Regulatory & Policy News
View all(71)CBSL Extends Perpetual Treasuries Suspension by 6 Months
• Monetary Authority Action: The Central Bank of Sri Lanka (CBSL) has extended the suspension of Perpetual Treasuries Limited (PTL) from operating as a Primary Dealer. • Timeline: The extension is effective for a further period of six months starting from 4:30 p.m. on 05th July 2026. • Regulatory Context: The decision was made under regulations within the Registered Stock and Securities Ordinance and the Local Treasury Bills Ordinance. • Objective: The extension has been implemented to facilitate the continuation of ongoing investigations being conducted by the CBSL.
🐾 Cabinet Approves Rabies Eradication & Dog Registration Bill
The Cabinet of Ministers approved a proposal to merge the Rabies and Dog Registration Ordinances into a unified Bill, aimed at eliminating rabies deaths by 2030 and addressing public safety. • Financial & Medical Impact: Sri Lanka spends over Rs. 5 Billion annually on rabies prevention and control. Animal bites (mostly dogs and cats) make up 70% of accident-related outpatient hospital treatments, marking it a primary cause of emergency medical care. • Progress & Targets: Rabies fatalities dropped from 20 in 2024 to 14 in 2025, with 3 deaths reported in Q1 2026. Eradication targets require continuous vaccination of at least 70% of the island's dog population to halt virus transmission. • Key Provisions: Proposed by Health Minister Dr. Nalinda Jayatissa, the framework mandates rabies vaccinations, improves legal dog registration, tightens population control, and defines the enforcement responsibilities of implementing institutions.
🔒 SEC Warns Against Misuse of CSE Branding on Social Media
The Securities and Exchange Commission of Sri Lanka (SEC) has issued a strict directive targeting unauthorized activities on social media platforms to protect capital market integrity. • Regulations Enforced: Individuals are strictly prohibited from using the Colombo Stock Exchange (CSE) name or logo. No unauthorized entity or profile may imply or represent themselves as a "Stock Exchange". • Market Advisories: Only Registered Investment Advisors are legally permitted to publish market predictions, analyses, or investment recommendations online. • Enforcement Action: The SEC warned that strict legal action will be taken against violators in accordance with national capital market regulations to prevent public misdirection.
Sri Lanka Reviews Free Trade Agreements to Boost Market Access 📈
Minister of Trade, Commerce, Food Security and Cooperative Development, Wasantha Samarasinghe, led a high-level stakeholder meeting to evaluate current Free Trade Agreements (FTAs) and map out a strategic framework for future trade partnerships. Key Developments & Strategy: • FTA Progress Evaluation: The Cabinet-appointed FTA Review Committee provided an update on the progress of their review report, which evaluates the performance and impact of existing trade pacts. • Market Diversification: The Minister emphasized the critical need to identify new potential global markets to diversify Sri Lanka's export destinations and strengthen long-term economic collaboration. • New Negotiation Framework: Guidance was issued to establish dedicated Technical Negotiating Teams and implement structured approaches for entering future bilateral FTAs. Strategic Impact: • Aligning trade agreements with national context is designed to support core sectors like apparel & textiles, tea, and emerging industries by securing favorable tariff concessions and expanding international footprint. _Note: Sourced from Ministry updates on July 01, 2026._
SLFRS 17 Implementation to Shift Life Insurance Focus to Profitability 📈
• Regulatory Timeline: Sri Lanka adopted IFRS 17 as SLFRS 17 in January. However, reporting for the first two quarters of 2026 is deferred until 30 September 2026 to resolve pending accounting and taxation issues with the Inland Revenue Department (IRD). • Strategic Shift: The longstanding industry emphasis on Gross Written Premium (GWP) is set to give way to insurance service revenue and Contractual Service Margins (CSM). This shifts investor focus from overall premium volumes to underlying profitability and long-term value creation. • Product Impact: Insurers are expected to place a heavier emphasis on protection products over investment-oriented ones, as only the protection component is recognized as insurance service revenue under the new standard. • Market Outlook: The evolving framework and solvency requirements are anticipated to improve transparency, encourage industry consolidation over time, and make Sri Lankan life insurers more comparable to regional peers, potentially boosting attractiveness to foreign investors.
📈 Tech Overhaul for Central Bank Regulation
The Cabinet has approved a procurement process to implement a technology-based supervisory solution for the Central Bank of Sri Lanka's (CBSL) Banking Supervision Department, modernizing national financial regulation. • The Core Problem: The Banking Supervision Department currently relies heavily on physical record management to oversee licensed banks and protect financial stability. • The Upgrade: A needs assessment conducted with technical assistance from the Asian Development Bank (ADB) identified digital modernization as a top priority. The upcoming digital platform is designed to streamline the preparation, review, storage, and retrieval of crucial supervisory documents. • National Context: The initiative, submitted by President Anura Kumara Dissanayake in his capacity as the Finance Minister, directly impacts the efficiency and soundness of Sri Lanka's banking & financial services sector, a foundational pillar for wider economic stability and digital infrastructure.
🚨 CBSL Declares "Infinity Rover" & 23 Others Illegal Pyramid Schemes
The Central Bank of Sri Lanka (CBSL) has officially declared Infinity Rover (Pvt) Ltd and 23 other entities/apps as prohibited schemes under Section 83 (C) of the Banking Act, No. 30 of 1988. • The Investigation: Following an official investigation, CBSL ascertained and determined that these companies and applications have engaged in, conducted, and promoted illegal pyramid structures. • Prohibited Entities: The banned operations span physical companies, online applications, and trading platforms impacting local finance & retail channels. Notable names on the updated prohibition list include: Infinity Rover (Pvt) Ltd OnmaxDT MTFE App (including MTFE SL Group, Success Lanka, DSCC Group) Global Lifestyle Lanka (Pvt) Ltd Qnet / Questnet Tiens Lanka Health Care (Pvt) Ltd Best Life International (Pvt) Ltd Fruugo Oline App / Fruugo Oline (Pvt) Ltd SGO / sgomine.com C.A.N. Advertising (Pvt) Ltd (and affiliates like bannercuts.com) • National Impact: Such schemes pose severe risks to public savings, consumer protection, and the stability of the broader financial services sector. CBSL issues these determinations to safeguard the public from unauthorized fund-mobilization networks.
Bond Scam Case Postponed to July 22 Over Bench Issue ⚖️
• Legal Proceedings: The Colombo High Court has ordered the case against 11 defendants in the Central Bank of Sri Lanka (CBSL) bond scam to be recalled on 22 July 2026. • The Cause: High Court Judge Manjula Thilakaratne informed the open court that the trial-at-bar hearing the matter had not been validly and properly constituted. • The Accused: The banking & finance and public sector figures involved include former CBSL Governor Arjuna Mahendran, former Finance Minister Ravi Karunanayake, Perpetual Treasuries Ltd., and its Directors Arjun Aloysius and Geoffrey Aloysius. • The Charges: The Attorney General instituted proceedings under the Public Property Act regarding alleged irregularities connected to the CBSL Treasury Bond auction held in March 2016.
📦 Para-Tariff Phase-Out & Customs Modernization to Begin in 2028
Sri Lanka's Government has outlined an ambitious Customs modernization program alongside a phased removal of para-tariffs (cess) starting in 2028 to boost trade facilitation and eliminate revenue leakages. Key Reform Highlights: • Para-Tariff (Cess) Removal Schedule: For most products, 50% of the cess will be removed in 2028, 25% in 2029, and the remaining 25% by 2030. • Domestic Industry Protection: To safeguard local competitiveness, a slower phase-out will apply to 107 selected HS codes (25% removed in 2028 and 2029, and 50% in 2030). Protection will transition into a simplified four-band Customs tariff structure of 0%, 10%, 20%, and 30%. • Digitalization & Automation: Focus is shifting away from physical interactions through electronic platforms for import documentation, forex remittances, and online payments. • Risk-Based Inspection: Cabinet approved the procurement of new non-intrusive inspection (NII) scanners to fast-track low-risk cargo clearance while focusing enforcement on high-risk shipments. • Legislative Updates: A new Customs Ordinance and greater automation remain top structural reform priorities in alignment with recent IMF discussions.
Customs Modernisation to Boost Exports Under NEDP 2026–2030 📈
A high-level discussion was held at the Presidential Secretariat to modernise Sri Lanka Customs and strengthen trade facilitation. The initiative aligns with the strategic goals of the upcoming National Export Development Plan (NEDP) for 2026–2030. • Key Focus Area: Streamlining and modernising customs processes to significantly enhance export facilitation and improve ease of doing business. • Strategic Alignment: The reforms are designed to support critical national sectors like apparel & textiles, tea, and ICT/BPM by reducing trade bottlenecks and boosting global competitiveness. • Context: Based on preliminary official updates regarding the NEDP 2026–2030 framework.
🚨 CCD Raids Uncover Counterfeit Engine Oil Operations in Kegalle & Mawanella
The Colombo Crimes Division (CCD) has seized a significant stockpile of suspected counterfeit engine oil following coordinated raids in the Kegalle and Mawanella districts. • The Operation: Conducted on June 2, 2026, targeting retail entities SF Marketing (Mawanella) and J.W. Auto (Kegalle). Court-authorized search warrants led to the seizure of multiple barrels bearing counterfeit labels of global brands Caltex and Delo. • Seizures & Legal Action: Four partially filled barrels were confiscated from J.W. Auto, where product was allegedly being sold at heavily reduced prices. Raids at SF Marketing led to three additional storage locations containing a larger stockpile. • Judicial Status: Case No. B/58709/26 is active in Kegalle and Case No. B/21492/26 in Mawanella. Both accused individuals have been released on surety bail of Rs. 10 million each. • Economic & Sector Impact: Offenses fall under the Intellectual Property Act No. 36 of 2006. Counterfeit products in the automotive lubricants sector pose severe financial and reputational risks to formal brand owners, undermine marketplace integrity, and risk costly mechanical failures or emissions hazards for consumers.
🚨 Suspect Remanded in Rs. 190 Bn Illicit Remittance Case
The Colombo Chief Magistrate’s Court has remanded a suspect until July 9, 2026, over an alleged scheme that illegally transferred nearly Rs. 190 billion out of Sri Lanka. • Overall Figures: Approximately Rs. 190 billion was fraudulently remitted overseas in US dollars via telegraphic transfers (TT) on the pretext of importing goods, with no corresponding imports entering the country. • Modus Operandi: The suspect allegedly operated multiple bank accounts under his name and a Colombo Fort-based company, A.Y. Investment. The Financial Crimes Investigation Division (FCID) has identified at least 36 additional companies suspected of involvement in similar dealings. • National Context & Risks: The investigation has uncovered suspected large-scale money laundering. The prosecution alleges that funds linked to drug traffickers were deposited into the suspect's accounts, threatening the integrity of Sri Lanka's banking & financial services sector. Investigators are currently probing the source of the unverified funds and the exact purpose of the overseas transfers.