Friday Nov 14, 2025
Friday Nov 14, 2025
Wednesday, 12 November 2025 02:40 - - {{hitsCtrl.values.hits}}
The Cabinet of Ministers at their meeting on Monday approved restructuring two State-affiliated housing finance institutions—the Housing Development Finance Corporation Bank (HDFC) and the State Mortgage and Investment Bank (SMIB), by bringing them under the ownership of the Bank of Ceylon (BOC) and People’s Bank to ensure banking sector stability and protecting depositors.
Speaking at the weekly post-Cabinet meeting media briefing yesterday, Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said the decision follows concerns raised by the Central Bank that the current business models of both HDFC and SMIB are unsustainable, citing their limited capacity to raise deposits, weak profitability and inability to meet minimum capital adequacy requirements.
He said under the approved plan, all Government shares of the HDFC Bank, incorporated under the Sri Lanka Housing Development Finance Corporation Bank Act No. 7 of 1997, will be transferred to the BOC, which will continue HDFC’s operations as its subsidiary.
Similarly, the SMIB, established under the State Mortgage and Investment Bank Act No. 13 of 1975, will have all its Government-owned shares acquired by People’s Bank and will continue to operate as a subsidiary of People’s Bank.
Dr. Jayatissa said the move aims to strengthen the financial sustainability of the two State housing finance institutions, enhance their ability to mobilise funds and safeguard depositor interests while supporting the broader stability of the national banking system.
The proposal to this effect was submitted by President Anura Kumara Dissanayake in his capacity as the Finance, Planning and Economic Development Minister and was approved by the Cabinet of Ministers.
