Central Bank of Sri Lanka requires all licensed banks to implement recovery plans with first submissions due 31 January 2026

The Central Bank of Sri Lanka has issued Directions under the Banking (Special Provisions) Act, No. 17 of 2023 requiring licensed commercial banks and licensed specialised banks to prepare Recovery Plans (RCPs) as part of their risk management processes, setting out measures to be taken if a bank’s financial position deteriorates. The requirement applies to all licensed banks, with each RCP to be proportionate to the bank’s nature, scale, structure, complexity and interconnectedness. Plans must also describe the entities within the banking group covered by the recovery framework, including their business activities and interdependencies with the licensed bank. Licensed banks must formulate RCPs for 2025 and submit the plan, approved by the Board of Directors for locally incorporated banks or the Regional Office or Head Office for foreign-incorporated banks, to the Directors of the Bank Supervision Department and the Deposit Insurance and Resolution Department by 31.01.2026. Banks must then provide an annual certification within one month after each calendar year ends that the latest RCP remains valid and unchanged unless there is a material change in circumstances, submit an updated RCP when significant changes occur, and conduct a comprehensive review at least every three years with resubmission within one month after the relevant calendar year ends.