Regulatory Alerts2018-06-06 | Direction No. 3 of 2018Central Bank of Sri Lanka Capital Adequacy Requirements for Licensed Finance Companies
The Monetary Board of the Central Bank of Sri Lanka has issued Directions No. 3 of 2018 to establish minimum capital adequacy ratios for Licensed Finance Companies (LFCs) effective July 1, 2018. The regulation mandates that LFCs maintain escalating Tier 1 and Total Capital ratios against risk-weighted assets, with stricter requirements and capital surcharges for larger institutions holding assets of Rs. 100 billion or more. Compliance is enforced through monthly and annual regulatory reporting, with non-compliance triggering measures such as dividend restrictions or suspension of business activities.
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