Regulatory Alerts2021-09-14 | Banking Act Direction No. 13 of 2021Classification, Recognition and Measurement of Credit Facilities in Licensed Banks
The Monetary Board of the Central Bank of Sri Lanka issues binding Directions requiring licensed banks to classify, recognize, and measure credit facilities in alignment with SLFRS 9. The framework mandates robust governance, clear staging criteria for performing and non-performing loans, and standardized impairment calculations using validated models and prudent collateral valuation. Licensed banks must implement comprehensive reporting mechanisms, maintain minimum impairment ratios, and ensure internal audit oversight to guarantee consistent risk assessment and regulatory compliance.
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