The Monetary Board, having considered the benefits to the banking system through the investments by Multilateral Financial Organizations in the shareholding of licensed specialized banks and licensed commercial banks hereby issues the following Direction.

For licensed Specialized banks, the following new Direction will be inserted immediately after Direction 3 (2) of the Banking Act Directions No. 2 of 2007.

The maximum percentage of ownership of shares - The Monetary Board, subject to terms and conditions it may deem fit, may grant permission on a case-by-case basis to acquire a material interest not exceeding 20% of the issued capital carrying voting rights in a licensed specialized bank by Multilateral Financial Organizations such as the World Bank, International Finance Corporation (IFC), Asian Development Bank (ADB) and any other Multilateral Financial Organization as approved by the Monetary Board of the Central Bank of Sri Lanka subject to the condition that the material interest so acquired shall be reduced to 15% within a period of 10 years from the date of stipulation.

For licensed commercial banks, Direction 4 of the Banking Act Directions No. I of 2007 is replaced as follows:

The maximum percentage of ownership of shares - Accordingly, the Monetary Board, subject to Sections 12(18), 12 (1C) and 13 and subject to terms and conditions it may deem fit, may grant permission on a case-by-case basis to:

(a) Any of the categories of shareholders referred to in Sections 12(lC) and 46(1)(d) to acquire a material interest not exceeding 15% of the issued capital carrying voting rights in a licensed commercial bank,

(b)Multilateral Financial Organizations such as the World Bank, International Finance Corporation (IFC), Asian Development Bank (ADB) and any other Multilateral Financial Organization as approved by the Monetary Board of the Central Bank of Sri Lanka, notwithstanding (a) above, to acquire a material interest not exceeding 20% of the issued capital carrying voting rights in a licensed commercial bank subject to the condition that the material interest so acquired shall be reduced to 15% within a period of 10 years from the date of stipulation.