Thursday Nov 05, 2026
Thursday Nov 05, 2026
Wednesday, 21 October 2026 00:02 - - {{hitsCtrl.values.hits}}
The Cabinet of Ministers has approved a methodology for assessing the credit risk of financial institutions in Sri Lanka that seek State guarantees or sub-loans.
The decision follows an earlier Cabinet approval of a credit risk assessment methodology, formulated by the Public Debt Management Office (PDMO), for evaluating the risk of providing Government guarantees or sub-loans to State -owned enterprises (SOEs) under the Public Debt Management Act, No. 33 of 2024.
However, the Central Bank of Sri Lanka and financial institutions that lend or borrow, wholly or partly, for their own businesses are not covered by the Act’s definition of “public enterprises.”
“This created a need for a separate, appropriate methodology for assessing the credit risk of such institutions when guarantees or sub-loans are extended to them,” Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said at the weekly post-Cabinet meeting media briefing yesterday.
He said the PDMO developed the new framework to reflect the unique nature of these institutions, including their higher levels of debt financing, liquidity and market risks, the need for regulation and the importance of their potential systemic impact.
It also incorporates credit ratings assigned to financial institutions by authorised credit rating agencies operating in Sri Lanka.
The proposal to this effect was submitted by President Anura Kumara Dissanayake, in his capacity as the Finance, Planning and Economic Development Minister.
