Business
EY webinar on CBSL direction 13 & 14 of 2021 – understanding the regulatory requirements
The Central Bank of Sri Lanka (CBSL) directions on classification, recognition and measurement of credit facilities and other financial assets will come into effect from 01st January 2022 onwards. It’s paramount for bankers to understand the regulatory expectations in this regard. New directions were introduced with the objective of harmonizing the regulatory framework with Sri Lanka Financial Reporting Standards-SLFRS 9 Financial Instruments.
The regulator has emphasized the importance of having a comprehensive credit risk management framework while stipulating its main components. Accordingly, Licensed Commercial Banks (LCBs) are expected to have a framework covering all aspects of credit lifecycle of its financial assets which includes, policy on classification, potential risk, under performing loans and write-offs, guidelines on computing Expected Credit Losses (ECL) & disclosures.
A high-profile deliberation on this crucial theme conducted by Manil Jayesinghe, Country Managing Partner, Ernst & Young, Sri Lanka and Maldives and Rajith Perera, Partner, Financial Accounting Advisory Services of Ernst & Young, Sri Lanka is to be held on 22 November 2021 where they will discuss regulatory expectations combined with Financial Reporting Risk Management challenges faced by banks.
Apart from the emphasize on governance, compliance with new regulation will induce other technical and operational changes for banking community. Mainly, change in the definition of Non-performing loans (NPL) may trigger system modifications and classification for certain segments of the loan portfolio while the specific and general provision based on the subclassification will cease to exist and provision determination will be based on SLFRS 9 Financial Instruments combined with the directive providing additional guidance as appropriate. Deliberation on “Significant Increase in Credit Risk” (SICR) will require lending officers to exercise judgement and have well documented policies and processes to ensure consistency in terms of staging its credit facilities. Another aspect which needs early intervention is on recognition of interest income for stage 3 facilities which shall be recognized in line with SLFRS 9 Financial Instruments. Banks may review the mechanism for income recognition as the interest suspension is no longer relevant with the revocation of the respective circulars.
Further, there will be impairment charges defined based on SLFRS 9 and the directive based on 12months Expected Credit Loss (ECL) and Lifetime ECL. Minimum Stage 1 Provision of 0.5% will be maintained and in the event 0.5% is not maintained adequate appropriations to be made from Equity.
Another important requirement under the new direction is on managing model risk. Banks are requested to develop comprehensive policies in relation to model governance covering life cycle of model development and validation. Given the increased use of sophisticated models with the implementation of SLFRS 9, regulatory requirement is timely to ensure accuracy and completeness of financial information. Further, if any changes in the credit models are required, the rationale and justification for such change shall be evaluated by the Chief Risk Officer, Integrated Risk Management Committee and approved by the Board of Directors.
The directive states that scope of internal audit function should be enhanced to independently evaluate the effectiveness of the credit risk assessment & measurements. Further, the Internal Audit function will at least annually, validate and evaluate all credit risk assessment models, inputs and assumptions used along with data smoothening. An assurance on the adequacy and effectiveness of back testing should be provided from third line of defense perspective.
Economists, banking and financial service professionals and other decision makers interested are invited to join for further deliberations on this crucial theme webinar with Ernst and Young, on 22nd November 2021 from 09.00 am to 12.00 pm. For registrations contact Thilini Perera on Thilini.perera1@lk.ey.com or Tel. +94 770623529.
Business
SIA warns of 1,000 SME collapses, urges fair policies to protect Sri Lanka’s rooftop solar sector
By Sanath Nanayakkare
The Solar Industries Association (SIA), representing over 1,000 companies and employing 40,000 workers in Sri Lanka’s rooftop solar sector, issued a stern warning recently regarding threats to the industry’s survival and the nation’s renewable energy ambitions. The association condemned recent regulatory instability and called for urgent policy reforms to avert economic and social crises.
The SIA categorically rejected the Ceylon Electricity Board’s (CEB) claim that rooftop solar installations caused the recent island-wide power outage, calling the accusation “baseless and misleading.”
“Public trust is eroded when accountability is misdirected,” the SIA stated. “We demand an independent, transparent investigation led by experts appointed by the Ministry or the Public Utilities Commission (PUCSL). The CEB’s unilateral statements disregard the sector’s contributions and jeopardize Sri Lanka’s renewable energy transition,” they said.
“While acknowledging the formation of a tariff determination committee, the SIA criticized its narrow focus on financial parameters, ignoring the sector’s socioeconomic value. Rooftop solar empowers businesses and households with energy independence, reduces grid strain, and supports climate goals. However, proposed volatile tariff structures risk destabilizing over 100,000 installations—primarily owned by middle-class families—and deter future investment,” they noted.
“A rigid, equation-based tariff system is unsustainable,” the association warned. “Sri Lanka needs a stable policy framework to attract long-term investments. For instance, retirees could invest EPF savings into solar projects, securing income while advancing national energy targets. Without urgent action, 1,000 SMEs and 40,000 jobs face collapse, with dire consequences for employment, energy security, and economic stability,” they pointed out.
SIA urged policymakers to establish an independent committee to investigate the power outage fairly, expand the tariff committee’s mandate to include socioeconomic and environmental benefits and implement predictable policies to safeguard SMEs, households, and investor confidence.
“Sri Lanka stands at a crossroads,” the SIA emphasized. “Protecting rooftop solar isn’t just about energy—it’s about livelihoods, economic resilience, and a sustainable future. We urge stakeholders to collaborate on solutions that prioritize both people and progress,: they emphasized.
Starting its promotional work for 2025, Sri Lanka Tourism Promotion Bureau (SLTPB) added another feather into its cap of endorsements, by being recognized as the most innovative Tourism Board promotion in Outbound Travel Mart (OTM) . In parallel to that, several other sub events were held. The OTM was held in Jio World Convention Centre, Mumbai—India, from 30th January to 01st February 2025.Before OTM, the Global Village – Global Exchange & Trade Exhibition was held at the Surat International Exhibition & Convention Centre , Sarsana, Surat (Gujarat – India , from 25th to 27th January 2025. This travel fair was organized by Southern Gujarat Chamber of Commerce and Industry (SGCCI).
Sri Lanka participated in both OTM and South Asia’s Travel & Tourism Exchange (SATTE), held from 19th – 21st Feb 2025, in New Delhi, India . This was an excellent opportunity for Sri Lanka to promote it’s potential as a unique travel destination, especially for the Indian counterparts, as SLTPB has identified India as the number one source market for Sri Lanka, tourism bringing the largest number of tourist arrivals to the destination.
SLT-MOBITEL has entered into a strategic partnership with Rush Lanka Group to provide exclusive SLT-MOBITEL Fibre connectivity solutions to their portfolio of luxury apartment developments in Colombo and the suburbs, enhancing the digital experience of all residents.
The agreement was signed between Imantha Wijekoon, Chief Business Officer of Consumer Business at SLT, and Zaid Ariff, Director of Construction at the Rush Group headquarters. Representatives from both companies also attended the ceremony.
Under the partnership, SLT-MOBITEL will serve as the exclusive digital service provider for five prestigious Rush Lanka developments including Street Rush Residencies and Rush Court 4 in Mt. Lavinia, Rush Tower 2, Rush Metropolis in Dehiwala, and Rush Court 5 in Colombo 14. The collaboration ensures residents will enjoy superior fibre connectivity speeds, enabling seamless digital experiences in modern smart homes. The partnership with the Rush Lanka Group aligns with SLT-MOBITEL’s commitment to offer ultra-fast, reliable connectivity solutions to residential developments. Delivering exclusive fibre connectivity to luxury apartments, SLT-MOBITEL ensures residents have access to world-class digital services that complement the living experience promised by Rush Lanka Group.
Powered by advanced fibre technology, SLT-MOBITEL network will provide the residences with seamless performance across digital activities. The SLT-MOBITEL Fibre backbone ensures lag-free experiences whether tenants are gaming online, attending virtual classes, working remotely, or streaming high-definition entertainment. SLT-MOBITEL Fibre will transform the lifestyles of all apartment users bringing greater convenience and superior quality of life.
Rush Lanka Group, established in 1992, is a property developer specializing in luxury and semi-luxury apartments.
Showers above 50mm can be expected at some places in Western and Sabaragamuwa provinces and in Galle, Matara and Kurunegala districts
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