Regulatory Alerts2017-10-26 | Banking Act Directions No. 5 of 2017Enhancement of Minimum Capital Requirement of Banks
The Monetary Board of the Central Bank of Sri Lanka has issued Banking Act Direction No. 05 of 2017 to increase the minimum capital requirements for licensed commercial and specialised banks, establishing tiered thresholds of Rs 5.0 Bn to Rs 20.0 Bn based on incorporation status and asset size. Banks must incorporate capital augmentation plans into their annual Internal Capital Adequacy Assessment Process submissions and calculate compliance using designated Basel III return codes. Non-compliant institutions face immediate restrictions on dividend distributions, profit repatriation, asset growth, and branch expansion until the Director of Bank Supervision confirms their capital levels meet the mandated standards.
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