To accommodate
dynamic economic and financial system developments upon gaining independence in
1948, the post-independence Government of Ceylon (as Sri Lanka was then known)
established the Central Bank of Ceylon to maintain an active monetary policy
regime and a dynamic financial sector to support and promote economic growth.
Vision
“A credible and
dynamic central bank contributing to the prosperity of Sri Lanka.”
Mission
"Maintaining
economic and price stability and financial system stability to support
sustainable growth through policy stimulus, advice, commitment and excellence.”
Values
- Commitment to inspirational leadership
- Transparency in what we do
- Accountability to our key stakeholders - the public, government, financial institutions and employees
- Integrity - trust, dependability, honesty
- Commitment to professional competence
- Commitment to lifelong learning, knowledge sharing and innovation
- Consistency, accuracy and timeliness of all actions taken by the Bank
- Managing and ensuring operational autonomy for policy formulation and implementation
- Urgent and continuous commitment to results and outputs
- Commitment to collaborative and participatory work practices
Objectives of Central
Bank of Sri Lanka (CBSL)
Economic and Price Stability
Price stability
safeguards the value of the currency in terms of what it will purchase at home
and in terms of other currencies. Price stability or stable prices means low
inflation. Experience has shown that the economy performs well when inflation
is low and is expected to be low. Interest rates are also low in these
conditions. Such an environment allows an economy to achieve its growth
potential and fosters high employment. Free from the disruptive effects of high
and variable inflation, both consumers and producers make economic decisions
with confidence. Low inflation or price stability fosters sustainable long-term
economic growth and employment. The Central Bank uses monetary policy measures
to control inflation.
Financial System Stability
A stable financial
system creates a favorable environment for depositors and investors, encourages
efficient financial intermediation and the effective functioning of markets,
and hence, promotes investment and economic growth. Financial system stability
means the effective functioning of the financial system (financial institutions
and markets) and the absence of banking, currency and balance of payments
crisis. Financial instability is caused by bank failures, excessive asset price
volatility, and collapse of market liquidity or a disruption to the payments
system. Financial system stability requires a stable macro-economic
environment, effective regulatory framework, well organized financial markets,
sound financial institutions and safe and robust payments infrastructure. The
maintenance of financial stability entails the prevention, detection and
reduction of threats to the financial system as a whole, through the
surveillance of markets and financial institutions, oversight of the payments
system and crisis resolution.
Functions of Central
Bank of Sri Lanka (CBSL)
Core Functions
- Conduct of Monetary Policy
- Conduct of Exchange Rate Policy
- Management of the Official International Reserves
- Oversight of the Financial System
- Licensing, Regulating and Supervising of Banks and Selected Non-Bank Financial Institutions
- Provision of Settlement Facilities and the Regulation of the Payment System
- Issue and Distribution of the National Currency
- Compilation, Dissemination and Analysis of Economic Data and Statistics
- Banker to the Government and its agencies, and provision of current account facilities to LCBs and non-commercial bank Primary Dealers for Government Securities
Agency Functions
- In addition, the CBSL also performs the following agency functions on behalf of the Government of Sri Lanka:
- Management of the Public Debt
- Foreign Exchange Management
- Fund Management and Custodian of the Employees’ Provident Fund
- Facilitating Financial Inclusion
- Financial Intelligence services to prevent, detect, investigate and prosecute Money Laundering and Terrorist Financing
Monetary board of
Central Bank
The Central Bank has a unique legal structure
in which the Central Bank is not an incorporated body. In terms of the Monetary
Law Act, the corporate status is conferred on the Monetary Board, which is
vested with all powers, functions and duties. As the governing body, the
Monetary Board is responsible for making all policy decisions related to the
management, operation and administration of the Central Bank.
The Monetary Board of
the Central Bank consists of five (5) members
The Governor
The Secretary to the
Ministry of Finance ( ex-officio )
Three (3) non -
executive members
Departments
For the smooth functioning of the
CBSL, the departments of the Bank are grouped into four key business areas,
namely -Economic and Price Stability; Financial System Stability; Currency
Issue & Management and Agency Services to Government and three support
services areas , namely -Human Resources Development and Management; Corporate
Services; and Policy Review and Monitoring.
Economic Policy Advisory Cluster
- Economic Research Department
- Statistics Department
- Macroprudential Surveillance Department
- International Operations Department
- Domestic Operations Department
- Information Technology Department
- Department of Foreign Exchange
- Currency Department
- Communications Department
Financial Sector Regulation &
Supervision Cluster
- Bank Supervision Department
- Supervision of Non-Bank Financial Institutions
- Public Debt Department
- Resolution & Enforcement Department
