Mar 10, 2011 (LBO) – Sri Lanka’s banking regulator is examining bonuses and compensation packages of bankers to see if they are excessive with the aim of limiting them if necessary, a central bank report said. “Directions on integrated risk management and Pillar II of Basel II which relate to additional prudential requirements following the supervisory process to further strengthen the capital planning process of banks, will be issued shortly,” the central bank said.
This is part of moves to strengthen the regulatory framework of the banking sector, the central bank said in its financial system stability review for 2010.
Fitness criteria now applicable to board members will be extended to key bank executive staff under plans to improve corporate governance.
“To strengthen the corporate governance in banks, the fitness and propriety criteria applicable to directors will be extended to executive staff performing key functions in banks,” the report said.
“Bonuses and compensation packages of bankers is currently being examined to ascertain if excessive remuneration is being provided and limits may be imposed if considered necessary.”
The central bank is also preparing guidelines on consumer pro