Cabinet approves reforms for State-owned banks to mitigate economic risks

Wednesday, 10 April 2024 02:50 - - {{hitsCtrl.values.hits}}

by charumini de silva

In response to the challenges faced by State-owned banking institutions, particularly in the realms of administration, risk management and supervision, during past economic crises, the Government has embarked on a comprehensive reform initiative. Acknowledging the need to avert similar constraints in the future, a committee comprising specialists from the International Monetary Fund (IMF), World Bank and the Central Bank of Sri Lanka has identified a series of reforms for implementation.

“These reforms aim to strengthen the resilience and efficiency of State-owned banks, thereby mitigating risks and enhancing their capacity to navigate economic challenges effectively.

The recommendations put forth by the committee are viewed as essential structural requirements within the comprehensive financial facilities program facilitated by the IMF, as well as fundamental activities under the development policy monitoring spearheaded by the World Bank,” the Cabinet Co-Spokesman and Minister Bandula Gunawardena said.

In line with this objective, the Cabinet of Ministers approved the resolution presented by the President, in his capacity as the Finance, Economic Stabilisation and National Policies Minister.

“The reforms include various aspects, including enhancing governance mechanisms, refining risk management frameworks, and strengthening regulatory oversight. By adhering to these reforms, State-owned banks are expected to fortify their financial stability and resilience, thereby contributing to overall economic stability and growth.” he explained.