Region

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2014-12-23 | 02/17/402/0073/002

Enhancement of Minimum Capital Requirement of Banks - LCB

The Central Bank of Sri Lanka mandates all licensed domestic commercial banks to increase their core capital to Rs. 10 billion under Section 19(3) of the Banking Act. This enhancement, aligned with the January 2014 Financial Sector Consolidation Master Plan, applies to banks incorporated or established within Sri Lanka and defines qualifying capital according to the 2007 Capital Adequacy Ratio guidelines. The requirement takes effect on 1 January 2016, requiring banks to implement timely compliance measures ahead of the deadline.

Sri Lanka

Central Bank of Sri Lanka

[Emblem of the Central Bank of Sri Lanka]

ශ්‍රී ලංකා මහ බැංකුව இலங்கை மத்திய வங்கி CENTRAL BANK OF SRI LANKA

බැංකු අධීක්ෂණ දෙපාර්තමේන්තුව | வங்கி மேற்பார்வைத் திணைக்களம் | Bank Supervision Department

Ref: 02/17/402/0073/002

23 December 2014

To: Chief Executive Officers of Licensed Commercial Banks

Dear Sir/Madam

Enhancement of Minimum Capital Requirement of Banks

We 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.

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.
All banks are required to take appropriate action to comply with the above on a timely basis.

Yours faithfully

[Signature]

(Mrs.) T M J Y P Fernando Director of Bank Supervision