Legal Muscle

Sri Lankan Prime Minister Ranil Wickremasinghe (2nd R) arrives to visit the site of a bomb attack at St. Anthony's Shrine in Kochchikade in Colombo on April 21, 2019. - A string of blasts ripped through high-end hotels and churches holding Easter services in Sri Lanka on April 21, killing at least 156 people, including 35 foreigners. (Photo by ISHARA S. KODIKARA / AFP) (Photo credit should read ISHARA S. KODIKARA/AFP/Getty Images)

Mar. 21 (LBO) – Sri Lanka’s Parliament Tuesday passed amendments to several financial bills, including a tax on foreign television programmes and compulsory lending to agriculture sector, that were proposed in the 2006 budget. Under changes to the Banking Act, licensed commercial banks or LCB’s are required to maintain a minimum Rs1 billion in capital. However, the changes empower the Monetary Board to vary the minimum capital requirement within a one-year period depending on the liabilities or assets of the bank.

Amendments to the Banking Act will strengthen the Central Bank’s powers and clear conflicts between Sinhala and English texts.

Parliament also passed amendments to the Monetary Law Act includes empowering the Central Bank to direct all banks to lend to specific economic sectors.

During the budget presentation, the government said agriculture lending has been quite inadequate over the last few years, despite increased savings deposits from the rural economy.

“The share of agricultural credit has declined from 6.3 percent in 1995 to 4.7 percent in 2004,” a note circulated among the government parliamentary group said.

Under the amendments, banks are now compelled to increase their