On Sep. 30, SRI CB issued directions on bank corporate governance.
SRI CB published the Directions on corporate governance for licensed banks.
It covers five schedules including regulatory requirements on corporate governance for licensed banks, responsibilities of the risk management function, responsibilities of compliance function, responsibilities of internal audit function, and schedule V.
Document dated Sep. 30, 2024, received from SRI CB Oct. 1, summarized on Oct. 3.
Regulatory Requirements
Specify the ultimate responsibility and accountability of the board, such as appointing chairperson and CEO, board meetings / procedures, maintenance of meeting minutes.
For board’s composition, specify the procedure for appointing directors; the number of directors; roles of executive directors, non-executive directors, independent directors.
Set out the requirements for suitability of directors as well as the cooling-off period.
Also cover delegation of functions, requirements for different committees such as the board committees, audit committee, human resources and remuneration committee.
Stipulate the requirements re related party transactions, and disclosure requirements.
Shall apply to banks incorporated outside Sri Lanka too, to the extent that it is not inconsistent with regulations and laws applicable in its country of incorporation.
Effectiveness
The Directions will be effective Jan. 1, 2025, but exceptions are covered in schedule V.
Oct. 2024 Press Release
On Oct. 3, 2024, SRI CB issued press release re the directions above, to strengthen corporate governance processes, practices of licensed commercial/specialized banks.
