Press release

18 Nov 2021 Colombo, LK

EY Sri Lanka announces webinar on “CBSL direction 13 & 14 of 2021”

The new CBSL direction 13 & 14 of 2021 were introduced with the objective of harmonizing the regulatory framework with Sri Lanka Financial Reporting Standards-SLFRS 9 Financial Instruments.

The new CBSL direction 13 & 14 of 2021 were introduced with the objective of harmonizing the regulatory framework with Sri Lanka Financial Reporting Standards-SLFRS 9 Financial Instruments.

EY Sri Lanka webinar on “CBSL direction 13 & 14 of 2021” will be discussing the regulatory expectations and Financial Reporting Risk Management challenges faced by banks.             

EY, SRI LANKA, 10 November 2021 – On 14 September 2021, the Central Bank of Sri Lanka (CBSL) issued directions on classification, recognition and measurement of credit facilities and other financial assets that will come into effect from 1 January 2022.

For the banking sector, there are new directions introduced to harmonize the regulatory framework with Sri Lanka Financial Reporting Standards-SLFRS 9  Financial Instruments. The regulator has emphasized the importance of having a comprehensive credit risk management framework while stipulating its main components. Accordingly, licensed commercial banks (LCBs) are expected to have a framework covering all aspects of credit lifecycle, including policies on classification, potential risk, under performing loans and write-offs, guidelines on computing expected credit losses (ECL) and disclosures, for their financial assets. 

To help banks understand the key regulatory changes and expectations, the impact on their business and the challenges that they will face, EY has organized a webinar, “CBSL direction 13 & 14 of 2021”, scheduled to be held on 22 November 2021.

Mr. Manil Jayesinghe, Country Managing Partner, Ernst & Young, Sri Lanka and Maldives says: “It’s paramount for banks to understand the regulatory expectations with his new regulations and directions. Hence, EY has organized this webinar to help banking institutions understand the implications to their businesses and processes, as well as the issues that banks can face in relation to the harmonization of reporting standards.

“Apart from the emphasis on governance, compliance with the new regulation can introduce other technical and operational changes. For example, amendments to the definition of non-performing loans may trigger system modifications and classification for certain segments of the loan portfolio, while the specific and general provision based on the subclassification will cease to exist and provision determination will be based on SLFRS 9 Financial Instruments.”

Rajith Perera, Partner, Financial Accounting Advisory Services of Ernst & Young, Sri Lanka adds: “Another important requirement under the new direction is on managing model risk. Banks are requested to develop comprehensive policies in relation to model governance covering life cycle of model development and validation. Given the increased use of sophisticated models with the implementation of SLFRS 9, regulatory requirement is timely to ensure accuracy and completeness of financial information. Further, if any changes in the credit models are required, the rationale and justification for such change shall be evaluated by the chief risk officer, integrated risk management committee and approved by the board of directors. The directive also states that scope of internal audit function should be enhanced to independently evaluate the effectiveness of the credit risk assessment and measurements. The Internal Audit function will also be required to validate and evaluate all credit risk assessment models, inputs and assumptions used along with data smoothening annually. These are significant changes that can affect policies and processes in financial institutions.”

For more information or to register for the event, please contact Thilini Perera on or Tel. +94 770623529.          


Notes to Editors

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Event: Webinar on CBSL direction 13 & 14 of 2021
Date:  22 November 2021 (Monday)
Time: 9:00 a.m. – 12:00 p.m.
Program: Webinar on CBSL direction 13 & 14 of 2021

Thilini Perera

Tel. +94 770623529.