Regulatory Alerts2014-06-06 | 02/17/600/0003/002Compliance with Banking Act Requirements for Valuation of Immovable Property
The Central Bank of Sri Lanka mandates licensed commercial and specialized banks to comply with the Banking Act Directions No. 1 of 2014 regarding immovable property valuation. These institutions must align their external professional valuation reports and revaluation reserves with specific capital adequacy and loan classification directives from 2007 and 2008. The directive simultaneously revokes the April 1999 circular governing valuer selection criteria for fixed asset revaluation computations.
Ocoq @rre6 oqctrt5oo@dAO eurrird @ goor @co Ooo4O @ordrola ropdur onjrd CENTRAT BANK OFSRI TANKA Gro$unrianeu$ pflanaro*eorLb BankSupervision Department R:ef . : 02 I 17 I 600 I 0003 I 002 To: Chief Executive Officers of Licensed Commercial Banks and Licensed Specialised Banks Dear Sir/Madam Ot June 2014 Compliance with the requirements imposed under the Banking Act on valuation of immovable property We write to inform you that the requirements on assessing the present market value of immovable property and the eligibility criteria for valuers as specified in paragraphs (i) and (ii) below 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 Commercial Banks and Licensed Specialised Banks dated 05 June 2014. (D ltem 6.2.2.4.1 - "Revaluation Reserves" and Item 6.4.3.1.9 - "Claims Secured by Residential Property" of the Schedule I of the Banking Act Directions Nos. 9 and 10 of 2007 onMaintenance of Capital Adequacy Ratio, as applicable. (ii) Directions 7(1) (I) (iii) - "Current external professional valuation report" of the Banking Act Directions Nos. 3 and 4 of 2008 on Classification of Loans and Advances, Income Recognition and Provisioning, as applicable. 2. The Circular dated 19 April 1999 under reference B3169193 on "Criteria for selection of valuers undertaking the revaluation of fixed assets for the computation of the Capital Adequacy Ratio" is hereby revoked. Yours faithfully (Mrs.)TMJYPFernando Director of Bank Supervision 6 OeD Ot'e, ecto 30, deDrA€(, oJO!D, 6 ggLb oflg, Odu. 30 etrtrpflugil onapog G6tr@rbq I !D.. eE . 5eO, olDr€O Ol, €l €p@ro tri. Ou. Oa). 590, Gangfrl 01, ea)nio6 level 6, t{0.30, Janadhlpatfil mawatfia, Colombo 1 P. 0. 8u.590, Colombo 01, Sri lrnka. I sqfi zafircorcss lJ g+tt2477711 fi banksup@cbsl.lk www.cbsl.gov.lk