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Clarification on Lending to an Entity (Concern) Where the Director of a Bank has an Interest

The Central Bank of Sri Lanka wishes to clarify the regulatory and supervisory procedure in relation to lending to a concern in which a director of a licensed bank (bank) has directly/indirectly an interest, consequent to the concerns raised in print and electronic media in the recent past.

Sri Lanka Purchasing Managers’ Index - July 2018

The Manufacturing Sector PMI decreased to 57.2 index points in July 2018 from 57.6 index points observed in the previous month. The marginal slowdown observed in manufacturing activities in July was mainly driven by slowdown in employment due to the difficulties in replacing unskilled employees to account for high labour turnover especially in the Food and Beverages, and Textiles and Apparel sectors. Moreover, new orders in July 2018 slightly slowed down. However, production and stock of purchases show some improvement, especially in manufacturing of chemicals and pharmaceutical products with the expected positive outlook for the next three months. Meanwhile, lengthening of suppliers’ delivery time usually indicates that economy is booming with expanding activities in the short run. However, in this instance, suppliers’ delivery time lengthened due to scarcity of raw materials in the world market and unfavourable weather conditions. Thus, it does not indicate an expansion in economic activities.

Regulatory Action on a Primary Dealer - Pan Asia Banking Corporation PLC

The Monetary Board of the Central Bank of Sri Lanka, acting in terms of the Regulations made under the Registered Stock and Securities Ordinance and the Local Treasury Bills Ordinance, has decided to extend the suspension of business and activities of a Primary Dealer of Pan Asia Banking Corporation PLC (PABC) for a period of six months with effect from 10.00 a.m. on 15th August 2018, in order to continue the investigations being conducted by the Central Bank of Sri Lanka.

The Central Bank wishes to emphasize that this regulatory action restricts PABC’s access to the primary auctions for government securities. It does not affect any of the other activities/services of PABC.