A new Banking Act and a new bank monitoring system will be introduced soon, the Central Bank said yesterday in its Road Map for 2018.
“The Central Bank is proactively working with all the relevant stakeholders of the banking sector and looks forward to finalising a new Banking Act in the near term,” Central Bank Governor Dr. Indrajit Coomaraswamy said.
He said that due to the changing nature of the banking sector, new challenges may arise as the sector grows and evolves both in Sri Lanka and abroad, requiring amendments to the Banking Act.
Meanwhile, the regulator will upgrade the bank examination methodology to focus not only on compliance to rules but on the efficiency, effectiveness and sustainability of individual banks and the entire banking sector, based on a Bank Sustainability Risk Index, instead of the current on-site examinations.
“Accordingly, initiatives are underway to assign ratings to banks based on a combination of quantitative and qualitative indicators that will assess their efficiency and sustainability,” he said, noting that these ratings will not be open for public scrutiny.