Cabinet nod for Banks Special Provisions Bill after AG clearance

The Cabinet of Ministers at its meeting on Tuesday approved the resolution presented by President Ranil Wickremesinghe in his capacity as the Minister of Finance, Economic Stabilisation and National Policies to publish the Banks (Special Provisions) Bill in the Government gazette and table it in Parliament for its approval.

The move follows the Attorney General clearing the bill prepared by the legal draftsman. 

The proposed bill is expected to supplement the existing Banking Act No. 30 of 1988. The new legislation once enacted will strengthen the Central Bank of Sri Lanka’s crisis management powers. 

The Cabinet approved the preparation of the proposed bill in November last year after the International Monetary Fund highlighted the importance of broadening the Central Bank’s regulatory powers and upgrading the resolution framework by setting up a special resolution regime for financial institutions, expanding resolution tools, improving deposit insurance and enhancing emergency liquidity assistance.

The IMF in its staff report released in March 2022 said the finalisation and adoption of the new Banking Act should help achieve these goals. An entirely new Banking Act is to be passed by the Cabinet in June 2023 and approved by Parliament in December 2023 as structural benchmarks.