Central Bank Archives

August 1, 2022

Mr. Anthony Nihal Fonseka has been reappointed as a member of the Monetary Board of the Central Bank of Sri Lanka (CBSL) with effect from 27 July 2022 for a period of six years. Previously, he served on the Monetary Board from July, 2016 to May 2020 and from May 2022 to July 2022.

He obtained his BSc Degree from the University of Ceylon, Colombo and is a Fellow of the Chartered Institute of Bankers, UK and a Honorary Fellow of the Chartered Institute of Securities and Investments, UK. He is a Senior Independent Director and Chairman of the Group Audit Committee of John Keells Holdings PLC, Chairman of Phoenix Industries Ltd., Non-Executive Director and Chairman of the Audit Committee of Brandix Lanka Ltd., Non-Executive Director and Chairman of Investment Committee of Phoenix Ventures Ltd..

A Banker by profession, Mr. Fonseka has held several key positions in the local and international banking and financial sector. He was the Chief Executive Officer of the DFCC Bank for over 13 years and prior to that was the Deputy Chief Executive Officer of HSBC Sri Lanka for 10 years. He has also served as the Chairman of the Colombo Stock Exchange and the Association of Development Financing Institutions in Asia and Pacific, Manila and as a director of Commercial Bank of Ceylon PLC, and DFCC Vardhana Bank PLC. He was the President of the Sri Lanka National Advisory Council of the Chartered Institute of Securities & Investments, UK for over 10 years and is a Member of the US-Sri Lanka Fulbright Commission.

Mr Fonseka has held many positions in the public sector as well. He was a member of the 2009 Presidential Commission on Taxation and a member of the National Procurement Commission established under the Constitution. He has served as a Director of the Credit Information Bureau and the Employees’ Trust Fund and has been the Co-Chairman of the national Council for Economic Development (NCED) – Capital Market Cluster.

Mr. Fonseka has authored many articles and made many presentations at seminars and conferences locally and internationally.

July 18, 2022

To All the Party Leaders Representing the Parliament, The primary demand of the people’s movement held on July 9, 2022 was to compel the then President Gotabhaya Rajapaksa and the Prime Minister Ranil Wickremesinghe to step down. Prime Minister Ranil Wickremesinghe has been appointed to fill the vacant position due to the resignation of the President who left the country in the face of intense public pressure and the Parliament is expected to elect a new President on July 20, 2022.

We are of the opinion that there is no need for a detailed explanation about the current economic crisis faced by the country thus we believe that the House of Representatives also understand the gravity of the catastrophe. The most practical solution at the moment to get out of the crisis is to get involved in a program with the International Monetary Fund (IMF) as soon as possible, which even the outgoing regime had recognized though was too late.

Even though it has been more than two months since a new Cabinet was appointed after the political upheaval that happened on May 9, 2022, the continued delay in the implementation of the necessary reforms in the fiscal sector is not at all beneficial to the aforementioned program. On the other hand, the “Central Bank Act” drafted in 2019 for a more independent Central Bank which will support the stability of the country is yet to be passed in the Parliament and the IMF too has insisted that the Central Bank should be made more independent.

Political stability is essential to achieve economic stability, and there should be a guiding economic and political program that can be agreed upon by all political parties in the existing Parliament. For that, it is necessary to appoint a President and a Prime Minister who would have public recognition. Therefore, we insist that all political parties representing the Parliament actively engage to find a viable solution to the existing problem deprioritizing party politics and personal agendas.

We are of the view that the opinion of the general public is not reflected through the existing Parliament majority, as a result of the wrong and ill-timed decisions taken by the ruling party especially during the past two and half years. In this background, it is doubtful that an Executive President who will be elected by the current Parliament will have the social acceptance to stay in power for a longer period of time. In such a situation, it would be prudent to give an opportunity for the people to express their opinion at the very first instance when the basic level of stability of the country is fulfilled, and we hope that the incoming President and Prime Minister will attend to this matter with due consideration.

June 28, 2022

The Monetary Board of the Central Bank of Sri Lanka (Monetary Board) established the Advisory
Committee for Revival of Failed Finance Companies (Committee) in October 2021 to examine
possible revival options for five (5) failed finance companies, i.e., Central Investments & Finance
Ltd., ETI Finance Ltd., TKS Finance Ltd., The Finance Company PLC and The Standard Credit
Finance Ltd, of which licenses have been either cancelled or suspended. The Monetary Board has
vested the Committee with the responsibility of recommending possible revival options or
recommending liquidation for aforementioned five failed finance companies if such revival options
do not seem feasible.

The Committee submitted its final report to the Monetary Board on 31.05.2022, after careful
consideration of several proposals submitted by different parties for revival of four (4) of the abovementioned companies.

The Monetary Board, having considered the Report of the Committee on the said five failed finance
companies, noted that the proposals received for perusal of the said Committee were not viable and
entailed a number of policy and legal implications, which did not appear to be workable within the
existing regulatory framework. Further, given the present economic conditions, the said Committee
does not expect any viable proposals to be received from prospective investors. Under these
circumstances, the only option concerning the five (05) failed finance companies would be to continue
with liquidation proceedings/filing for liquidation. In the light of the above, the Committee in its report
has recommended to wind up the Committee. Based on the recommendation of the Committee the
Monetary Board decided to dissolve the Committee.

Consequently, actions will be taken to liquidate the aforementioned five failed finance companies in
accordance with applicable legal provisions.

June 27, 2022

SLT-MOBITEL mCash, the innovative mobile money platform and wallet conceptualized by SLT-MOBITEL and approved by the Central Bank of Sri Lanka, now offers greater convenience for People’s Leasing and Finance (PLC) customers in processing their monthly leasing repayments.

SLT-MOBITEL, the National ICT Solutions Provider and People’s Leasing and Finance (PLC), the financial solutions provider in the Non-Banking Financial Institutions (NBFI) sector in Sri Lanka have partnered to support the organisation’s collection management process while strengthening leasing repayment mechanisms via expanding mCash services.

PLC customers are now empowered to repay their lease payments easily and without hassle through the SLT-MOBITEL mCash wallet or at mCash retailer points. In turn this measure enables PLC to collect due leasing payment conveniently and without delays.

SLT-MOBITEL mCash authorized retailer network are available island-wide with more approved retailers to be added in the future. Partnering PLC is another milestone achieved by SLT-MOBITEL in promoting digital transformation for all citizens.

SLT-MOBITEL’s mCash has transformed the mobile money concept in Sri Lanka by introducing innovative features, and constantly creating ways in which mCash can be more inclusive and adapted to customer lifestyles.

mCash offers services such as Sending & Receiving Money, Mobile Reloads & Bill Payments, Utility, Insurance, Finance & Leasing payments, Online, In-store Shopping Payments via QR which has been developed to LankaQR standards of Central Bank of Sri Lanka, Bank Deposits, Loan & Credit card repayments and Digital Loans where Customer could apply & get a Loan from the mobile via mCash. SLT- MOBITEL’s mCash retailer network includes small corner shops to leading retail outlets adding up to 25,000+ retailer network / touch points island-wide including Mobitel Branches, SLT Teleshops, Singer showrooms, Lanka Bell, Pay & Go Kiosks or top up mCash directly from the mCash App.

May 13, 2022

Colombo, Sri Lanka, May 13, 2022—The Central Bank of Sri Lanka, with support from the International Finance Corporation (IFC) has launched a series of guidelines – known as the Sri Lanka Green Finance Taxonomy – designed to help channel financing for sustainable, environmentally friendly products and services while supporting the country’s climate goals.

The Sri Lanka Green Finance Taxonomy is a critical tool to help investors, companies, and green-bond issuers navigate transition to a low-carbon, climate-resilient, and resource-efficient economy. A classification system, which defines and categorizes economic activities that are environmentally sustainable, taxonomy development is a key action plan outlined in the Sustainable Finance Roadmap for Sri Lanka (2019).

“We are committed towards creating a greener and more sustainable financial system that contributes to a sustainable economy. Today, the Central Bank of Sri Lanka is in the forefront of promoting and developing a holistic strategy towards integrating sustainability into the country’s financial system. This is particularly important in the context of current economic challenges that we face as a country, and during the recovery in the aftermath of the COVID-19 pandemic,” said Dr. P Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka. “With the launch of the Green Finance Taxonomy, we are reaching a key milestone in the journey embarked upon with the launch of the Sustainable Finance Road Map of Sri Lanka in 2019. We envisage that the Green Finance Taxonomy would be a critical tool to guide financial institutions, investors, corporates, and green-bond issuers to navigate the transition to a low-carbon, climate-resilient, and resource-efficient economy.”

Sri Lanka is among one of the most affected countries by extreme weather events. According to the World Bank, the country is expected to see a 1.2 percent annual gross domestic product (GDP) loss by 2050 due to climate change. In response, the first phase of the new document covers three priority areas—climate mitigation, climate adaptation, and ecological conservation and resource efficiency.

The green finance taxonomy will be applicable to all domestic and foreign market participants—offering financial products such as bank lending and debt instruments, among others—large corporations, and national and local government bodies. The document can also be used as a reference by industrial planning authorities while serving as the basis for local governments to support green industries.

“This is an important move. Even as Sri Lanka works to navigate uncertainties in its economic outlook, it must look to achieving a sustainable and low-carbon future. The initial focus will be on industries of high priority, including agriculture, construction, and manufacturing. Most importantly, this will also be a critical enabler for developing the green bond and green lending market,” said Lisa Kaestner, Country Manager for IFC Sri Lanka and Maldives. “As one of IFC’s long-standing partners in Sri Lanka, we acknowledge the Central Bank of Sri Lanka (CBSL) for their steadfast support and commitment in shaping an important national policy that will contribute to a strong sustainable economy for future generations.”

The first national green finance taxonomy to be developed using the International Platform on Sustainable Finance (IPSF) Common Ground Taxonomy on climate change mitigation, it reflects the experience from the European Union and China. The Sri Lanka taxonomy also references IFC’s Blue Finance Guidelines and Climate Smart Agriculture activities.

The work was facilitated through the Sustainable Banking and Finance Network (SBFN) and supported by the IFC Green Bond Technical Assistance Program (GB-TAP). According to the SBFN 3rd Global Progress Report and the accompanying 41 Country Progress Reports (including the Sri Lanka Country Progress Report, April 2022), 16 SBFN countries have introduced or are developing green or sustainability-focused taxonomies. Nine countries – Bangladesh, Brazil, China, Colombia, Indonesia, Kazakhstan, Mongolia, South Africa, and now Sri Lanka – have already published taxonomies for green and sustainable finance.

Combating climate change is a strategic priority for IFC globally. In FY 2021, IFC committed a record $4 billion for climate-related projects across the world, representing 32 percent of IFC’s own account commitments.

May 11, 2022

Our Union vehemently condemns with contempt, the despicable attack by mobs, incited and directed
by certain politicians, on peaceful protests that have been continuing for more than a month, aimed at
untimely implementation of policy measures, intense pressure on the lives of the general public and
forcing the government to make positive measures. We also emphasize the importance of conducting
an independent investigation to identify the perpetrators of these attacks and bringing them before the
court of law without delay.

After consistently ignoring the recommendations of the professionals at the Central Bank of Sri Lanka
(CBSL), the responsible parties have taken the initial step to enter into a program with the International
Monetary Fund (IMF). We firmly emphasize the importance of formulating and implementing medium
and long-term economic and structural reforms to address the current acute economic crisis and to
reduce the risk of recurrence. In the short-run, the governing political authority has the responsibility
for providing the basic necessities of life for the people and maintaining social stability. Further,
endorsement of effective measures, as soon as possible such as working with the IMF and the World
Bank, entering into bilateral or multilateral agreements with allied countries is quintessential. However,
engaging in activities that violate the freedom of the peaceful assembly, freedom of expression, etc., and
enforcing repressive laws that encourage such violations may adversely affect international
cooperation.

Representing the executive officers of CBSL exclusively, our Union continues to extend its technical
assistance in taking all the progressive measures to strengthen the entire financial system and the
already weakened economy.

In such a situation, the Parliament has a greater responsibility, including restoring political stability and
enacting legislation to implement required reforms. Under this, it is imperative that, procedures for
appointing the heads of independent public institutions which should essentially be depoliticized,
including the CBSL Governor, and members of the Monetary Board, must be properly in place as well
as the enactment of the proposed ‘Central Bank Act’ (Draft)

As the Central Bank Executive Officers’ Union, we urge all political parties and groups to make an active
and genuine contribution to resolving the current economic crisis as attaining economic stability would
be impossible without having political and social stability

April 4, 2022

The Central Bank’s continued spot examinations at the places of Authorized Money Changers have revealed that the following Money Changers have transacted at rates beyond the rates offered to them by Licensed Banks, thereby violating the Directions issued to them under the provisions of Foreign Exchange Act No. 12 of 2017.

i.Swiss Money Exchange (Pvt) Ltd, Colombo 01 (Head Office) and Colombo 06 (Branch)

ii.Western Money Exchange (Pvt) Ltd, Colombo 06

Accordingly, Warning Notices have been issued to the above Money Changers ordering them to comply with the relevant Directions, with immediate effect.

In the event the errant Money Changers fail to rectify the matters communicated through the Warning Notices, the Central Bank will suspend/ revoke the permits issued to them.

March 31, 2022

Considering the complaints received from general public that Prasanna Money
Exchange (Pvt) Ltd is offering higher exchange rates, the Department of Foreign
Exchange of the Central Bank conducted an on-site investigation at the Prasanna
Money Exchange (Pvt) Ltd on 30.03.2022. As per the investigation, it was
observed that the Prasanna Money Exchange (Pvt) Ltd had offered higher
exchange rates and thereby attempted to purchase foreign currency from its
customers at higher rates than the exchange rates offered to them by Licensed
Banks and that they were in violation of the Directions issued to Authorized
Money Changers under the Foreign Exchange Act No. 12 of 2017 (FEA).

Accordingly, the Central Bank has decided to temporarily suspend the permit
issued to the Prasanna Money Exchange (Pvt) Ltd under the provisions of the
FEA, with effect from 31.03.2022.

The public is hereby informed that the Prasanna Money Exchange (Pvt) Ltd is
no longer permitted to engage in money changing activities as an Authorized
Money Changer with effect from 31.03.2022. The public is also informed that
any transaction with the Prasanna Money Exchange (Pvt) Ltd during the period
of suspension is considered as a contravention with the provision of the FEA.

The Central Bank has intensified its on-site investigations at Authorized Money
Changing outlets and will stand ready to suspend/revoke permits of Authorized
Money Changers who do not adhere to the Directions issued under the Foreign
Exchange Act.

March 28, 2022

March 28, 2022: The Monetary Board of the Central Bank of Sri Lanka has approved the amalgamation of HNB Finance PLC and Prime Finance PLC with the amalgamated company being HNB Finance PLC, on December 8, 2021, under the Finance Companies (Structural Changes) Direction No. 1 of 2013, while considering the submission of the detailed amalgamation proposal submitted by both companies.

The union of these two key players in the country’s non-bank financial institute (NBFI) arena will give rise to a powerful synergy providing impetus to a diverse product and service offering.

Through this successful merger, HNB FINANCE will strengthen the relationship with the Prime Group, as the company is now equipped with innate knowledge and experience to further facilitate its venture into real estate financing.

While the controlling stake of 87.27 percent was acquired through the initial merger by crossing, the company moved to increase the stake by 9.37 percent by mandatory offer, as well as by another 0.51 percent by share market, giving HNB FINANCE a total stake of 97.15 percent. The remaining 2.85 percent is among outside minority shareholders.

HNB FINANCE’s existing and future customers can expect to benefit from an enhanced portfolio, efficient and easily accessible services through a combined branch network, a strengthened balance sheet and better distribution of risk with the addition of Prime Finance’s 93 percent asset-backed loan portfolio.

The anticipated combination of dynamism between the teams into one unit will also undoubtedly assist in accelerating the company’s plans for national expansion. Prime Finance’s expertise and indelible reputation within the sector combined with HNB FINANCE’s strengths, positions the company well to further its vision of adding value to the lives of all Sri Lankans.

March 25, 2022

Newer Posts

Older Posts

Reappointment of Mr. Anthony Nihal Fonseka as a member of the Monetary Board of the Central Bank of Sri Lanka for a period of six years

Letter to All Party Leaders – Central Bank Executive Officers’ Union

Recommendations made by the Advisory Committee for Revival of Failed Licensed Finance Companies

SLT-MOBITEL’s mCash supports Peoples Leasing customers with convenient collection and repayment process

Central Bank of Sri Lanka and IFC Launch New Move to Spur Green Sustainable Investments

Central Bank Executive Officers’ Union – Press Release

Central Bank continues regulatory actions against errant Money Changers

Central Bank suspends Money Changing permit issued to Prasanna Money Exchange (Pvt) Ltd

CBSL approves HNB Finance PLC and Prime Finance amalgamation

Clarification Regarding the Forex Sales by Banks to the Central Bank of Sri Lanka