Regulatory Alerts2021-01-25 | Circular No. 2 of 2021Amendments to Circular No. 4 of 2018 on Guidelines for Licensed Banks Adopting SLFRS 9
The Central Bank of Sri Lanka has amended Circular No. 4 of 2018 to update accounting guidelines for licensed banks adopting SLFRS 9. The amendment inserts Guideline 2.5(c), permitting a minimum Loss Given Default of 10 percent when computing expected losses for the 2021 financial year. This change addresses current exceptional circumstances and aligns regulatory practices with the latest International Sovereign Bonds budget proposal.
CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT
25 January 2021 | CIRCULAR | No. 02 of 2021
Amendments to Circular No. 04 of 2018 on Guidelines to Licensed Banks on the Adoption of Sri Lanka Accounting Standard – SLFRS 9: Financial Instruments
The Central Bank of Sri Lanka, having considered the current exceptional circumstances, latest Budget proposal on International Sovereign Bonds and with a view to establishing consistent practices on the adoption of Sri Lanka Accounting Standard – SLFRS 9: Financial Instruments by licensed banks, hereby issues the amendment to the Annex I of the Circular No. 04 of 2018 on Guidelines to Licensed Banks on the Adoption of Sri Lanka Accounting Standard – SLFRS 9: Financial Instruments.
Guideline 2.5 (c) shall be inserted immediately after Guideline 2.5 (b) as follows:
2.5 (c) However, it is permitted to apply a minimum LGD of 10 per cent when computing expected losses for the year 2021.
[Signature] Director of Bank Supervision