CBSL issues regulatory measures for commercial and specialized banks

COLOMBO (News1st): The Central Bank of Sri Lanka has introduced regulatory measures for commercial and specialized banks to assist those affected by the current situation surrounding COVID - 19. Among such measures were to permit banks to grant an extension of 60 days to borrowers of loans and advances who do not enjoy any other concessions, to settle their dues. Accordingly, payments that should have been settled by these borrowers during March 2020 will not be considered as dues. In addition, another key measure was to allow Domestic Systemically Important Banks (D-SIBs) and non D-SIB banks to reduce their Capital Conservation Buffers by 100 Basis Points and 50 Basis Points respectively. A statement issued by the CBSL read that this had been allowed in order to facilitate smooth credit flows to the economy and borrowers to sustain their businesses in the future. Further, the requirement to enhance capital by banks that are yet to meet the requirement by the end of 2020 has been deferred until the end of 2022. Banks have also been allowed to recover loans in rupees, as the last resort, if the recovery of loans in foreign currency is remote, provided that banks meet the necessary conditions in that regard. In addition, the CBSL said that banks which are required to meet timelines to address supervisory concerns/findings during the period up to 30 May 2020, are granted a further period of 3 months for addressing such supervisory concerns. The deadline for submission of statutory returns to the Bank Supervision Department has also been extended by two weeks and the publication of quarterly financial statements has been extended by one month, until further notice.