Regulatory Alerts2026-09-09 | Banking Act Direction No. 04 of 2026Added
Identifying, Reporting and Managing of Operational Loss Events of Licensed Banks
These Directions require licensed commercial banks and licensed specialised banks to establish robust frameworks for identifying, reporting, and managing operational loss events. Licensed banks must report 'Critical' and 'High' rated loss events with a gross loss of Rs. 5 million or more within 24 hours of identification. Quarterly reporting, due within 15 working days commencing 30 September 2026, is mandated for all loss events with a gross loss of Rs. 500,000 or more, as well as recurring or high-frequency events with a cumulative loss of Rs. 500,000 or more. The Board of Directors is responsible for the operational risk management framework, which includes calculating an additional capital charge for operational risk under ICAAP based on the last 5 years' historical loss events, if needed. These Directions, issued by the Central Bank of Sri Lanka, are effective from 09 September 2026.
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