A CBSL scheme announced in April to drive inward remittances and investment may risk Sri Lanka falling back into the FATF's grey list, says Duruthu Chandrasekera.
The CBSL has cut the statutory reserve ratio by 200 basis points, releasing $617mn in liquidity in the banking system. The size of its re-finance facility has also been tripled.
Banks are allowed to distribute cash dividends to general shareholders and stock dividends to sponsors and institutional investors.
The tripling of the limit was proposed to the Cabinet following complaints from various parties that they had not received relief from their banks.
Sri Lanka’s SEC has approved rules to enable electronic account opening, trading and settlement at the Colombo Stock Exchange.
Exacerbated by a seven-week stock market shut down, foreign investors sold large quantities of Sri Lankan bank stocks following a ban on bank dividends this month.