Courtesy The Daily Mirror

Colombo, Feb 02 (Daily Mirror) –  The Government of Sri Lanka has negotiated a financial assistance package of USD 150 million from the International Development Association (IDA) of the World Bank Group. The funds are earmarked for the implementation of the Financial Sector Safety Net Strengthening Project.

The primary focus of the project is to enhance the robustness of Sri Lanka’s financial sector safety net, with particular attention to the Sri Lanka Deposit Insurance Scheme (SLDIS), managed by the Central Bank of Sri Lanka (CBSL). The initiative aims to fortify the financial and institutional capacities of SLDIS, aligning them with international best practices governing effective deposit insurance schemes.

Specifically, the project seeks to reinforce the reserves of SLDIS, ensuring its ability to fulfill payout and bank resolution obligations. This strategic move aims to uphold public confidence in the financial system while concurrently improving SLDIS’s efficiency in performing its legally mandated functions. The reduction in reimbursement time and increased public awareness about the scheme are integral components of this comprehensive effort.

The implementation of the Financial Sector Safety Net Strengthening Project will be spearheaded by the CBSL, ensuring alignment with project development objectives and design. The financing agreement for this transformative initiative, amounting to USD 150 million, was formally signed on January 31, 2024. K.M. Mahinda Siriwardana, Secretary to the Treasury, and Faris H. Hadad-Zervos, Country Director for the Maldives, Nepal and Sri Lanka, represented the Government of Sri Lanka and the IDA respectively, in sealing this crucial partnership.