Sri Lanka new banking act in 2021, regulations for banks in Chinese port city

ECONOMYNEXT- Sri Lanka will enact a new Banking Act in 2021, which will include the merging of banking licenses and regulation of banks in the China-built port city, the central bank governor said.

“We expect to complete enactment of new banking act in 2021,” W. D. Lakshman said, delivering the Central Bank roadmap for 2020.

“Key provisions include a single type of banking license for licensed commercial bank and licensed specialized banks,” he said.

Currently, Licensed Specialized Banks (mainly savings and development banks) cannot offer current accounts, and are limited from full foreign exchange activities.

Specialized banks in turn have to face lower regulatory capital requirements.

Banking regulations will differ based on bank sizes and their nature of operations Lakshman said.

He said regulations will also be introduced to supervise banks being set up in the Colombo International Financial Centre, which will be situated in the Chinese built Colombo Port City, which recently completed land reclamation.

Banks’ offshore and domestic banking units will be merged to a single business under the new law.

Further, banks with foreign operations will have to incorporate new subsidiaries, which will also have to face regulations to protect them from external shocks, Lakshman said. (Colombo/Jan06/2019)

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