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Establishing Banks and Representative Offices in Sri Lanka

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Overview

It appears that you have provided a comprehensive guide outlining the requirements for establishing banks or representative offices in Sri Lanka under the Banking Act of 2007.

Requirements for Establishing Banks and Representative Offices

The document is divided into several sections, including:

  • General Requirements
  • Specific Requirements with Respect to Locally Incorporated Banks and Representative Offices of Foreign Banks
  • Additional Criteria with respect to Subsidiaries and Branches of Foreign Banks

General Requirements

Within these sections, the document provides detailed requirements for:

  • Business Model and Feasibility Study: A comprehensive business model that outlines the bank’s or representative office’s objectives, strategies, and financial projections.
  • Capital and Shareholding Structure: Minimum capital requirement, foreign shareholding limits, and director qualifications.
  • Governance and Management: Governance structure, risk management practices, and employment of expatriate staff.
  • Risk Management Systems: Implementation of robust risk management systems to mitigate potential risks.
  • Training Facilities: Availability of training facilities for employees to enhance their skills and knowledge.
  • Technology Risk Management and Resilience: Implementation of technology risk management and resilience measures to ensure business continuity.
  • Business Projections: Comprehensive business projections that outline the bank’s or representative office’s financial performance.

Specific Requirements for Locally Incorporated Banks

Locally incorporated banks are required to:

  • Register as a public company under the Companies Act No. 7 of 2007
  • Have an Articles of Association that sets out “carrying on of banking business” as a primary object
  • Meet minimum capital requirements
  • Comply with foreign shareholding limits
  • Ensure director qualifications

Specific Requirements for Subsidiaries and Branches of Foreign Banks

Subsidiaries and branches of foreign banks are required to:

  • Have a parent bank that is incorporated outside Sri Lanka or a body corporate formed in pursuance of any statute
  • Implement robust risk management practices
  • Establish a governance structure
  • Maintain capital adequacy
  • Ensure availability of liquidity