Few Tweaks

January 8, 2007 (LBO) – Sri Lanka’s Central Bank plans to revise the way commercial banks’ compute the single borrower limit, as part of its drive to strengthen the banking system. “We are looking at revising the Single Borrower Limit in line with improved risk management by banks,” Governor Nivard Cabraal said.

Presently, a single company, corporation, firm association of persons/individuals can borrow up to 30 percent of the bank’s capital.

Under the proposed amendments, the 30 percent limit for a single entity remains. But if it’s a group company, the single borrower limit goes up to 33 percent.

Further increases will be
determined based on the credit rating of the bank and the customer and
the capital adequacy ratio of th

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