl.2 Licensed banks may grant new working capital facilities to\nborrowers with excess exposures on a case-by-case basis, in\na prudent manner, until 01.01.2026, based on suitable\nrepayment arrangements to ensure compliance with the\ntransitional arrangement given in Table 1.\n11.3 Licensed banks shall reduce all credit facilities granted based\non national priorities and/or national interest and for direct\nfunding of local infraskucture projects, with the approval of\nthe Central Bank of Sri Lanka in terms of the Banking Act\nDirections No. 07 & No. 08 of 2007 on Maxirnum Amount\nof Accommodation of Licensed Commercial Banks andExposure as at\n01.01.2026 rs aYo\nof Audited Tier I\nCapitalExposure as a o/o of Latest Audited Tier 1\nCapital during the Transitional Period\n31.12.2026 31.12.2027 31.12.2028\n26% - s0% 4s% 3504 25Y\"\nsr% -75% 6s% 50% 25%\n760/o andabove 85% 60% 2504", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 6, "year": 2024}, "type": "Document"}
{"page_content": "12. Other Requirements\n13. Non-Compliance\nwith DirectionsLicensed Specialised Banks in line with the transitional\narrangement given in Table 1.\nl2.I Licensed banks shall gradually reduce the exposures to\nPublic Corporations to meet the maximum limit specified in\nDirection 6 with respect to the aggregate exposures to all\nPublic' Corporations by 31.12.2030. The tansitional\narrangement to be followed in this ..gu.*d will be informed to\nthe respective licensed banks.\n12.2 Licensed banks incorporated outside Sri Lanka may consider\nsubsidiaries within the own banking group as separate entities\nfor the purpose of these Directions until 31.12.2030 and shall\nconsider all subsidiaries as a part of the own banking group\nfrom 01.01.2031for the purpose of these Directions.\n12.3 These Directions shall not be applied to the government\ninskuments and exposures which are subject to sovereign\ndebt restructuring and to the new instruments/exposures that\nwill be generated consequent to the sovereign debt\nrestructuring process. Applicability of these Directions to\nsuch instruments and exposures will be informed upon\nfinalising the debt restructuring terms and conditions.\n13.1 The Central Bank of Sri Lanka shall implement appropriate\nregulatory actions in accordance with the Banking Act\nagainst licensed banks failing to comply with the transitional\narrangement in Table 1, in the case of non-compliance of the\nlicensed banks with the maximum limit specified in Direction\n6.\n13.2 Licensed banks shall not increase the exposures to any\ncategory of borrowers referred to in Directions 4.1 and 4.2\nthat exceed the maximum limit specified in Direction 6 on or\nafter 01.01.2026.\n13.3 Licensed banks shall risk weight the excess eiposures at\nl,250yo for capital adequacy computations in the event the", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 7, "year": 2024}, "type": "Document"}
{"page_content": "14. Regulatory\nSubmissions\n15. Revocation of\nPrevious Directionst4.1exposures to any category of borrowers referred to in\nDirections 4.1 and 4.2, exceed the maximum limit specified\nin Direction 6 on or after 01.01.2029, until such excesses are\nregularised. Such licensed banks may be subject to any other\nregulatory action in accordance with the Banking Act, as\ndetermined by the Central Bank of Sri Lanka.\nLicensed banks shall submit:\n(D details of large exposures to the Director of Bank\nSupervision in line with these Directions, as at end of\neach quarter colnmencing30.09.2024, within one month\nin the reporting format as largely set out in Annex I.\n(ii) the measures taken to comply with these Directions as at\nend of each quarter until the effective date of these\nDirections.\nThe following Directions are hereby revoked with effect from\n0t.0r.2026.\n(i) Banking Act Directions No. 07 of 2007 dated\n01.11.2007 on Maximum Amount of Accommodation.\n(ii) Banking Act Directions No. 08 of 2007 dated\n01.11.2007 on Maximum Amount of Accommodation.\n(iii) Banking Act Directions No. 02 of 2014 dated\n26.06.2014 on Amendment to Banking Act Directions\nNo. 07 of 2007 on Maximum Amount of\nAccommodation.\n(iv) Banking Act Directions No. 03 of 20i4 dated\n26.06.2014 on Amendment to Banking Act Directions\nNo. 08 of 2007 on Maximum Amount of\nAccommodation.15.1", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 8, "year": 2024}, "type": "Document"}
{"page_content": "16. Interpretations 16.1 Public corporation shall mean any corporation, board or\nother body which was or is established by or under any\nwritten law other than the Companies Act, with funds or\ncapital wholly or partly provided by the Government.\n16.2 Exposure shall mean any accommodation, i.e., any on-\nbalanee sheet and off-balance sheet facility including but not\nlimited to loans, overdrafts, advances or any commitment to\ngrant loans, and all debt and equity investments, excluding\nequity investments in financial subsidiaries.\n16.3 Accommodation shall mean any on-balance sheet and off-\nbalance sheet facility including but not limited to loans,\noverdrafts, advances or any commitment to grant loans.\nL6.4 Off-balance sheet exposure shall mean the total of the\nexposure limits prevailing at any given time or the\noutstanding amount, whichever is higher, computed using\nthe credit conversion factors applicable to such exposures in\nterms of Banking Act Direction No. 01 of 2016 on Capital\nRequirements under Basel III for Licensed Commercial\nBanks and Licensed Specialised Banks.\n16.5 Value of exposure shall mean the total ofthe exposure limits\nprevailing at any given time or the outstanding amount,\nwhichever is higher. In the case of fully drawn term loans,\nthe outstanding value shall be reckoned as the amount of\nexposure.\n16.6 Substantial interest shall be within the meaning of Section\n86 of the Banking Act, No. 30 of 1988, as amended.\nL6.7 Significant influence shall mean the power to participate in\nmanagement, financial and operating policy decisions.\n16.8 Tier 1 capital shall mean the Tier 1 capital before\nadjustments, reported in the latest computation of the Total\nCapital Ratio in terms of Banking Act Direction No. 0l of\n2016 on Capital Requirements under Basel III for Licensed\nCommercial Banks and Licensed Specialised Banks, as at\n10", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 9, "year": 2024}, "type": "Document"}
{"page_content": "the end of the preceding financial year or immediately\npreceding quarter, subject to certification by the external\nauditor. In the event of losses subsequent to the audit\ncertification, such losses shall be deducted from Tier I\ncapital for the purpose of these Directions.\n16.9 Govenrment of Sri Lanka shall mean the Government of Sri\nLanka, Ministries, Government Departrnents and Local and\nProvincial Government Bodies.\n16.10 A qualiffing central counterparty shall mean a legal person\nwho engages in clearing and settlement of transactions.\n16. 1 1 Board of Directors in the case of licensed banks incorporated\noutside Sri Lanka shall mean the Head Office or the\nRegional Office of such licensed bank that supervises the\nrespective branch or a management committee, for which\nthe powers on overseeing the management have been\ndelegated by such Head Office or the Regional Office, as the\ncase may be, to act as the Board of Directors of such branch.\nM\"r^^-=-A\nDr.PNa@\nChairman of the Governing Board and\nGovernor of the Central Bank of Sri Lanka\nt1", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 10, "year": 2024}, "type": "Document"}
{"page_content": "[.hrn Nqme: I-roe ExDoiuE of Llccnsed Bmk\nD.n-ilinr n.h! DI}MM.YYYY\nB.nL Neme:\nLrtclt Auditcd Ticr I\nCrpitrl of the blkAnner I\nAwat lo bc Rqutd in Rst0ol},\nColtm Guklam\natrdividul Bmw: Arry single oonparry, publio corpuatior\\ finr1\nusmiatim of penoro, u an individral;\nGroup of Borm: in aggegat\u20ac to I Sroup of bmws in tqm of\nDirotim 4.2 of the DirstioN No. 0l of 2024 u LilgG ExpoBWB\nfo be selwted from Priul\u20ac SEtd tr St&te Swtor (A drop dom list will be\n; No- o6 - I i to be filled in tms of qch fqcilitg/ittvslrenl.\n6\n7Iype of Credit Facility - TmI-qq Ow&aft, Credit Cu4 Bankcuartee\n' #.' ^f a'Ji} *^ /A imn rlmm lio uil! he ntroidsl in rhe FinNd R*!rn)\nloValw ofExpcure shall be in lerm of thr definitiom giYm frm Dir@tion\nr <, +^ 1 < < ^f lh. nirdi^n{ N^ Ot ^f ,nrA ^h l ffo. FynNrrra\nfype of Collettral in tffi of Dir*tion 8.3 and 8.4 of the Diretim No. 0l o\n2024 m Lage Expcue (A &op dm list will be prodded ion the FinNet", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_1_of_2024_e1.pdf", "page": 11, "year": 2024}, "type": "Document"}
{"page_content": "28 June2024CENTRAL BANK OF SRI L.{NKA\nBANKING ACT DIRECTIONS No.03 of2024\nAMENDMENTS TO THE BANKING ACT DIRECTIONS NO. 08 OF 2019 ON\nASSESSMENT OF FITNESS AND PROPRIETY OF DIRECTORS OF LICENSED\nBANKS IN SRI LAI\\KA\nBanking Act Directions No. 08 of 2019 dated 19.12.2019 on Assessment of Fitness and Propriety\nof Directors of Licensed Banks in Sri Lanka are hereby amended by replacing Directions 2.1 and\n2.3 as givOn below.\n2 Information to be\nfumished and\ndeadline for\nsubmission2.1\n2.3The person proposed to be appointed, elected or nominated as\na Director of a licensed bank shall submit the original\nAffidavit as given in Schedule I hereto, for the assessment of\nfitness and propriety before such person is appointed, elected\nor nominated to the licensed bank.\nThe Cornpany Secretary shall forward the Affidavit and\nSchedule II hereto with respect to the person proposed to be\nappointed, elected or nominated as a Director of a licensed\nbank and the continuing Directors of a licensed bank.\n)\nNo*J^_f\nMrs.KMANDaulagala\nChief Executive Officer/Senior Deputy Governor of the\nCentral Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "2 \n Schedule I   \n \nAffidavit  to be submitted  by Directors  proposed to be appointed /elected/nominated  in \nlicensed commercial banks  and licensed specialised banks (hereinafter referred to as \nlicensed banks)  and the continuing Directors of licensed banks in terms of sections 42, and \n76H of the Banking Act, No. 30 of 1988 (As amended)  \n  \n AFFIDAVIT  \n \nI \u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026 (full name), \nholder of National Identity Card No1.\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026 and Passport No. \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026 \nof \u2026\u2026.\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026\u2026\u2026\u2026\u2026 (address), being a \n[Buddhist / Hindu/ Muslim/ Christian / Catholic/other \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. (please specify)] do \nhereby [solemnly, sincerely and truly declare and make oath /affirm (please specify as appropriate)] \nas follows:  \n1 I am the [affirmant / deponent] above named . \n2 I state that  I have been proposed to be appointed , elected or nominated  as the \n\u2026\u2026\u2026\u2026...\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026. (designation) of \u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.\u2026 \n(name of bank) , which is a licensed commercial bank/licensed specialised bank under the \nBanking Act, No. 30 of 1988 (as amended ). \n \n3 I state that I possess the following academic and/or professional qualification/s in Banking, \nFinance, Economics, Accounting, Business Administration, Information Technology, Risk \nManagement, Law or any other relevant discipline as may be determined by the Central \nBank  of Sri Lanka according to the mandate /business model  of the bank.  \nQualifications  Relevant Discipline  Country  Name of the \nInstitution  Year of \nCompletion  \nAcademic  \n(i)     \n(ii)     \nProfessional  \n(i)     \n(ii)     \n \n1 Not applicable for expatriates.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "3 \n  \n4 I state that  I possess the following  effective experience in Banking, Finance, Economics, \nAccounting, Business Administration, Information Technology , Risk Management, Law  or \nany other relevant discipline as may be determined by the Central Bank  of Sri Lanka , \naccording to the mandate /business model  of the bank . \nDescription  Name of the \nInstitution/ \nOwn \nBusiness  Designation \n/Position  Nature of \nAppointment *  Work \nSpecialization  Date of \nAppoint\nment \n(dd/mm\n/ yyyy)  Service \nPeriod \n(dd/mm/ \nyyyy to \ndd/mm/\ny yyy)  \nCurrent Positions  \nDirectorships  \n       \nOther Positions  \n       \nPrevious Positions  \nDirectorships  \n       \nOther Positions  \n       \n* Independent / Non-Independent / Executive / Non-Executive / Alternate / Ex-officio / Other (Please Specify)  \n \n5 I state that there is a finding/ no finding of any regulatory or supervisory authority, \nprofessional association, any Commission of Inquiry, tribunal or other body established by \nlaw in Sri Lanka or outside Sri Lanka, to the effect that I have committed or have been \nconnected with the com mission of any act which involves fraud, deceit, dishonesty or any \nother improper conduct.  \n6 I state that I am subject/ not subject to any proceedings, inquiry or investigation consequent \nupon being served with notice of a charge involving fraud, deceit, dishonesty or other \nsimilar criminal activity, by any court , tribunal, regulatory authority, supervisory authority, \nprofessional association, commission of inquiry, or any other body established by law, in \nSri Lanka or outside Sri Lanka.  \n \n7 I state that I have  been convicted/ not been convicted by any court in Sri Lanka or outside \nSri Lanka in respect of a crime committed in connection with financial management or of \nany offence involving moral turpitude.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "4 \n 8 I state that I am /am not an undischarged insolvent or have been /not been declared a \nbankrupt in Sri Lanka or outside Sri Lanka.  \n9 I state that I have failed/ not failed to satisfy any judgment or order of any court whether in \nSri Lanka or outside Sri Lanka, to repay a debt.  \n10 I state that I have been/ not been declared by a court of competent jurisdiction in Sri Lanka \nor outside Sri Lanka, to be of unsound mind.  \n11 I state that I have been/ not been removed or suspended by an order of a regulatory or \nsupervisory authority from serving as a Director/Chief Executive Officer/Officer \nPerforming Executive Functions or any other officer in a licensed bank or any other \nfinancial institution or corpo rate body, in Sri Lanka or outside Sri Lanka . \n12 I state that I have  been/ not been a Director, Chief Executive Officer or have held/not held \nany other position of authority in any bank or financial institution \u2013 \n(i) whose licence has been suspended or cancelled; or  \n(ii) which has been wound up or is being wound up, or which is being compulsorily \nliquidated;  \nwhether in Sri Lanka or outside Sri Lanka.  \n13 I state that to the best of my knowledge I am a fit and proper person proposed to be \nappointed , elected or nominated  as an Independent Non -Executive/  Non-Independent Non -\nExecutive/  Executive/ Alternat e/ Ex-officio  Director / Other (specify)  of a licensed bank in \nterms of the provisions of the Banking Act No.30 of 1988 (as amended ). \n14 I state that I am not prevented by any written law from being appointed to the above post.  \n15 I state that the information given in Annex I  hereto  is to the best of my knowledge and \nbelief, true and complete.  \n \nThe averments contained \nherein were read over to the \n[affirmant/deponent] who \nhaving understood the \ncontents hereof and having \naccepted same as true, \naffirmed/swore to and \nplaced his/her signature at \n\u2026\u2026\u2026. on this \u2026\u2026\u2026 day \nof \u2026\u2026\u2026 (Month, Year)  \n \n  \n  \n \nBefore me", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "placed his/her signature at \n\u2026\u2026\u2026. on this \u2026\u2026\u2026 day \nof \u2026\u2026\u2026 (Month, Year)  \n \n  \n  \n \nBefore me  \n \nJUSTICE OF THE PEACE / \nCOMMISSIONER FOR OATHS  Affix stamps \nas applicable", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "5 \n  \nAnnex I  \n \n                Declaration to be submitted by proposed/continuing Directors in licensed banks  \n \n \nPassport Size \nPhoto  \n \n(Taken within last \n6 months)  \n \nDECLARATION  \nName of the Bank:  \n                      Personal Information, Qualifications and Business Transactions  \n \n1. Personal Details  \n1.1 (i) Name with Initials:  \n(ii) Title: Mr/Mrs/Ms/Dr/Prof/Other \n(Please specify)  (iii) Age as at date of signing the  \naffidavit: (dd/mm/yyyy ) \n(iv) Date of Birth: (dd/mm/yyyy ) (v) Sex:  \n(vi) Civil Status:  (vii) Nationality:   (viii) Citizenship2: \n(ix) Local/expatriate:  \n1.2 Contact  \nDetails  Permanent Address:  \nResidential Address:  \n(i) Telephone  Mobile   \nFixed line   \nFax  \n(ii) E- mail Personal   \nOfficial  \n1.3  Occupation or Profession:  \n \n2 A Dual Citizen is required to state whether he/she should be considered as local or expatriate.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 4, "year": 2024}, "type": "Document"}
{"page_content": "6 \n 1.4 (i) Post/Designation proposed to be \nappointed in the bank:  (ii) Proposed date of appointment to the \nPost/Designation (dd/mm/yyyy)  \n1.5 (i) Nature of the appointment (Please mark X in relevant box(es):  \nIndependent   Executive   Alternate   \nNon-Independent   Non-\nExecutive   Ex-officio   \nSenior \nDirector   Other (Please \nSpecify)   \n(ii) If non -independent, reasons for determining as non -independent3: \n(iii) If nominated by major shareholder/s, name/s of such nominating shareholder/s:  \n(iv) If an Alternate, name of the Principal Director:  \n1.6 1.6.1 Details of close relations in terms of Section 86 of the Banking Act No.30 of 1988 \n(as amended ) \n(i) Full name of the Spouse:  \n(ii) NIC No: (iii) Passport No:  \n1.6.2 . Details of dependent children  \n (i) Full Name  (ii) NIC No:  (iii)  Passport No:  \n \n2. Additional Qualifications:  \nSpecial Assignments / \nConsultancy/Advisory/Audit \nServices  Name of the \nInstitution  Description  Service Period \n(dd/mm/yyyy  to \ndd/mm/yyyy)  \n(i)    \n(ii)    \n \n3. Details of all direct and/or indirect share ownership in entities, presently hel d. \nName of the \nInstitution/s  Voting/Non -\nvoting  No. of Shares  For Indirect \nHoldings, Name \nof the Institution \nof Direct \nHolding  Percentage \nHolding  \nDirect  Indirect  Direct  Indi\nrect \n     \n     \n \n3 Please refer the criteria for determining independence of a director specified in the Banking Act , Directions No. 11 of 2007 and \n12 of 2007 on Corporate Governance of Licensed Banks in Sri Lanka  (as amended ).", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 5, "year": 2024}, "type": "Document"}
{"page_content": "7 \n 4. Business Transactions  \n4.1 I state that I have/do not have deposits with the bank, its subsidiaries4 or associate \ncompanies5 (If yes, please state name/s of the institution/s ). \n4.2 I state that I currently have (had) the following business transactions during the two years \nimmediately preceding the appointment, with licensed banks, their subsidiaries, associate \ncompanies and affiliated companies/entities, and other related parties6 of the licensed bank, \nand other financial institutions as defined in the Central Bank of Sri Lanka Act , No.16 of \n2023.  \nName of the \nInstitution/s  Date of \nTransaction \n(dd/mm/yyyy)  Amount as at \ndd/mm/yyyy  \n(Rs. mn)  Classificatio\nn \n(Performing/ \nNon-\nperforming)  Type and \nValue of \nCollatera\nl (Rs.mn)  % of Bank\u2019s \nRegulatory  \nCapital /Relevant  \nEntity\u2019s Capital  Limit  Outstanding  \nBorrowings7 \n      \nInvestments8 \n      \n \n4.3 I state that I am the Guarantor for the following business transactions.  \nType of \nTransaction  Name of the \nInstitution/s  Date of Transaction \n(dd/mm/yyyy)  Amount as at dd/mm/yyyy \n(Rs.mn)  \n    \n    \n \n4.4 I state that I currently  have/  do not have or have had/ have not had during the two years \nimmediately preceding the appointment, a material business relationship9 with the licensed \nbank.  \n \n \n \n \n \n4 \u2018Subsidiary\u2019 as defined in Section 17(3) of the Banking Act No.30 of 1988 (as amended ). \n5 \u2018Associate\u2019 as defined in Section 46(1) of the Banking Act No.30 of 1988  (as amended ). \n6 \u2018Related Parties\u2019 as defined in the Banking Act Directions No. 11 of 2007 and 12 of 2007 on Corporate Governance of Licensed \nBanks in Sri Lanka (as amended ). \n7 Shall include on -balance sheet and off -balance sheet borrowings.  \n8 Shall include debt instruments.  \n9 \u201cMaterial business relationship\u201d shall mean a relationship resulting in income/non -cash benefits equivalent to 20 per cent of the", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 6, "year": 2024}, "type": "Document"}
{"page_content": "director\u2019s annual income. Any income/non -cash benefits received by such director which are applicable on a uniform basis to a ll \nnon-executive directors on the board shall not be considered in calculating the annual income for this purpose.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 6, "year": 2024}, "type": "Document"}
{"page_content": "8 \n 5. Appointments, Shareholdings and Business Transactions of Close Relations  \n5.1 I state that my close relations10 are presently employed as directors, chief executive officers, \nor officers performing executive functions of the following licensed banks, their \nsubsidiaries, associate companies, affiliated companies/entities, and other related parties of \nthe licensed bank, and other financial institutions as defined in the Central Bank of Sri \nLanka Act , No.16 of 2023 .  \n \nName of the Close Relation  Name of the  Institution  Position  \n   \n   \n \n5.2 I state the following d etails of all direct and/or indirect share ownerships in entities, \npresently held by my close relation s. \nName of the close \nrelations  Voting/Non -\nvoting  No. of Shares  For Indirect \nHoldings, Name \nof the Institution \nof Direct \nHolding  Percentage \nHolding  \nDirect  Indirect  Direct  Indi\nrect \n     \n     \n     \n \n5.3 I state that my close  relations  currently have  (had) the following business transactions \nduring the two years immediately preceding the appointment, with licensed banks, their \nsubsidiaries, associate companies , affiliated companies/entities, and other related parties of \nthe licensed bank,  and other financial institutions as defined in the Central Bank of Sri \nLanka Act No.16 of 2023 . \n \n10 Close Relations as defined in the Section 86 of the Banking Act No.30 of 1988 (as amended ). Name of \nthe Close \nRelation  Name of \nthe \nInstitution  Date of \nTransaction \n(dd/mm/yy)  Amount as at \ndd/mm/yyyy \n(Rs.mn)  Type and \nValue of \nCollateral \n(Rs mn)  % of Bank\u2019s \nRegulatory \nCapital/relevant \nentity\u2019s capital  \nLimit  Outstanding  \nBorrowings7", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 7, "year": 2024}, "type": "Document"}
{"page_content": "9 \n  \n \n6. Other Information  \n6.1 I state that I am subject to/not subject to supervision or regulation of regulatory \nauthority/ies, supervisory authority/ies established outside Sri Lanka  (if the answer is given \nin the affirmative, please specify the regulatory/supervisory authority) . \n6.2 I state that the following information of the inquiries/investigations to which I have been \nsubject, conducted  by the regulatory authority, supervisory authority, professional \nassociation, commission  of inquiry , financial institution as defined in the Central Bank of \nSri Lanka Act , No.16 of 2023  or any other body established by law in Sri Lanka or outside \nSri Lanka , if any : \nYear  Name of the \nInstitution  Subject Matter  Current Status  \n    \n    \n \n7. Any other explanation/information with regard to  the information furnished above and \nother information considered relevant for assessing the suitability of the proposed  or \ncontinuing director.  \n \nDECLARATION:  \nI state that I am aware of the provisions of the Banking Act , No. 30 of 1988 (as amended ) and the \nDirection s and Determination s issued thereunder , on assessment of fitness and propriety of my \nposition and confirm that the above information is to the best of my knowledge and belief true and \ncomplete. I undertake to keep the licensed bank fully informed, as soon as possible, of all \nsubsequent events, which are relevant to the information provided above.  \nDate:____________      ______________________________  \n Signature of the Director  proposed  to be \nappointed/elected  /nominated  \n        \nInvestments8", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 8, "year": 2024}, "type": "Document"}
{"page_content": "10 \n Guidance to Duly Complete the Affidavit  and Declaration  \nto be submitted by the Proposed/ Continuing Directors of Licensed Banks  incorporated in \nSri Lanka  \n \nThis guidance is issued to ensure that complete and accurate information is provided by licensed \nbanks for assessing the fitness and propriety of Directors, prior to his/her appointment , election or \nnomination, as the case may be, to the respective licensed bank in Sri Lanka.  \n \n1. Purpose of obtaining the Affidavit  and Declaration  \n(i) The purpose of obtaining Affidavits and Declarations of Directors of licensed banks is \nto enable the Bank Supervision Department of the Central Bank of Sri Lanka to assess \nthe fitness and propriety of such directors in terms of the provisions of the Banking Act , \nNo.30 of 1988 (as amended ).  \n(ii) Accordingly, the Bank Supervision Department requires comprehensive information to \nevaluate the qualifications, experience, integrity and compliance with the requirements \nspecified in the Banking Act, to assess the suitability of the Directors prior to their \nappointments to  the respective licensed bank.  \n(iii) The Affidavit  and Declaration  submitted by a director shall  be legally  binding \ndocument s in the event of any dispute /controversy . \n \n2. Affidavit  \n(i) It is preferable that the affidavit is prepared as a fresh document, based on the format \nprovided by the Central Bank of Sri Lanka , so as to  avoid inclusion of unnecessary \nwords. However, if the given format is filled, all alterations, erasures and interlineations \nshould be initialed by the Commissioner for Oaths/Justice of the Peace immediately \nafter all such amendments.  \n(ii) All blank spaces should be completed appropriately.  \n(iii) Appropriate words should be used based on the religion of the officer. If the officer \nrefrains/objects to disclose his/her religion, a confirmation should be submitted by the \nofficer stating that:", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 9, "year": 2024}, "type": "Document"}
{"page_content": "officer stating that:  \n\u2022 He/she is an atheist or belongs to a religion not mentioned in this Affidavit; or  \n\u2022 He/she objects to disclosing his/her religion.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 9, "year": 2024}, "type": "Document"}
{"page_content": "11 \n (iv) Strike -out the irrelevant word(s). If the irrelevant words are stricken out, the \nCommissioner for Oaths/Justice of the Peace should place his initials immediately after \nall such amendments.  If the answer is given in the affirmative, provide relevant \ninformation.  \n(v) If the person is a foreigner and signs the Affidavit while in overseas:  \n\u2022 Signature of the person should be attested by a Commissioner for Oaths or an \nequivalent in the country in which he places his signature.  \n\u2022 Attestation should be made in front of the diplomatic , consular officer of Sri Lanka  \nin the country where the Director resides or in terms of the laws applicable in such \ncountry.  \n(vi) Affix a stamp for the value applicable as at the date of signing the Affidavit, if \napplicable.  \n(vii) If the affidavit is executed in Sri Lanka, the same shall be attested by  a Commissioner \nfor Oaths/Justice of the Peace immediately after placing the signature of the person at \n\u2018Before me .\u2019 \n \n3. Declaration  \n(i) All sections of the Declaration  should be : \n- duly completed  and irrelevant sections , if any, should be  stated as Not \nApplicable/ Nil/None. \n- signed and dated.  \n(ii) If there is no comment it should  be state d as Not Applicable/ Nil/None.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 10, "year": 2024}, "type": "Document"}
{"page_content": "12 \n Schedule II  \n \nAssessment of Fitness and Propriety of Directors of Licensed Banks in Sri Lanka   \nInformation to be submitted by the Company Secretary  \n \n1. Corporate Information  \n \nRecommendation of the Nomination Committee/Appointing Authority for \nDirectors  \nName of the Licensed Bank   \nFull Name of the person proposed to be \nappointed/elected/nominated or continuing as a \nDirector   \nAssessment Criteria  (Please specify the specific \nknowledge/skills considered by the Nomination \nCommittee and the Appointing Authority)   \nRecommendation  (Please attach minutes of the \nresolution/decision of the Nomination Committee and the \nAppointing Authority)   \n \n2. Remarks of the Board of Directors  \n(1) Any other explanation / information regarding the details furnished above.  \n(2) Submitted to the Board of Directors of the Bank /Approval has been granted by \nthe Board of Directors for above proposed appointment, nomination or election at \nthe meeting dated\u2026\u2026\u2026\u2026(dd/mm/yyyy)  \n \n3. I state that the affidavit has been completed in terms of Sections  42 (with respect to licensed \ncommercial banks), and 76H (with respect to licensed specialised banks) of the Banking \nAct, No. 30 of 1988 (as amended) and the Directions and Determinations, issued \nthereunder.  \nName:  \nSignature of the Company Secretary and the Official Stamp:  \nDate:", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_3_of_2024.pdf", "page": 11, "year": 2024}, "type": "Document"}
{"page_content": "eT) \nCENTRAL BANK OF SRI LANKA \n(9 July 2024 BANKING ACT DIRECTIONS \nAMENDMENTS TO DIRECTIONS ON CAPITAL REQUIREMENTS UNDER BASEL \nII FOR LICENSED COMMERCIAL BANKS AND LICENSED SPECIALISED BANKS \nBanking Act Directions No. 01 of 2016 on Capital Requirements under Basel III for Licensed \nCommercial Banks and Licensed Specialised Banks are hereby amended as follows: \n1. Appendix I and 1.1 New web-based return code 20.3.1.8.4.0 - The portion of \nAppendix IV, Part III exposures guaranteed by the National Credit Guarantee \n(A) Computation of Institution Limited, is inserted immediately after web-based \nRisk Weighted Amount return code 20.3.1.8.3.3 as given in Annex I hereto. \nfor Credit Risk \n2. Appendix III, Part 2.1 The Indicative List of Financial Institutions is replaced with \nII(A) Computation of the following. \nTotal Regulatory Indicative List of Financial Institutions \nCapital i) Licensed commercial banks and licensed specialised \nvi) banks licensed under the Banking Act No. 30 of \n1988 (as amended) \nLicensed finance companies licensed under the \nFinance Business Act No. 42 of 2011 \nSpecialised leasing companies registered under the \nFinance Leasing Act No. 56 of 2000 \nMicrofinance institutions registered under the \nMicrofinance Act No. 6 of 2016 \nInsurance companies, their agents and insurance \nbrokers registered under the Insurance Industry Act \nNo. 43 of 2000 (as amended) \nPrimary dealers licensed under the Local Treasury \nBills Ordinance No. 8 of 1923 (as amended): and \nRegistered Stocks and Securities Ordinance No. 7 of \n1937 (as amended) No. 04 of 2024", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_4_of_2024.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": ". Appendix IV, Part III \n(C) Guideline on \nRecognising Exposures \nunder Credit Risk \nMitigation 3.1 vii) \nviii) Merchant/investment banks and venture capital \ncompanies incorporated under the Companies Act \nNo. 7 of 2007 \nRegistered market intermediaries, including margin \nproviders, investment managers, underwriters, \nsecurities clearing houses, credit rating agencies, \nstockbrokers/dealer companies and \u00a9 managing \ncompanies of unit trust registered under the \nSecurities and Exchange Commission of Sri Lanka \nAct No. 36 of 1987 (as amended) \nNational Credit Guarantee Institution Limited \nAny other financial subsidiaries/institutions \nestablished in or outside Sri Lanka \nWeb-based return code 20.3.3.2.2.0 \u2014 Guarantees, Item (4) \n- Risk Weights, is replaced with the following. \nRisk Weights: \na) \nb) \nd) The protected portion is assigned the risk weight of the \nprotection provider. \nA zero risk weight will be applied to that portion of loans \nguaranteed by GOSL and CBSL. \nThe portion of exposures guaranteed by the Sri Lanka \nExport Credit Insurance Corporation (SLECIC) and \nother guarantees acceptable to CBSL will receive a 50% \nrisk weight. \nThe portion of exposures guaranteed by the National \nCredit Guarantee Institution Limited (NCGIL) will \nreceive a 20% risk weight. \nThe uncovered portion of the exposure is assigned the \nrisk weight of the underlying counterpart. \n# M4 \nKao. a \nDr. P1 Nandalal Weerasinghe\u2019 \nChairman of the Governing Board and \nGovernor of the Central Bank of Sri Lanka \n2", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_4_of_2024.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "Annex I \nAppendix I and Appendix IV \nPart Ill (A) \u2014 Computation of Risk Weighted Amount for Credit Risk \nWeb-based Return Assets | Risk weight % \nCode \n20.3.1.8.4.0 The portion of exposures guaranteed by 20 \nNational Credit Guarantee Institution \nLimited", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_4_of_2024.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA  \n30 September 2024                 BANKING ACT DIRECTIONS                         No. 05 of 2024  \n \n1 \n \n[Limited Sharing]  \nBANKING ACT DIRECTIONS ON  \nCORPORATE GOVERNANCE FOR LICENSED BANKS  \n \nThe Central Bank of Sri Lanka, with a view to strengthening the corporate governance processes \nand practices of the licensed commercial banks and licensed specialised banks in Sri Lanka \n(hereinafter referred to as licensed banks), hereby issues these Directions to licensed banks \nenhancing the overall stability of the banking sector and the financial system as a whole. Corporate \nGovernance processes and pract ices shall be deemed to be the management framework that \nfacilitates the conduct of the banking business in a responsible and accountable manner in order to \npromote the safety and soundness of the individual banks, thereby leading to the stability of the \noverall banking sector.  \n1. Empowerment  \n 1.1 In terms of Section 46(1) of the Banking Act, No. 30 of 1988, as \namended (Banking Act), to ensure the soundness of the banking \nsystem, the Central Bank of Sri Lanka is empowered to issue \nDirections to licensed commercial banks regarding the manner in \nwhich any aspect of the business of such banks is to be conducted.  \n1.2 In terms of Section 76J(1) of the Banking Act, to ensure the \nsoundness of the banking system, the Central Bank of Sri Lanka is \nempowered to issue Directions to licensed specialised banks or to \nany category of licensed specialised banks, regarding the m anner \nin which any aspect of the business of such banks is to be \nconducted.  \n2. Scope of \nApplication  2.1 These Directions shall be applicable to all licensed banks.  \n3. Regulatory \nRequirements  3.1 Licensed banks shall comply with the regulatory requirements \ngiven in Schedules I - IV hereto .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "1      \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nSCHEDULE I  \n \n \nREGULATORY REQUIREMENTS ON \nCORPORATE GOVERNANCE  \nFOR  \nLICENSED BANKS", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "2 \n Regulatory Requirements o n Corporate Governance for Licensed Banks  \n \n1. Ultimate  \nResponsibility and \nAccountability of \nthe Board  \n The Board shall be ultimately responsible and accountable to oversee \nthe management of affairs and the governance framework of the bank , \nbusiness strategy, financial soundness,  and risk management and to \nensure that the business of such bank is carried out in compliance with \nall applicable laws and regulations and is consistent with safe and sound \nbanking practices. Directors shall make objective decisions in the \ninterest of bank\u2019s depositors, creditors, shareholders,  and other \nstakeholders. Any decision taken by the directors  shall  be presumed  to \nbe a decision  taken  by the Board of directors  (Board)  collectively, \nexcept for a director who expressly dissents for any such decision . \n \n1.1 Responsibilities of \nthe Board    The Board shall  exercise \u201cduty of care\u201d and \u201cduty of loyalty\u201d to the \nbank with a view to strengthening the  safety  and soundness  of the bank  \nby ensuring  the implementation  of the following:  \na) Approve and oversee the bank\u2019s strategic objectives and corporate \nvalues in terms of bank's long-term goals and ensure that  these  are \nproperly communicated throughout  the bank;  \nb) Approve  the overall  business  strategy  of the bank,  including  the \noverall  risk policy  and risk management procedures and \nmechanisms with measurable goals , at least for the next three  years;  \nc) Inculcate a strong risk governance culture by;  \n(i) identifying  the principal  risks  and ensuring  implementation  \nof appropriate  systems  to manage risks  prudently,  \n(ii) establishing well -defined organizational responsibilities for the \nthree lines of defence of the bank, viz.,  \na. the business line s, \nb. the risk management function and the compliance function \nwhich are independent from the first and third lines of \ndefence, and,  \nc. the internal audit function which is independent from the", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "defence, and,  \nc. the internal audit function which is independent from the \nfirst and second lines of defence.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "3 \n (iii) ensuring that the risk management, compliance,  and internal \naudit functions are properly positioned, sufficiently staffed and \nresourced to carry out the responsibilities independently, \nobjectively and effectively. The responsibilities of risk \nmanagement, compliance and internal audit functions are \nprovided in Schedule II , III and IV, respectively ; \n(iv) defining the risk appetite of the bank aligning with the bank\u2019s \nstrategic, capital,  and financial plans, which is articulated \nthrough a Risk Appetite Statement, and,  \n(v) outlining the actions to be taken when stated risk appetite limits \nare breached, including disciplinary actions for excessive risk \ntaking, escalation procedures and notifications to the Board of \ndirectors.  \nd) Establish a policy to ensure that the Board is not dominated or \nsignificantly influenced by a director or a group of directors in a \nmanner that is detrimental  or prejudicial  to the interests of the \ndepositors , creditors,  and the bank as a whole;  \ne) Approve  implementation  of a policy  of communication  with all \nstakeholders,  including regulators, depositors,  creditors, \nshareholders,  and borrowers;  \nf) Review the adequacy and the integrity of the bank\u2019s internal control \nsystems and management  information  systems;  \ng) Ensure implementation of effective control systems for managing \nthe related party exposures and avoiding any conflicts of interest \nthat may arise from related party transactions;  \nh) Approve and oversee the business continuity and disaster recovery \nplans to ensure financial stability, operational resilience and \npreserve critical operations and services including core -banking \nsystems during any disruptive event;  \ni) Oversee the approach to remuneration, including monitoring and \nreviewing remuneration and ensure alignment of remuneration with \nbank\u2019s risk culture and risk appetite;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 4, "year": 2024}, "type": "Document"}
{"page_content": "4 \n j) Identify and designate key management personnel,  who are in a \nposition  to; \n(i) significantly influence over policies,  \n(ii) direct activities, and,  \n(iii) exercise control over business activities, operations,  and risk \nmanagement.  \nk) Define the areas of authority and key responsibilities for the Board \nof directors themselves and  for the Chief Executive Officer (CEO) \nand the key management  personnel;  \nl) Ensure  that there  is appropriate  oversight  of the affairs  of the bank  \nby CEO and key management              personnel,  who is consistent  with the \nBoard's strategies and policies;  \nm) Periodically assess the effectiveness of the Board of directors\u2019 own \ngovernance practices, including:  \n(i) the selection, nomination and election of directors, CEO,  and \nkey management personnel;  \n(ii) the management of conflicts of interests: and,  \n(iii) identification of weaknesses and implementation of \nimprovements where necessary;  \nn) Approve the criteria  for self-assessment  to be undertaken  by each \ndirector annually and maintain records  of such assessments.  \no) Ensure  that the bank  has an appropriate succession  plan for CEO and \nthe key management personnel as explained in  Direction 6.4 i);  \np) Meet regularly, on a needs basis, with CEO and the key \nmanagement personnel to review policies, establish  communication  \nlines  and monitor  progress  towards  corporate  objectives;  \nq) Keep abreast of material changes in the regulatory environment  and \nensure  that the bank  maintains  an effective  relationship  with \nregulators;  \nr) Exercise  due diligence in  the hiring  and oversight  of external  \nauditors;  \ns) Conduct itself in a professional and an ethical manner and shall not \nreceive any undue financial or non -financial benefits including", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 5, "year": 2024}, "type": "Document"}
{"page_content": "5 \n incentives, gifts or funds from the employees, customers, suppliers,  \nshareholders or any other stakeholder of the bank;  \nt) Inculcate a sound corporate culture which reinforces norms for \nprofessional, ethical and prudent behaviour throughout the bank . \nApprove and oversee the implementation of a Code of Conduct \nbased on corporate values providing clear guidelines on \nprofessionally and ethically acceptable behaviours of directors and \nemployees addressing inter alia the issues on confidentiality of \ndata, conflicts of interest, procedures for dealing with financial and \nnon-financial benefits and gifts, integrity in reporting, and th e fair \ntreatment to customers;  \nu) Ensure timely rectification of the supervisory concerns raised by the \nregulator/s and for this purpose, the assistance of the relevant sub -\ncommittees shall be sought ;  \nv) Approve a whistleblowing policy with a view to encouraging \nemployees to communicate confidentially the legitimate concerns \nregarding illegal, unethical or questionable practices without the \nrisk of reprisal. The policy shall be reviewed at least on an annual \nbasis. The whistleblowing policy shall clearly specify:  \n(i) the persons to whom the concerns can be escalated within the \nbank;  \n(ii) procedures for investigating legitimate material concerns \nraised by the employees;  \n(iii) procedures to ensure protection and anonymity of the \nemployees who raise concerns due to any detrimental \ntreatment or reprisals; and,  \n(iv) alternative avenues for whistleblowing to regulators.  \nw) Promote sustainability through appropriate environmental, social \nand governance considerations in the bank's business strategies and \nensure that policies are in place to  assist  businesses that are greener, \nclimate -friendly and socially inclusive .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 6, "year": 2024}, "type": "Document"}
{"page_content": "6 \n 1.2 Appointing \nChairperson and \nCEO  The Board shall appoint the Chair person and CEO and define and \napprove the functions and responsibilities of the Chair person  and CEO \nin line with Direction  5 of these Directions.  \n \n1.3 Board Meetings  The Board shall meet at approximately monthly intervals and Board \nmeetings shall be held at least twelve times a year. Such regular Board \nmeetings shall normally involve  active  deliberation  of a majority  of \ndirectors  entitled  to be present.  Obtaining  the Board\u2019s consent through \nthe circulation of written resolutions/papers shall be avoided as far as \npossible. The Board approvals obtained through circulation shall be \nratified at the Board meeting held immediately  following the \ncirculation. The Board may convene and/or a Board member may attend \nthe Board meetings virtually subject to ensuring active involvement of \nthe relevant directors  and attending Board meetings physically at least \non a half yearly basis . \n  \n1.4 Board Procedures  a) The Board shall ensure that arrangements are in place to enable all \ndirectors to include  matters and proposals in the agenda for regular \nBoard meetings where such matters and  proposals  relate  to the \npromotion of banking  business, risk management and conduct of \nemployees of  the bank.  \nb) The Board procedures shall ensure that notice of at least 7 days is \ngiven of a regular Board  meeting to provide all directors an \nopportunity to attend. For all other Board meetings,  reasonable  \nnotice  may be  given.  \nc) The Board procedures  shall  ensure  that a director  who has not \nattended  at least two-thirds of the meetings  in the period  of 12 \nmonths  immediately  preceding  or has not attended  the \nimmediately  preceding  three  consecutive  meetings  held,  shall  \ncease  to be a director. Participation at the Board meetings through \nan alternate director shall, however, be acceptable as attendance.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 7, "year": 2024}, "type": "Document"}
{"page_content": "7 \n 1.5 Appointing a \nCompany  \nSecretary  a) The Board shall appoint a company secretary who satisfies the \nprovisions of Section 43 of the Banking Act, whose primary \nresponsibilities shall be to handle the secretariat services to the \nBoard and shareholder meetings and to carry out other functions \nspecified in the statutes and such other written laws for the time \nbeing in force.  \nb) All directors shall have  access to advice  and services of  the \ncompany  secretary  with a  view to ensuring  that Board procedures  \nand all applicable  laws, rules  and regulations  are followed.  \nc) The company secretary shall implement the recommendations made \nby the Nomination and Governance Committee on training, \ncapacity building and professional development programs for the \ndirectors.  \nd) The company  secretary  shall  maintain  the minutes  of Board \nmeetings together with the recordings of meetings  and such minutes  \nshall be  open  for inspection at  any reasonable  time, on  reasonable \nnotice  by any director or the regulator.  \n \n1.6 Maintenance of \nBoard Meeting \nMinutes  Minutes of Board meetings shall be recorded in sufficient detail so that \nit is possible to gather from the minutes as to whether the Board acted \nwith due care and prudence in performing  its duties. The minutes shall \nalso serve as a reference for regulatory and supervisory  authorities  to \nassess  the depth  of deliberations  at the Board meetings.  Therefore,  the \nminutes      of a Board meeting shall clearly  contain or refer to the \nfollowing:  \na) a summary of data  and information and justifications/rationale used \nby the Board in its deliberations;  \nb) the matters considered by the Board;  \nc) the fact -finding discussions reflecting the issues of contention or \ndissent which may illustrate whether the Board was carrying out its \nduties with due care and prudence;  \nd) the testimonies and confirmations of relevant key management", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 8, "year": 2024}, "type": "Document"}
{"page_content": "d) the testimonies and confirmations of relevant key management \npersonnel  which indicate compliance with the Board\u2019s strategies", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 8, "year": 2024}, "type": "Document"}
{"page_content": "8 \n and policies and adherence to relevant laws and regulations  \nappropriately ; \ne) the Board\u2019s knowledge and understanding of the risks to which the \nbank is exposed to , and an overview of the risk management \nmeasures adopted; and,  \nf) the Board resolutions and decisions.  \n \n1.7 Obtaining \nIndependent \nProfessional \nAdvice  There shall be a procedure agreed by the Board to enable directors, upon \nreasonable request, to seek independent professional advice in \nappropriate circumstances, at the bank\u2019s expense. The Board shall \nresolve to provide separate independent professional a dvice to directors \nto assist the relevant director or directors to effectively discharge the \nduties.  \n \n1.8 Managing \nConflicts of \nInterest  a) Directors shall avoid conflicts of interest, or the potential  conflicts \nof interest, in the activities  with,  and commitments  to, other  \norganisations, related  parties and other stakeholders.   \nb) A director shall abstain from  participating in any discussion in \nrelation to a matter in which he/she or any of his/her close relation \nor a concern in which he/she  has substantial interest, is interested , \nnor shall receive the access to the information pertaining thereto, \nincluding accessing such information both physically and/or \nelectronically.  \nc) Directors shall ensure that the relationships between the directors \namongst themselves as well as between the directors , CEO and key \nmanagement personnel are at a level that does not result in excessive \nfamiliarity, undue influence or coercion.  \nd) The Board shall approve and oversee the implementation of a policy \nto identify and manage conflicts of interests, which shall include:  \n(i) a Board member\u2019s duty to promptly disclose any matter that \nmay result, or has already resulted, in a conflict of interest;  \n(ii) a Board member\u2019s duty to avoid, to the extent possible, \nactivities that could create conflicts of interest or the potential", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 9, "year": 2024}, "type": "Document"}
{"page_content": "activities that could create conflicts of interest or the potential  \nconflicts of interest including political affiliations;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 9, "year": 2024}, "type": "Document"}
{"page_content": "9 \n (iii) situations where conflicts may arise when serving as a Board \nmember;  \n(iv) a Board member\u2019s responsibility to abstain from participating \nin discussions on any Board decisions in relation to which \nhe/she or any of his/her close relation s or a concern in which \nhe/she  has substantial interest, is interested ; and,  \n(v) the measures to be taken in the event of any non -compliance \nwith the policy.  \n \n1.9 Requirement to \ninform on \ninability to meet \nobligations  The Board shall,  if it considers  that the bank  is, or is likely  to be, unable  \nto meet its obligations or about  to become  insolvent  or is about  to \nsuspend  payments  due to depositors  and other creditors, forthwith  \ninform  the Director  of Bank  Supervision  of the situation  of the bank  prior  \nto taking  any decision or  action.  \n \n1.10 Compliance with \nPrudential \nRequirements  \n The Board shall ensure that the bank is capitalized at levels as required \nby the Central Bank of Sri Lanka in terms of the capital adequacy ratio \nand other prudential requirements  imposed by the Central Bank of Sri \nLanka from time to time . \n \n1.11 Annual Corporate \nGovernance \nReport  The Board shall publish in the bank\u2019s Annual Report, an Annual \nCorporate Governance Report setting out the compliance with these \nDirections.  \n2. Board\u2019s \nComposition  The Board\u2019s composition shall ensure a healthy mix of knowledge, \nqualifications, skills, experience in relevant disciplines, gender and \nhave varied backgrounds to promote diversity of views commensurate \nwith the size, scale, diversity and complexity of operations of the bank. \nThe qualifications and experience shall be i n banking, finance, \neconomics, accounting, business administration, information \ntechnology, risk management, law or any other relevant discipline as \nmay be determined by the Central Bank  of Sri Lanka .  \n2.1 Procedure for \nAppointing \nDirectors  a) There shall be a formal and transparent procedure for the", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 10, "year": 2024}, "type": "Document"}
{"page_content": "Appointing \nDirectors  a) There shall be a formal and transparent procedure for the \nappointment of new  directors to the Board. There shall also be \nBoard approved procedures in place for the orderly succession of", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 10, "year": 2024}, "type": "Document"}
{"page_content": "10 \n appointments  to the  Board.  \nb) A director or an employee of a bank  shall  not be appointed,  elected  \nor nominated  as a director of another  bank  except  where  such bank  \nis a subsidiary  company  or an associate  company  of the first \nmentioned bank.  \n \n2.2 Number of \nDirectors  a) The number  of directors  on the  Board shall  not be  less than  7 and  \nnot more than  13. The number of directors shall be  commensurate \nwith the size, scale, diversity and complexity of operations of the \nbank.  \nb) The Board shall have at least one female representative by \n31.12.2025 and the Boards with more than 10 members shall have \nat least two female representatives by 31.12.2026.  \n \n2.3 Executive \nDirectors  A member of the key management personnel of the bank may be \nappointed, elected or nominated as a director of the bank  (hereinafter \nreferred to as an \u201cexecutive director\u201d) provided that the number of \nexecutive  directors  shall  not exceed  one-third  of the number  of directors  \nof the Board.  In such an event, one of the executive directors shall be \nCEO of the bank.  \n \n2.4 Non-Executive \nDirectors  Non-executive directors shall be suitable professionals  with credible \ntrack record  of good conduct and integrity and have necessary \nknowledge,  skills and experience to bring an independent judgment to \neffectively address  issues of strategy,  performance  and resources  and to \ncontribute towards the sustainability of the bank . \n \n2.5 Independent \nDirectors  a) At least half of the  total number of directors shall be independent \nnon-executive directors. Licensed banks shall comply with this \nDirection by 01.01.2027.  \nb) A non-executive  director  shall  not be considered independent if  \nhe/she:  \n(i) has direct  and indirect  voting and/or non -voting shareholdings \nof more  than 1 per cent of the bank;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 11, "year": 2024}, "type": "Document"}
{"page_content": "11 \n (ii) currently has or had during the period of two years \nimmediately preceding his/her appointment as director, any \nbusiness transactions with the bank as described in Direction \n7.2, exceeding 10 per cent of the regulatory capital of the \nbank;  \n(iii) has been employed by the bank during the two -year period \nimmediately preceding the appointment as director;  \n(iv) currently has or had during the period of two years \nimmediately preceding his/her appointment as director, a \nmaterial b usiness relationship with the bank;  \n(v) has a close relation who is a director or CEO or a member of \nthe key management personnel or a material shareholder of \nthe bank. For this purpose, a \u201cclose relation\u201d shall mean the \nspouse or a dependent child;  \n(vi) represents a specific stakeholder of the bank;  \n(vii) is an employee or a director or a material shareholder or has \na material business relationship in a company or business \norganization;  \na. which currently has a transaction with the bank as defined \nin Direction 7.2 of these Directions, exceeding 10 per \ncent of the regulatory capital of the bank, or  \nb. in which  any of the other  directors  of the bank  are \nemployed  or are directors  or    are material  shareholders \nexcept for the appointments recommended by the \nfinancial sector authorities, or,  \nc. in which any of the other directors of the bank have a \ntransaction as defined in Direction  7.2, exceeding 10 per \ncent of regulatory capital in      the bank.  \n(viii) currently is or has been during the period of one year \nimmediately preceding his/her appointment as director, \nserving as a consultant/ advisor or principal \nconsultant/advisor in the case of a firm providing consultancy \nto the bank; and,", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 12, "year": 2024}, "type": "Document"}
{"page_content": "12 \n (ix) currently is or has been during the period of one year \nimmediately preceding his/her appointment as director, an \nengagement partner of a firm providing audit services to the \nbank.  \n       The requirements of Direction 2.5 b) with extended compliance \ndates  are provided in Schedule V.  \nc) The independent non -executive directors shall be expressly \nidentified in all corporate communications that disclose the names \nof directors of the bank.  \n \n2.6 Representation \nthrough Alternate \nDirectors  \n a) Representation through an alternate director is allowed only in \nexceptional circumstances as approved by the Board for a maximum \nperiod of one year from the date of such appointment with prior \napproval of the Director of Bank Supervision under the provisio ns \nof Section 42 of the Banking Act.  \nb) In the event an alternate director is appointed to represent an \nindependent director, the person so appointed shall also meet the \ncriteria that applies to the independent director.  \nc) An existing director of the bank cannot be appointed as an alternate \ndirector to another existing director of the bank.  \nd) An individual appointed as an alternate director to one of the \ndirectors cannot be appointed as an alternate director to another \ndirector in the same Board.  \n2.7 Quorum for the \nBoard Meetings  At least half of the Board members shall constitute the quorum for the \nBoard meetings. A meeting of the Board shall not be duly constituted, \nalthough the number of directors  required  to constitute  the quorum  at \nsuch meeting  is present,  unless  more  than one  third of  the   number of \ndirectors present at such meeting are independent non -executive \ndirectors. Licensed banks shall comply with this Direction by \n01.01.2026.  \n \n3. Suitability of \nDirectors  A person who serves or wishes to serve as a director of a licensed bank \nshall comply with the following requirements.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 13, "year": 2024}, "type": "Document"}
{"page_content": "13 \n 3.1 Criteria to Assess \nFitness and \nPropriety  \n \n \n The provisions  of Section  42 and Section 76H of the Banking  Act \nshall apply to determine the fitness and propriety of a person who serves \nor wishes to serve  as a director  of a licensed bank.  Non-compliance  \nwith any criteria  set out therein  shall disqualify  a person  to be appointed,  \nelected  or nominated  as a director  or to continue  as a director.  The prior \napproval of the Director of Bank Supervision shall be obtained for \nthe fitness and propriety of each person to be appointed, elected or \nnominated as a director of a licensed bank in terms of Section 42 and \nSection 76H of the Banking Act.  \n \n3.2 Additional \nRequirements for \nSuitability of \nDirectors  \n a) The age of  a person  who serves  as a director  shall  not exceed  70 \nyears.  \nb) The total period of service of a director other than a director who \nholds the position of CEO or key management personnel position \nshall not exceed nine years.  \nc) A person shall not hold office as a director of more than 20 \ncompanies/entities/institutions inclusive  of subsidiaries  or associate  \ncompanies  of the bank.  \nd) Directors  shall have sufficient time to carry out the responsibilities \nas a director of the bank.  \n3.3 Coolin g-Off \nPeriod  \n A director or CEO of a licensed bank operating in Sri Lanka shall not \nbe appointed as a director or CEO of another licensed bank operating \nin Sri Lanka before the expiry of a period of six months from the date \nof cessation of his/her office at the licensed  bank in Sri Lanka. Any \nvariation thereto in exceptional situations such as where expertise of \nretiring bankers may be required when reconstituting Boards of \nlicensed banks which need restructuring, shall be subject to the prior \napproval of the Central Ban k of Sri Lanka .  \n \n4. Delegation of \nFunctions  The Board shall comply with the following requirements in delegating \nits functions.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 14, "year": 2024}, "type": "Document"}
{"page_content": "14 \n 4.1 Division of \nResponsibilities  There shall be a clear division of the responsibilities at the Board level \nand the key management level to ensure a greater balance of power and \nauthority, so that powers are not concentrated in any individual.  \n4.2 Specific Matters \nfor Board \nDecisions  The Board shall have a formal schedule of matters specifically reserved \nfor its decisions to ensure that the direction and control of the bank is \nfirmly under its authority.  \n4.3 Restrictions to \nDelegate  The Board shall not delegate any matters to a Board committee, CEO, \nexecutive directors or key management personnel, to an extent that such \ndelegation would significantly hinder or reduce the ability of the Board \nas a whole to discharge its functions.  \n4.4 Review of \nDelegation Process  The Board shall  review  the delegation  processes  in place  on a periodic  \nbasis  to ensure  that they  remain relevant to the  needs  of the bank.  \n5. The Chairperson \nand CEO  There are two key aspects of management of every bank, viz., (a) the \noverall governance by the Board, and (b) the day -to-day management \nof the bank\u2019s business by CEO, in line with Board approved strategic \nobjectives, corporate values, overall risk policy and risk management \nprocedures . \n \n5.1 Division of \nResponsibilities \nbetween \nChairperson and \nCEO  The roles of Chairperson and CEO shall be separate and shall not be \nperformed by  the same  individual. The division of responsibilities \nbetween Chairperson and CEO shall be clearly established and set out \nin writing.  \n5.2 Suitability of the \nChairperson  a) The Chairperson shall be an independent non -executive director . In \nthe event the Chairperson becomes non -independent after the initial \nappointment, as an interim arrangement, the Board shall designate \nan independent director as the Senior Director for a period not \nexceeding six months with suitably documented terms of reference.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 15, "year": 2024}, "type": "Document"}
{"page_content": "exceeding six months with suitably documented terms of reference. \nThe designation  of the Senior  Director  shall  be disclosed in the \nbank\u2019s Annual Report.   \nb) Where a non -independent director is currently serving as the \nChairperson, such director may continue to serve as the Chairperson", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 15, "year": 2024}, "type": "Document"}
{"page_content": "15 \n for a further period not beyond 31.12.2027, subject to applicable \nlaws and regulations including Direction  3. \nc) A Chairperson appointed after the effective date of this Direction \nshall be an independent non -executive director.  \n \n5.3 Responsibilities of \nthe Chairperson  The Chairperson shall:  \na) provide leadership to the Board and ensure the Board works \neffectively and  duly discharges its responsibilities;  \nb) ensure that all key and appropriate  issues  are discussed by  the Board \nin a timely  manner;  \nc) approv e the agenda for  each Board meeting, considering where \nappropriate, any matters proposed by the  other  directors  for \ninclusion  in the agenda.  The Chairperson  may delegate  the \npreparation of agenda to the  company  secretary ; \nd) ensure that all directors are properly briefed on issues arising at \nBoard  meetings  and also ensure  that directors  receive  adequate  \ninformation  in a timely  manner;  \ne) encourage  all directors  to make  a full and active  contribution  to \nthe Board\u2019s affairs and take the lead to ensure that the Board acts in \nthe best interests of the bank;  \nf) facilitate the effective contribution of non -executive directors in \nparticular and ensure constructive discussions  between executive \nand non -executive directors;  \ng) encourage all directors to make critical and constructive discussions \nat the Board meetings and ensure that dissenting views can be freely \nexpressed and discussed within the decision -making process;  \nh) not engage  in activities  involving  direct  supervision  of key \nmanagement personnel, other employees  or any other  executive  \nduties  whatsoever; and,  \ni) ensure  that appropriate  steps  are taken  to maintain  effective  \ncommunication with shareholders and that the views of \nshareholders are communicated to  the Board .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 16, "year": 2024}, "type": "Document"}
{"page_content": "16 \n 5.4 Conduct of CEO  \n a) CEO shall function as the apex executive -in-charge of the day -to-\nday management of the bank\u2019s operations and business and shall not \nhold any other executive functions . \nb) CEO shall not be appointed or nominated as an employee or a \ndirector of another licensed bank or any other \ncompany/institution/entity except as a non -executive director of a \nsubsidiary or an associate company of the licensed bank . \nc) In the event CEO is appointed as a non -executive director of a \nsubsidiary or an associate company of the licensed bank, he/she \nshall ensure that such duties do not affect the effective discharge of \nresponsibilities as CEO.  \n5.5 Suitability of CEO  \n The person appointed as CEO shall be a fit and proper person to hold \nsuch position  in terms of Section 44A and Section 76H of the Banking \nAct, and shall possess sufficient authority, stature, knowledge, \ncompetencies, and expertise in the core banking functions given the \nsize, scale, diversity and complexity of operations of the bank . \n \n6. Board \nCommittees  Each  licensed bank  shall have at least five Board  committees  as set out in \nDirections  6.2 \u2013 6.6 of these Directions.  \n6.1 Requirements for \nthe Board \nCommittees  a) Each committee shall report directly to the Board.  \nb) Board shall set out the authority of each committee, and in particular, \nwhether the committee has the authority to act on behalf of the Board \nor simply has the authority to examine a particular issue and report \nback to the Board with recommendations.  \nc) Each committee shall have a Board approved Terms of Reference.  \nd) All committees shall appoint a secretary to inter alia arrange the \nmeetings and maintain minutes, records in sufficient detail, under \nthe supervision of the Chairperson of the committee. The minutes of \nall committees shall be submitted to the Board .  \ne) The quorum of each committee shall consist of at least half of the \ncommittee members.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 17, "year": 2024}, "type": "Document"}
{"page_content": "e) The quorum of each committee shall consist of at least half of the \ncommittee members.  \nf) The Board shall present a report on the performance of each \ncommittee, on the duties and roles at the annual general meeting.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 17, "year": 2024}, "type": "Document"}
{"page_content": "17 \n 6.2 Audit Committee  a) The Chairperson  of the Committee  shall  be an independent  \ndirector  and is not the chair of the Board or any other  Board \ncommittee and shall p ossess qualifications and experience in \nfinance , accounting and/or auditing, with a membership of a \nrecognized professional accounting body.  \nb) All members of the Committee shall be non -executive directors, \nwith a majority of independent directors. The members shall \npossess a collective balance of skills and expert knowledge in \nfinanc e, accounting and auditing commensurate with size, scale, \ndiversity and complexity of operations of the bank.  \nc) A majority of the members of the Committee shall not be \nconstituted by the members of the Integrated Risk Management \nCommittee and vice -versa.  \nd) The Committee shall make recommendations on matters in \nconnection with:  \n(i) the appointment of the external auditor for audit services to be \nprovided in compliance  with the relevant  statutes;   \n(ii) the implementation of the Central Bank guidelines issued to \nexternal auditors from time to time;  \n(iii) the application of the relevant accounting standards; and  \n(iv) the service  period,  audit  fee and any resignation  or dismissal  \nof the external auditor, provided that the engagement of the \nexternal auditor shall not exceed six years and shall change the \nparticular engagement partner once in every  three  years.  \ne) The Committee shall review and monitor the external auditor\u2019s \nindependence, integrity, objectivity and the effectiveness of the \naudit processes in accordance with applicable standards and best \npractices.  \nf) The Committee shall develop and implement a policy on the \nengagement of an external   auditor to provide non -audit services \nthat are permitted under the Guidelines issued by the Central Bank \nof Sri Lanka to External Auditors. The Committee shall ensure that", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 18, "year": 2024}, "type": "Document"}
{"page_content": "18 \n the provision by an external auditor of non -audit services does not \nimpair the external auditor\u2019s independence or objectivity. When \nassessing the external auditor\u2019s independence or objectivity in \nrelation to the provision of non -audit services, the  Committee shall  \nconsider:  \n(i) whether the skills and experience of the audit firm make it a \nsuitable provider of the non -audit services;  \n(ii) whether there are safeguards in place to ensure that there is no \nthreat to the objectivity and/or independence in the conduct of \nthe audit resulting from the provision of such services by the \nexternal auditor; and,  \n(iii) whether the nature of the non -audit services, the fee levels \nindividually and in aggregate relative to the audit firm, pose \nany threat to the objectivity and/or independence of the \nexternal auditor.  \ng) The Committee shall, before the audit commences, discuss and \nfinalise with the external auditor, the nature and scope of the audit, \nincluding:  \n(i) an assessment of the bank\u2019s compliance with the relevant \nDirections in relation to corporate governance and the \nmanagement\u2019s internal control over financial reporting;  \n(ii) the preparation of the financial statements for external \npurposes in accordance with relevant accounting principles \nand reporting obligations; and  \n(iii) the co -ordination between firms where more than one audit \nfirm is involved.  \nh) The Committee shall review the accounting policies/systems and \nthe internal control framework with a view to ensuring greater \ntransparency and integrity of the bank\u2019s financial reporting process \nand the adequacy of accounting and other internal controls.  \ni) The Committee shall review the financial information of the bank, \nin order to monitor the integrity of the financial statements of the", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 19, "year": 2024}, "type": "Document"}
{"page_content": "19 \n bank, its annual report, accounts and quarterly reports prepared for \ndisclosure, and the significant financial reporting judgements \ncontained therein. In reviewing the bank\u2019s annual report and \naccounts and quarterly reports before submission to the Board, the \ncommittee shall focus particularly on:  \n(i) major judgmental areas;  \n(ii) any changes in accounting policies and practices;  \n(iii) significant adjustments arising from the audit;  \n(iv) the going concern assumption; and  \n(v) the compliance with relevant accounting standards and other \nlegal requirements.  \nj) The Committee shall discuss issues, problems and reservations \narising from the interim and final audits, and any matters the \nexternal auditor may wish to discuss including those matters that \nmay need to be discussed in the absence of CEO and key \nmanagement pers onnel, if necessary.  \nk) The Committee shall review the external auditor\u2019s management \nletter and the management\u2019s response thereto.  \nl) The Committee shall take the following steps with regard to the \ninternal audit function of the bank:  \n(i) Review the adequacy of the scope, functions and resources of \nthe internal audit  department, and satisfy itself that the \ndepartment has the necessary authority to  carry  out its work;  \n(ii) Review the internal audit programme and results of the \ninternal audit process and, where necessary, ensure that \nappropriate actions are taken on the recommendations of the \ninternal audit department;  \n(iii) Review any appraisal or assessment of the performance of the \nChief Internal Auditor (CIA) and senior staff members of the \ninternal audit department;  \n(iv) Recommend any appointment or termination of CIA, senior", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 20, "year": 2024}, "type": "Document"}
{"page_content": "20 \n staff members and outsourced service providers to the internal \naudit function;  \n(v) Ensure that the committee is apprised of  resignations of senior \nstaff members of the internal audit department including CIA \nand any outsourced service providers, and to provide an \nopportunity to the resigning senior staff members and \noutsourced service providers  to submit reasons for resigning; \nand, \n(vi) Ensure that the internal audit function is independent of the \nactivities it audits and that it is performed with impartiality, \nproficiency and due professional care.  \nm) The Committee shall consider the major findings of internal \ninvestigations and management\u2019s responses thereto.  \nn) Other Board members, CEO, CIA, the Chief Financial Officer \n(CFO), the Chief Risk Officer (CRO), the Chief Compliance \nOfficer (CCO), any other key management personnel and a \nrepresentative of the external auditors may attend meetings upon the \ninvitation of the Committee for the relevant agenda item. However, \nat least twice a year, the Committee shall meet with the external \nauditors without the executive directors being present.  \no) The Committee shall have: (i) explicit authority to investigate into \nany matter within its terms of reference; (ii) the resources which it \nneeds to do so; (iii) full access to information; and (iv) authority to \nobtain external professional advice and to invite outsiders with \nrelevant experience to attend, if necessary.  \np) The Committee shall meet regularly, with due notice of issues to be \ndiscussed and shall record its conclusions in discharging its duties \nand responsibilities.  \nq) The secretary of the Committee (who may be the company  secretary  \nor CIA ) shall record and keep detailed minutes of the Committee  \nmeetings.  \nr) The Committee  shall:", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 21, "year": 2024}, "type": "Document"}
{"page_content": "21 \n (i) ensure effective implementation of the Board approved \nwhistleblowing policy; and,  \n(ii) ensure that proper  arrangements are in place for the fair and \nindependent investigation of such matters  and for appropriate  \nfollow -up action.  \ns) The Committee shall act as the key representative  body  for \noverseeing the bank\u2019s relations with the external auditor.  \n \nThe requirements of Direction 6.2 with extended compliance dates \nare provided in Schedule V.  \n6.3 Human  Resources \nand Remuneration \nCommittee  \n The Committee shall:  \na) be chaired by a director who is not the chair of the Board and \npreferably independent;  \nb) preferably be constituted with a majority of independent directors;  \nc) require CEO to be present at the meetings upon invitation, except \nwhen matters relating to CEO are being discussed;  \nd) determine the remuneration policy in relation to salaries, \nallowances, special payments/benefits made at termination or \nretirement, and other financial and non -financial benefits made to \ndirectors, CEO and the key management personnel ; \ne) set goals and targets for the directors, CEO and the key management \npersonnel;  \nf) evaluate the performance of CEO and the key management \npersonnel against the set targets and goals periodically and \ndetermine the basis for revising remuneration, benefits and other \npayments of performance -based incentives;  \ng) ensure that the prior written approval of the shareholders is obtained \nfor any special payments/ financial and non -financial benefits to be \nmade to the directors, CEO and key management personnel at the \ntermination of employment or at the retirement. In th e case of \nlicensed banks where the Government of Sri Lanka holds fifty per \ncent or more of issued capital carrying voting rights of the bank, \nsuch prior approval shall be obtained from the Secretary to the", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 22, "year": 2024}, "type": "Document"}
{"page_content": "22 \n Treasury;  \nh) coordinate with the Integrated Risk Management Committee to \nensure that the compensation made to directors, CEO and key \nmanagement personnel is within the risk appetite limits of the bank; \nand, \ni) establish a policy on claw -back arrangements for performance -\nbased payments made to CEO and key management personnel of \nthe licensed bank under the circumstances of inter alia  fraud and \nmisappropriation of funds, to the extent of the financial loss caused \nto the licensed bank. Such policy shall articulate the process to be \nfollowed by the licensed bank prior to giving effect to the claw back \narrangements ensuring procedural pro priety, fair hearing and \ntransparency. The claw -back procedure of the licensed ba nk shall \nbe incorporated into the employment contracts of CEO and key \nmanagement personnel and a similar arrangement shall be \nimplemented for the existing CEO and key management personnel.  \n \nThe requirements of Direction 6.3 with extended compliance dates \nare provided in Schedule V.  \n6.4 Nomination  and \nGovernance \nCommittee:  \n The Committee shall:  \na) be chaired  by an independent  director  who is not the chair of the \nBoard and shall  be constituted with a majority of independent \ndirectors. CEO may be present at  meetings  by invitation except \nwhen matters relating to CEO are being discussed;  \nb) implement a formal and transparent procedure to identify, nominate  \nand recommend new directors, CEO and the key management \npersonnel;  \nc) ensure the directors, CEO and the key management personnel are \nfit and proper persons to hold office as specified in the criteria given \nin Direction s 3 and 8.2 and as  set out  in the applicable laws and \nregulations;  \nd) obtain the views of the Integrated Risk Management Committee in \nselecting CRO and CCO and that of the Audit Committee in", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 23, "year": 2024}, "type": "Document"}
{"page_content": "23 \n selecting CIA;  \ne) consider  and recommend  (or not recommend)  the re-election  of      \ncurrent  directors,  through periodic evaluation of the performance  \nand contribution  made  by the director concerned towards the \noverall discharge of the Board\u2019s responsibilities;  \nf) quarterly evaluate the status of independence of the independent \nnon-executive directors in terms of the Direction 2.5 b) and whether \nsuch directors have any conflict s of interest that may impede the \nability to perform duties independently and notify the changes to \nthe independent status (if any) to the Director of Bank Supervision;  \ng) set the criteria such as qualifications, experience and key attributes \nrequired for eligibility to be considered for appointment or \npromotion to the post of CEO  and the  key management  positions;  \nh) consider and recommend from time to time, the requirements of \nadditional/new expertise  to the Board  and the succession \narrangements for retiring directors ; \ni) ensure  that the bank  has a robust succession  plan for CEO and the \nkey management personnel with an effective and transparent \nprocess to:  \n(i) identify qualified and competent persons (internal/external) \nto fulfil the positions of CEO and key management personnel \nfor succession in short, medium and long term given the size, \nscale, diversity and complexity of operations of the bank;  \n(ii) groom the selected successors for the respective positions by \nidentifying and mitigating the skill/knowledge gaps for the \nrespective area; and,  \n(iii) review the succession plan at least on an annual basis . \nj) ensure that the directors are updated on the applicable laws, \nregulations, macroeconomic policies, latest technological \ndevelopments and emerging financial sector and market \ndevelopments relevant to the banking industry on a continuous \nbasis;  \nk) identify the training needs of the directors and make", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 24, "year": 2024}, "type": "Document"}
{"page_content": "24 \n recommendations to the Board relating to training, capacity \nbuilding and professional development programs for the directors \non a regular basis;  \nl) review the structure, size, qualifications and composition of the \nBoard and Board committees to ensure effective discharge of duties \nand responsibilities; and,  \nm) ensure that the overall corporate governance framework and \npolicies of the bank are reviewed, updated and effectively \nimplemented considering all applicable laws and regulations and \nindustry/international best practices.  \n \nThe requirements of Direction 6.4 with extended compliance dates \nare provided in Schedule V.  \n6.5 Integrated Risk \nManagement \nCommittee  The Committee shall:  \na) be chaired by an independent director who is not the chair of the \nBoard or any other Board committee;  \nb) consist of at least three non -executive directors with a majority of \nindependent directors. The Committee members shall have sound \ncollective experience in risk management issues and practices in \nrelation to banking and/or financial services;  \nc) A majority of the members of the Committee shall not be \nconstituted by the members of the Audit Committee and vice -versa;  \nd) require CEO, CRO, CCO and key management personnel \nsupervising broad risk categories, i.e., credit,  market, liquidity, \noperational and strategic risks to attend the meetings on needs basis;  \ne) work with key  management personnel very closely and make \ndecisions on behalf of the Board within  the framework of  the \nauthority and  responsibility  assigned  to the Committee;  \nf) establish an independent risk management function responsible for \nintegrated risk management of the bank;  \ng) assess all risks, i.e., credit, market, liquidity, operational, \ninformation security and strategic risks to the bank on a monthly \nbasis through appropriate risk indicators and management", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 25, "year": 2024}, "type": "Document"}
{"page_content": "25 \n information. In the case of subsidiary companies and associate \ncompanies, risk management shall be conducted, both on solo and \nconsolidated  basis;  \nh) advise and report to the Board on the bank\u2019s exposures against the \nrisk appetite;  \ni) oversee the functioning of CRO. The Committee shall receive \nregular reports and communication from CRO and other relevant \nfunctions with respect to the risk profile, exposures against the \nestablished risk appetite limits and limit breaches;  \nj) oversee the strategies implemented by CEO and the key \nmanagement personnel for capital and liquidity management and \nmanagement of all relevant risks of the bank, such as credit, market, \noperational, information security and strategic risks, to ensure \nconsi stency with the stated risk appetite;  \nk) review the adequacy and effectiveness of all management level  \ncommittees  that are related to risk taking activities, such as the \ncredit  committee  and the asset -liability  committee  to address \nspecific risks and to manage those risks within quantitative and \nqualitative risk limits as specified by the Committee;  \nl)  take prompt corrective action to mitigate the effects of specific \nrisks where  such risks  are at levels  beyond  the prudent  levels  \ndecided  by the Committee on the basis of the bank\u2019s policies and \nregulatory and supervisory requirements;  \nm) meet at least quarterly to assess all aspects of risk management \nincluding updated business continuity plans;  \nn) take prompt corrective actions against the Officers responsible for \nfailure to identify specific risks as recommended by the Committee;  \no) submit a risk assessment report within a week of each meeting to \nthe Board seeking the Board\u2019s views, concurrence and/or specific \ndirections;  \np) establish a compliance function to assess the bank\u2019s compliance \nwith laws, regulations, regulatory guidelines and approved policies \non all areas of business operations. A dedicated compliance officer", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 26, "year": 2024}, "type": "Document"}
{"page_content": "26 \n selected from key management personnel shall carry out the \ncompliance function and report to the Committee periodically;  \nq) establish an effective communication and coordination mechanism \nwith the Audit Committee to facilitate exchange of information to \nensure effective management of all risks, including emerging risks, \nand any adjustments needed to the integrated risk manageme nt \nframework of the bank; and,  \nr) without prejudice to the tasks of the Human Resources and \nRemuneration Committee, examine whether the incentives \nprovided to the employees take into consideration the levels of risk, \ncapital, liquidity and earnings of the bank.  \nThe requirements of Direction 6.5 with extended compliance dates \nare provided in Schedule V.  \n6.6 Related Party \nTransactions \nReview Committee  \n The Committee shall:  \na) be chaired by an independent director who is not the chair of the \nBoard;  \nb) consist of at least three non -executive directors with a majority of \nindependent directors. CEO  and relevant key management \npersonnel  may attend the meetings on need basis only for the \nrelevant agenda items;  \nc) ensure that a clear policy, procedures and processes are in place for \nidentifying, monitoring and reporting related party transactions on \nan on -going basis in line with applicable laws and regulations;  \nd) review the related party transactions of the bank including the \ntransactions defined in Direction. 7.2, particularly with the persons \nwho shall be considered as \u201crelated parties\u201d, as defined in Direction \n7.1, with a view to avoiding any conflicts of interest that may arise \nfrom such transactions;  \ne) quarterly report to the Board, the details of related parties, related \nparty transactions and economic consequences of the related party \ntransactions;  \nf) ensure that a director abstains from participating in discussions on \nany Board decision on transactions in relation to the director or any", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 27, "year": 2024}, "type": "Document"}
{"page_content": "27 \n of his/her close relation or a concern in which the director has \nsubstantial interest;  and, \ng) ensure that the bank does not engage in transactions with related \nparties as defined in Direction  7.1 in a manner that would grant such \nparties \u201cmore favourable treatment\u201d than that accorded to other \nconstituents of the bank carrying on the same business. In this \ncontext, \u201cmore favourable treatment\u201d shall mean:  \n(i) granting of \u201ctotal net accommodation\u201d to related parties, \nexceeding a prudent percentage of the bank\u2019s regulatory \ncapital, as determined by the Board. For purposes of this sub -\ndirection;  \na. \u201cAccommodation\u201d shall mean accommodation as defined \nin the Banking Act Directions on Maximum Amount of \nAccommodation/ Large Exposures.  \nb. The \u201ctotal net accommodation\u201d shall be computed by \ndeducting from the total accommodation, the cash \ncollateral and investments made by such related parties in \nthe bank\u2019s share capital and debt instruments with a \nmaturity of 5 years or more.  \n(ii) charging of a lower rate of interest than the bank\u2019s best lending \nrate or paying more than the bank\u2019s deposit rate for a \ncomparable transaction with an unrelated comparable \ncounterparty;  \n(iii) providing of preferential treatment, such as favourable terms, \ncovering trade losses and/or waiving fees/commissions, which  \nextend beyond the terms granted in the normal course of \nbusiness undertaken with unrelated parties;  \n(iv) providing services to or receiving services from a related party \nwithout an evaluation procedure; and  \n(v) maintaining reporting lines and information flows that may \nlead to sharing potentially proprietary, confidential or \notherwise sensitive information with related parties, except as \nrequired for the performance of legitimate duties and functions.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 28, "year": 2024}, "type": "Document"}
{"page_content": "28 \n  \nListed licensed banks and unlisted licensed banks shall comply with \nDirection 6.6 by 01.01.2025 and 01.01.202 7, respectively.  \n7. Related Party \nTransactions  The following requirements shall apply to related party transactions \nof licensed banks.  \n7.1 Related Parties  The categories of persons considered as \u201crelated parties\u201d for the \npurpose of this Direction  are as follows . \na) a director of a licensed bank;  \nb) close relations of such director;  \nc) a concern in which a director of a licensed bank has a substantial \ninterest, being an interest acquired either before or after the \nappointment as a director of such licensed bank;  \nd) a concern in which a close relation of a director of a licensed bank \nhas a substantial interest;  \ne) a chief executive officer or an officer performing executive \nfunctions of a licensed bank in respect of any accommodation \ngranted other than an accommodation granted to such officer under \na scheme applicable to the employees of such licensed bank;  \nf) a shareholder of a licensed bank having material interest, whether \nindividual or a concern;  \ng) a subsidiary or an associate company of the licensed bank;  \nh) a holding company of the licensed bank including its subsidiaries, \nexcluding the parent bank and subsidiaries of a bank incorporated \noutside Sri Lanka;  \ni) a director of a subsidiary or an associate company of the licensed \nbank;  \nj) a director of a holding company of the licensed bank and its \nsubsidiaries;  \nk) a close relation of a person specified in Direction 7.1 (e) and (f) \nabove;  \nl) a concern, whose director or partner is a director of such bank;  \nm) a concern in which a material shareholder of a licensed bank has \nsubstantial interest; and,", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 29, "year": 2024}, "type": "Document"}
{"page_content": "29 \n n) a concern in which a close relation of an individual material \nshareholder has substantial interest.  \n7.2 Type of Related \nParty Transactions  The type of transactions  with related  parties  that shall  be covered  by \nthis Direction  shall include the following . \na) The grant of any type of accommodation, as defined in the Banking \nAct Directions on Maximum Amount of Accommodation/ Large \nExposures  of Licensed Banks.  \nb) The creation of any liabilities of the bank in the form of deposits, \nborrowings and investments . \nc) The provision of any services of a financial or non -financial  nature \nprovided to the bank or received from the bank . \nd) The creation or maintenance of reporting lines and information \nflows between the bank and any related parties which may lead to \nthe sharing of potentially proprietary, confidential or otherwise \nsensitive information that may give benefits to such related p arties.  \n7.3 Applicability of \nBanking Act \nProvisions  Licensed banks shall ensure compliance with the provisions of  Section \n47 and Section 76K of the Banking Act, with respect to accommodation \ngranted to any of its related parties defined in Direction 7.1 as \napplicable, except for any accommodation granted to a CEO or a \nmember of the key management personnel under a scheme applicable \nto the employees of the bank.  \n7.4 Accommodation \nGranted to \nDirector s and \nConnected Parties   Where any accommodation has been granted by a  licensed  bank to a \nperson or to a close relation of a person or to any concern in which the \nperson has a substantial interest, and such person is subsequently \nappointed as a director of the bank, and if:  \na) the necessary security as approved by the Central Bank  of Sri Lanka  \nis not provided, within one year from the date of appointment of \nsuch person as a director; and,  \nb) any amount due on account of such accommodation, together with \ninterest, if any, is not settled within the period specified at the time", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 30, "year": 2024}, "type": "Document"}
{"page_content": "interest, if any, is not settled within the period specified at the time \nof grant of accommodation or at the expiry of a period of eighteen \nmonths from the date of appointment of the director, whichever is \nearlier, in the event such security is not provided by the period as", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 30, "year": 2024}, "type": "Document"}
{"page_content": "30 \n provided in a) above;  \nsuch director shall be deemed to have vacated the office of director. \nThis Direction, however, shall not apply to a director who at the time \nof the grant of the accommodation was an employee of the bank and the \naccommodation was granted under a scheme appl icable to all \nemployees of such bank.  \n7.5 Accommodation \ngranted to \nEmployees  A bank shall not grant any accommodation or \u201cmore favourable \ntreatment\u201d relating to the waiver of fees and/or commission to any \nemployee or a close relation of such employee or to any concern in \nwhich the employee or close relation has a substantial intere st other than \non the basis of a scheme applicable to the employees of such bank or \nwhen secured by security as may be approved by the Central Bank of \nSri Lanka in respect of accommodation granted as per Sections 47(3) \nand (5) of the Banking Act.  \n7.6 Writing -off of \nAccommodation to \nRelated Parties  No accommodation granted  by a licensed bank  to related parties given \nin Direction  7.1, nor any part of such accommodation, nor any interest \ndue thereon shall be written -off without the prior approval of the \nCentral Bank  of Sri Lanka  and any writing -off without such approval \nshall be void and of no effect.  \n8. Senior \nManagement  The senior management shall mean CEO and the key management \npersonnel of the licensed bank for the purpose of this Direction.  \n8.1 Board Oversight \non Senior \nManagement  The overall responsibility of the Board shall not be construed as an \nobligation to undertake the inspection of day -to-day activities, but shall \nrather be understood as an obligation to oversee and ensure that the \nsenior management members are carrying out the day -to-day activities \nin a safe and sound manner in accordance with the Board a pproved \nstrategies and policies. Accordingly, the Board shall:  \na) define the areas of authority and responsibilities of the senior \nmanagement;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 31, "year": 2024}, "type": "Document"}
{"page_content": "a) define the areas of authority and responsibilities of the senior \nmanagement;  \nb) ensure  that the actions of senior management are consistent with the \nbusiness strategy and policies approved by the Board;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 31, "year": 2024}, "type": "Document"}
{"page_content": "31 \n c) meet regularly, on needs basis, with the senior management to \nreview the progress towards achieving corporate objectives;  \nd) question and critically review explanations and information \nprovided by the senior management;  \ne) assess whether collective knowledge and expertise of the senior \nmanagement remain appropriate given the size, scale, diversity and \ncomplexity of operations of the bank; and,  \nf) hold the senior management members accountable for the actions.  \n \n8.2 Criteria to Assess \nthe Fitness and \nPropriety of Senior \nManagement  \n In terms of Section 44A and Section 76H of the Banking Act, the senior \nmanagement of licensed banks as determined by the Central Bank of \nSri Lanka shall be fit and proper persons to hold such respective \npositions and the provisions of Sections 42(2) of the Banking Act shall \napply in determining whether the members  of the senior management \nare fit and proper persons.  \n8.3 Responsibilities of \nSenior \nManagement  \n Senior management members shall:  \na) contribute substantially to a licensed bank\u2019s sound corporate \ngovernance framework through personal conduct;  \nb) devote sufficient professional time to discharge his/her duties at the \nlicensed bank. In the event a senior management member is \nappointed as a non -executive director of a subsidiary or an associate \ncompany of the licensed bank, he/she shall ensure that su ch duties \ndo not affect the effective discharge of responsibilities to the bank;  \nc) implement business strategies, risk management systems, risk and \ncompliance culture, processes and controls for managing both \nfinancial and non -financial risks under the directions given by the \nBoard;  \nd) recognize and respect the independent duties of the risk \nmanagement, compliance and internal audit functions and shall not \ninterfere in the exercise of such duties;  \ne) receive access to regular training to maintain and enhance \ncompetencies and keep abreast of developments relevant to the", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 32, "year": 2024}, "type": "Document"}
{"page_content": "competencies and keep abreast of developments relevant to the \nrespective areas of responsibility;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 32, "year": 2024}, "type": "Document"}
{"page_content": "32 \n f) be responsible for delegating duties to staff and overseeing such \ndelegated duties;  \ng) establish a management structure that promotes accountability and \ntransparency throughout the bank;  \nh) ensure that appropriate remedial or disciplinary action is taken if \nbreaches are identified;  \ni) regularly provide the Board and the Board sub -committees as \napplicable with the information of material matters including but \nnot limited to;  \n(i) changes in business strategy, risk strategy/risk appetite,  \n(ii) the bank\u2019s performance and financial condition,  \n(iii) breaches of risk limits or compliance rules,  \n(iv) internal control failures, and,  \n(v) legal or regulatory concerns.  \nj) notify the Director of Bank Supervision upon becoming aware of \nany material information that may negatively affect the fitness and \npropriety of a Board member or another senior management \nmember.  \n9. Disclosures  Licensed banks shall comply with the following requirements with \nrespect to disclosure of information .  \n \n9.1 Board \nResponsibilities on \nDisclosures  The Board shall ensure adequate and timely public disclosures of \nrelevant information including but not limited to key performance \nindicators, capital adequacy, liquidity, business concentrations, related \nparty transactions, corporate governance, financial statements, etc.,  are \nmade with a view to facilitating enhanced market d iscipline and \ntransparency commensurate with the size, scale, diversity and \ncomplexity of operations of the bank. The Board shall ensure that \nannual audited financial statements and quarterly financial statements \nare prepared and published in accordance wi th the formats prescribed \nby the supervisory and regulatory authorities and applicable accounting \nstandards.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 33, "year": 2024}, "type": "Document"}
{"page_content": "33 \n 9.2 Minimum \nDisclosures to be \nmade in the \nAnnual Report  The Board shall ensure that the following minimum disclosures are \nmade in the Annual Report.  \na) A statement to the effect that the annual audited financial statements \nhave been prepared in line with applicable accounting standards and \nregulatory requirements, inclusive of specific disclosures.  \nb) A report by the Board on the bank\u2019s internal control mechanism \nwhich  confirms the financial reporting system has been designed to \nprovide reasonable assurance regarding the reliability of financial \nreporting, and the preparation of financial statements for external \npurposes has been done in accordance with relevant account ing \nprinciples and regulatory requirements.  \nc) The external auditor\u2019s certification on the effectiveness of the \ninternal control mechanism referred to in b) above. The Assurance \nReport issued by the Auditors under \u201cSri Lanka Standard on \nAssurance Engagements SLSAE 3050 \u2013 Assurance Reports for \nBanks on Directors\u2019 Statements on Internal Control\u201d may be used \nas a substitute disclosure in this regard.  \nd) Details of directors, including names, transactions with the bank and \nthe total fees/remuneration paid by the bank.  \ne) Total net accommodation granted to each category of related \nparties. The net accommodation granted to each category of related \nparties shall also be disclosed as a percentage of the bank\u2019s \nregulatory capital.  \nf) The aggregate values of remuneration paid by the bank to its CEO \nand the key management personnel and the aggregate values of the \ntransactions of the bank with its CEO and key management \npersonnel, set out by broad categories such as remuneration paid, \naccommodation granted, and deposits or investments made in the \nbank.  \ng) Details of Board committees including (i) details of the key \nactivities of each Board committee during the year; (ii) the number \nof meetings of each committee held in the year; and (iii) attendance", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 34, "year": 2024}, "type": "Document"}
{"page_content": "of meetings of each committee held in the year; and (iii) attendance \nof each individual director at such meetings.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 34, "year": 2024}, "type": "Document"}
{"page_content": "34 \n h) The following  shall be disclosed in the Annual Corporate \nGovernance Report:  \n(i) the external auditor\u2019s certification of the compliance with \nthese Directions, clearly demonstrating the compliance status \nof the licensed bank with each sub -direction;  \n(ii) the composition of the Board, by category of directors, \nincluding the names of the Chairperson, executive directors, \nnon-executive directors and independent non -executive \ndirectors; and,  \n(iii) the identity of the Chairperson and CEO and the nature of any \nrelationship including financial, business, family or other \nmaterial/ relevant relationship(s), if any, among the \nChairperson, CEO and the members of the Board.  \ni) A report setting out details of the compliance with prudential \nrequirements, regulations, laws and internal controls and measures \ntaken to rectify any material non -compliances.  \nj) A statement of the regulatory and supervisory concerns on lapses in \nthe bank\u2019s risk management, or non -compliance with these \nDirections that have been communicated  by the Director of Bank \nSupervision, or administrative fines imposed by the Central Bank  of \nSri Lanka , if so directed by the Central Bank  of Sri Lanka  to be \ndisclosed to the public, together with the measures taken by the bank \nto address such concerns.  \nk) The aggregate value of total non-statutory special payments/ \nfinancial or non -financial benefits made to directors, CEOs and key \nmanagement personnel at the termination of employment or at the \nretirement during the respective financial year.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 35, "year": 2024}, "type": "Document"}
{"page_content": "35 \n 9.3 Disclosures to be \nmade on \nResignation, \nRemoval or \nVacation of Office \nof Directors  If a director resigns or is removed or is deemed to have vacated the \noffice of director due to regulatory non -compliances and/or as decided \nby the Board, the Board shall disclose the director\u2019s resignation or \nremoval or the status of being deemed vacated the office and the \nreasons for same in the official website of the licensed bank, including \nbut not limited to information relating to the relevant director\u2019s \ndisagreement with the bank, if any.  \n10. Banks \nIncorporated \nOutside Sri Lanka  Banks incorporated outside Sri Lanka shall comply with the following \nrequirements.  \n10.1 Applicability of \nthe Directions  These Directions shall apply to the banks incorporated outside Sri \nLanka to the extent that it is not inconsistent with the regulations and \nlaws applicable in such bank\u2019s country of incorporation . Accordingly, \nthe banks incorporated outside Sri Lanka shall comply with the \nrequirements of these Directions as applicable, based on the existing \ngovernance frameworks/structures that are laid down by the Head \nOffice or the Regional Office.  \n10.2 Submission of \nInformation  The banks incorporated outside Sri Lanka shall submit  the following \ninformation to the Director of Bank Supervision on an annual basis.  \na)  Information required by Direction 9.2 except Direction 9.2 d), g) \nand h) together with the annual audited financial statements. The \nReports referred to in Directions 9.2 b) and i) shall be prepared by \nthe Head Office or the Regional Office supervising Sri Lankan \noperations.  \nb) The following details within one month after the  closure of the \nfinancial year : \n(i) a list of all management level committees functioned during the \nfinancial year together with the meeting dates and the key \nsubject matters discussed at each meeting ; \n(ii) copies of Terms of Reference for all management committees \napproved by the relevant authority ;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 36, "year": 2024}, "type": "Document"}
{"page_content": "36 \n (iii) composition of each committee: Names and designations of the \nmembers ; and,  \n(iv) details of functional reporting lines of the branch to the Head \nOffice and/or the Regional Office that were in effect during the \nyear.   \nc) A copy of the parent bank\u2019s annual corporate governance report \nwithin five months after the closure of its financial year . \n11. Conflict with \nArticles of \nAssociation  In the event of a conflict between any of the provisions of these \nDirections and the Articles of Association (or Internal Rules) pertaining \nto any bank, the provisions of these Directions shall prevail. In the event \nthe Articles of Association of an individual bank set a more stringent \nstandard than that specified in this Direction, such provisions in the \nArticles of Association may be followed.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 37, "year": 2024}, "type": "Document"}
{"page_content": "37 \n 12. Interpretations  1.1 \u201cDuty of care\u201d shall mean the duty of  a director of a licensed bank \nto act and take decisions with skill, care, prudence and due diligence \nin the performance of his duties of such bank .  \n1.2 \u201cDuty of loyalty\u201d shall mean the duty of the Board of directors to \nact in good faith in the interest of the bank, for the purpose of these \nDirections.  \n1.3 \u201cKey management personnel\u201d shall mean the Officers performing \nexecutive functions as referred to in the Banking Act Determination \nNo. 01 of 2019 on Assessment of Fitness and Propriety of Chief \nExecutive Officer and Officers Performing Executive Functions in \nLicensed Banks.  \n1.4 \u201cMaterial business relationship\u201d shall mean a relationship resulting \nin income/noncash benefits equivalent to 20 per cent of the \ndirector\u2019s annual income and any  income/noncash benefits received \nby such director which are applicable on a uniform basis to all non -\nexecutive directors on the Board shall not be considered for this \npurpose.  \n1.5 \u201cBoard of directors in the case of a bank incorporated outside Sri \nLanka\u201d shall mean the Head Office or the Regional Office of such \nlicensed bank that supervises the respective branch or a \nmanagement committee, for which the powers on overseeing the \nmanage ment have been delegated by such Head Office or the \nRegional Office, as the case may be, to act as the Board of directors \nof such branch.  \n1.6  \u201cRegulatory capital\u201d shall mean the to tal capital reported in the \nlatest computation of the Total Capital in terms of the Banking Act \nDirection No. 01 of 2016 on Capital Requirements under Basel III, \nas at the end of the preceding financial year or immediately \npreceding quarter, subject to cert ification by the external auditor.  \n1.7 \u201cFinancial sector authority\u201d shall be as defined in the Central Bank \nof Sri Lanka Act, No. 16 of 2023.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 38, "year": 2024}, "type": "Document"}
{"page_content": "38 \n Schedule II \n \nResponsibilities of the Risk Management Function  \n \nEvery licensed bank shall establish an independent risk management function as per the \nrequirements of this Schedule in addition to the Banking Act Directions No. 07 of 2011 on \nIntegrated Risk Management Framework for Licensed Banks  \n \n1. The Integrated Risk Management Committee shall establish an effective independent risk \nmanagement function which shall be a part of the second line of defence, under the \ndirection of a Chief Risk Officer (CRO).  \n2. CRO shall be a member of the key management personnel, and in the case of Domestic \nSystemically Important Banks (D -SIBs), he/she shall be in the immediate layer below the \nlevel of CEO in the organizational structure . \n3. CRO shall possess sufficient stature, independence, knowledge, skills and expertise in \nrisk management and shall be fit and proper to hold such position in terms of the Section \n44A and Section 76H of the Banking Act.  \n4. CRO shall be independent from the other executive functions of the bank and shall not \nhave management or financial responsibility related to any operational business lines or \nrevenue generating functions.  \n5. The Chief Operating Officer, Chief Compliance Officer, Chief Financial Officer, Chief \nInternal Auditor, or any other key management personnel shall not serve as CRO.  \n6. Appointment, dismissal and other changes to CRO position shall be recommended by the \nIntegrated Risk Management Committee to the Board.  \n7. The primary responsibilities of CRO shall include but not limited to:  \n7.1 implement the Board approved integrated risk management framework which \ncovers (i) risk management policies,  processes and procedures (ii) material risk \nexposures and the sources of such risks (iii) mechanisms of identifying, assessing, \nmonitoring and reporting of such risks (iv) reviewing of bank's  exposures against \nthe risk appetite framework and risk limits (v) quantitative and qualitative risk", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 39, "year": 2024}, "type": "Document"}
{"page_content": "the risk appetite framework and risk limits (v) quantitative and qualitative risk \nanalysis methods including stress testing and (vi) effective risk control and \nprudential risk mitigation methods in terms of the Banking Act Directions No.  07 \nof 2011 on Integrated Risk Management Framework for Licensed Banks;", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 39, "year": 2024}, "type": "Document"}
{"page_content": "39 \n 7.2 actively engage in assessing material risks individually and in aggregate and \nmeasuring the bank\u2019s exposure against risk appetite limits;  \n7.3 establish an early warning or trigger system for breaches of the bank\u2019s risk appetite \nlimits;  \n7.4 implement necessary measures to strengthen the staff skills and to enhance the risk \nmanagement systems, policies, processes and reports on an on -going basis to \nensure that the bank\u2019s risk management capabilities are sufficiently robust and \neffective to mee t the strategic objectives of the bank;  \n7.5 regularly report and communicate to the Integrated Risk Management Committee \non the risk profile, current state of the risk culture, exposures against the established \nrisk appetite limits and limit breaches in a timely and accurate manner to take \ninformed decisions;  \n7.6 support the Board in its oversight of the development of the bank\u2019s risk appetite \nframework including the risk limit structure;  \n7.7 outline actions to be taken when the approved risk appetite limits are breached, \nincluding disciplinary actions for excessive risk -taking, escalation procedures and \nnotifications to the Board; and,  \n7.8 participate in key decision -making processes of the bank, e.g., strategic planning, \ncapital and liquidity planning, new products and services , etc. \n8. The risk management function shall be independent of any responsibilities related to \nthe first line of defence, the compliance function and the third line of defence and shall \nnot be involved in revenue generation. However, the risk management function sha ll \nensure effective coordination and communication with business and operational units \nand the internal audit function of the bank to facilitate exchange of information for \neffective risk management.  \n9. The risk management function shall have a sufficient number of employees who possess \nthe requisite experience and qualifications, including market and product knowledge and", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 40, "year": 2024}, "type": "Document"}
{"page_content": "the requisite experience and qualifications, including market and product knowledge and \nthe command of risk disciplines.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 40, "year": 2024}, "type": "Document"}
{"page_content": "40 \n Schedule I II \nResponsibilities of the Compliance Function  \n \nEvery licensed bank shall establish an independent compliance function as per the requirements of \nthis Schedule in addition to the Circular dated 14.09.1998 on Appointment of Compliance Officers.  \n1. The Integrated Risk Management Committee shall establish an effective independent \ncompliance function as a part of the second line of defence and approve the bank\u2019s policies \nand processes for identifying, assessing, monitoring, reporting and advising on co mpliance \nrisk, providing sufficient authority, stature, independence, resources and access to the \nBoard.  \n2. The Board through the Integrated Risk Management Committee shall establish a \ncompliance policy that inter alia contains the basic principles of compliance and the main \nprocesses by which compliance risks are to be identified and managed through all levels \nof the bank.  \n3. The compliance function shall be responsible for ensuring that the bank operates with \nintegrity in compliance with applicable laws and regulations.  \n4. The compliance function shall proactively assess compliance risk faced by various \nactivities undertaken by the first line of defence together with ensuring remediation on \ngaps observed during the assessment.  \n5. The compliance function shall be independent of any responsibilities related to the first \nline of defence, the risk management function and the third line of defence.  \n6. The compliance function shall have full and unconditional access to bank's records, \nphysical properties, management information systems and minutes of all \nconsultative/decision making bodies.  \n7. A dedicated person with sufficient authority, stature, independence, relevant knowledge, \nskills and expertise selected from key management personnel shall be designated as the \nChief Compliance Officer (CCO) and in the case of DSIBs, he/she shall be in the \nimmediate layer below the level of CEO in the organizational structure.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 41, "year": 2024}, "type": "Document"}
{"page_content": "immediate layer below the level of CEO in the organizational structure.  \n8. CCO shall be fit and proper to hold such position in terms of the Section 44A and Section \n76H of the Banking Act.  \n9. Appointment, dismissal and other changes to CCO position shall be recommended by the \nIntegrated Risk Management Committee to the Board.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 41, "year": 2024}, "type": "Document"}
{"page_content": "41 \n  \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 10. The Chief Operating Officer, CRO, Chief Financial Officer, Chief Internal Auditor, or \nany other key management personnel shall not serve as CCO.  \n11. CCO shall have the overall responsibility for identification, management, mitigation of \nbank's compliance risk and supervising activities of other compliance function staff.  \n12. CCO shall have the ability to interpret and articulate compliance risk in an understandable \nmanner as well as to effectively engage the Board, Integrated Risk Management \nCommittee and key management personnel in constructive dialogue on key compliance \nrisk issues.  \n13. CCO shall regularly report to the Integrated Risk Management Committee on the bank\u2019s \ncompliance with applicable laws, rules and regulations, level of compliance risk, the \nquality and effectiveness of the bank\u2019s internal controls put in place to manage \ncomp liance risk and the latest developments in the area of compliance. Such reporting \nshall be without any management filtering or intervention.  \n14. CCO shall function as a contact point within the bank for compliance queries from staff \nmembers and provide guidance to staff on the appropriate implementation of applicable \nlaws and regulations.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 42, "year": 2024}, "type": "Document"}
{"page_content": "42 \n Schedule I V \nResponsibilities of the Internal Audit Function  \n \nEvery licensed bank shall establish an independent internal audit function as per the requirements \nof this Schedule.  \n1. The internal audit function shall provide independent assurance to the Board of directors, \nCEO and key management personnel on the quality and effectiveness of the bank\u2019s internal \ncontrols, risk management and governance systems and processes.  \n2. The internal audit function shall have a clear mandate, be accountable to the Board and the \nAudit Committee and be independent of the audited activities.  \n3. The internal audit function shall have sufficient standing, knowledge, skills, resources and \nauthority within the bank to enable the internal auditors to carry out the assignments \neffectively and objectively commensurate with the size, scale, diversity and  complexity of \noperations of the bank.  \n4. A dedicated person with sufficient authority, stature, independence, relevant knowledge, \nskills and expertise selected from key management personnel shall be designated as the \nChief Internal Auditor (CIA), and in the case of D -SIBs, he/she shall be in the immediate \nlayer below the level of CEO in the organizational structure.  \n5. CIA shall be fit and proper to hold such position in terms of the Section 44A and Section \n76H of the Banking Act.  \n6. The Board, CEO and key management personnel shall contribute to the effectiveness of \nthe internal audit function by:  \n7. providing the function with full and unconditional access to any records, file data and \nphysical properties of the bank, including access to management information systems and \nrecords and the minutes of all consultative and decision -making bodies;  \n7.1 requiring the function to independently assess the effectiveness and efficiency of the \ninternal controls, risk management and governance systems and processes; and,  \n7.2 requiring timely and effective correction of audit issues by senior management.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 43, "year": 2024}, "type": "Document"}
{"page_content": "7.2 requiring timely and effective correction of audit issues by senior management.  \n8. The internal audit function shall perform a periodic assessment of the bank\u2019s overall risk \ngovernance framework, including but not limited to the assessment of:  \n8.1 the effectiveness of the risk management and compliance functions;  \n8.2 the quality of risk reporting to the Board and senior management; and,  \n8.3 the adequacy and integrity of the bank\u2019s internal controls and management \ninformation systems.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 43, "year": 2024}, "type": "Document"}
{"page_content": "43 \n 9. The Board, CEO and key management personnel shall promote the independence of the \ninternal audit function by ensuring that:  \n9.1 internal audit reports are provided to the Board or the Audit Committee without \nmanagement filtering and the internal auditors have direct access to the Audit \nCommittee; and,  \n9.2 CIA\u2019s primary reporting line is to the Audit Committee, which is also responsible for \nthe selection, oversight of the performance and, if necessary, dismissal of CIA.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 44, "year": 2024}, "type": "Document"}
{"page_content": "44 \n Schedule V  \nExtended Timelines for Compliance  \nDirection  New/ Amended  \nRequirement  Date to be complied  \n2.5 a)  At least half of the  total number of \ndirectors shall be independent non-\nexecutive directors.  01.01.2027 \n \nLicensed banks shall comply with the \nDirection s prevailing immediately \npreceding these Directions, till the above \ndate.  \n2.5 b)  Enhanced independent criteria  \n1. 2.5 b)(iv)  \n2. 2.5 b)(viii)  \n3. 2.5 b)(ix)  01.01.2026 \n2.7 At least half of the Board members \nshall constitute the quorum for the \nBoard meetings. A meeting of the \nBoard shall not be duly constituted, \nalthough the number of directors  \nrequired  to constitute  the quorum  at \nsuch meeting  is present,  unless  more  \nthan one third of  the   number of \ndirectors present at such meeting are \nindependent non -executive directors.  01.01.2026  \n \nLicensed banks shall comply with the \nDirection s prevailing immediately \npreceding these Directions, till the above \ndate. \n5.2 a)  The Chairperson shall be an \nindependent non -executive director. In \nthe event the Chairperson becomes \nnon-independent after the initial \nappointment, as an interim \narrangement, the Board shall designate \nan independent director as the Senior \nDirector for a period not exceeding six \nmonths with suitably documented Where a non -independent director is \ncurrently serving as the Chairperson, \nsuch director may continue to serve as \nthe Chairperson for a further period not \nbeyond 31.12.2027 .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 45, "year": 2024}, "type": "Document"}
{"page_content": "45 \n Direction  New/ Amended  \nRequirement  Date to be complied  \nterms of reference. The designation  of \nthe Senior  Director  shall  be disclosed \nin the bank\u2019s Annual Report.   \n6.2 Board Audit Committee  \n1. 6.2 a)  \n2. 6.2 b)  \n3. 6.2 c)  01.01.2027  \n6.3 Board Human Resources and \nRemuneration Committee  \n1. 6.3 a)  \n2. 6.3 i)  01.01.2026  \n6.4 Board Nomination and Governance \nCommittee  \n1. 6.4 a)  01.01.2027  \n6.5 Board Integrated Risk Management \nCommittee  \n1. 6.5 a)  \n2. 6.5 b)  \n3. 6.5 c)  01.01.2027  \n6.6 Board Related Party Transactions \nReview Committee  Listed licensed banks by 01.01.2025 .  \nUnlisted licensed banks by 01.01.2027 .", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_5_of_2024.pdf", "page": 46, "year": 2024}, "type": "Document"}
{"page_content": "01 October 2024CENTRAL BANK OF SRI LAI\\KA\nBANKING ACT DIRECTIONS No.06 of 2024\nDTRECTTONS UNDER SECTTON 76J (1) OF TrrE BANKING ACT NO.30 OF 1988,\nAS AMENDED\nACCOMMODATION TO DIRECTORS AND RELATED COMPAI\\IES\nWith the issuance of Banking Act Determination No. 04 of 2024 dated 01 October 2024 on\n'Approved Securities for Accommodation Granted to Related Parties of Licensed Banks\", the\nfollowing Banking Act Directions relating to the accommodation granted to directors and\nrelated parties oflicensed specialised banks are hereby revoked.\nBanking Act Directions under 76J (l) dated 21 November 1997 on Accommodation to\nDirectors and Related Companies.\nBanking Act Directions No. 04 of 2009 dated 02 Septemb er 2009 on Lease-backed Trust\nCertificates/Lease Receivables as Approved Security for Accommodation to any\nDirector or Close Relation of a Director or to any Concern in which the Director has\nSubstantial Interest.\nW\nDr. P Nandalal Weerasinghe\nChairman of the Governing Board and\nGovernor of the Central Bank of Sri Lanlu(i)\n(ii)", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_6_of_2024.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA \n07 October 2024 BANKING ACT DIRECTIONS No. 07 of 2024 \nDIRECTIONS UNDER SECTION 76J (1) OF THE BANKING ACT NO. 30 OF 1988, \nAS AMENDED \nACCOMMODATION TO DIRECTORS AND RELATED COMPANIES \nWith the issuance of the Gazette No. 2404/33 dated 03.10.2024 on the Order published under \nSections 47(4), 47(11B) and 76K of the Banking Act No. 30 of 1988, as amended, Amendment \nto the Directions under 76J (1) on Accommodation to Directors and Related Companies dated \n17 March 2005 is hereby revoked. \nfen at 2 Dr. P Nandalal Weerasinghe \nChairman of the Governing Board and \nGovernor of the Central Bank of Sri Lanka (-", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Directions_No_7_of_2024.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "14 Jrne2024CENTRAL BANK OF SRI LAI\\KA\nBANKING ACT ORDER No.01 of2024\nBANKING (OFF-SHORE BATIKTNG BUSTNESS) ORDER\nDESIGNATED F'OREIGN CURRENCIES\nIn terms of Section 22A ofthe Banking Act No. 30 of 1988, as amended, thJ Central Bank of Sri\nLanka (CBSL) hereby issues Banking (Off-shore Banking Business) Order, designating foreign\ncurrencies for the purpose of carrying on off-shore banking business by Licensed Commercial Banks.\n1. Designated\nForeign\nCurrencies1.1\nt.2The foreign currencies set out in Schedule I below are determined\nas the Designated Foreign Currencies, effective from the appointed\ndate of the Banking (Amendment) Act, No. 24 of 2024, on\nts.06.2024.\nBanking (Off-shore Banking Business Scheme) Order No. 01 of\n2022, dated 26 August 2022 is\nrevoked from the appointed date of the Banking (Amendment)\nAct, No. 24 of 2024, on 15.06.2024.\nW\nDr.P@\nChairman of the Governing Board and\nGovernor of the Central Bank of Sri Lanka\nSchedule I\nDesignated Foreign Currencies\n9 New Zealand Dollar (NZD)\nl0 Norwegian Kroner (NOK)\n11 Sterling Pound (GBP)\n12 Singapore Dollar (SGD)\n13 Swedish Kroner (SEK)\n14 Swiss Franc (CHF)\n15 Thai Bhat GHB)\n16 United States Dollar (USD)\n11\n2\n3\n4\n5\n6\n7\n8Australian Dollar (AUD)\nCanadian Dollar (CAD)\nChinese Renminbi (CI.[Y)\nDanish Kroner (DKK)\nEuro (EUR)\nHongkong Dollar (HKD)\nIndian Rupee (INR)\nJapanese Yen (JPY)", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Order_No_1_of_2024_e1.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "ffi\nL4 June2024CENTRAL BAIIK OF SRI LAI\\KA\nBANKING ACT ORDER No.02 of2024\nBANKING (OFF-SrrORE BANKTNG BUSINESS) ORDER\nWith the implementation of the Banking (Amendment) Act, No. 24 of 2024,the demarcation of the\nDomestic Banking Unit and Off-shore Banking Unit is eliminated, and off-shore banking business is\nidentified as a permissible activity that a Licensed Commercial Bank (LCB) may carry out.\nAccordingly, with a view to facilitating the conduct of off-shore banking business, the following\nshall take effect.\n1. Revocations 1.1The Banking (Off-shore Banking Business Scheme) Orders and\nsuch other instruments applicable to Off-shore Banking Units of\nLicensed Commercial Banks, as set out in Schedule I hereto, are\nhereby revoked, effective from the appointed date of the Banking\n(Amendment) Act, No. 24 of 2024, on15.06.2024.\nThe revocation effected above shall not affect:\n(i) any offence committed or liability incurred under the Orders\nand other instruments referred to in schedule I hereto;\n(ii) any action or proceeding pending or incomplete on the date of\nrevocation; or\n(iii) any examination, investigation or inquiry pending on the date\nof revocation and such action, proceeding, examination,\ninvestigation or inquiry shall be carried on and concluded as\nif the Orders and such other instruments referred to in\nSchedule I hereto, continue to be in force.r.2\nffr9-,^r---a-*o i'-.\"---*-f\no\". rxuilffiffign\"\nChairman of the Governing Board and\nGovernor of the Central Bank of Sri Lanka", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Order_No_2_of_2024_e1.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "Schedule I\nRevocation of Banking Orders and Operating Instructions\n1. Banking (Off-shore Banking Scheme) Order,2000 dated 07.04.2000.\n2. Operating Instructions EC1O4I2O}O (D) dated 07.04.2000 on Off-shore n-anking Business.\n3. Circular Reference No. 021171800/0005/01 dated 20.08.2008 on granting perrnission to\nlicensed commercial banks to trade in the international sovereign bonds issued in 2007 by the\nGoven:ment of Sri Lanka.\n4. Banking Act, Order No. 01 of 2008 dated 12.09.2008 on Banking (Off-shore Banking\nBusiness Scheme) Order.\n5. Banking Act, Order No. 01 of 2009 dated 23.10.2009 on Banking (Off-shore Banking\nBusiness Scheme) Order.\n6. Banking Act, Order No. 01 of 2011 dated 27.10.2011 on Banking (Off-shore Banking\nBusiness Scheme) Order.\n7. Banking Act, Order No. 02 of 2011 dated 08.11.2011 on Banking (Off-shore Banking\nBusiness Scheme) Order.\n8. Banking Act, Order No. 0l of 2018 dated 14.03.2018 on Banking (Off-shore Banking\nBusiness Scheme) Order.\n9. Banking Act, Order No. 02 of 2018 dated 30.11.2018 on Banking (Off-shore Banking\nBusiness Scheme) Order.", "metadata": {"source": "data\\CBSL\\2024\\Banking_Act_Order_No_2_of_2024_e1.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BANK OF SRI LANKA \nBANK SUPERVISION DEPARTMENT \n29 February 2024 CIRCULAR No. 01 of 2024 \nAMENDMENTS TO THE LIST OF QUALIFIED AUDITORS TO AUDIT THE \nACCOUNTS OF LICENSED COMMERCIAL BANKS AND LICENSED \nSPECIALISED BANKS \nCircular No.08 of 2019 dated 18.11.2019 on List of Qualified Auditors to Audit the Accounts \nof Licensed Commercial Banks and Licensed Specialised Banks is hereby amended by \nreplacing (iv) and (v) of the list of qualified auditors provided in Section 2.1 of the aforesaid \nCircular as follows. \n2. List of (iv) Deloitte Partners (Previously known as PricewaterhouseCoopers) \nQualified No.100, Braybrooke Place, Colombo 02 \nAuditors (v) Deloitte Associates (Previously known as SIMS Associates) \nNo. 11, Castle Lane, Colombo 04 \ng \nR R S De Silva Jayatillake \nDirector of Bank Supervision", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_1_of_2024_e.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "CENTRAL BAIIK OF SRI LAI[KA\n28March2024 CIRCT]LAR No.02 of2024\nGTJIDELIIIES FOR THE ESTABLISIIMENT OF BUSIIYESS REVWAL T'MTS IN\nLICENSED BAI\\KS\nChallenging macroeconomic circumstances have led to disrupting the income generating\nactivities of businesses adversely impacting the ability of borrowers to duly repay their\nobligations and thereby impairing the recovery process of licensed commercial banks and\nlicensed specialised banks (hereinafter referred to as licensed banks). Therefore, with a view\nto facilitating the sustainable economic revival of businesses affected by the extraordinary\nmacroeconomic circumstances and to improve asset quality of licensed banks, the Central Bank\nof Sri Lanka hereby issues broad guidelines to further strengthen the existing Post COVID-19\nRevival Units of licensed banks and reformulate such units as Business Revival Units with an\nenhanced scope.\n1. Objective t.1\n2. Governance\nFramework and\nResourcesThe purpose of Business Revival Units is to identifr and assist\nperforming and non-performing borrowers of licensed banks\nwho are facing challenges or may face potential financial\n[and/or business] difficulties inter-alia due to a reduction of\nincome, cash flows or sales, reduction or impairment of\nbusiness operations or the temporary closure of business\nemanating from the extraordinary macroeconomic\ncircumstances. The Unit aims to revive businesses that are\nfacing actual or potential financial difficulties but are\nfundamentally viable, with a view to providing benefits to such\nborrowers, leading to the revival of such businesses,\nenhancement of economic activities and contributing to the\ndevelopment of the national economy.\nThe Board of Directors, Chief Executive Officer (CEO) and\nthe respective Key Management Personnel (KI/P) are\nresponsible for ensuring that the licensed bank has robust2.1", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BANK OF SRI LAIIKA\nCIRCULAR No.02 of2024\n2.2\n2.3\n2.4business revival and rehabilitation policies and procedures,\nincluding an effective system of internal controls, to manage\nbusiness revival in accordance with these guidelines.\nLicensed banks shall formulate a revival and rehabilitation\npolicy for borrowers who are facing actual or potential\nfinancial difficulties but are fundamentally viable. Such policy\nshall be approved by the Board of Directors for a locally\nincorporated licensed bank and by the regional/global head\noffice for a licensed bank incorporated outside Sri Lanka.\nThese policies need to be reviewed and updated, at least\nannually.\nThe Revival and Rehabilitation Policy shall inter alia include\nthe following at a minimum:\n(i) Mandate for establishment ofthe Business Revival Unit\n(ii) Its scope of activities including deliverables\n(iii) Revival mechanism for borrowers\n(iv) Eligibility Criteria for a loan transfer from the Loan\nOrigination Unit to the Business Revival Unit and vice\nVETSA\n(v) Quantitative and / or qualitative triggers for a loan\ntransfer, including days-past-due and the time period (in\ndays) during which this transfer shall take place from\nthe Loan Origination Unit to the Business Revival Unit\n(vi) Internal methodology for determining the financial\nviability of borrowers including an economic and\nfinancial analysis of the borrower, analysis of the\nborrower's business plans, cash flow projections,", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BAIIK OF SRI LANKA\nCIRCT]LAR No.02 of2024\n2.5\n2.6\n2.7\n2.8current and expected overall level ofindebtedness and\nsolvency assessment\n(vii) Time period for how long a loan can stay in the Business\nRevival Unit before being transfened to the Credit\nEnforcement Unit in the case of unsuccessful revival or\nto the Loan Origination Unit in the case of successful\nrevivals\n(viii) Operational criteria for a Corporate Workout\nFramework and the Framework Agreement for\nCorporate Workout as provided for in Section 5 below.\nThe Business Revival Unit shall monitor the repayment\nbehaviour and the financial condition of the borrower, who is\nsubject to revival, on an ongoing basis.\nTransfer of revived business loans from the Business Revival\nUnit to the Loan Origination Unit shall not be affected in less\nthan one year.\nThe Business Revival Unit shall be organuationally separate\nfrom Loan Origination Units. The Unit shall not report to the\nsame management level committee as the Loan Origination\nI Inits-\nThe Business Revival Unit shall be headed by a KMP of the\nlicensed bank with sufficient authority and seniority to ensure\neffective and efficient oversight of the Unit and expeditious\nimplementation of revival and rehabi litation activities.\nThe Business Revival Unit shall be adequately staffed and\npossess sufficient expertise and authority and be provided with\nall other resources such as financial, human resources, and\ninformation technology as needed.2.9", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 2, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BAI\\K OF SRI LAI\\KA\nCM.CULAR No.02 of2024\n2.I0 The Business Revival Unit shall work together in a\ncoordinated manner with other relevant departments of the\nbank including the Risk Management and Legal Units, among\nothers. When loans are transferred between Loan Origination\nand Business Revival Units, or between the Business Revival\nand the Credit Enforcement Units, licensed banks shall ensure\nan orderly handover of cases, including a full transfer of\nrelevant loan documentation and relevant information.\n2.ll The Business Revival Unit shall be provided with unfettered\naccess to the bank's loan documentation and management\ninformation systems in order to function effectively.\n2.12 Licensed banks may consider establishment of Business\nRevival Units at large branches / regional offices of banks as\nappropriate in the case of licensed banks with more than 50\nbank branches considering the effectiveness ofthe operations.\nOther licensed banks shall have the Unit established centrally.\n2.13 Licensed banks shall report the performance of Business\nRevival Unit/s to an appropriate Board Sub-Committee on a\nquarterly basis.\n3.1 At a minimum, the following criteria need to be met, in order\nto consider as an eligible borrower under the Business Revival\nUnit:\n3.1.1 Fundamental Viability\n(i) The Unit shall consider borrowers who are fundamentally\nviable. Borrowers that do not meet the viability qriteria,\ni.e., non-viable borrowers shall not be transferred to the\nBusiness Revival Unit. The viability assessment shall, to\nthe extent possible, be based on the audited financial3.Eligibility\nCriteria for\nSelection of\nBorrowers", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 3, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BAI\\K OF SRI LATIKA\nCIRCULAR No.02 of2024\nstatements for the three preceding financial years and\ninclude at a minimum the analysis of the following\nfinancial indicators:\n(a) Operating income, gross profit, profit before interest\nand tax\n(b) Financial cost, interest coverage ratio, interest cost to\ntotal borrowings\n(c) Profitability, return on equity, return on assets\n(d) Leverage, debt to equity, assets to equity\n(e) Sufficiency of liquidity and cash flows, to assess the\nadequacy cash Jlows to service the forthcoming debt\nobligations and to meet working capital requirements,\nsuch as curuent ratio, quick-assets ratio\n(f) Maturity profile ofthe liabilities ofthe borrower\n(g) Other quantitative and qualitative information to assess\nthe fundamental viability ofthe business.\n(ii) In the absence of audited financial statements owing to\njustifiable reasons, licensed banks may use appropriate\nand credible sources of information at the discretion of\nthe bank.\n(iii) Licensed banks shall prescribe threshold values on the\nabove indicators distinguishing fundamentally viable\nbusinesses from non-viable businesses. Threshold values\nmay be adjusted in light of any special considerations\nconcerning a specific industry or sector. Where threshold\nvalues have already been satisfied, qualitative factors\nrelating to the borrower may be taken into account in\ndetermining whether the borrower is viable or not viable.", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 4, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BAI\\K OF SRI LANKA\nCM.CULAR No.02 of2024\n(iv) Licensed banks are encouraged to disclose these\nmethodologies in their Annual Report or any other\npublished reports as part of risk and non-performing loan\nmanagement disclosures.\n3.1.2 Borrower Co-operation\n(i) Licensed banks shall consider only the cooperative\nborrowers for revival. Therefore, licensed banks shall\nensure that the borrower is cooperative, before\nconsidering for revival.\n(ii) Non-cooperative borrowers are identified based on one of\nthe following, at a minimum:\n(a) The borrower has defaulted in meeting its\npayment/repayment obligations to the licensed bank\neven when the borrower has the financial capacity to\nhonour its obligations.\n(b) The borrower has defaulted or has a potential to default\ndue to a diversion of funds where the borrowed funds\nhave not been utilized for the specific purposes for\nwhich the finance was availed of.\n(c) The borrower has defaulted in meeting its\npayment/repayment obligations to the licensed bank\nand has also disposed of or removed the movable fixed\nassets or immovable property pledged by him for the\npurpose of securing such loans without the consent of\nthe licensed bank.\n(d) The borrower does not submit periodical financial\nstatements for the assessment of its financial and\noperational viability.", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 5, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BANK OF SRI LATIKA\nCIRCT'LAR No.02 of2024\n(e) The borrower is not responsive to the enquiries\n(elechonic, postal, invitations to meetings, etc.) of the\nlicensed bank or has not acted in good faith during the\ncourse of the restructuring negotiations.\n(D The borrower does not allow the licensed bank to\nreviedassess the state of assets pledged as collateral\nagainst the loan.\n(g) Any other relevant qualitative and quantitative factors,\nincluding the behaviour of the distressed borrower in\nprior restructurings, including in cases involving other\nlicensed banks.\n4.1 The Business Revival Unit shall use financial and./ or\noperational restructuring tools and techniques or any\ncombination thereofto revive distressed but viable businesses.\nThese tools and techniques include:\n4.1.1 Financial Restructuring\n(i) The tools and techniques for financial restructuring\ninclude debt forgiveness, debt rescheduling (including\ngrace periods for the payment of principal and interest),\nadjustment of interest rates, maturity extensions, and\nprovision of new financing, including interim financing\nand exit financing, etc. These tools and techniques may be\ncombined as appropriate.\n(ii) Licensed banks shall adopt the following assessments,\nwhen deciding to provide restructuring measures\nincluding the following at a minimum:Revival\nMechanisms", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 6, "year": 2024}, "type": "Document"}
{"page_content": ".28March2024CENTRAL BAIIK OF SRI LAI\\KA\nCIRCULAR No.02 of2024\n(a) Borrower's debt servicing capacity based on the\nborrower's overall indebtedness, including debts owed\nto other creditors, viz., financial and non-financial\ncreditors, including tax authorities\n(b) Aggregate debt service obligations\n(c) Borrower's economic interests\n(d) Reports of the Credit Information Bureau of Sri Lanka\n(cRrB)\n(e) Assessments based on other external sources, as\nnecessary.\n(iii) The revised repayment plan for borrowers considered for\nrestructuring shall be based on a full assessment of the\nborrower's cash flow available for debt servicing, and\nanalysis of financial statements and projected cash flows.\n4.1.2 Operational Restructuring\n(i) The Business Revival Unit may in addition consider\nproposing operational restructuring of the business of the\nborrowers, i.e., fundamental changes in the business's\noperations or assets to restore commercial viability,\nincluding but not limited to developing a new business\nplan/strategy, and enhancing operational efficiency and\nprofitability of such businesses, improving cash\nmanagement systems, reviewing pricing strategy, and\nreviewing customer retention and/or acquisition shategies.\n4.2 The Unit may also conduct awareness programs on\nrehabilitation initiatives, procedures and methodologies to\nrelevant stakeholders,viz., branches and business units of the", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 7, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BAIIK OF SRI LAI\\KA\nCIRCTILAR No.02 of2024\n5. Framework for\nCorporate\nWorkouts5.1bank, borrowers and provide credit counselling and business\nadvisory services, in reaching out to potential investors.\nLicensed banks may establish a framework for corporate\nworkouts namely \"Corporate Workout Framework\" to\naddress the financial and,/or business distress faced by\ncorporate borrowers who have obtained credit facilities\nfrom more than one licensed bank, without court\nintervention. Workouts are a potential means of achieving\nfinancial and operational restructuring as described in\nsubsections 4.1.1 and 4.1.2. For this purpose, a corporate\nis defined as a business with an annual turnover above\nRs. I bn, as per the latest available audited financial\nstatements or cumulative outstanding credit facilities\ngranted by licensed banks are equal to or more than\nRs.250 mn.\nAny Workouts conducted under the Corporate Workout\nFramework shall be a voluntary, consensual process\ninvolving the corporate borrower and the licensed banks\nwithout court intervention. It shall, if successful, result in a\nrestructuring plan between the corporate borrower and\nlicensed banks setting forth the terms of the agreed upon\nrestructuring.\nThe Corporate Workout shall be conducted in accordance\nwith the provisions of this section and through a\n\"Framework Agreement for Corporate Workout\" between\nand among licensed banks that have exposures to a given\ncorporate borrower.5.2\n5.3", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 8, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BANK OF SRI LANKA\nCIRCT]LAR No.02 of2024\n5.4\n5.5\n5.6Performing credit facilities of corporate borrowers that are\nfacing actual or potential financial and/or business distress\nand non-performing credit facilities of corporate borrowers\nmay be eligible to be restructured under the Corporate\nWorkout Framework subject to a positive outcome at the\nviability assessment.\nLicensed banks may adopt a collaborative approach to\ndevelop a model for Framework Agreement for Corporate\nWorkout that shall govern negotiations of a workout\nagreement between the licensed banks and any given\ncorporate borrower that seeks to avail the Corporate\nWorkout Framework.\nIndividual banks may become a party to a Framework\nAgreement for Corporate Workout on a voluntary basis.\nThe Corporate Workout Framework shall set forth the\nparameters for the process of negotiating a workout\nsolution between licensed banks and a corporate borrower.\nThe Framework Agreement for Corporate Workout shall, at\na minimum, includp provisions addressing, inter alia, the\nfollowing:\n(i) A specified standstill period\n(ii) Confrdentiality\n(iii) Information sharing\n(iv) Procedures for developing a restructuring plan\n(v) Methods for handling disputes arising in the course of\nconducting the workout\nA corporate borrower on a voluntary basis, may apply to\nhave a workout conducted in accordance with the5.7\n10", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 9, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BAI\\K OF SRI LAIIKA\nCIRCT'LAR No.02 of2024\n7.6. Accounting\nConsiderations\nand Regulatory\nReporting\nReporting to the\nCredit\nInformation\nBureau ofSri\nLanka\nCredit Facilities\ngranted under\nRe-finance or\nInterest Subsidy\nSchemes\nRecovery Action\nfor Default afterFramework Agreement for Corporate Workout; provided,\nhowever, that the standstill afforded to any such borrower,\npursuant to the terms of Framework Agreement for\nCorporate Workout, may be terminated if the borrower\nbreaches any of the covenants set forth in its application.\n5.8 The corporate borrower and the licensed banks may agree\non a Corporate Workout on a voluntary basis along with the\nterms of any restructuring agreement negotiated in this\nregard.\n6.1 Licensed banks shall apply relevant Sri Lanka Accounting\nStandards issued by the Institute of Chartered Accountants of\nSri Lanka and prudential Directions & regulations issued by\nthe Central Bank of Sri Lanka for accounting and regulatory\nreporting of credit facilities considered under the Business\nRevival Unit.\n7.1 Licensed banks, in consultation with CRIB, may develop an\nappropriate reporting modality to report credit facilities\ntransferred to the Business Revival Unit.\n8.1 Licensed banks are required to seek necessary instructions\nfrom the relevant agencies, if credit facilities granted under\nvarious refinance or interest subsidy or guarantee schemes are\nto be transferred to the Business Revival Unit.\n9.1 Licensed banks may adopt suitable recovery and/or\nenforcement actions against borrowers who have failed to8.\n9.\n11", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 10, "year": 2024}, "type": "Document"}
{"page_content": "28March2024CENTRAL BAIIK OF SRI LANKA\nCIRCT]LAR No.02 of2024\nUnsuccessful\nRevival\nl0.Implementation\nll.Reporting\nRequirementadhere to the terms and conditions agreed for revival and\nrehabilitation under the Business Revival Unit as per the\nbank's intemal guidelines and policies.\n10.1 Licensed banks are required to make necessary arrangements\nto establish Business Revival Units within forfy-fi ve days from\nthe date of this Circular.\n10.2 Licensed banks that have already established Revival Units,\nmay expand the scope of activities of these Units to be in line\nwith the requirements of this Circular within thirty days from\nthe date of this Circular.\n10.3 Licensed banks which do not have non-performing business\nloans as at the date of this Circular and potential stressed\nborrowers in the foreseeable future, may not be required to\nestablish a Business Revival Unit. However, such licensed\nbanks are required to closely monitor the performance and the\nquality of the credit portfolio and adopt measures in line with\nthe provisions of this Circular if and when the need arises.\n10.4 The scope of this Circular focusses on the loans granted for\nbusiness purposes and which are currently under stress or\npotential stress. Licensed banks are advised to take appropriate\nmeasures with respect to loans granted for non-business\npurposes, which are currently under stress or potential stress.\n11.1 Licensed banks shall report the progress of revival and\nrehabilitation proposals availed to the bank's borrowers as at\nthe end of each quarter, within 15 working days, commencing\n30 September 2024, in the format given in Annex I.\nt2", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 11, "year": 2024}, "type": "Document"}
{"page_content": ";fr\ni'\n\\-,\n28March2024CENTRAL BAI\\IK OF SRI LANKA\nCM.CT]LAR No.02 of2024\nLl.z Licensed banks me required to make necessary arrangements\nto disclose to customers on the establishment of Business\nRevival Unit, including the objectives, scope, functions,\nactivities, through their respective websites and public media.\nl2.l Circular No. 01 of 2022 dated,24.03.2022 on Guidelines on\nEstablishment of Post COVID-I9 Revival Units in Licensed\nBanks is hereby revoked.\n13.1 Licensed banks are required to fully comply with the\nrequirements ofthis Circular by 0l July 2024.12.Revocation\nl3.Effective Date\nMrs.TMJYPFernando\nChief Executive fficer / Senior Deputy Governor\nofthe Central Bankof Sri Lanka\n13", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 12, "year": 2024}, "type": "Document"}
{"page_content": "r\nr\nI\nI:,1\nName of the Bank:\n(o) Sectorc to be mentioned as per the sector-wise FitNet Retum, specily sub-,sectors, i/applicable.Rcport on Borrowers Facllltatcd Under Busincss Rcyival Unit (BRU) as at (Rcporting Date)Annex-I\nAll Amourtts in Rs. 000's\n)\n)Total Number of Facilities Undcr BRU:\nDetails of the Exlstlng Facillties", "metadata": {"source": "data\\CBSL\\2024\\bsd_circular_no_2_of_2024_e_0.pdf", "page": 13, "year": 2024}, "type": "Document"}
{"page_content": "w;s \u00fafYI\nwxl 2380$01 - 2024 wfm%a,a ui 15 jeks i\u00f7od - 2024.04.15\nNo. 2380/01  -  moNday ,   april   15 , 2024EXTRAORDINARYY%S ,xld m%cd;dka;%sl iudcjd\u00a7 ckrcfha .ei\u00dc m;%h\nThe Gazette of the Democratic Socialist Republic of Sri Lanka\n(Published by Authority)\nPART I : SECTION (I) \u2014 GENERAL\nCentral Bank of Sri Lanka Notices\n1a- G 41759 - 24 (04/2024) \nThis Gazette Extraordinary can be downloaded from www.documents.gov.lk\nCENTRAL   BANk  Of  SRI  LANkA   ACT , No. 16 Of 2023\nordEr made under Section 106(1) of the Central Bank of Sri lanka act, No. 16 of 2023.\n    dr. P. Nandalal Weerasinghe ,\n   Chairman of the monetary policy Board and \n   Governor of the Central Bank of Sri lanka.\n   \nCentral Bank of Sri lanka,\nColombo,10\nth april, 2024.\nMaximum Interest Rates on Rupee Denominated Lending Products\nmonetary law act order No. 01 of 2023 dated 25th august 2023 on maximum interest rates on rupee denominated \nLending Products is hereby rescinded with immediate effect.\nThe aforesaid order is rescinded considering the notable easing of monetary policy and monetary conditions that has \nprovided space for licensed banks to reduce the lending rates further.EoG 04 - 0124\npriNTEd aT THE dEpar TmENT oF GoVErNmENT priNTiNG,  Sri laNKa.", "metadata": {"source": "data\\CBSL\\2024\\bsd_gazette_20240415_2380_01_e.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "w;s \u00fafYI\nwxl 2404$33 - 2024 Tlaf;dan\u00be ui 03 jeks n%yiam;skaod - 2024.10'03\nNo. 2404/33  -  Thursday ,   OcT Ober  03 ,  2024EXTRAORDINARYY%S ,xld m%cd;dka;%sl iudcjd\u00a7 ckrcfha .ei\u00dc m;%h\nThe Gazette of the Democratic Socialist Republic of Sri Lanka\n(Published by Authority)\nPART I : SECTION (I) \u2014 GENERAL\nCentral Bank of Sri Lanka Notices\n1a- G 42802 - 24 (10/2024) \nThis Gazette Extraordinary can be downloaded from  www.documents.gov.lk\nBANKING ACT, No. 30 OF 1988, AS AMENDED\nOrder  published under sections 47(4), 47(11b) and 76K of the banking act, No. 30 of 1988, as amended.\n   dr. P. Nandalal Weerasinghe ,\n   chairman of the Governing board and\n   Governor of the central bank of sri Lanka.\n   \ncentral bank of sri Lanka,\ncolombo,\n01st October, 2024.\nLIMITS FOR  ACCOMMODATION GRANTED TO RELATED PARTIES OF LICENSED BANKS\nIn terms of sections 47(4), 47(11b) and 76K of the banking act, No. 30 of 1988, as amended, the central bank of sri \nLanka has approved the following limits in respect of accommodation granted by a licensed commercial bank and licensed \nspecialised bank (hereinafter referred to as licensed banks) to related parties as specified in this Order .", "metadata": {"source": "data\\CBSL\\2024\\bsd_gazette_20241003_2404_33_e.pdf", "page": 0, "year": 2024}, "type": "Document"}
{"page_content": "I fldgi ( ^I& fPoh - YS% ,xld m%cd;dka;s%l iudcjd\u00a7 ckrcfha w;s \u00fafYI .ei\u00dc m;%h - 2024'10'03\nPart  I : Sec. (I) - GAZETTE EXTRAORDINARY OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA - 03.10.20242a\n1. Related Parties \nof a Licensed Bank1.1 The following categories of persons shall be considered as \u201crelated parties\u201d of licensed banks for the purpose of this Order:\n(a) a director of a licensed bank; \n(b) close relations of such director;\n(c) a concern in which a director of a licensed bank has a substantial interest, being an \ninterest acquired either before or after the appointment as a director of such licensed bank;\n(d) a concern in which a close relation of a director of a licensed bank has a substantial interest;\n(e) a chief executive officer or an officer performing executive functions of a licensed bank in respect of any accommodation granted other than an accommodation granted to such officer under a scheme applicable to the employees of such bank;\n(f) a shareholder of a licensed bank having material interest, whether individual or a con-cern;\n(g) a subsidiary or an associate company of the licensed bank;\n(h) a holding company of the licensed bank including its subsidiaries, excluding the parent bank and subsidiaries of a bank incorporated outside sri Lanka;\n(i) a director of a subsidiary or an associate company of the licensed bank; \n(j) a director of a holding company of the licensed bank and its subsidiaries;\n(k) a close relation of a person specified in Order 1.1 (e) and (f) above;\n(l) a concern, whose director or partner is a director of such bank; \n(m) a concern in which a material shareholder of a licensed bank has substantial interest; and\n(n) a concern in which a close relation of an individual material shareholder has a substantial interest.\n2. Approved limits \nin respect of \naccommodation granted to Related Parties2.1 The central bank of sri Lanka has approved the following limits in respect of accommodation", "metadata": {"source": "data\\CBSL\\2024\\bsd_gazette_20241003_2404_33_e.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "granted by licensed banks to related parties of such banks, subject to obtaining approved securities specified in the banking act determination No. 04 of 2024 dated 01.10.2024 on \n\u201capproved securities for accommodation Granted to related Parties of Licensed banks\u201d:\n(a) In the case of accommodation granted to related parties that are individuals as specified in (a), (b), (e), (f), (i), (j) and (k) of Order 1.1 above; up to rupees Twenty Million \n(rs. 20,000,000/-). \n(b) In the case of accommodation granted to related parties that are concerns as specified in (c), (d), (f), (g), (h), (m) and (n) of Order 1.1 above; 10% of the Tier 1 capital of the licensed bank.\n(c) In the case of accommodation granted to related parties that are concerns as specified in (l) of Order 1.1 above; 15% of the Tier 1 capital of the licensed bank.\n       Tier 1 capital as given in (b) and (c) of Order 2.1 above, shall mean the Tier 1 capital \nbefore adjustments, computed in terms of banking act directions No. 0l of 2016 on \n\u201ccapital requirements under basel III for Licensed commercial banks and Licensed \nspecialised banks\u201d, as at the end of the preceding financial year or immediately \npreceding quarter, subject to certification by the external auditor. In the event of losses subsequent to the audit certification, such losses shall be deducted from Tier I capital for the purpose of this Order.", "metadata": {"source": "data\\CBSL\\2024\\bsd_gazette_20241003_2404_33_e.pdf", "page": 1, "year": 2024}, "type": "Document"}
{"page_content": "I fldgi ( ^I& fPoh - YS% ,xld m%cd;dka;s%l iudcjd\u00a7 ckrcfha w;s \u00fafYI .ei\u00dc m;%h - 2024'10'03\nPart  I : Sec. (I) - GAZETTE EXTRAORDINARY OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA - 03.10.20243a\n2.2(d) In the case of accommodation by way of issue of a credit card to an individual, up to \nrupees Two Million (rs.2,000,000/-), provided that such accommodation is on the same terms and conditions as for other customers of the respective bank.\nIn the case of accommodation granted over and above the proposed limits specified in Order 2.1 above, cash or near cash collateral specified in 2.1 (a), (b), (c) and (d) of the banking act determination No. 04 of 2024 dated 01.10.2024 on \u201capproved securities \nfor accommodation Granted to related Parties of Licensed banks\u201d shall be obtained by \nlicensed banks as approved securities. \n3. Revocation 3.1 banking act Order published under section 47(4) of the banking act, No. 30 of 1988, as \namended, by banking (amendment) act, No. 2 of 2005, dated 11 February 2005 is revoked. \nPrINTed aT The deP arTMeNT OF GOVerNMeNT PrINTING,  srI LaNKa.EOG 10 - 0062", "metadata": {"source": "data\\CBSL\\2024\\bsd_gazette_20241003_2404_33_e.pdf", "page": 2, "year": 2024}, "type": "Document"}