Sri Lanka - Banking SystemsSri Lanka - Banking Systems
Includes special features of this country’s banking system and rules/laws that might impact U.S. business.Last Published:7/22/2019Sri Lanka has a fairly well-diversified banking system, which includes the Central Bank of Sri Lanka (CBSL), two large state-owned commercial banks (Ceylon Bank and People’s Bank), eleven private domestic commercial banks, thirteen foreign banks, a national savings bank, a regional development bank, two housing banks, and three licensed specialized banks. Citibank N.A. is the only U.S. bank operating in Sri Lanka. The domestic commercial banks operate branches throughout the island. All commercial banks operate foreign currency banking units and conduct off‑shore business and finance projects approved by the BOI. The Central Bank is responsible for regulation and supervision of Sri Lanka's banking system. The legal framework consists of the Monetary Law Act and the Banking Act. The Central Bank is empowered to issue detailed directives to the commercial banks. In 1993, Sri Lanka adopted the Basel Accord capital guidelines for commercial banks. Sri Lanka adopted Basel III capital standards in 2017 and capital requirements for Sri Lankan banks have increased. According to the Central Bank the banking sector maintained capital ratios at a comfortable level in 2017. However, rating agencies estimate that some large banks will require substantial fresh capital to meet full Basel III compliance by 2019. The Central Bank has requested banks to enhance minimum capital requirements by 31 December 2020.
Sri Lanka adopted International Financial Reporting Standards (IFRS) in January 2012 by issuing Sri Lanka Financial Reporting Standards and Sri Lanka Accounting Standards. Commercial banks are required to comply with these accounting standards and Central Bank guidelines. In January 2018, Sri Lanka adopted New IFRS9 standards set out by the International Accounting Standards Board, which require banks to set aside provisions for future losses, and introduced a new basis for financial asset classification and a model for hedge accounting. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.