Sept 08, Colombo: Sri Lanka's Central Bank yesterday announced that it has decided to raise the minimum capital requirement of licensed banks to promote the 'existence of strong banks that are resilient to internal and external shocks.'

Accordingly, new licensed commercial banks are required to have an initial capital of 3 billion rupees in 2010 which is to be raised by one billion rupees by every two years till 2014. The initial capital for new licensed specialized banks will be 2.0 billion rupees in 2010 and thereafter it will increase by half a billion rupees every two years until 2014.

The Central Bank in support of its decision said the increased capital will further provide a cushion for banks to enhance their contribution to the new growth sectors of the economy and to absorb any unexpected losses.

The Monetary Board further decided to require unlisted locally incorporated private banks to list them in the Colombo Stock Exchange by the end of next year.

" In keeping abreast with this requirement and having considered the need for enhancing the ability of banks to raise additional capital in a more transparent manner and further improving governance through market discipline, the Monetary Board has also decided to require unlisted locally incorporated private banks to list them in the Colombo Stock Exchange by 31.12.2011," it said.