Regulatory Alerts2019-07-18 | Explanatory Note No. 4 of 2019Interpretations for Banking Act Directions No. 12 of 2018 on Leverage Ratio under Basel III for Licensed Commercial Banks and Licensed Specialised Banks
The Bank Supervision Department of the Central Bank of Sri Lanka issued this explanatory note to standardize leverage ratio calculations for licensed commercial and specialised banks following the adoption of SLFRS 9. Licensed banks must now utilize Sri Lanka Accounting Standards-based statements of financial position to compute exposure measures, while off-balance sheet exposure calculations remain unchanged. This directive ensures consistent capital and risk-weighted asset computations under Basel III, aligning regulatory reporting with updated accounting standards effective from 18 July 2019.
CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT
18 July 2019 | EXPLANATORY NOTE | No. 04 of 2019
Interpretations for Banking Act Directions No. 12 of 2018 on Leverage Ratio under Basel III for Licensed Commercial Banks and Licensed Specialised Banks
The Bank Supervision Department issued Explanatory Note 03 of 2019 on 18 July 2019 to ensure the consistency of capital and risk weighted assets computation in terms of the Banking Act Directions No. 01 of 2016 on Capital Requirements under Basel III considering the implications of adoption of Sri Lanka Accounting Standard - SLFRS 9: Financial Instruments.
Accordingly, with a view to ensuring consistency licensed banks shall hereinafter use Sri Lanka Accounting Standards based Statement of Financial Position to compute the exposure measure in the Leverage Ratio computation under Basel III whilst computation of off-balance sheet exposure remains the same.
[Signature]
A A M Thassim Director of Bank Supervision