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Fitch
comments on Lankan Bank Prudential Regulations
Fitch
is to shortly publish its latest report on Sri Lankan
bank prudential regulations.
The Central Bank of Sri Lanka (CBSL) has gradually tightened
the banking system’s prudential norms to be closer
in line with regional best practices; and although CBSL’s
guidelines have generally been adhered to, it has entailed
instances of extensions of deadlines for compliance,
consultative compromises to facilitate smooth adoption,
and, in some instances, the interpretation of such guidelines
left to the banks themselves, notes a special report
to be published shortly by Fitch Ratings on Sri Lankan
Bank Prudential Regulations.
The most noteworthy regulatory changes were the introduction
of a capital charge for market risk, the introduction
of a mandatory general provision on performing advances,
and the introduction of the Basel II framework from
January 2008.
Banks have been submitting parallel computations under
the Basel II framework on a quarterly basis since 2006.
Based on the observation of parallel computations of
the six largest licensed commercial banks, the agency
believes that further refinement to risk weightings
and classifications may be warranted, given that the
banks are still in the process of calibrating their
systems to accurately identify customer segments as
stipulated in the Basel framework. Full
Story....
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