Be Prepared

Central Bank is pushing commercial banks to improve risk management and be ready to adopt stringent ‘BASEL II’ standards soon after they are implemented. Central Bank is pushing commercial banks to improve risk management and be ready to adopt stringent ‘BASEL II’ standards soon after they are implemented. The banks deputy governor Ranee Jayamaha told LBR that local banks will be expected to follow their counterparts in risk management by 2007.
Excerpts:-

Shamindra Kulamannage: How tighter financial sector regulations are affecting commercial banks?
Dr. Ranee Jayamaha: We increased the capital adequacy ratio of the banks. In addition to that this is also a forerunner to start the BASEL II guidelines, which probably might come into operations in 2007 or so.

We are not yet ready but we are making all the preliminary work that is necessary to start the BASEL II soon after the developed countries introduce that – especially the G7 countries.

In preparation for that there are several things that need to be done.

One is to increase the regulatory capital which will enable them to assign some part of the capital for operat