Financial Crime World

Establishing Banks or Representative Offices in Sri Lanka

Introduction

The Central Bank of Sri Lanka (CBSL) sets forth guidelines and regulations for establishing banks or representative offices in Sri Lanka. This article outlines the key requirements for setting up a bank or representative office in Sri Lanka.

Requirements for Establishing Banks or Representative Offices

1. Business Plan

  • A comprehensive business plan should be submitted to CBSL, including:
    • Proposed bank’s business model
    • Management structure
    • Risk management systems
    • Financial projections

2. Capital Requirements

  • The minimum capital required for a new bank entering the market in Sri Lanka is set by CBSL from time to time (Please refer Table 03).

3. Company Registration

  • The proposed bank should be a Public Company registered under the Companies Act, No. 7 of 2007.

4. Articles of Association

  • The Articles of Association of the Company should set out the “carrying on of banking business” as defined in the Banking Act as a primary object.

5. Capital Structure

  • The capital of the company should not be less than the minimum capital required by CBSL from time to time for new banks entering the market in Sri Lanka (Please refer Table 03).

6. Foreign Shareholding Limitations

  • The Company cannot have a foreign shareholding in excess of the limit established from time to time by the Governing Board of CBSL.

7. Director Qualifications

  • Directors should not be subject to any disqualification in terms of Section 42 (2), 44B, and Section 76 of the Banking Act and the Banking Act Directions No. 11 and 12 of 2007 on Corporate Governance for Licensed Commercial Banks and Licensed Specialised Banks, respectively.

8. CEO and Officer Qualifications

  • The CEO and other officers performing executive functions of the proposed bank as determined in the Banking Act Determination should be fit and proper persons to hold such positions.

Conclusion

These requirements are subject to change and may vary depending on the specific circumstances of the application. It is recommended to consult the original document or seek clarification from relevant authorities for accurate information.