Business
‘New CBSL Act set to have balanced impact on all sectors’
by Sanath Nanayakkare
The dominance of the fiscal policy used by the government over the Monetary Policy of the Central Bank is set to wax and wane under the new Central Bank Act, creating a more balanced and positive impact on all sectors of the economy , Central Bank Governor Dr. Nandalal Weerasinghe said in Colombo recently.
The Governor made this remark on July 21 while delivering the keynote speech at the CFA Society Sri Lanka CEO Forum.
“The new Central Bank Act which was passed in parliament recently will ensure the Central Bank’s mandate to maintain domestic price stability, financial stability and greater accountability to the general public of the country thanks to the provisions that establish the independence of the Central Bank. According to its provisions, whatever we do, we are accountable to the public, to the parliament and to the Cabinet. The new law empowers the Central Bank to implement flexible inflation targeting. And that framework will stay on course irrespective of the administration in power or whoever happens to be on the Monetary Board of the Central Bank. This will ensure predictability and stability of the monetary policy framework. It will also help negate the fiscal dominance on Monetary Policy,” he said.
“With the new law, the Secretary to the Treasury is moving out of the Monetary Board, creating conditions for a much more representative Monetary Board. When the Secretary to the Treasury is sitting on the Monetary Board obviously his mandate is to reduce borrowing costs for the government side by reducing the cost of financing, and this is in conflict with the Monetary Policy,” he said.
“Further, the Central Bank by law, engaged in monetary financing or so-called money printing as it was one of the instruments the Central Bank used over many years, and very heavily within the past two years to facilitate the fiscal policy and government spending. Now it is prohibited under the new Central Bank Act barring in extreme circumstances, subject to approval of parliament. When the fiscal policy’s objectives override, inevitably the Monetary Policy is tainted.” he noted.
The Governor emphasized the fact that Monetary Policy needs to encompass all sectors of the country and not just government’s public finance.
“Thus the new Act enables a welcome separation while having good coordination between the Fiscal Policy and Monetary Policy. Although there is no Treasury Secretary sitting on the Monetary Board now, there will be coordination between Fiscal and Monetary policies through a Coordinating Council, which is an embedded institutional structure in the new law,” he pointed out.
Referring to the appointments of the Central Bank Governor, members of the Monetary Board and the Governing Board, he said,” The new law stipulates the mandatory suitability of the appointees and checks and balances which the Minister of Finance recommends. Subsequently those appointments recommended by the Minister of Finance need to go through the Constitutional Council of bipartisan consensus. Thus the members for these posts will be made for fixed terms regardless of administration changes. Thus there are clauses in the new Act to consolidate the independence of the Central Bank which is a favourable outcome for all sectors in the country,” he said.
Referring to the recent debate in parliament over the draft bill of the Central Bank, the Governor said, “On the whole, it was a good debate although it was obvious that some members of parliament who took part in it, had not read the bill’s provisions.”
In line with a broader, more inclusive approach and in alignment with evolving global standards, the Colombo Stock Exchange (CSE) announces the launch of the GSS+ Bonds Regulatory Framework, effective March 2025. This marks the first comprehensive regulatory framework in Sri Lanka dedicated to thematic bonds.
Under this initiative, the term “Sustainability Bonds” in the CSE Listing Rules has been replaced with “GSS+ Bonds”, which now encompasses Green, Blue, Social, Sustainability, and other related bond types, including Sustainability-Linked Bonds.
Social Bonds are fixed-income instruments where proceeds are exclusively allocated to finance or refinance projects aimed at addressing social challenges and generating positive social outcomes—such as improved access to essential services, affordable housing, education, healthcare, and employment opportunities. The global Social Bond market has seen significant growth in recent years, driven by rising investor interest in fostering inclusive and sustainable development.
In a significant development, the requirements for issuing GSS+ Bonds are now fully aligned with the guidelines of the International Capital Market Association (ICMA). This alignment ensures consistency with globally accepted practices and enhances the credibility and transparency of the sustainable finance instruments listed on the CSE.
The verification framework has also been enhanced. In addition to the previously accepted forms of assurance and impact reporting, issuers may now utilize enhanced methods such as Second Party Opinion and Certification, providing additional layers of investor confidence and credibility.
These rule enhancements were made possible through the collaborative efforts of the Asian Development Bank (ADB) and the Securities and Exchange Commission (SEC) of Sri Lanka, underscoring the commitment of all stakeholders to elevate Sri Lanka’s sustainable finance landscape to meet international best practices.
The primary objective of this initiative is to enable capital raising for projects with measurable environmental and social impact, while also offering investors the opportunity to align their investment strategies with Environmental, Social, and Governance (ESG) principles.
The introduction of GSS+ offers wide-ranging benefits. For issuers, it opens access to a new pool of capital dedicated to funding projects with positive social outcomes. Investors gain an opportunity to diversify their portfolios with instruments that deliver both financial and social returns. At a broader level, the initiative supports responsible capital allocation and contributes to key national development priorities such as poverty alleviation, gender equality, access to healthcare, and inclusive education.
Commenting on the launch, . Rajeeva Bandaranaike, Chief Executive Officer of the Colombo Stock Exchange, stated, “The introduction of GSS+ to the Sri Lankan capital market represents a significant step in our journey towards promoting sustainable finance. This initiative not only expands the suite of sustainable investment products available in the market but also empowers issuers to raise funds for socially impactful projects that can make a lasting difference in our communities.”
“We are proud to support this important development, which reflects our ongoing commitment to align capital market infrastructure with global best practices and to play an active role in Sri Lanka’s sustainable economic growth.”
The CSE remains committed to advancing ESG-aligned initiatives and providing market participants with robust frameworks for sustainability-oriented investments. The introduction of GSS+ Bonds reinforces the CSE’s role in facilitating financial innovation that contributes meaningfully to national and global development goals.
SLT-MOBITEL recently rewarded the lucky customer of its special ‘Roam and Win’ campaign with an all-inclusive tour package to Thailand, as part of its special roaming promotional campaign. The prize giving ceremony was held at the SLT-MOBITEL headquarters, marking a celebration of customer loyalty and appreciation.
The campaign was designed to recognize and reward both prepaid and postpaid customers who activated SLT-MOBITEL roaming plans during their international travels. The grand prize winner was selected through a raffle draw conducted among the pool of eligible customers. The tour package to Thailand included fully paid airfare, hotel accommodation, visa arrangements, guided excursions, and a daily allowance for 2 persons—offering the winners an unforgettable and worry-free experience abroad.
In a landmark move set to redefine the financial services landscape across two continents, LOLC Holdings PLC, Sri Lanka’s largest multi-currency, multi-geographic financial conglomerate, has entered into a strategic partnership with Tomorrow Financial Solutions (TFS) Australia. The agreement, formalized earlier this year, was officially inaugurated on April 03, 2025, at the TFS headquarters in Melbourne, followed by the grand launch held on April 24, 2025, at the opening of the new TFS office at the LOLC premises in Colombo, Sri Lanka.
Tomorrow Financial Solutions (TFS) is an Australian financial services firm specializing in mortgage broking, financial planning, commercial lending, and investment strategy. With a focus on client-first, tech-powered experiences, TFS delivers innovative, strategic, and personalized solutions that drive long-term wealth creation.
This alliance represents a significant milestone for both organizations. For TFS, the partnership cements its evolution from a visionary local enterprise into a formidable player on the global financial stage, bolstered by LOLC’s capital investment and international credibility. For LOLC Holdings, this collaboration marks its official foray into the Australian financial market, further reinforcing its global footprint and commitment to providing inclusive financial solutions across new geographies.
“This strategic partnership is more than just an association,” remarked Mr. Pramu Rodrigo, Managing Director/ CEO of TFS, “It is the beginning of a transformative chapter in the Australian financial services sector. Harnessing LOLC’s global expertise, we’re cementing our presence in the Australian market with a bold vision, to set a benchmark in agile, client-focused financial services for a smarter, more connected future.”
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