Regulatory Alerts2021-01-25 | Banking Act Direction No. 3 of 2021Amendments to Directions on Capital Requirements under Basel III for Licensed Commercial and Specialised Banks
The Central Bank of Sri Lanka issued Banking Act Directions No. 03 of 2021 to amend capital requirements under Basel III for licensed commercial and specialised banks. The revised Schedule I establishes a 10 percent risk weight for foreign government claims and qualifying residential mortgages that satisfy specific margin and valuation criteria, while assigning a 100 percent weight to non-qualifying performing claims. Commercial real estate exposures are explicitly excluded from the preferential residential category, and all adjustments apply to web-based regulatory returns for 2021.
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