Banks’ Association hails Central Bank Governor’s assurances on DDR/DDO

The Sri Lanka Banks’ Association (SLBA) has welcomed the assurance by Central Bank Governor Dr. Nandalal Weerasinghe that the financial sector stability will be maintained and the clarifications provided by the governor on the relevant process in this regard.

In a statement, the SLBA noted that Dr. Weerasinghe’s public announcement covered important issues and included a categoric assurance that the forthcoming Domestic Debt Optimisation (DDO) or Domestic Debt Restructuring (DDR) will not impact the financial system stability and will not in any way adversely affect the depositors in the banks or non-bank financial institutions.

Dr. Weerasinghe had also clarified that the five-day holiday for the banking sector was to afford a sufficient period of days for discussion of the DDO/DDR strategy within the government and it also provides an opportunity for reflection by the public and market participants, the SLBA said. 

The SLBA also welcomed Dr. Weerasinghe’s statement that the DDO/DDR strategy has to be announced and must follow the proper approval process from the Cabinet of Ministers, Committee of Public Finance and Parliament, via a debate, apart from having been discussed with the Central Bank and Finance Ministry.

“The governor also mentioned that during the five-day holiday, banking services will be available for customers as usual via ATMs, online and other digital channels,” the SLBA noted and pointed out, “Meanwhile, the capital and liquidity ratios of the banks remain above the regulatory requirements and the banks pay close attention to these indicators.” 

The statement added that the SLBA represents all licensed banks in Sri Lanka and encourages cooperation among the members and coordination of the banking sector operations as required. 

“Within this ambit, a key aim is assisting in maintaining and developing a sound banking structure in Sri Lanka, in accordance with the policy and regulatory frameworks set by the Central Bank,” the association said