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| Sunday, 17 April 2005 |
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Business |  |
| News Business Features Editorial
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Capital requirements of licensed banks enhanced As part of its financial stability, responsibility and in the interests of a strong and sound banking system, the Monetary Board of the Central Bank of Sri Lanka has decided to enhance the minimum capital requirements of all licensed banks, a media release from the Bank said. The release said in promoting a robust and stable financial system, it is important to have strong banks that are resilient to internal and external shocks. It is also felt that an enhanced minimum capital level for all licensed banks will encourage the much needed consolidation of existing banks by placing them on a sound financial footing, thereby providing adequate protection for depositors' funds. This policy would encourage the entry and growth of strong, competitive banks in Sri Lanka in the future. The Monetary Board of the Central Bank of Sri Lanka, has accordingly, decided to increase the minimum capital requirements for licensed banks, with immediate effect on the following basis:- * To increase the minimum capital requirements of licensed commercial banks from the current Rs. 500 million to Rs. 2,500 million. * To increase the minimum capital requirement of licensed specialised banks from Rs. 200 million to Rs. 1,500 million. * To give existing banks time till end December 2007 to meet the new requirements while ensuring that they meet at least 50% of the increase at end of 2006 and the balance 50% of the increase at end of 2007. * To waive the present requirement to remit U.S.$ 2 million by foreign banks under the provisions of Section 4(1) of the Banking Act with the approval of the Minister of Finance; * All applicants for new banking licences will be required to meet the new minimum capital requirements. |
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