Financial System Stability is one of the main objectives of the Central Bank. A stable financial system is capable of mobilising savings and allocating them to productive investments, managing risks and settling payments, without materially affecting economic growth and welfare of the people even during economic shocks and stressful circumstances. This helps to create a favourable environment for efficient financial intermediation to promote investment and economic growth.

Role of the Central Bank in Maintaining Financial System

  Promoting and maintaining public confidence in money.

  Promoting safety and soundness of individual financial institutions.

  Ensuring public confidence in financial system, in collaboration with other financial regulators, through minimisation of risks to the financial system.

  Acting as lender of last resort.

  Resolving failing financial institutions in a manner that minimises possible adverse implications of such an event on the overall financial system/economy.

  Regulating and supervising financial market infrastructure.

Entities Falling Under the Regulatory Purview of the Central Bank of Sri Lanka

  Licensed banks

  Licensed finance companies

  Registered leasing establishments

  Licensed micro-finance companies

  Primary dealers in government securities

  Authorised Dealers in Foreign Exchange

  Authorised Money Changers

  Authorised Money Brokers

Other Main Financial Regulators

  Securities Exchange Commission (SEC) responsible for regulating stock exchanges, stock brokers/dealers, unit trust companies, margin providers, credit rating agencies, investment managers, equity and private debt securities clearing houses;

  Insurance Regulatory Commission of Sri Lanka (IRCSL) that regulates insurance industry i.e. insurance companies, insurance agents and insurance brokers.

(Deputy Governor in charge of financial system stability represents the Central Bank in the boards of each of these regulators)