RegAlert2026-09-24 | Banking Act Directions No. 05 of 2026Added · Updated
Amendments to the Banking Act Directions No. 01 of 2024 on Large Exposures of Licensed Banks
Banking Act Directions No. 01 of 2024 on Large Exposures of Licensed Banks are amended by inserting Direction 8.10, effective October 1, 2026. This new direction excludes investments in instruments issued or guaranteed by foreign sovereigns and their central banks from the maximum exposure limits specified in Directions 6 and 7, provided these instruments are risk-weighted at 0 percent under Banking Act Directions No. 01 of 2016. For Licensed Commercial Banks and Licensed Specialised Banks, this exclusion is subject to permission from the Central Bank of Sri Lanka, and requires that total investments in any single foreign sovereign do not exceed 50 percent of the licensed bank's Tier 1 capital, with instruments denominated in the respective sovereign's domestic currency.
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CENTRAL BANK OF SRI LANKA
BANKING ACT DIRECTIONS
24 September 2026 No. 05 of 2026
AMENDMENTS TO THE BANKING ACT DIRECTIONS NO. 01 OF 2024 ON LARGE EXPOSURES OF LICENSED BANKS
Banking Act Directions No. 01 of 2024 dated 25.03.2024 on Large Exposures of Licensed Banks are hereby amended by inserting Direction 8.10 immediately after Direction 8.9, as given below, with effect from 01.10.2026.
- Exclusions of 8.10 Investments in instruments issued/guaranteed by foreign
Exposures from sovereigns and their central banks that are risk weighted Maximum Limits at 0 per cent in terms of Banking Act Directions No. 01 given in Directions 6 of 2016 on Capital Requirements under Basel III for and 7 Licensed Commercial Banks and Licensed Specialised Banks, subject to the following:
(i) Investments in such instruments are permitted by the Central Bank of Sri Lanka.
(ii) Total investments in instruments issued/guaranteed by any single foreign sovereign and its central bank do not exceed 50 per cent of Tier 1 capital of the licensed bank.
(iii) Instruments are denominated in the domestic currency of the respective sovereign.
Dr. P Nandalal Weerasinghe
Chairman of the Governing Board and
Governor of the Central Bank of Sri Lanka
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This document amends: Large Exposures of Licensed Banks
Source: Central Bank of Sri Lanka — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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