Regulatory Alerts2018-11-21 | Banking Act Directions No. 8 of 2018Net Stable Funding Ratio under Basel III Liquidity Standards for Licensed Commercial Banks and Licensed Specialized Banks
The Central Bank of Sri Lanka issued Banking Act Directions No. 08 of 2018 to mandate the Net Stable Funding Ratio (NSFR) for licensed commercial and specialized banks, effective January 1, 2019. This directive requires institutions to maintain a minimum NSFR of 100 percent by calculating the ratio of available stable funding against required stable funding across defined capital, liabilities, on-balance sheet assets, and off-balance sheet exposures. It establishes precise ASF and RSF weighting factors for various financial instruments, details the treatment of encumbered assets and derivatives, and prescribes standardized web-based reporting formats to ensure consistent long-term liquidity risk management.
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