Note: The data are provided for informational purposes only and in some cases, the information may be incomplete, not fully accurate or out of date. For more information on how data are compiled, see "A Note About Sources." The date of the last update for each country is marked in the section "Country Indicators." We welcome updates and comments. Click here to write to us.
Sri Lanka
Country Indicators
Information Last Updated
June 2008
Population (Millions)
19.6 [2005]
Population Density (per sq km)
303 [2005]
GNI per capita (US$)
1160 [2005]
GNI per capita (PPP US$)
4520 [2005]
Total Unemployment (% of labor force)
9 [2003]
Employment in Agriculture (% of total employment)
34 [2003]
Gross domestic saving (% of GDP)
15 [2005]
% Population under $2/day (PPP)
41 [2002]
Depth of Financial Sector (M2/GDP)
35 [2005]
Exchange rate
1 USD : 107.84 Sri Lanka Rupee, as of June 2008
Capitalization of banks, NBFIs, stock market
STOCK MARKET CAPITALIZATION: USD 7.6 billion [LKR 821 billion] (as of end 2007) (Annual Report 2007, Chap. 8)
Ownership structure of banks (and financial institutions if available)
1) NATIONAL DEVELOPMENT TRUST FUND (NDTF): Created by World Bank and funded chiefly by the Asian Development Bank, the NDTF is a USD 17 million wholesale fund lending to cooperatives, banks, and NGOs. 2) SUSAHANA: A USD 81 million (LKR 8.7 billion) fund managed by the Central Bank of Sri Lanka (CBSL) that was created by the Japan Bank for International Cooperation (JBIC), UNDP, and the Government of Sri Lanka after the 2004 tsunami.
3) ISURU POVERTY ALLEVIATION MICROFINANCE PROJECT: Another CBSL-managed fund (USD 12 million) supported by the JBIC (CLEAR Sri Lanka).
Definitions of microfinance or microcredit
No specific definition provided in the law.
NGO microfinance provider formalization or transformation issues
The Draft Microfinance Institutions Act would allow a variety of nonprofit and for-profit institutions to provide microfinance services, but this Act has not yet been enacted.
Ongoing microfinance policy development status
1) As of end 2007, the Central Bank of Sri Lanka had drafted legislation providing for the regulation and supervision of non-prudentially regulated microfinance providers, but this legislation was still pending as of end 2007 (Annual Report 2007, Chap. 8).
2) The Central Bank of Sri Lanka (CBSL) has requested all licensed commercial banks and specialized banks to ensure that at least 10% of their lending portfolio is targeted to agriculture. While this target was set out in the 2006 budget, the need to meet the target was reemphasized in May 2008 in response to soaring food prices worldwide (Agriculture Lending Circular).
Safety net availability: insurance, pension, etc.
Old-age, disability, and survivors' benefits for employed persons; free government-provided healthcare; maternity leave must be provided to plantation employees and certain other wage-earners; workers' compensation; welfare (Social Security -- Sri Lanka).
Varies by institution, but banks support various development priorities. The housing, industrial, and financial sectors accounted for approx. 2/3 of total lending in 2007 (CLEAR Sri Lanka) (Annual Report 2007, Chap. 8).
USD 325 million [LKR 35 billion], of which [LKR 29 billion] belonged to Co-operative Rural Banks and USD 55.6 million [LKR 6 billion] belonged to Thrift and Credit Co-operative Societies (as of end of 2007) (Annual Report 2007, Chap. 8)
DEPOSITORS: Over 5 million, as of Dec. 2004 (this figure may refer to deposit accounts instead of depositors). BORROWERS: Nearly 500,000, as of Dec. 2004 (CLEAR Sri Lanka).
OUTSTANDING LOAN PORTFOLIO: USD 34.3 million [LKR 3.7 billion], as of Dec. 2004 (CLEAR Sri Lanka).
USD 109.4 million [LKR 11.8 billion], as of Dec. 2004 (CLEAR Sri Lanka).
Non-profit institutions
Unregulated Providers
OUTSTANDING LOAN PORTFOLIO FOR NGOS AND COMPANIES: USD 19.5 million [LKR 2.1 billion], as of Dec. 2004 (CLEAR Sri Lanka).
TOTAL DEPOSITS FOR NGOS AND COMPANIES: USD 19.4 million [LKR 2.1 billion], as of Dec. 2004 (CLEAR Sri Lanka).
Poor customers
General Approach to Regulating
Legal basis for regulating
Definition or description of institution
Regulator(s) and role of regulator(s)
Activity that determines required regulatory status
A company licensed to engage in "banking business." "Banking Business" involves (i) receiving funds through public deposits that are payable upon demand; and (ii) using these part or all of these funds for advances, investments, and other permitted activities (Banking Act, Sections 2, 86).
Central Bank of Sri Lanka (CBSL). CBSL is responsible for licensing and supervision of licensed commercial banks.
The conduct of "banking business" by a commercial institution.
A company licensed to perform many banking transactions (not including servicing deposits that are payable upon demand) that is not licensed as a commercial bank, a finance company, a cooperative society, a building society, or a not-for-profit deposit-taking organization (Banking Act, Sections 76A).
Central Bank of Sri Lanka (CBSL). CBSL is responsible for licensing and supervision of licensed specialized banks.
The conduct of most banking transactions by a commercial institution that is not a licensed commercial bank and is not permitted to engage in "banking business" (i.e. may not accept demand deposits).
PRIMARY SOCIETY: A society having as its object the provision -- in accordance with cooperative principles -- of services that contribute to the economic, social, educational, and cultural welfare of its members. SECONDARY SOCIETY: A society consisting of registered primary societies (Co-operative Societies Law, Section 3).
1) MAX. FOREIGN SHAREHOLDING: As established by the Monetary Board. As of this update, max. is 100% of issued share capital (Local Commercial Bank Licensing Requirements, Section 2(e).
2) MAX. HOLDINGS BY A COMPANY, INCORPORATED BODY, OR INDIVIDUAL AND THEIR RELATED PARTIES: As established by the Monetary Board. As of this update, max. is 15% of issued share capital that carries voting rights (this limit may be waived in the case of restructuring, on a case-by-case basis). In addition, ownership of more than 10% of issued share capital requires Monetary Board approval, with concurrence of Minister of Finance (Local Commercial Bank Licensing Requirements, Sections 2(f-h)) (Direction No. 1 of 2007).
1) MAX. FOREIGN SHAREHOLDING: Up to 100% of issued share capital. 2) MAX. HOLDINGS BY A COMPANY, INCORPORATED BODY, OR INDIVIDUAL AND THEIR RELATED PARTIES: As established by the Monetary Board. As of this update, max. is 15% of issued share capital that carries voting rights (this limit may be waived in the case of restructuring, on a case-by-case basis) (Local Specialized Bank Licensing Requirements, Section 2(e-g)) (Direction No. 2 of 2007).
ANNUAL LICENSE FEE: As determined by the Monetary Board. As of this update, the fee was USD 900 (LKR 100,000) (Annual License Fees for LSBs).
1) In the case of a limited liability society, no member that is not another cooperative society may own more than 20% of total share capital (Co-operative Societies Law, Section 11(1A)); (Cooperative Societies Rules, Rule 14, as quoted in WOCCU Guide).
2) FOR PRIMARY (FIRST-TIER) COOPERATIVES: Min. 10 members. FOR SECONDARY (SECOND-TIER) COOPERATIVES: Min. 3 registered societies as members (Co-operative Societies Law, Section 4)
Licensing Requirements and Standards
Standards for ownership officers
Feasibility study/business plan
Audit of Proposed Founders, Owners, Officers
Operating Manuals
Prohibited sources of funds
Banks
Licensed Commercial Banks (LCBs)
DIRECTORS: Must have at least 7 and no more than 13 Directors, and each Director must be no older than 70 (Direction No. 11 of 2007, Sections 3(2)(i), 3(3)(i)). Directors may not: (i) be of unsound mind; (ii) have an undischarged bankruptcy or insolvency; (iii) have been convicted of an office involving "moral turpitude" that is punishable by imprisonment; (iv) have been a director or CEO of a previously wound-up commercial bank (except with written Monetary Board approval); or (v) be an employee (except CEO) of this bank, or any employee or director of another licensed commercial bank. If a previously qualified director becomes incapable of exercising her duties, violates one of the aforementioned prohibitions, or acts against the interest of the bank, she may be removed from office (Banking Act, Sections 42, 44(2)). MANAGERS, SECRETARIES, AND OTHER OFFICERS: May not: (i) have an undischarged bankruptcy or insolvency; (ii) have been sentenced to imprisonment anywhere in the world; (iii) in the case of the CEO, have been a director or CEO of a previously wound-up commercial bank (except with written Monetary Board approval); or (iv) have been convicted of a fraudulent or illegal act (Banking Act, Section 44).
Must submit: (i) feasibility study, including 3 years of projections for deposits, loans, branch expansion, and profit/loss; and (ii) audited balance sheet and profit & loss account of company for preceding 3 years (if company has been established prior to application) (Local Commercial Bank Licensing Requirements, Section 4(b) and p6).
Must provide statement containing names, addresses, occupations, and qualifications of proposed directors and CEO. Information on Directors should include a list of companies and business undertakings in which they have an interest (and the nature of that interest). Must supply CVs for CEO and other key officers. Must also submit shareholding information, including list of major shareholders and their respective shareholdings (Local Commercial Bank Licensing Requirements, Section 4(b) and p6).
DIRECTORS: Must have at least 7 and no more than 13 Directors, and each Director must be no older than 70 (Direction No. 12 of 2007, Sections 3(2)(i), 3(3)(i)). Directors may not: (i) be of unsound mind; (ii) have an undischarged bankruptcy or insolvency; (iii) have been convicted of an office involving "moral turpitude" that is punishable by imprisonment; (iv) have been a director or CEO of a previously wound-up commercial bank (except with written Monetary Board approval); or (v) be an employee (except CEO) of this bank, or any employee or director of another licensed commercial bank. If a previously qualified director becomes incapable of exercising her duties, violates one of the aforementioned prohibitions, or acts against the interest of the bank, she may be removed from office (Banking Act, Sections 42, 44(2)). MANAGERS, SECRETARIES, AND OTHER OFFICERS: May not: (i) have an undischarged bankruptcy or insolvency; (ii) have been sentenced to imprisonment anywhere in the world; (iii) in the case of the CEO, have been a director or CEO of a previously wound-up commercial bank (except with written Monetary Board approval); or (iv) have been convicted of a fraudulent or illegal act (Banking Act, Section 44).
Must submit: (i) feasibility study, including 3 years of projections for deposits, loans, branch expansion, and profit/loss; and (ii) audited balance sheet and profit & loss account of company for preceding 3 years (if company has been established prior to application) (Local Specialized Bank Licensing Requirements, Section 4(b) and p6).
Must provide statement containing names, addresses, occupations, and qualifications of proposed directors and CEO. Information on Directors should include a list of companies and business undertakings in which they have an interest (and the nature of that interest). Must supply CVs for CEO and other key officers. Must also submit shareholding information, including list of major shareholders and their respective shareholdings (Local Specialized Bank Licensing Requirements, Section 4(b) and p6).
DIRECTORS AND OFFICERS: May not: (i) have been declared insolvent by a court of law; (ii) have been convicted of an offense involving "moral turpitude"; (iii) have been convicted of an offense under the Finance Companies Act or the Companies Act; or (iv) have had any action taken against him/her by the Monetary Board of the CBSL for withholding documents from the Central Bank or for enriching him/herself at the company's expense (Finance Companies Act, Section 32).
Minimum issued share capital: USD 23 million (LKR 2.5 billion). For any commercial bank having trouble meeting the increased requirements, the CBSL's Monetary Board may grant an extension for full compliance until the end of 2009, on a case-by-case basis (Minimum Capital for LCBs) (Minimum Capital Requirements Extension for LCBs).
CAR: 10% of risk-weighted assets, as of Jan. 1, 2008 ("core" capital must be at least 5% of risk-weighted assets) (Direction No. 9 of 2007)
CORE CAPITAL (TIER I): Permanent shareholders' equity; assigned capital; and disclosed reserves. SUPPLEMENTARY CAPITAL (TIER II): Up to 50% of revaluation reserves (with CBSL approval); general provisions (up to 1.25% of risk-weighted assets); certain hybrid capital instruments (with CBSL approval); minority interests from preference shares; and CBSL-approved subordinated term debt. Supplementary Capital may not exceed 100% of the value of the Core Capital. TIER III CAPITAL: Certain short-term subordinated debt may be included as "Tier III capital" for the purposes of meeting up to 71.5% of the Basel II requirements with respect to market risk (Capital Adequacy Guidelines, Schedule I, Section 6.2.2).
Under Basel II, banks are required to weight assets according to credit risk, market risk, and operational risk. CREDIT RISK: Risk weights are complex and range from 0% - 150%. To encourage micro and SME lending, small-value personal term loans and SME loans are granted preferential treatment with a 75% risk weight (the regular risk weight is 100%). (See Capital Adequacy Guidelines, Schedules I & II, for full details. Re: micro and SME lending, see Capital Adequacy Guidelines, Schedule I, Part 6.4.3.1.8). MARKET RISK: Capital Charge for market risk addresses interest rate risk, equity risk, and foreign exchange/gold risk. OPERATIONAL RISK: Capital Charge for operational risk is equal to 15% of average "gross income" over the previous three years. "Gross Income" is defined to include net interest income and non-interest income. (Capital Adequacy Guidelines, Schedule I, Section 6.4.2) (Capital Adequacy Guidelines, Schedule II, Part V).
GENERAL PROVISION (for all performing loans and all loans that are overdue less than 6 months): 1% (min. 0.7% by June 30, 2008; 0.8% by Sept. 30, 2008; 0.9% by Dec. 31, 2008; and 1% by March 31, 2009) (General Provisioning Requirement for LCBs). SPECIFIC PROVISIONS: Substandard (6 months to less than 1 year overdue): 20%. Doubtful (12-18 months overdue): 50%. Loss (more than 18 months overdue): 100% (Directions re: Classification of Doubtful and Bad Advances -- Aug. 1997).
LIQUIDITY: Must maintain min. 20% of total liabilities (less liabilities to Central Bank and shareholders) in liquid assets (Liquidity Requirements for LCBs). RESERVES: 10% of LKR-denominated deposit liabilities (Reserve Requirements for LCBs -- March 2003).
Licensed Specialised Banks (LSBs)
Minimum issued share capital: USD 14 million (LKR 1.5 billion). For any commercial bank having trouble meeting the increased requirements, the CBSL's Monetary Board may grant an extension for full compliance until the end of 2009, on a case-by-case basis (Minimum Capital for LSBs) (Minimum Capital Requirements Extension for LSBs).
CAR: 10% of risk-weighted assets, as of Jan. 1, 2008 ("core" capital must be at least 5% of risk-weighted assets) (Direction No. 10 of 2007)
CORE CAPITAL (TIER I): Permanent shareholders' equity; assigned capital; and disclosed reserves. SUPPLEMENTARY CAPITAL (TIER II): Up to 50% of revaluation reserves (with CBSL approval); general provisions (up to 1.25% of risk-weighted assets); certain hybrid capital instruments (with CBSL approval); minority interests from preference shares; and CBSL-approved subordinated term debt. Supplementary Capital may not exceed 100% of the value of the Core Capital. TIER III CAPITAL: Certain short-term subordinated debt may be included as "Tier III capital" for the purposes of meeting up to 71.5% of the Basel II requirements with respect to market risk (Capital Adequacy Guidelines, Schedule I, Section 6.2.2).
Under Basel II, banks are required to weight assets according to credit risk, market risk, and operational risk. CREDIT RISK: Risk weights are complex and range from 0% - 150%. To encourage micro and SME lending, small-value personal term loans and SME loans are granted preferential treatment with a 75% risk weight (the regular risk weight is 100%). (See Capital Adequacy Guidelines, Schedules I & II, for full details. Re: micro and SME lending, see Capital Adequacy Guidelines, Schedule I, Part 6.4.3.1.8). MARKET RISK: Capital Charge for market risk addresses interest rate risk, equity risk, and foreign exchange/gold risk. OPERATIONAL RISK: Capital Charge for operational risk is equal to 15% of average "gross income" over the previous three years. "Gross Income" is defined to include net interest income and non-interest income. (Capital Adequacy Guidelines, Schedule I, Section 6.4.2) (Capital Adequacy Guidelines, Schedule II, Part V).
GENERAL PROVISION (for all performing loans and all non-performing loans that are not classified as substandard, doubtful, or loss): 1% (min. 0.7% by June 30, 2008; 0.8% by Sept. 30, 2008; 0.9% by Dec. 31, 2008; and 1% by March 31, 2009) (General Provisioning Requirement for LSBs). SPECIFIC PROVISIONS: Substandard (6 months to less than 1 year overdue): 20%. Doubtful (12-18 months overdue): 50%. Loss (more than 18 months overdue): 100% (Directions re: Classification of Doubtful and Bad Advances for LSBs -- Nov. 1997)
LIQUIDITY: Must maintain min. 20% of total deposit liabilities in liquid assets (Liquidity Requirements for LSBs -- Nov. 1997). RESERVE FUND: Must transfer (i) at least 5% of net profits annually until reserve fund equals 50% of the LSB's equity capital; and then (ii) at least 2% of net profits annually until reserve fund equals 100% of the LSB's equity capital (Reserve Fund for LSBs -- Nov. 1997).
RESERVE FUND: Must transfer 25% of annual net profits. COOPERATIVE FUND: Must transfer a prescribed percentage of annual net profits (Co-operative Societies Law, Section 43).
Risk Management Guidelines
Guidelines & restrictions on financial services
Guidelines & restrictions on operational rules
Guidelines & restrictions on interest rates
Concentration of risk
Connected/insider business
Banks
Licensed Commercial Banks (LCBs)
PERMITTED: Full range of financial services, including deposit-taking, lending, guarantees and underwriting, and other services (Banking Act, Schedule II).
MAX. LOAN, OVERDRAFT, OR ADVANCE: 30% of capital base for individuals or companies; 33%-40% of capital base for individuals or companies and their related parties (exact amount depends upon bank's credit rating, customer's credit rating, and bank's capital adequacy ratio). Certain exceptions apply (including for infrastructure projects, short-term loans, and with Monetary Board approval) (Direction No. 7 of 2007). MAX. AGGREGATE LARGE LOANS, OVERDRAFTS, OR ADVANCES: Loans, overdrafts, or advances that exceed 15% of the capital base shall be limited, in the aggregate, to 55% of the bank's total outstanding loans, overdrafts, and advances (Direction No. 7 of 2007). MAX. INVESTMENT IN PUBLIC COMPANIES: 10% of bank's capital funds per company, 30% aggregate. In no case may a bank own shares exceeding 20% of another company's paid-up capital (Determination of Shareholding in Other Companies -- August 1997).
1) Board of Directors is responsible for ensuring that transactions with "related parties" are undertaken on terms that are not more favorable than the terms for other bank customers conducting the same business. "Related Parties" includes, among others, subsidiaries and associates; directors, key management personnel, and their close relatives; significant shareholders; or parties in which a director, a significant shareholder, or their close relative has a "substantial interest." (Direction No. 11 of 2007, Sections 2(7), 3(7)).
2) Providing accommodations to Directors is only permitted upon the vote of 2/3 of the disinterested Board members, and such accommodations are subject to collateral requirements established by the CBSL's Monetary Board on Feb. 11, 2005 (Direction No. 11 of 2007, Section 3(7)) (Determination of Security for Accommodations to Directors (LCBs))
3) Board members may not vote on matters in which they or their close relatives have a "substantial interest." (Direction No. 11 of 2007, Section 3(1)(xii)).
Licensed Specialised Banks (LSBs)
PERMITTED: Most financial services, including time and savings deposits; and loans for commercial or housing-related purposes. PROHIBITED: "Banking business", in particular demand deposits (Banking Act, Schedule IV).
MAX. LOAN, OVERDRAFT, OR ADVANCE: 30% of capital base for individuals or companies; 33%-40% of capital base for individuals or companies and their related parties (exact amount depends upon bank's credit rating, customer's credit rating, and bank's capital adequacy ratio). Certain exceptions apply (including for infrastructure projects, short-term loans, and with Monetary Board approval). MAX. AGGREGATE LARGE LOANS, OVERDRAFTS, OR ADVANCES: Loans, overdrafts, or advances that exceed 15% of the capital base shall be limited, in the aggregate, to 55% of the bank's total outstanding loans, overdrafts, and advances (Direction No. 8 of 2007) MAX. INVESTMENT IN PUBLIC COMPANIES: 10% of LSB's capital funds per company, 50% aggregate. In no case may an LSB own shares exceeding 20% of a public company's paid-up capital (Investments in Equity by LSBs -- Nov. 1997). MAX. INVESTMENT IN PRIVATE COMPANIES: 10% of LSB's capital funds per company, 25% aggregate. In no case may an LSB own shares exceeding 20% of a private company's paid-up capital. Investments in private companies are subject to further restrictions (Investments in Equity by LSBs -- Nov. 1997).
1) Board of Directors is responsible for ensuring that transactions with "related parties" are undertaken on terms that are not more favorable than the terms for other bank customers conducting the same business. "Related Parties" includes, among others, subsidiaries and associates; directors, key management personnel, and their close relatives; significant shareholders; or parties in which a director, a significant shareholder, or their close relative has a "substantial interest." (Direction No. 12 of 2007, Sections 2(7), 3(7)).
2) Providing accommodations to Directors is only permitted upon the vote of 2/3 of the disinterested Board members, and such accommodations are subject to collateral requirements established by the CBSL's Monetary Board (Direction No. 12 of 2007, Section 3(7))
3) Board members may not vote on matters in which they or their close relatives have a "substantial interest." (Direction No. 12 of 2007, Section 3(1)(xii)).
Cooperatives/Credit Unions
Cooperatives/Credit Unions
PERMITTED: Deposit-taking from members (and from non-members if permitted under the society's bylaws); loans to members; loans to other registered societies, if approved by the general body. PROHIBITED: Loans to non-members (Co-operative Societies Law, Sections 39-40).
Society's bylaws must include information on maximum interest rates for deposits and loans (Cooperative Societies Rules, Rule 29(ix),(xiv-xv), as quoted in WOCCU Guide).
Max. loan size must be determined at society's general meeting (Cooperative Societies Rules, Rule 17(I)(b), as quoted in WOCCU Guide).
1) If an elected member of the management committee acquires an interest that conflicts with the interests of the cooperative society, he/she may be removed from office (Cooperative Societies Rules, Rule 21(ii)(e), as quoted in WOCCU Guide).
2) Aggregate advances to members of the management committee may not exceed 25% of the society's working capital (Cooperative Societies Rules, Rule 27, as quoted in WOCCU Guide).
Reporting and Supervision
Supervision Method
Supervision costs and fees
Disclosure and reporting requirements
Depositor protection mechanisms (e.g., deposit insurance or lender of last resort)
REPORTING -- ANNUALLY: Audited balance sheet and profit & loss statement (Banking Act, Section 38(1)). SEMI-ANNUALLY: Share ownership (Regulation and Supervision of Banks in Sri Lanka). QUARTERLY: Income and expenditure; capital adequacy; non-performing advances, classified advances, and loan loss provisioning; investment in shares; accommodations made to bank directors and related parties; interest spreads (Regulation and Supervision of Banks in Sri Lanka). MONTHLY: Liquid assets; assets and liabilities (Monthly Liquid Asset Return -- April 1989) (Regulation and Supervision of Banks in Sri Lanka). WEEKLY: Average deposit liabilities; interest rates on deposits/advances (Reserve Requirements for LCBs -- March 2003, Schedule A) (Regulation and Supervision of Banks in Sri Lanka). DISCLOSURE: 1) ANNUALLY: Must publish audited balance sheet and profit & loss statement in Sinhala, Tamil, and English daily newspapers (Banking Act, Section 38(1)). 2) QUARTERLY: Must publish: summarized balance sheet and income statement; statement of changes in equity and reserves; and selected indicators related to capital adequacy, asset quality, profitability, and liquidity (Circular on Publication of Quarterly Financial Statements) 2) Must conspicuously display annual audited balance sheet, profit & loss statement, and consolidated financial statements in each place of business (Banking Act, Section 38(4)).
Banks may join a voluntary deposit insurance system managed by the Central Bank of Sri Lanka. Premiums, which are set by the Central Bank, may not exceed 0.15% of total deposits annually (Monetary Law Act, Sections 32A-E)
ANNUAL LICENSE FEE: As determined by the Monetary Board. As of this update, the fee was USD 930 (LKR 100,000) (Annual License Fees for LSBs).
REPORTING -- ANNUALLY: Audited balance sheet and profit & loss statement (Banking Act, Section 38(1)). SEMI-ANNUALLY: Share ownership (Regulation and Supervision of Banks in Sri Lanka). QUARTERLY: Income and expenditure; capital adequacy; non-performing advances, classified advances, and loan loss provisioning; investment in shares; accommodations made to bank directors and related parties; interest spreads (Regulation and Supervision of Banks in Sri Lanka). MONTHLY: Liquid assets; assets and liabilities (Liquidity Requirements for LSBs -- Nov. 1997) (Regulation and Supervision of Banks in Sri Lanka). WEEKLY: Interest rates on deposits/advances (Regulation and Supervision of Banks in Sri Lanka). DISCLOSURE: 1) ANNUALLY: Must publish audited balance sheet and profit & loss statement in Sinhala, Tamil, and English daily newspapers (Banking Act, Section 38(1)). 2) QUARTERLY: Must publish: summarized balance sheet and income statement; statement of changes in equity and reserves; and selected indicators related to capital adequacy, asset quality, profitability, and liquidity (Circular on Publication of Quarterly Financial Statements) 2) Must conspicuously display annual audited balance sheet, profit & loss statement, and consolidated financial statements in each place of business (Banking Act, Section 38(4)).
Banks may join a voluntary deposit insurance system managed by the Central Bank of Sri Lanka. Premiums, which are set by the Central Bank, may not exceed 0.15% of total deposits annually (Monetary Law Act, Sections 32A-E)
Audit conducted by the Registrar or a party assigned by the Registrar. Audits must be conducted at least once per year. In addition, the Registrar can inspect or inquire into the affairs of a registered society at any time on its own motion or in response to a request from the society's management or members (Co-operative Societies Law, Sections 44, 46).
DISCLOSURE: 1) Must present audited balance sheet and profit & loss statement at general meeting (Cooperative Societies Rules, Rule 24, as quoted in WOCCU Guide). 2) Must keep copy of Cooperative Societies Law, Cooperative Societies Rules, the society's bylaws, and the society's list of members available for inspection at the society's registered address (Co-operative Societies Law, Section 19).
COOPERATIVE RURAL BANKS AND COOPERATIVE SOCIETIES: From April 1, 2008: 1) Exempt from taxes on profits and income for a 5-year period; 2) Exempt from withholding tax on interest received on their deposits in other financial institutions; 3) Exempt from debits tax on current accounts or savings accounts held by the cooperative bank/society (Annual Report 2007, Chap. 8).
COOPERATIVES/CREDIT UNIONS: Exempt from stamp duties and other fees related to the registration of documents. (Co-operative Societies Law, Section 35). COOPERATIVE RURAL BANKS: Exempt from VAT on the provision of financial services (Annual Report 2007, Chap. 8). COOPERATIVE SOCIETIES: Exempt from VAT on the supply of goods and services (Annual Report 2007, Chap. 8).
