Banking system of Sri Lanka

INNOVATION TREND  The banking industry is beginning to incorporate the traits and practices that were once the domain of fintech startups. Banks and credit unions have become more comfortable with a faster pace of innovation, using data and analytics more extensively and digitizing processes as opposed to simply turning paper into PDFs. The global banking sector is becoming both more strategically focused and technologically advanced to respond to consumer expectations while trying to defend market share against an increasing array of competitors. A great deal of emphasis is being placed on digitizing core business processes and reassessing organizational structures and internal talent to be better prepared for the future of banking. This transformation illustrates the increasing desire to become a ‘digital bank’. The importance of innovation and developing new solutions that take advantage of data, advanced analytics, digital technologies and new delivery platforms has never...

  BASEL III AND SRI LANKA BANKS NEW CAPITAL REQUIREMENTS FOR BANKS BECOME EFFECTIVE FROM JUNE 2017. What is Basel III? The Basel Committee on Banking Supervision was established in 1974 to contain global banking risks by formulating guidelines and regulations relating to credit, capital, markets and operations. Its first accord, Basel I, was issued in 1988 and updated in 2004 with Basel II. Basel III was issued in the aftermath of the global financial crisis in 2008, with tighter regulations and requirements around capital adequacy, leverage, liquidity and funding to ensure that banks maintain sufficient capital to meet financial obligations and absorb unexpected losses. Sri Lanka is implementing capital adequacy requirements conforming to Basel III in June 2017, setting targets over the next two years.However, the process started much earlier. How is Sri Lanka rolling out Basel III? Basel III will be in effect from June 2017, but there aren’t any overnight changes. T...