Regulatory Alerts2018-11-30 | Banking Act Directions No. 11 of 2018Foreign Currency Borrowings by Licensed Banks
The Monetary Board of the Central Bank of Sri Lanka issued Banking Act Directions No. 11 of 2018 to establish a structured policy framework governing foreign currency borrowings by licensed commercial and specialised banks. The directive caps outstanding foreign currency debt as a percentage of total assets based on a credit rating and capital adequacy scoring system, distinguishing between short-term and long-term maturities. It mandates prior Monetary Board approval for limit exceedances, requires robust hedging and risk management practices, and restricts long-term borrowing utilization to strategic domestic investments and government debt.
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