Road Map:
Monetary and Financial Sector Policies for 2017
and Beyond
Delivered by
Dr. Indrajit Coomaraswamy
Governor
Central Bank of Sri Lanka
3 January 2017
1. Introduction
Your Excellencies, Members of the So, let me warmly welcome you to the
Monetary Board, Deputy Governors and presentation of this year's Road Map.
Officials of the Central Bank,
Ladies and Gentlemen, as you aware, the
Distinguished Invitees, Ladies and
core objectives of the Central Bank are
Gentlemen,
the attainment of economic and price
The presentation of the Road Map is a stability and the maintenance of
very important tradition that was financial system stability with a view to
initiated by the Central Bank in 2007 and encouraging and promoting the
this is the 10th statement in that tradition development of productive resources of
that we are presenting today. It is our Sri Lanka. We attach the highest priority
belief that sharing our policy direction to delivering collectively on the
would make our policies for the medium- mandates given to us. The considerable
term more predictable and transparent, resources of the Central Bank of Sri
and would help you in shaping your own Lanka are focused on achieving these
plans and operational modalities in the objectives on a sustained basis and on
future. It will also ensure greater clarity performing the important agency and
regarding our policies and actions. ancillary functions bestowed upon us
effectively.
In this context, we believe that
harmonisation of purpose and better During 2016, we have implemented
coordination among private sector and several proactive policy measures in
public sector operations would enhance order to ensure economic and price
the effective implementation of our stability. These policies have helped curb
policies and measures, thereby helping demand pressures in the economy and
to achieve our common development maintain inflation at a low level. At the
goals. same time, we have introduced several
policies related to the financial sector
with the view of strengthening
institutions and ensuring effective and to strengthen the delivery of credit to
active markets as well as safe and sound the agriculture sector and to small and
payment mechanisms. medium scale enterprises as well as the
microfinance sector, thus facilitating
In addition to our core functions related
greater financial inclusion. Also, as the
to the key objectives I have just outlined,
sole authority for issuing currency, the
we have performed a number of agency
Bank has continued to ensure that all
and ancillary functions, thus
cash transactions take place smoothly.
contributing to enhance the overall
performance of the economy. We consider that communication is an
integral part in pursuing policy actions
The Central Bank manages the Public
and discharging our responsibilities.
Debt to ensure that the government's
Considering the utmost importance of
financing needs and its payment
clear communication and enhanced
obligations are met at the lowest
transparency, we attach priority to
possible cost over the medium- to long-
formulating our policies in a forward
term, consistent with a prudent degree
looking manner, which will help
of risk. The Exchange Control
economic agents to make their
Department also initiated a number of
economic decisions in a more informed
measures in order to create a more
manner.
conducive environment for both local
and foreign investors. The new Foreign Ladies and Gentlemen, today, we are
Exchange Act is designed to effect living in a challenging world. Sri Lanka is
further improvements in this regard. A gradually transforming to an upper
number of measures will be taken in the middle income economy. However, the
medium term to further relax foreign objectives of the government and the
exchange transactions. The Central Bank aspirations of the people cannot be met
is also the manager of the Employees' through "business as usual" on the part
Provident Fund, which is the largest of the public and private sectors.
superannuation fund in the country. Government policy making needs to be
Through the activities of the Regional proactive. It has to be more data driven
Development Department and the and less influenced by short-term
provincial offices, the Central Bank seeks political expedience. Equally, the private
sector needs to recalibrate its risk When we review Sri Lanka's post-
appetite and take advantage of independence economic performance, it
opportunities generated by improving is clear we could have done better. In
macroeconomic policies and a more the Central Bank's context, the
conducive, enabling environment for perennial excess aggregate demand in
business. We would all like progress to the economy, created by large fiscal
be faster but the direction of travel is deficits, has complicated monetary and
clearly positive. There is also the exchange rate policies.
likelihood that, as the reforms gain
However, I believe Sri Lanka now faces
momentum, the pace of change will
one of its best chances since
accelerate, provided there is the
independence, to correct this situation.
commitment to persist with the
In particular, the country does not have
measures that are necessary to place the
a drag in terms of an internal conflict or
economy on a higher trajectory of
regressive policies.
growth, employment generation and
incomes.
Today, Sri Lanka is poised for a fresh
leap of development. In that context, it
As the Central Bank, we have a pivotal
is the responsibility of the Central Bank
role to play while being at the heart of
to provide a stable foundation to
this much needed transformation. The
leverage the country's excellent
government is putting forward many
geographical location and favourable
new initiatives to develop the country.
international relations to attract
This is happening at a time when the
investment to foster more robust and
global economy is undergoing yet
sustainable growth and employment
another transitional period. Hence, this
generation. Sri Lanka is twenty miles
is truly a challenging time, which calls us
from the fastest growing large economy,
to be proactive and focused on clear
India; in the middle of China's Maritime
outcomes.
Silk Route; and fortunate to have
At this juncture, I would like to share excellent relations with a number of
some of my thoughts on the Sri Lankan capital surplus countries in the world.
economy in a broader perspective.
As I have repeatedly emphasised, We have to establish a solid foundation
sustained growth requires for the nation to meet the imperatives of
strengthening macroeconomic a new economic growth model, built on
fundamentals, implementing structural the core tenets of high value-added
reforms that increase the entrepreneurship, creativity and
competitiveness of the economy, and innovation to generate benefits for all
improving the business environment. Sri Lankans.
The challenge that we are having right The country has a number of structural
now is to put in place policies that give problems that have been amplified over
us sustained stabilisation of the years by the large fiscal and trade
macroeconomic fundamentals in the deficits, which are the core weaknesses
country, amidst uncertain global of the Sri Lankan economy. Being a twin
conditions. deficit country increases vulnerability in
an uncertain and volatile global
It is important to recognise that
economic environment.
stabilising the economy after decades of
fundamentally unstable macroeconomic Unsustainable budget deficits boost
policies cannot be achieved without excess and untenable demand in the
discipline. This will inevitably result in economy. When there is excess demand,
some pain in the short-term. However, it leads to inflationary pressures and
there is every possibility that a more higher nominal interest rates in the
promising future can be realised economy and there is also a higher
through the policies and programmes propensity to import, given the
that are already in the pipeline. For this limitations in domestic supply. That in
to happen, consensus must be built turn, exerts pressure on the balance of
among politicians, policy makers and payments and the exchange rate.
the general public on the need for
This has been the Sri Lankan experience
cohesive reforms around the three
over several decades, which stands in
pillars of robust macroeconomic
marked contrast to the policies of the
fundamentals, improving
successful East and South East Asian
productivity/competitiveness and the
countries. Those countries achieved
improved business environment.
robust fiscal outcomes, low inflation, encouraging that it has commenced.
low interest rates and competitive The International Monetary Fund (IMF)
exchange rates. itself has recognised that progress has
been made in stabilising the economy.
We cannot continue with repeating stop-
Improved fiscal performance has been
go cycles, with each successive trough
at the heart of this improvement.
becoming more dangerous. We have to
Honourable Finance Minister and his
change with vigour in order to achieve
team deserve credit for this. However,
our objectives. We have missed enough
the continuing challenge is to have the
opportunities and we cannot afford to
clarity of purpose, focus and
miss them repeatedly. We need decisive
determination to implement the
policy initiatives implemented with
necessary changes. It has to be a
commitment. More importantly, we
national effort.
need to take a longer term view and act
accordingly. The potential for accelerated
development is clearly evident. The
It is naïve to believe economics can be
government's plans, programmes and
separated from politics. No country, no
projects, as set out in the Honourable
society has been able to achieve this.
Prime Minister's Statement and the
However, we need to ask why Sri Lanka,
Budget Speech have sign-posted the
which was second to Japan in Asia, on
way ahead. However, the task now is to
most socio-economic indicators, has
continue to turn the good intentions
slipped so far behind today.
into reality. This journey ahead also
requires a rebalancing of economics and
We need to ask why this is. In what is
politics in economic decision-making, if
often termed the Asian century, Sri
we are to stay on course.
Lanka is the only country, other than
Afghanistan, in the Asia/Pacific region
The government has commenced a
with an IMF programme - having an IMF
strong revenue-based fiscal
programme is the economic equivalent
consolidation programme.
to being in hospital. We are not in the
ICU but clearly in hospital. The remedial
treatment is known and it is
Trade and investment policies are also  Section 2: Review of the
being changed to harness our untapped developments in the economy along
potential. with the progress in the real, fiscal,
external, monetary and financial
We at the Central Bank, are changing
sectors during 2016
and upgrading many of our processes
and policies.  Section 3: An analysis of the Central
Bank's monetary policy strategy and
Frameworks are being developed for
policies for 2017 and beyond
proactive monetary and exchange rate
policymaking on a data driven basis.  Section 4: A discussion on the Central
Bank's policies related to the
In this context, the Road Map 2017
financial sector performance and
reviews developments in the economy
stability in 2017 and beyond
and the policy actions that have been
pursued during the past year. More  Section 5: Key policies related to
importantly, it seeks to enunciate strengthening the broader economy
policies and programmes for the through the Central Bank's agency
forthcoming period. and ancillary functions

Accordingly, the outline of the Road Section 6: Concluding remarks
Map 2017 is as follows:
2. Developments in the Economy in 2016
The Sri Lankan economy achieved a Inflation continued to remain at low
moderate growth rate of 4 per cent levels although there were some upward
during the first nine months of 2016. pressures during 2016. Supply side
Among major sectors, Agricultural pressures due to adverse weather
activities remained subdued, driven conditions and revisions to the
mainly by the contraction in the value government tax policy partly
addition of rice, tea and rubber. Adverse contributed to the increase in inflation
weather conditions during the second during the year. The relaxed monetary
and third quarters of the year and policy stance pursued in the past and the
subdued demand conditions in the major increase in wages in the economy also
export destinations affected this exerted some demand pressures on
growth. Industry-related activities grew prices. Accordingly, headline inflation, as
substantially in 2016 with considerable measured by the year-on-year change in
contribution from the recovery of the the Colombo Consumers' Price Index
construction sector. Notable growth (CCPI, 2006/07=100), was 4.1 per cent in
was also witnessed in manufacturing, December 2016 compared to 2.8 per
and mining and quarrying activities. cent in December 2015. Headline
Meanwhile, the growth in Services inflation, as measured by the year-on
activities also remained buoyant, year change in the National Consumer
supported by improvements in financial Price Index (NCPI, 2013=100), was 4.1 per
services, and wholesale and retail trade cent in November 2016 compared to 4.2
activities. Based on these developments per cent at end 2015. Accordingly, overall
so far, it is projected that the economy inflation has been contained within our
would grow by around 4.5 - 5.0 per cent mid-single figure target of 4 - 6 per cent.
in 2016. We anticipate a growth of Meanwhile, core inflation continued its
5.5 - 6.0 per cent in 2017. upward trend in 2016, reflecting the
firming up of demand conditions in the
economy and the revisions made to the eleven months of 2016, an increase of
tax structure in the latter part of the 14.7 per cent over the previous year.
year. Core inflation, based on CCPI, Workers' remittances recorded a
increased to 6.3 per cent, year-on-year, moderate growth of 3.1 per cent during
at end 2016 in comparison to 4.5 per the first eleven months of 2016 and
cent at end 2015, while NCPI based core amounted to around US dollars 6.6
inflation was 6.8 per cent, year-on-year, billion. With these developments, there
in November 2016. was a narrowing of the savings -
investment gap as reflected in the lower
In response to preemptive monetary
current account deficit during the first
policy measures, monetary aggregates,
nine months of 2016. Foreign
which expanded at a high rate,
investment in the government securities
decelerated, while growth of credit to
market saw a net outflow, while long-
the private sector showed some
term loans to the government recorded
slowdown, mainly reflecting the impact
a net inflow. Meanwhile, during 2016, Sri
of increased market interest rates.
Lanka entered into a three year
Extended Fund Facility (EFF) of SDR 1.1
Sri Lanka's external trade performance
billion (approximately US dollars 1.5
was modest during 2016, although some
billion) with the IMF to strengthen the
improvement was observed towards the
external position of the country and to
latter part of the year. Earnings from
support the government's broad
exports declined by 2.6 per cent during
economic reform agenda. Reflecting
the first ten months of 2016, while the
these developments, the level of gross
expenditure on imports increased
official reserves is estimated to be
marginally by 0.2 per cent. As a result,
around US dollars 6.0 billion by end 2016.
the cumulative deficit in the trade
Moreover, despite considerable
account increased by 3.7 per cent to US
depreciation pressure on the rupee
dollars 7.2 billion during the first ten
during some months, the rupee
months of 2016. Supporting the external
remained relatively stable in 2016
sector, earnings from tourism is
compared to the previous year. It has
estimated to have increased to around
US dollars 3.0 billion during the first
depreciated by 3.8 per cent during the During 2016, several policy measures
year. were implemented by the Central Bank,
in line with international standards and
Fiscal policy in 2016 has been directed
best practices, to strengthen the
towards strengthening the fiscal
regulatory and supervisory framework
consolidation process. Reflecting the
pertaining to licensed banks. Key
positive impact of the strenuous efforts
banking sector indicators remained at
of the government, fiscal performance
healthy levels, while the nonbank sector
has indicated an improvement during
performed despite stringent fiscal and
2016. Government revenue has
macroprudential measures.
continued its increasing trend while
maintaining expenditure at the desired Meanwhile, the national payment
level. The government is certain that the systems of the country operated
announced budget deficit of 5.4 per cent smoothly without any major disruption
of GDP will be achieved in 2016, and it while facilitating the growing and
will be reduced further to 4.6 per cent in changing payment needs of the financial
2017. sector with improved efficiency and
safety.
3. Monetary Policy Strategy and Policies for 2017 and Beyond
A coherent and clear macroeconomic macroeconomic policy framework in
framework, is important to achieve our the country, built upon three key areas.
objectives.
The government is in the process of
Among the key elements of the overall taking decisive measures to address the
macroeconomic framework, price long felt deficiencies in its budgetary
stability is an important pillar. Price operations through a new fiscal
stability is interpreted to mean low, framework, aimed at strengthening
stable and predictable levels of inflation, fiscal sustainability in the medium-term.
which is conducive for fostering This framework is embedded in the IMF-
sustainable long-term economic growth EFF arrangement.
and employment in a country. Price
These efforts will complement the
stability is instrumental in keeping
expected improvements of the Central
nominal interest rates low, thereby
Bank with regard to two key policy
enabling an economy to exploit its
frameworks in relation to monetary
growth potential, while both consumers
policy.
and producers can make economic
decisions with confidence and certainty.
a. The conduct of monetary policy will
Therefore, modern central banks
be strengthened through the move
predominantly focus on achieving price
towards a flexible inflation targeting
stability as a pre-condition for
(FIT) framework.
sustainable growth.
b. A properly designed and widely
In this context, I would like to indicate
accepted framework for exchange
that the Central Bank and the
rate management will also be
government are working towards
introduced to establish a market-
establishing a well-designed
based exchange rate system in the
The broad-based reform actions under towards new frameworks, such as
the EFF arrangement with the IMF will inflation targeting.
complement these efforts.
In line with this global tendency, the
The Central Bank, since the 1980s, has Central Bank of Sri Lanka has also been
been pursuing monetary targeting (MT) improving its monetary policy
as its monetary policy framework to framework over the years.
achieve price stability. Under this
In particular, the Central Bank has
framework, monetary aggregates were
officially announced that the monetary
used as a key nominal anchor in the
targeting framework would be gradually
conduct of monetary policy and the final
replaced by migrating towards a flexible
objective of price stability was expected
inflation targeting framework.
to be achieved by influencing money
aggregates. Reserve money was
Under this enhanced monetary policy
considered the operating target and
framework, the Central Bank would
broad money was used as the
focus on stabilising inflation in mid-
intermediate target of monetary policy
single digits over the medium-term,
under this framework.
while supporting growth objectives and
flexibility in exchange rate management.
Nevertheless, monetary targeting has
become a less meaningful framework for
Generally, an inflation targeting
monetary policy conduct, given issues
framework is characterised by an
such as the instability in the money
announced numerical inflation target, a
demand function amidst financial
medium-term inflation forecast, which
innovations and the weakening
facilitates forward looking monetary
relationship between money and
policy decision making and a higher
inflation.
degree of transparency and
accountability.
Hence, countries, which were
dependent on monetary targeting
Inflation targeting is known to be
frameworks, have been moving away
operationally complex. It requires
greater awareness of the whole
monetary transmission mechanism upgrade the technical capabilities of the
(MTM) and is based on a working link Central Bank staff.
from policy interest rates to interbank
With a view to strengthening its policy
interest rates and to long-term interest
formulation and modelling capacity, the
rates. Under our enhanced monetary
Central Bank of Sri Lanka has been
policy framework, we expect to
obtaining technical assistance from the
predominantly employ market-based
IMF in the area of macroeconomic
instruments, particularly policy interest
forecasting, modelling and policy
rates and open market operations
analysis. As such, a joint effort has been
(OMO) to guide the average weighted
made by the Central Bank and the IMF in
call money rate (AWCMR), which is
developing a structural model-based
considered as the operating target,
Forecasting and Policy Analysis System
along the desired path. This would
(FPAS) to strengthen the monetary
ensure effective transmission of
policy decision making process and to
monetary policy.
support Sri Lanka's transition to a
Within this enhanced framework, the flexible inflation targeting regime. The
Central Bank does not set any monetary FPAS is a medium-term, pre-emptive
targets explicitly. However, broad policy analysis system, which brings
money (M2b) will remain as the key together information and judgment in a
indicative intermediate variable, which coherent and logical manner.
reflects the broad liquidity conditions in
Under the FPAS, the Central Bank has
the economy, to guide the conduct of
already finalised the development of the
monetary policy of the Central Bank.
baseline version of a semi-structural
To implement the new framework, Quarterly Projection Model (QPM) for
macroeconomic projections, including forecasting and analysing monetary
inflation projections, are currently being policy.
strengthened using short-term as well as
Meanwhile, the Central Bank is in the
medium-term structural forecasting
process of implementing several
tools and techniques. In this endeavour,
organisational changes necessary for the
continued efforts are being made to
effective implementation of the model. Moreover, we also intend to reintroduce
To this end, a separate Modelling and the Monetary Policy Consultative
Forecasting Division has been setup in Committee (MPCC) in 2017, comprising
the Economic Research Department and eminent academics, professionals as
relevant processes are being developed well as representatives from the private
while equipping the staff with adequate sector. We expect to benefit from the
training. views and inputs of the MPCC in better
calibrating the monetary policy decision
More importantly, we intend to
making process.
introduce several changes in the
monetary policy formulation process as In addition, we also intend to establish
well. Accordingly, we will reduce the two other important consultative
number of Monetary Policy Committee committees in relation to financial
(MPC) meetings to 8 meetings per year system stability and private sector views
from the current level of 12 meetings per on Central Bank policies and regulations.
year. Consequently, around 5-6 weeks We are of the view that the inputs of
will be devoted for analysing the latest such committees would also be helpful
developments in the economy and in devising appropriate monetary policy
developing model-based decisions.
macroeconomic forecasts, thereby
We will continue to monitor
facilitating the provision of in-depth and
developments in the monetary sector
more forward looking insights to the
closely and adopt timely and effective
monetary policy formulation process.
monetary policy measures, supported
The above improvements envisaged in by other macroprudential measures in
the monetary policy decision making order to ensure stable monetary
process are expected to be conditions and price stability, thus
implemented before the end of 2017. facilitating envisaged economic growth.
This will entail revising the Monetary
At the same time, we will continue to
Law Act to accommodate some of the
actively engage in liquidity management
new changes to be introduced in this
operations in the money market to guide
process in the medium-term.
the short-term interest rates within the economic analyses for the purpose of
desired path. formulating effective policies, while
improving the transparency of monetary
In order to ensure the effective
policy and policy communication.
implementation of monetary policy, we
expect to introduce certain measures At the same time, in the process of
with regard to OMOs, such as making more informed policy decisions,
introducing fixed rate and variable rate we look forward to enhancing statistical
auctions, and fine tuning auctions after inputs by introducing new indices on
examining their need and feasibility in property prices as well as modifying
line with other country experiences and wage indices, while improving the
market needs. We will evaluate coverage of existing surveys to better
alternative instruments to strengthen track developments in the private
OMOs. sector.
Reflecting these measures, inflation is The Central Bank will continue to
expected to remain at mid-single digit communicate policy decisions among
levels in the medium-term. As such, it is market participants and the general
expected that the low inflation public through multiple means providing
environment that prevailed for several greater clarity and understanding about
years would be sustained in a range of 4 policy. Moreover, launching of the
- 6 per cent in the medium-term, which revamped corporate website of the
is also consistent with the inflation Central Bank is expected to provide high
target bands stipulated under the EFF quality content with dynamic and
arrangement with the IMF. interactive features.
We would also continue to strengthen At the same time, continuing the
the technical capability, particularly with practice that has been followed in the
regard to the compilation past, we intend to make monetary policy
methodologies of macroeconomic announcements according to an
statistics in line with international advance announcement calendar. The
standards. This will promote sound calendar for 2017 is set out below.
expending US dollars 4.0 billion of scarce
external reserves in a futile attempt to
defend the external value of the rupee
1 7 February, Tuesday
through market intervention. There was
2 24 March, Friday
a similar experience in 2015 when the
3 9 May, Tuesday
currency depreciated by 6.5 per cent
after spending US dollars 2.1 billion of
4 27 June, Tuesday
our reserves. Wasting large amounts of
5 3 August, Thursday
the country's external reserves, much of
it borrowed, in a vain effort to defend
6 26 September, Tuesday
the currency, which has to be ultimately
7 7 November, Tuesday
depreciated anyway, is clearly
8 28 December, Thursday
unsustainable. It is time to stop this
pattern and commence building up of
external reserves through sustainable
Volatile global market conditions and Sri
foreign exchange inflows.
Lanka's vulnerability as a twin deficit
The impact of global developments,
country underscore the vital importance
such as Brexit, recent Presidential
of having a flexible exchange rate policy
elections in the United States (US) as
to adjust to external pressures. Recent
well as interest rate hikes by the US
experience has clearly demonstrated
Federal Reserve, the forthcoming
that it is unsustainable to maintain an
elections in France and Germany in
overvalued exchange rate at the
Europe, the projected slowdown in the
expense of external reserves. A smooth
Chinese economy, as well as economic
market based exchange rate would
conditions in Sri Lanka's major trading
prevent highly disruptive adjustments
partners, including India, Japan, Russia
after a period of stable rates artificially
and the Middle East, will also have a
maintained by continuous intervention
significant influence on the domestic
by the Central Bank, as experienced in
economy.
the 2011-12 period when the currency
depreciated by around 14 per cent after
Trends in oil prices and international notably agriculture and power
capital flows, following the generation.
normalisation of interest rates in the US
As in the past, it is expected that the
are likely to be particularly important.
government would take timely measures
We also expect that changes to to counter the adverse supply side
government tax structure and supply effects on prices, thus mitigating
shortages stemming from weather- adverse inflation expectations of the
related developments as well as shocks general public.
that could arise due to possible reversal
Accordingly, it is anticipated that
of global commodity prices could cause
inflation expectations would broadly
temporary variations in price levels. In
remain anchored in the medium-term
particular, if current drought conditions
with appropriate demand management
prevail, there could be adverse
policies, supported by timely supply side
implications on price levels, while
measures.
impacting on economic activities,
4. Financial Sector Policies for 2017 and Beyond
The financial system remains important from various internal and external
for efficient allocation of resources and developments.
hence in facilitating strong economic
The Central Bank has sought to preserve
performance of the country. In
the soundness, efficiency and stability of
particular, a broader, deeper and a
the financial system primarily through
liquid financial system is vital as
the regulation and supervision of all
economies grow more sophisticated.
major categories of financial institutions,
A stable financial system creates a ensuring sound and safe payment and
trusted, enabling environment settlement systems as well as
favourable to savers and investors; helps establishing risk management systems
the transmission of monetary policy; and instilling good corporate
encourages efficient financial governance standards and practices in
intermediation, which eventually the financial sector while promoting
promotes investment and growth; and financial inclusion.
encourages effective and efficient
In the medium-term, our overall aim is to
operation of markets while improving
ensure the stability in the financial sector
the allocation of resources in the
through identifying emerging
economy.
vulnerabilities in this sector; adopting
Financial system stability is founded on early corrective actions; and
the confidence of the public in the implementing a series of measures to
financial system and depends on the further strengthen financial institutions,
soundness and resilience of principal markets, infrastructure and safety nets.
components of the financial system to
Our medium-term plan is to have a
collectively withstand risks emanating
financial system, which offers the full
range of financial products and services
to all economic sectors, including change, both nationally and
agriculture, infrastructure, internationally. Considering the need for
manufacturing, particularly small and upgrading of statutes in line with these
medium enterprises (SMEs), and trade developments, we expect to initiate
to achieve broader economic objectives amendments to the existing Banking
of our country. We need to have a well- Act. Accordingly, steps will be initiated
planned and an ambitious agenda for to streamline and strengthen the
financial sector development and regulatory and supervisory framework
reforms ranging across financial sector through the proposed Banking Act
policies with a vision of innovative, amendments. We will consider
robust and competitive financial provisions for reinforcing the Central
systems. Banks's enforcement powers for
violations of the Act and the Directions
As a priority, we expect to strengthen
issued under it. In this regard, we wish to
the regulatory framework pertaining to
seek views from the banking sector as
all financial institutions, including
well.
licensed banks, licensed fina