Regulatory Alerts2021-03-31 | Finance Business Act Directions No.03 of 2021Amendments to Directions on Liquid Assets
The Monetary Board of the Central Bank of Sri Lanka has issued amendments to liquid asset directions for Licensed Finance Companies (LFCs) to mitigate liquidity stress from the second wave of the COVID-19 pandemic. The directive extends the validity of Directions 2, 3, and 4.1 for three months until 30 June 2021, allowing LFCs additional time to manage liquidity pressures. LFCs must implement necessary measures to fully comply with the original liquid assets requirement under Direction No. 04 of 2013 once this three-month extension expires.
MONETARY BOARD CENTRAL BANK OF SRI LANKA 31 March 2021 FINANCE BUSINESS ACT DIRECTIONS No. 03 of 2021
AMENDMENTS TO DIRECTIONS ON LIQUID ASSETS
Issued under Section 12 of the Finance Business Act, No.42 of 2011
The Monetary Board hereby issues following amendments to the Directions on liquid assets of the Licensed Finance Companies (LFCs), considering the challenging operating environment due to the prolonged impact of the second wave of the COVID-19 pandemic.
Accordingly, the following will replace Direction 5 of the Finance Business Act (Amendments to Directions on Liquid Assets) Direction No.07 of 2020.
- Validity Period
5.1 The Directions 2, 3 and 4.1 shall be effective for an extended period of three (3) months until 30.06.2021, in order to facilitate the LFCs to overcome the stress on liquidity due to the present challenging environment.
5.2 LFCs shall take necessary measures to ensure that the liquid assets requirement in terms of the Finance Companies (Liquid Assets) Direction No. 04 of 2013 are complied on the expiration of the extension given in 5.1 above.
(Signature) Prof. W D Lakshman Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka