Regulatory Alerts2020-05-05 | Instructions to CEOs of LCBs and LSBsExtraordinary Regulatory Measures to Provide Liquidity to Licensed Banks Amidst COVID-19 Outbreak
The Monetary Board of the Central Bank of Sri Lanka issued extraordinary measures requiring licensed banks to strengthen liquidity and maintain uninterrupted credit flows during the COVID-19 outbreak. These provisions authorize additional refinance facilities and emergency loans at concessionary rates, permit specific assets to count toward Statutory Liquid Assets Ratio calculations, and allow Liquidity Coverage and Net Stable Funding Ratios to operate at 90 percent until June 2021. Licensed banks must monitor their liquidity positions, deploy funds prudently toward economic credit flows, and refrain from using them for discretionary payments such as dividends, bonuses, and share buybacks.
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