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Central Bank permits banks to pay cash dividends and repatriate profits

25 Jan 2021

The Central Bank of Sri Lanka (CBSL) on Friday (22) stated that it has reassessed its earlier restrictions and last Tuesday (19) permitted licensed banks to pay cash dividends and repatriate profits after the completion of the audit of the financial statements for the year 2020. Issuing a clarification with regard to varied views published recently on discretionary payments, including payment of cash dividends by licensed banks, the Central Bank stated: “Previously, the Central Bank, on 13 May 2020, decided to restrict certain discretionary payments of licensed banks, such as declaring cash dividends and repatriation of profits, engaging in share buybacks, increasing management allowances, and payments to the Board of Directors until 31 December 2020 with a view of strengthening the liquidity and capital positions of licensed banks under exceptional circumstances amidst the Covid-19 pandemic.” However, following the reassessment last week, when deciding payment of cash dividends and repatriation of profits for the year 2020, licenced banks are expected to consider assets growth, business expansion, and the impact from the Covid-19 pandemic. Furthermore, licensed banks were required to refrain from engaging in share buybacks and increasing non-essential expenditure, while exercising extreme due diligence and prudence when incurring capital expenditure until 30 June 2021.


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