Regulatory Alerts2020-03-31 | Finance Business Act Directions No. 2 of 2020Amendments to Directions on Liquid Assets
The Monetary Board of the Central Bank of Sri Lanka issued Direction No. 02 of 2020 to modify liquid asset requirements for Licensed Finance Companies in response to market slowdowns and the COVID-19 outbreak. The directive mandates that LFCs maintain liquid assets equal to six percent of time and non-transferable certificate deposits, ten percent of savings deposits, and five percent of total outstanding borrowings. Additionally, LFCs must hold government and central bank securities equivalent to five percent of their average deposit and borrowing liabilities, with these measures effective for six months from the date of issuance.
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