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Sri Lanka banking regulation: licensing, supervision, capital and liquidity, ownership limits and M&A control, foreign bank entry, consumer protection, deposit insurance, AML/CFT, and resolution—practitioner Q&A

Practice notes
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Banking regulation—Sri Lanka—Q&A guide

This Practice Note delivers a Sri Lanka-focused Q&A on banking regulation, produced within the Lexology Getting the Deal Through series by Law Business Research (law stated as at 31 January 2023). Authors: Tiruchelvam Associates—Heshika Rupasinghe.

1. What are the principal governmental and regulatory policies that govern the banking sector?

Banks operate under the Banking Act and must obtain the Monetary Board’s consent. The regime treats overseas and domestic banks alike. Licences are granted to both licensed commercial banks (LCBs) and licensed specialised, savings or deposit-taking banks (LSBs). An institution must either be a public company or a branch of a foreign bank registered under the Companies Act. Several institutions are state-owned, partly to counter the dominance of privately held banks in the capital and partly to channel funds into priority areas such as agriculture, small-scale industry and regional development. Oversight is carried out by the Banking Supervision Department of the Central Bank of Sri Lanka, applying standards set by the Basel Committee on Banking Supervision; Basel III rules on capital, leverage and liquidity presently apply...

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Web page updated on 21/05/2026

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