Unlisted Banks get 2011 end deadline:
Bank capital requirement increased
The Monetary Board of the Central Bank has decided to increase the
minimum capital requirement of licenced banks, the Central Bank said
yesterday. This aims to promote the existence of strong banks that are
resilient to internal and external shocks. Increased capital will
further provide a cushion for banks to enhance their contribution to the
new growth sectors of the economy and to absorb any unexpected losses.
The decision was taken to provide much comfortable economic
environment while ensuring a strong banking sector. “We have given them
five years to accomplish the targets and we are confident that the bank
will gradually improve their minimum capital requirement, Central Bank
Governor Ajith Nivard Cabraal told Daily News Business.
The Monetary Board has also decided to require unlisted locally
incorporated private banks to get listed in the Colombo Stock Exchange
by December 31, 2011. There are only few unlisted locally incorporated
private banks, Union Bank of Colombo, DFCC Vardhana Bank and SANASA
Development Bank, which require to enter the capital market.
The listing of these banks will help to raise capital in a much
transparent manner and further improving governance through market
discipline. Previously the Central Bank revised the minimum capital
requirement of licenced banks in 2005.
C de S