Business
EY webinar on CBSL direction 13 & 14 of 2021 – understanding the regulatory requirements
The Central Bank of Sri Lanka (CBSL) directions on classification, recognition and measurement of credit facilities and other financial assets will come into effect from 01st January 2022 onwards. It’s paramount for bankers to understand the regulatory expectations in this regard. New directions were introduced with the objective of harmonizing the regulatory framework with Sri Lanka Financial Reporting Standards-SLFRS 9 Financial Instruments.
The regulator has emphasized the importance of having a comprehensive credit risk management framework while stipulating its main components. Accordingly, Licensed Commercial Banks (LCBs) are expected to have a framework covering all aspects of credit lifecycle of its financial assets which includes, policy on classification, potential risk, under performing loans and write-offs, guidelines on computing Expected Credit Losses (ECL) & disclosures.
A high-profile deliberation on this crucial theme conducted by Manil Jayesinghe, Country Managing Partner, Ernst & Young, Sri Lanka and Maldives and Rajith Perera, Partner, Financial Accounting Advisory Services of Ernst & Young, Sri Lanka is to be held on 22 November 2021 where they will discuss regulatory expectations combined with Financial Reporting Risk Management challenges faced by banks.
Apart from the emphasize on governance, compliance with new regulation will induce other technical and operational changes for banking community. Mainly, change in the definition of Non-performing loans (NPL) may trigger system modifications and classification for certain segments of the loan portfolio while the specific and general provision based on the subclassification will cease to exist and provision determination will be based on SLFRS 9 Financial Instruments combined with the directive providing additional guidance as appropriate. Deliberation on “Significant Increase in Credit Risk” (SICR) will require lending officers to exercise judgement and have well documented policies and processes to ensure consistency in terms of staging its credit facilities. Another aspect which needs early intervention is on recognition of interest income for stage 3 facilities which shall be recognized in line with SLFRS 9 Financial Instruments. Banks may review the mechanism for income recognition as the interest suspension is no longer relevant with the revocation of the respective circulars.
Further, there will be impairment charges defined based on SLFRS 9 and the directive based on 12months Expected Credit Loss (ECL) and Lifetime ECL. Minimum Stage 1 Provision of 0.5% will be maintained and in the event 0.5% is not maintained adequate appropriations to be made from Equity.
Another important requirement under the new direction is on managing model risk. Banks are requested to develop comprehensive policies in relation to model governance covering life cycle of model development and validation. Given the increased use of sophisticated models with the implementation of SLFRS 9, regulatory requirement is timely to ensure accuracy and completeness of financial information. Further, if any changes in the credit models are required, the rationale and justification for such change shall be evaluated by the Chief Risk Officer, Integrated Risk Management Committee and approved by the Board of Directors.
The directive states that scope of internal audit function should be enhanced to independently evaluate the effectiveness of the credit risk assessment & measurements. Further, the Internal Audit function will at least annually, validate and evaluate all credit risk assessment models, inputs and assumptions used along with data smoothening. An assurance on the adequacy and effectiveness of back testing should be provided from third line of defense perspective.
Economists, banking and financial service professionals and other decision makers interested are invited to join for further deliberations on this crucial theme webinar with Ernst and Young, on 22nd November 2021 from 09.00 am to 12.00 pm. For registrations contact Thilini Perera on Thilini.perera1@lk.ey.com or Tel. +94 770623529.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
US sports envoys to Lanka to champion youth development
Rahuman questions sudden cancellation of leave of CEB employees
