Regulatory Alerts2020-11-30 | Finance Business Act Guidelines No. 1 of 2020Prompt Corrective Action Framework for Licensed Finance Companies
The Monetary Board of the Central Bank of Sri Lanka issued guidelines on 30 November 2020 to enforce a Prompt Corrective Action framework for Licensed Finance Companies. The document establishes five capital adequacy categories and mandates escalating regulatory restrictions, such as dividend limits and capital restoration plans, as financial health deteriorates. It further outlines supervisory discretion for reclassification, public disclosure requirements, and investor suitability standards for controlling stakeholders.
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