REGULATORY FRAMEWORK OF CENTRAL BANK OF SRI LANKA
Importance of Supervision of Banks and Their Regulatory Framework In present, banking sector of Sri Lanka is regulated by the Monetary Law Act No.58 of 1949 The Act is established by the Central Bank to administer and regulate the system and to confer and impose upon the Monetary Board of the Central Bank powers, functions and responsibilities necessary for the purpose of such administration and regulation. And also the Banking Act No.30 of 1998 has established to provide for the introduction and operation of a procedure for the licensing of persons carrying on banking business, for the regulation and control of matters relating to the banks. Regulation of banks is required to protect the public against mismanagement, bank failures and loss of confidence in the banking system. Bankers’ failures can have broader ramification hurting customers, other banks, the community and the market as a whole. To protect depositors and stock-holders CBSL has established several regulatory dep