Financial Crime World

Central Bank of Sri Lanka Introduces New Financial Consumer Protection Regulations

The Central Bank of Sri Lanka (CBSL) has announced new regulations aimed at strengthening the current financial consumer protection frameworks and bringing them in line with international standards. This follows the issuance of the Financial Consumer Protection Regulations, No. 01 of 2023 published in the Government Extraordinary Gazette No. 2344/17 on August 9, 2023.

Key Highlights of the New Regulations

  • Applies to all financial service providers regulated by CBSL.
  • Uniformly applies to financial service providers under the Monetary Law Act, No.58 of 1949.
  • Strengthens existing financial consumer protection guidelines issued under the Banking Act, the Finance Business Act, and the Finance Leasing Act.
  • Empowers consumers with more rights and protections.
  • Establishes a foundation for market conduct supervision by the Central Bank.
  • Paves the way for the development of a trusted and stable financial system in Sri Lanka.

Empowering Consumers

The regulations are expected to enhance consumer protection by:

  • Establishing clear communication channels between financial service providers and consumers.
  • Providing consumers with easier access to information regarding financial products and services.
  • Giving consumers the right to seek compensation for any losses incurred due to failures on the part of the financial service provider.
  • Requiring financial service providers to disclose all relevant information, including potential risks, fees, and charges, in a clear and concise manner.

International Best Practices

The Central Bank’s commitment to promoting transparency and fairness in the financial markets and protecting consumers from potential risks and financial pitfalls aligns with international best practices in financial consumer protection. This move is expected to attract foreign investment and promote economic growth by:

  • Improving the efficiency and stability of the financial sector.
  • Enhancing consumer trust and confidence.
  • Strengthening the regulatory framework.

Conclusion

By issuing these new regulations, the Central Bank of Sri Lanka signals its commitment to creating a strong, reliable, and resilient financial system for all. The introduction of these regulations marks a crucial milestone in the nation’s financial regulatory landscape and is part of an ongoing effort to enhance consumer protection and financial stability.