Regulatory Alerts2025-04-17 | Banking Act Direction No. 02 of 2025Domestic Systematically Important Banks
The Central Bank of Sri Lanka issued Banking Act Directions No. 02 of 2025 to mandate Higher Loss Absorbency capital surcharges on Domestic Systemically Important Banks (D-SIBs). Designated institutions must maintain tiered Common Equity Tier 1 buffers between 1.0% and 2.0% of risk-weighted assets, with a 12-month compliance window for newly designated or upgraded banks. Non-compliance triggers dividend and distribution restrictions, while banks with leverage ratio exposures exceeding Rs. 500 billion must submit standardized annual disclosures effective 17 April 2025.
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