Sri Lanka’s financial sector is slated to receive a fresh boost, with the government having entered into an agreement with the World Bank to strengthen the industry’s resilience.
As per the agreement, Sri Lanka will receive US $ 150 million in financing through the Financial Sector Safety Net Strengthening Project (FSSNP). In parallel, the project agreement between the World Bank and Central Bank of Sri Lanka (CBSL) was also entered in respect of the project implementation arrangements. 
The project development objective is to strengthen Sri Lanka’s financial sector safety net, with the focus on the Sri Lanka Deposit Insurance Scheme (SLDIS), which is managed by the CBSL. The project also aims to strengthen the financial and institutional capacity of the SLDIS, in line with international best practices for effective deposit insurance schemes. 
The CBSL will be the Implementing Agency of the FSSNP. The Deposit Insurance Scheme of Sri Lanka was legally instituted and named as the Sri Lanka Deposit Insurance Scheme, with the enactment of Banking (Special Provisions) Act No. 17 of 2023. 
Central Bank Governor Dr. Nandalal Weerasinghe said the proposed loan would boost the reserves of the SLDIS, thereby enhancing the payout capability of the scheme. It will also facilitate the SLDIS to become more aligned with the internationally accepted best practices on deposit insurance. 
“These measures will help to build the confidence of the depositors in the financial system and lead to the stability of the country’s financial system. Hence, the World Bank support by way of this financing facility is considered a timely measure,” said Dr. Weerasinghe.

World Bank Country Director for the Maldives, Nepal and Sri Lanka Faris Hadad-Zervos asserted that a stable and reliable financial sector is crucial for Sri Lanka’s economic revival and sustainable growth. Strengthening the deposit insurance scheme will safeguard the savings of smaller depositors, including women and people living in rural areas. 
“It will also sustain the confidence in Sri Lanka’s financial system, which will pave the way for job creation, business growth and enhanced financial wellbeing of Sri Lankan people,” he said.
Signing of the agreements between the government of Sri Lanka, World Bank and CBSL were represented by Treasury Secretary K.M. Mahinda Siriwardana, Hadad-Zervos and Dr. Weerasinghe, respectively. World Bank Regional Vice President for South Asia Martin Raiser was in attendance at the signing ceremony.