CBSL issues fresh directive to banks restricting discretionary payments

Monday, 9 May 2022 03:09 - - {{hitsCtrl.values.hits}}

The Central Bank has issued fresh directives with immediate effect restricting discretionary payments.

Banks have been told to defer payment of cash dividends until the financial statements/interim financial statements for the year 2022 are finalised and audited by its External Auditor.

They are also required to defer repatriation of profits not already declared for financial years 2021 and 2022 until the financial statements for the year 2022 are finalised and audited by its External Auditor.

Licensed banks need to give due considerations to the requirements of the Banking Act Direction No. 01 of 2016 on Capital Requirements under Basel III for Licensed Banks, expected assets growth, business expansion and the potential impact of the COVlD-19 pandemic and prevailing macroeconomic conditions when deciding on payments of cash dividends and profit repatriations.

The CBSL directive also requires banks to adhere to the following with immediate effect until 31 December.

a)Refrain from buying-back of its own shares

b)Refrain from increasing management allowances and payments to the Board of Directors

c)Refrain from incurring non-essential and/or non-urgent expenditure and have a Board approved policy to rationalise if such expenditure is to be incurred

d)Exercise extreme due diligence and prudence when incurring capital expenditure, if any

CBSL said the fresh directives are after considering the possible adverse impact on liquidity and other key performance indicators of banks due to the prevailing macroeconomic conditions and the importance of maintaining appropriate levels of liquidity and capital buffers in licensed banks.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.