Sri Lanka bourse asked to mandate electronic dividend payments
ECONOMYNEXT – Sri Lanka’s central bank has called upon the Colombo Stock Exchange to ask listed companies to pay dividends through electronic means and stop issuing paper cheques, an official said.
"We encourage and request the CSE to consider the possibility of mandating use of electronic payment methods currently available," Central Bank Governor Indrajit Coomaraswamy told an Asia-Pacific forum of central depositories in Colombo.
Coomaraswamy said a committee set up to find ways to reduce physical cheque payments found that dividend payments by listed firms made up a large volume of cheques still issued in the country.
Some were for very small amounts, he said.
Coomaraswamy said the central bank was setting up a central counterparty and fully electronic trading platform for government securities.
There is a central depository for government securities, but trading was also done manually.
Sri Lanka’s Colombo Stock Exchange set up a central depository and automated trading platform in 1991, in a first for the region at the time. (COLOMBO, 27 November 2018)