Sri Lanka’s banking sector should start preparing for the anticipated transformation of the current banking industry landscape as the new Banking Act is set to come into effect with the regulator gaining power to impose fines on errant banks.

“We are in the process of reviewing the current banking act and there are number of amendments that will be introduced to strengthen the banking act and one of those amendments is to empower the statutory authority who is the director of bank supervision to impose fines,” Central Bank Governor Dr.  Indrajit Coomaraswamy told reporters on Friday (11 October).

“Right now we don’t have the capacity to impose fine. You would have read in media all over the world that regulators impose billions of dollars of fines on some of the biggest banks in the world. Now we can’t do that. We can restrict their business in certain ways. We can restrict the role of board members etc. But we can’t impose fines so that is what would be introduced,” governor said.

“So the World Bank is helping us to resave the banking act. So with that I think all those penalties, structures would be introduced."added the Deputy Governor of the CBSL H.A. Karunaratne .