Central Bank increases minimum capital requirements for licenced commercial, specialised banks

Keshala Dias

The Central Bank says it has increased the minimum capital requirements for licensed commercial banks and licenced, specialised banks.

Issuing a media release, the Central Bank notes that enhancing minimum capital requirement will support the implementation of the Basel III framework in Sri Lanka to strengthen the resilience of banks, and may lead to consolidation in the banking sector.

Thereby, the minimum capital requirement of licenced commercial banks has been increased to Rs. 20 billion while the capital requirement for licenced specialised banks has been increased to Rs. 7.5 billion.

The minimum capital requirement for banks incorporated outside Sri Lanka has been set at Rs. 10 billion.A time period of over three years has been granted for existing banks to enhance capital and to meet the minimum capital requirement.

A Moody’s report published recently regarding the Sri Lankan banking system, notes that the outlook for Sri Lanka’s banking system is negative with both asset quality and profitability under pressure.