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Budget 2026: Bankers present proposals to drive recovery

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6 months ago

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Sri Lanka’s banking sector has presented a set of far-reaching proposals for inclusion in the government’s Budget 2026.

The proposals, developed and submitted by the Sri Lanka Banks’ Association (SLBA), on behalf of all licensed commercial banks, were handed over to Deputy Minister of Finance, Planning and Economic Development Dr. Anil Jayantha Fernando at the Presidential Secretariat recently.

The submission underscores the critical role of banks in rebuilding economic resilience, restoring investor confidence and accelerating growth. The recommendations are designed not only to stabilise the financial system but also to expand opportunity for businesses, entrepreneurs and households nationwide.

The SLBA has called for urgent reforms to strengthen the financial sector’s capacity to support recovery. Proposals include targeted credit guarantee schemes to help revive distressed enterprises, accelerated tax deductibility for impairment provisions to encourage restructuring, and alignment of banking sector taxation with regional benchmarks. Excessive taxation, currently at 53% for domestic banks and 65% for foreign banks, is described as a barrier to competitiveness and capital formation. A fairer regime, the Association argued, would allow banks to direct resources towards lending for critical infrastructure and priority sectors.

Recognising the backbone role of SMEs in the economy, banks have urged the government to accelerate SME formalisation through mandatory VAT registration at concessional rates, the adoption of subsidised accounting software, SME-specific business bank accounts, and national-level financial literacy programmes. The SLBA also proposed mandatory Taxpayer Identification Numbers for all new accounts, and incentives for SMEs to digitise transactions, which would expand the tax base and improve credit access.

To drive growth and consumption, banks recommend rationalising indirect taxes to improve household disposable income and investor appetite, while broadening the tax net through digitisation and the use of proxy data such as utility and vehicle records. Simplifying compliance by treating withholding tax as a final tax, even at higher rates, was also suggested as a way to improve liquidity and overall revenue collection.

Calling for decisive investment in the country’s digital infrastructure, the SLBA proposed the creation of a national cloud framework to serve both public and private stakeholders, alongside tax incentives for fintech startups and local payment gateways. The Association also stressed the importance of levelling the playing field by applying VAT on global digital services, such as Google, Meta, PayPal, while advancing digital transactions by capping large cash payments and mandating electronic settlement of supplier, tax and utility bills. A public–private initiative on cybersecurity was also recommended to lower compliance costs and safeguard systemic resilience.

In proposals aimed at catalysing investment, the SLBA urged expedited restructuring of SriLankan Airlines to improve the country’s sovereign rating, which it argued is currently a major barrier to foreign direct investment. The creation of regional one-stop shops for regulatory approvals, reforms to facilitate Port City investments, and tax incentives for corporate bond issuances were among other measures advocated.

Banks also underlined the urgent need to mobilise capital for sustainable growth, recommending tax exemptions for green lending and the issuance of tax-free green bonds. Parallel proposals called for tax-free public–private partnership bonds to fund infrastructure and long-term development needs.

In a clear message of partnership, the SLBA proposed closer collaboration between government, regulators and the financial sector to deliver structural reforms. Suggested measures include integrating ports, customs, banks and revenue authorities into a unified digital platform to improve valuations and tax transparency, and creating a national data repository for climate and sustainability analytics.

Sectoral initiatives, including long-term funding for tea replanting and agricultural mechanisation, were also featured, reflecting the Association’s recognition of the need to modernise and future-proof Sri Lanka’s traditional industries.

Commenting on the submission, the SLBA said the financial services industry is ready to partner the government in shaping a resilient, inclusive and digitally empowered economy. “These proposals are designed to address immediate fiscal challenges while laying the foundation for sustainable growth. We believe this budget can be a turning point for the country, and the banking sector stands committed to play its part,” the Association noted.


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A strong Technical and Vocational Education and Training (TVET) system equips individuals with practical, relevant, and future-oriented skills helping to innovate responsibly towards a greener and sustainable future – PM

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9 hours ago

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2026/03/26

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The Prime Minister, Minister of Education, Higher Education and Vocational Education Dr. Harini Amarasuriya participated as the Chief Guest in the international conference on ’Transforming TVET Systems for climate resilience and green jobs’ organized by Colombo Plan Staff College, Philippines together with the Ministry of Education, Higher Education and Vocational Education Sri Lanka on 24 th of March at Courtyard by Marriott Colombo, Sri Lanka.

The Conference serves as the flagship event of the five-day Regional Programme on “Transforming TVET for a Digital, Green, and Inclusive Economy” (23-27 March 2026), which continues throughout the week, bringing together representatives from CPSC member countries including Bhutan, Fiji, Malaysia, Maldives, Myanmar, Nepal, Philippines, Thailand, Pakistan, and Sri Lanka, fostering high-level dialogue and knowledge sharing on climate-resilient and green skills development.

The Conference features technical and plenary sessions on climate-responsive TVET systems, green skills development, national policy frameworks, and emerging technologies shaping industry transformation.

Addressing at the event, the Prime Minister emphasized the role of Technical and Vocational Education and Training (TVET) that equips individuals with practical, relevant, and future-oriented skills in addressing climate change and shaping a sustainable future.

The Prime Minister reaffirmed that this transformation remains a national priority for Sri Lanka. She stressed that education must go beyond knowledge dissemination to empower individuals with opportunities, dignity, and the capacity to contribute meaningfully to society.

She further emphasized the need to integrate environmental sustainability into education and training systems by embedding green skills in curricula, investing in modern training facilities, promoting innovation, and fostering collaboration between training institutions and emerging green industries.

Highlighting the importance of ensuring equity the Prime Minister further stated, that opportunities arising from the green transition must be accessible to all, including youth, young women, people with special needs, and marginalized communities.

Reaffirming Sri Lanka’s commitment to working closely with regional and international partnerships, the Prime Minister emphasized the importance of transforming them to actual benefits and partnerships.

The occasion was attended by the Secretary to the Ministry of Education, Higher Education and Vocational Education  Nalaka Kaluwewa, Additional Secretary (Vocational Training) Ms. Samanthi Senanayake Director General Colombo Plan Staff College Prof. Dr. Suresh K. Dhameja , TVET administrators, institutional leaders, policymakers, instructors, industry representatives, and international delegates from across the region and seniors officials and officials from Ministries.

(Prime Minister’s Media division)

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PM reviews progress of the committee appointed for the establishment of a National Nursing University

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9 hours ago

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2026/03/26

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A discussion to review the current progress of the special committee appointed under the government’s policy proposals to establish a National Nursing University aimed at elevating the nursing profession in Sri Lanka to degree level was held on 23rd of March at the Prime Minister’s Office under the patronage of Prime Minister Dr. Harini Amarasuriya.

During the meeting, the Prime Minister inquired into the progress made by the committee in relation to the establishment of the Nursing University and paid attention to the issues and views presented by the committee members.

Emphasizing that establishing a university is a long-term and complex process, the Prime Minister pointed out the importance of advancing this project in line with higher education standards, without hasty decisions, while also taking into account the existing conflicts and challenges within the university system.

The meeting was attended by the Vice Chairman of the University Grants Commission, Professor K. L. Wasantha Kumara, representatives of the All Ceylon Nurses’ Association, and officials from the Ministry of Health and Mass Media.

(Prime Minister’s Media Division)

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Heat Index at ‘Caution level’ in the Western, Sabaragamuwa, Southern and North-western provinces and in Anuradhapura, Mannar, Vavuniya and Monaragala districts

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19 hours ago

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2026/03/26

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Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre of the Department of  Meteorology
at 3.30 p.m. on 25 March 2026, valid for 26 March 2026.

The Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in the Western, Sabaragamuwa, Southern and North-western provinces and in
Anuradhapura, Mannar, Vavuniya and Monaragala districts.

The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.

Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.

ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.

Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry
of Health in this regard as well. For further clarifications please contact 011-7446491.

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