Regulatory Alerts2020-05-05 | Banking Act Directions No. 2 of 2020Liquid Assets for Licensed Commercial Banks and Licensed Specialised Banks
The Monetary Board of the Central Bank of Sri Lanka has issued a directive designating specific financial instruments as liquid assets for licensed commercial and specialised banks. Effective until 30 June 2021, this extraordinary measure expands the Statutory Liquid Assets Ratio calculation to include interest subsidy receivables, government-guaranteed state-owned exposures, interbank fixed deposits with tiered haircuts, and EPF receivables. By exercising its statutory powers to adjust maintenance ratios between 20 and 40 percent, the Board aims to preserve banking system soundness and counteract pandemic-driven liquidity constraints.
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