Regulatory Alerts2017-02-01 | Circular No. 1 of 2017Implementation of Budget 2017 Proposals for Banking Services
The Central Bank of Sri Lanka requires licensed banks to allocate minimum credit percentages to targeted sectors, mandating 10 percent each for SMEs, exports, tourism, and agriculture alongside 5 percent allocations for youth and women. Banks must lend at least 15 percent of locally mobilized deposits within each branch area, expedite loans under Rs. 5 million to be processed within one month, and ensure at least one district branch operates seven days a week. Quarterly sector-wise credit distribution reports must be submitted to the Director of Bank Supervision starting 1 July 2017, with data due within thirty days after each quarter ends.
CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT 0l February 2017 CIRCULAR No.01 of 2017 IMPLEMENTATION OF BUDGET PROPOSALS 2017 IN RESPECT OF BANKING SERVICES We wish to draw your attention to the national policy approved in the Budget 2017 in respect of the following categories of banking service requirements of the country and request all licensed banks to take appropriate measures to implement same. I Distribution 1.1 of Credit to Identified Sectors Enhancing Banking Services 3 Definition 3.1 2.1 Credit granted by licensed banks may not be less than the following percentages of total loans: (D 10 per cent each for Small and Medium Enterprises (SMEs), Exports and Tourism activities (ii) 10 per cent for Agriculture in line with the existing circulars (iii) 5 per cent each for Youth and Women for credit needs Credit granted by bank branches for business development in the respective area may not be less than 15 percent of deposits mobilized by each branch within the same area. Banks may streamline existing processes to expedite the grant of credit with a value of less than Rs. 5 million in less than 1 month. At least one branch in each district may be opened on all 7 days of the week excluding the religious holidays. Enterprises with an annual turnover not exceeding Rs. 750mn will be considered as SMEs for the purpose of this circular in line with the definition of SME adopted by the Department of Industry and Commerce in its National Policy Framework for SME Development. Credit granted to agriculture shall continue to be in terms Circulars on Mandatory Lending to Agriculture Sector issued Director of Bank Supervision. 2.2 2.3 of the by the 3.2
0l Februarv 2017 CENTRAL BANK OF SRI LANKA BANK SUPERVISION DEPARTMENT CIRCULAR No.01 of 2017 J.J When classifying credit to the above sectors for the purpose of compliance with this circular, credit granted to certain borrowers in sectors in Item 1 above may fall within more than one sector in the event such credit overlaps across identified sectors. Commencing 1 July 2017, all licensed banks shall report details of Item 1 above to the Director of Bank Supervision within 30 days from the end of each quarter in the attached format in order to monitor the bank's compliance with the national policy. I A A M Thassim Director of Bank Supervision 4 Reporting 4.1 W
Annex I Distribution of Credit Sector-wise under Budget Proposals 2017 Name of Bank Position as at Seetor Credit Outstanding (Rs. Mn) As a 96 of Total Credit Granted I Agriculture 2 Small and Medium Enterprises 1 J Export 4 Tourism 5 Youth 6 Women Note l: Reference to Bank Supervision Department Circular No. 01 of 2017 dated 01't February 2017. Note 2: The above details shall be e-mailed to banksup@cbsl.lk within 30 days from the end ofeach quarter. Date: Name and designation of authorised officer