COMPLIANCE REQUIREMENTS ENFORCED BY

THE CENTRAL BANK OF SRI LANKA

Compliance to other disclosure requirements on Annual Financial Statements, which were applicable to licensed commercial banks are

summarised below:
1.

Information about the significance of financial instruments for financial position and performance

1.1

Statement of Financial Position

1.1.1

Disclosures on categories of financial assets and financial liabilities

Note 21 to the Financial Statements

1.1.2

Other disclosures
(i) Special disclosures about financial assets and financial liabilities designated to be measured

at fair value through profit or loss, including disclosures about credit risk and market risk,

changes in fair value attributable to these risks and the methods of measurement

Note 4.4, 27 and 64 to the Financial

Statements

(ii) Reclassifications of financial instruments from one category to another

Note 63.4 to the Financial Statements

(iii) Information about financial assets pledged as collateral and about financial or nonfinancial

assets held as collateral

Note 58 to the Financial Statements

(iv) Reconciliation of the allowance account for credit losses by class of financial assets

Note 28.1 and 28.2 to the Financial

Statements

(v) Information about compound financial instruments with multiple embedded derivatives

None

(vi) Breaches of terms of loan agreements

None

1.2

Statement of Comprehensive Income

1.2.1

Disclosures on items of income, expense, gains and losses

Note 7 to 18 to the Financial Statements

1.2.2

Other disclosures
(i) Total interest income and total interest expense for those financial instruments that are not

measured at fair value through profit and loss

Note 8 to the Financial Statements

(ii) Fee income and expense

Note 9 to the Financial Statements

(iii) Amount of impairment losses by class of financial assets

Note 14 to the Financial Statements

(iv) Interest income on impaired financial assets

Note 8.1 to the Financial Statements

1.3

Other disclosures

1.3.1

Accounting policies for financial instruments

Note 4.4, 21 to 30, 39 to 44 and 49 to the

Financial Statements

1.3.2

Information on financial liabilities designated at FVTPL

None

1.3.3

Investments in equity instruments designated at FVOCI
(i) Details of equity instruments that have been designated as at FVOCI and the reasons for

the designation.

Note 30 to the Financial Statements

(ii) Fair value of each investment at the reporting date

Note 30.2 and 30.3 to the Financial

Statements

(iii) Comparable carrying amounts

Note 30 to the Financial Statements

(iv) Description of how fair value was determined

Note 63 to the Financial Statements

(v) Dividends recognised during the period, separately for investments derecognised during

the reporting period and those held at the reporting date.

Note 13 to the Financial Statements

Circular No.

Requirement

Period

Date published in

Sinhala, Tamil and

English Newspapers

No. 02 of 2019

6.1 The publication should be made within two months from

the end of each quarter, at least once in an English,

Sinhala and Tamil newspaper.

6.2 Publication of annual audited financial statements shall

be made within five months from the end of the financial

year.

6.3 If the Bank publishes its Audited Financial Statements

within three months from the end of the financial year,

the requirement to publish the Financial Statements

for the 4th quarter in terms of 6.1 above would not be

mandatory.

Quarter 1 ended 31 March 2023

26 May 2023

18 January 2019

Quarter 2 ended 30 June 2023

25 August 2023

Quarter 3 ended 30 September 2023

30 November 2023

Quarter 4 ended 31 December 2023

(Audited)

22 March 2024

(vi) Transfer cumulative gain or loss within equity during the period and the reasons for those

transfers

Note 12 to the Financial Statements

(vii) If investments in equity instruments measured at FVOCI are derecognised during the

reporting period,

None

• Reasons for disposing of the investments

• Fair value of the investments at the date of derecognition

• The cumulative gain or loss on disposal

1.3.4

Reclassification of financial assets
(i) For all reclassifications of financial assets in the current or previous reporting period

Note 63.4 to the Financial Statements

• Date of reclassification

• Detailed explanation of the change in the business model and a qualitative description

of its effect on the Financial Statements

• The amount reclassified into and out of each category

(ii) For reclassifications from FVTPL to amortised cost of FVOCI

None

• The effective interest rate (EIR) determined on the date of reclassification

• The interest revenue recognised

(iii) For reclassifications from FVOCI to amortised cost, or from FVTPL to amortised cost or

FVOCI

Note 63.4 to the Financial Statements

• The fair value of the financial assets at the reporting date

• The fair value gain or loss that would have been recognised in profit or loss or OCI during

the reporting period if the financial assets had not been reclassified.

1.3.5

Information on hedge accounting

Note 53 to the Financial Statements

1.3.6

Information about the fair values of each class of financial asset and financial liability, along with:
(i) Comparable carrying amounts

Note 63 to the Financial Statements

(ii) Description of how fair value was determined

Note 63 to the Financial Statements

(iii) The level of inputs used in determining fair value

Note 63 to the Financial Statements

(iv) (a) Reconciliations of movements between levels of fair value measurement hierarchy

None

(b) Additional disclosures for financial instruments that fair value is determined using Level

3 inputs

Note 63.1.3 to the Financial Statements

(v) Information if fair value cannot be reliably measured

None

Information about the nature and extent of risks arising from financial instruments

2.1

Qualitative disclosures

2.1.1

Risk exposures for each type of financial instrument

Risk Report and Note 64 to the Financial

Statements

2.1.2

Management’s objectives, policies, and processes for managing those risks

Risk Management Report

2.1.3

Changes from the prior period

Risk Management Report

2.2

Quantitative disclosures

2.2.1

Summary of quantitative data about exposure to each risk at the reporting date

Note 64 to the Financial Statements

2.2.2

Disclosures about credit risk, liquidity risk, market risk, operational risk, interest rate risk and

how these risks are managed

Note 64 to the Financial Statements

(i) Credit Risk

Note 64.2 to the Financial Statements

(a) Maximum amount of exposure (before deducting the value of collateral), description of

collateral, information about credit quality of financial assets that are neither past due

nor impaired and information about credit quality of financial assets

Note 64.2.2 to the Financial Statements

(b) For financial assets that are past due or impaired, disclosures on age, factors

considered in determining as impaired and the description of collateral on each class

of financial asset

Note 64.2.1 to the Financial Statements

Note 64.2.2.1 to the Financial Statements

(d) Credit risk management practices – CRM practices and how they relate to the

recognition and measurement ECL, including the methods, assumptions, and

information used to measure ECL

Note 28 and 64 to the Financial Statements

• Quantitative and qualitative information to evaluate the amounts in the Financial

Statements arising from ECL, including changes and the reasons for those changes

• How the Bank determines whether the credit risk of financial instruments has

increased significantly since initial recognition

• The Bank’s definitions of default for different financial instruments, including the

reasons for selecting those definitions

• How instruments are grouped if ECL are measured on a collective basis

• How the Bank determines that financial assets are credit – impaired

• The Bank’s write-off policy, including the indicators that there is no reasonable

expectation of recovery

• How the modification requirements have been applied

(e) ECL calculations

Note 28 to the Financial Statements

• Basis of the inputs, assumptions and the estimation techniques used when

estimating ECL

• How forward – looking information has been incorporated into the determination

of ECL including the use of macroeconomic information. Changes in estimation

techniques or significant assumptions made during the reporting period

(f) Amounts arising from ECL

Note 22, 24, 28 and 29 to the Financial

Statements

• Reconciliation for each class of financial instruments of the opening balance to the

closing balance of the impairment loss allowance

(g) Collateral

Note 64.2.2 to the Financial Statements

• Bank’s maximum exposure to credit risk at the reporting date

• Description of collateral held as security and other credit enhancements

(h) Written-off assets

Note 28 to the Financial Statements

• Contractual amount outstanding of financial assets written off during the reporting

period that are still subject to enforcement activity.

(i) Pillar III disclosures of the Banking Act Directions No 1 of 2016 on Capital

requirements under Basel III for licensed banks

Capital Adequacy in Compliance annexes

(ii) Liquidity Risk

(a) A maturity analysis of financial liabilities

Note 60 to the Financial Statements

(b) Description of approach to risk management

Risk Management Report and Note 64.3 to

the Financial Statements

requirements under Basel III for Licensed Banks

Capital Adequacy in Compliance Annexes

(iii) Market Risk

(a) A sensitivity analysis of each type of market risk to which the entity is exposed

Note 64.4 to the Financial Statements

(b) Additional information, if the sensitivity analysis is not representative of the

Bank’s risk exposure

Note 64.4 to the Financial Statements

requirements under Basel III for Licensed Banks

Capital Adequacy in Compliance Annexes

(iv) Operational Risk Pillar III disclosures of the Banking Act Direction No. 1 of 2016 on

Capital requirements under Basel III for Licensed Banks

Capital Adequacy in Compliance Annexes

(v) Equity risk in the banking book

(a) Qualitative disclosures

Differentiation between holdings on which capital gains are expected and

those taken under other objectives including for relationship and strategic

reasons

Note 27 and 30 to the Financial Statements

Discussion of important policies covering the valuation and accounting of

equity holdings in the banking book

Note 27 and 30 to the Financial Statements

(b) Quantitative disclosures

Value disclosed in the Statement of Financial Position of investments, as well

as the fair value of those investments; for quoted securities, a comparison to

publicly quoted share values where the share price is materially different from

fair value

Note 27.2, 30.2 and 30.3 to the Financial

Statements

The types and nature of investments

Note 27 and 30 to the Financial Statements

The cumulative realised gains/ (losses) arising from sales and liquidations in the

reporting period

Note 12 to the Financial Statements

(vi) Interest rate risk in the banking book

(a) Qualitative disclosures

Nature of interest rate risk in the banking book (IRRBB) and key assumptions

Note 64.4.2 to the Financial Statements

(b) Quantitative disclosures

The increase/(decline) in earnings or economic value (or relevant measure

used by management) for upward and downward rate shocks according to

management’s method for measuring IRRBB, broken down by currency (as

relevant)

Note 64.4.3 to the Financial Statements

2.2.3

Information on concentrations of risk

Note 64.2.3 to the Financial Statements

Other Disclosures

3.1

Capital

3.1.1

Capital structure

Note 50 to the Financial Statements

3.2

Qualitative disclosures

Summary information on the terms and conditions of the main features of all capital

instruments, especially in the case of innovative, complex or hybrid capital instruments

Debt – Note 49 to the Financial Statements

Equity – Note 50 to the Financial Statements

3.3

Quantitative disclosures

3.3.1

Quantitative disclosures
• Paid-up share capital/common stock

Capital Adequacy in Compliance Annexes

• Reserves

Capital Adequacy in Compliance Annexes

• Non-controlling interests in the equity of subsidiaries

Capital Adequacy in Compliance Annexes

• Innovative instruments

None

• Other capital instruments

None

(a) Deductions from Tier I capital

Capital Adequacy in Compliance Annexes

(b) The total amount of Tier 2 and Tier 3 capital

Capital Adequacy in Compliance Annexes

(d) Total eligible capital

Capital Adequacy in Compliance Annexes

3.4

Capital adequacy

(i) Qualitative disclosures

A summary discussion of the Bank’s approach to assessing the adequacy of its capital or

support current and future activities

Risk Report and Note 64.6 to the Financial

Statements

(ii) Quantitative disclosures

(a) Capital requirements for credit risk, market risk and operational risk

Capital Adequacy in Compliance Annexes

(b) Total and Tier 1 capital ratio

Capital Adequacy in Compliance Annexes