Licensed Banks to come under requirements to implement Recovery plans

Sri Lanka’s Licensed Banks come under requirements to implement Recovery plans in order to strengthen crisis preparedness and to enhance their ability to respond effectively to adverse scenarios with the expected rise in sour loans when COVID-19 related moratoriums are expired, the Central Bank (CB) announced today.

“Directions will be issued in due course, providing necessary guidelines. The Central Bank will continue to adapt its supervisory approaches to suit the new normal,” Central Bank (CB), Governor, Professor W D Lakshman said.

He revealed this while presenting “the Road Map: Monetary and Financial Sector Policies for 2021 and Beyond.”

Further, he also revealed that the CB would introduce a regulatory framework for technology risk management and resilience of licensed banks.

“This would prompt banks to upgrade and strengthen their information
systems and technology platforms in line with the international standards and best practices. In this regard, the Central Bank will explore the possibilities of implementation of Supervisory Technology (SupTech) and Regulatory Technology (RegTech) solutions to streamline the data-intensive offsite supervision function by harnessing the capabilities of artificial intelligence (AI) and machine learning,” he said.

Adoption of such frameworks and supportive human resource policies are expected to enable the CB to keep pace with the rapidly evolving technology-driven financial innovations.

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