The Monetary Board of the Central Bank has decided to increase the minimum capital requirement of licensed banks with a view to promoting the existence of strong banks that are resilient to internal and external shocks.

According to the Central Bank, the minimum capital requirement of licensed banks follows:

New Banks
 

Year	Licensed Commercial Banks (Rs. Bn.)	Licensed Specialised Banks (Rs. Bn.)
2010	3.0	2.0
2012	4.0	2.5
2014	5.0	3.0

Existing Banks
 

Effective Date	Licensed Commercial Banks (Rs. Bn.)	Licensed Specialised Banks (Rs. Bn.)
31.12.2011	3.0	2.0
31.12.2013	4.0	2.5
31.12.2015	5.0	3.0

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 loss, the Central Bank further stated.

It also said that 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.