Regulatory Alerts2020-02-14 | Finance Business Act Direction No. 1 of 2020Classification and Measurement of Credit Facilities
The Monetary Board of the Central Bank of Sri Lanka issued Finance Business Act Directions No. 01 of 2020 to establish minimum requirements for Licensed Finance Companies regarding the classification and measurement of credit facilities. The directive mandates the adoption of SLFRS 9 for expected credit loss measurement while maintaining specific regulatory provisioning tiers for non-performing loans. It further outlines strict criteria for classifying performing versus non-performing assets, rescheduling protocols, and the responsibilities of boards to implement robust credit risk management frameworks effective from April 2021.
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