Regulatory Alerts2022-05-23 | Banking Act Direction No. 04 of 2022Regulatory Requirements Amidst Prevailing Extraordinary Macroeconomic Conditions
The Monetary Board of the Central Bank of Sri Lanka has issued binding directions to licensed commercial and specialized banks to strengthen capital resilience amid prevailing macroeconomic conditions. Licensed institutions are permitted to draw down their Capital Conservation Buffer by up to 2.5 percent, stagger overnight mark-to-market losses on government securities through mid-2024, and fully include accumulated other comprehensive income gains in capital calculations. The directive also extends the Liquidity Coverage and Net Stable Funding Ratios to a minimum of 90 percent until September 2022, delays the minimum capital requirement deadline to December 2023 for undercapitalized banks, and grants an extension until June 2022 for Internal Capital Adequacy Assessment Process submissions.