Regulatory Alerts2024-03-25 | Banking Act Directions No. 01 of 2024Large Exposures of Licensed Banks
The Central Bank of Sri Lanka issued Banking Act Directions No. 01 of 2024 to cap large exposures of licensed commercial and specialized banks, mitigating credit concentration risks through a 25 percent maximum limit per borrower or connected group and a 55 percent aggregate cap. Licensed banks must implement these standalone limits by January 2026 and on a consolidated basis by January 2030, applying staggered transitional arrangements for existing borrowers exceeding the thresholds. The directive establishes comprehensive governance frameworks, defines specific collateral and government security exclusions, and revokes previous 2007 accommodation directions to ensure ongoing banking sector safety and soundness.
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