Regulatory Alerts2023-02-02 | Banking Act Direction No. 01 of 2023Restrictions on Discretionary Payments of Licensed Banks
The Monetary Board of the Central Bank of Sri Lanka has issued directions imposing immediate restrictions on discretionary payments for all licensed commercial and specialized banks to safeguard liquidity and capital amid prevailing macroeconomic conditions. Licensed banks must evaluate capital requirements, asset growth, and macroeconomic factors when approving 2022 cash dividends and profit repatriation, notify the Director of Bank Supervision prior to payment, and defer all 2023 distributions until audited financial statements are finalized. Until December 31, 2023, banks must halt share buybacks and increases to management and board allowances while rationalizing non-essential expenditures through a newly mandated Board-level Sub Committee.