Bankers Redefine Risk Standards Following 2022 Crisis 📈

Sri Lanka’s leading bankers have confirmed a permanent shift in risk management, moving away from sovereign-heavy exposure toward private-sector lending and rigorous cash-flow analysis. • Strategic Reset Banking leaders describe the post-2022 era as a "structural reset." Institutions are reducing concentration in government-linked assets; People's Bank noted its loan book previously had 60% exposure to State-Owned Enterprises (SOEs). Shift from "collateral-heavy" lending to prioritizing borrower cash flow and "real-time" liquidity. • Risk & Liquidity Lessons A key focus is now on asset-liability currency alignment to prevent mismatches between rupee liquidity and US$ obligations. Operational risks, including business continuity during power and fuel shortages, are now Board-level priorities. • AML & Compliance Focus The industry is bracing for the third AML/CFT mutual evaluation; failure is cited as "not an option" for global funding access. Banks are integrating AI for transaction monitoring and upgrading Know-Your-Customer (KYC) and Ultimate Beneficial Ownership (UBO) frameworks. Compliance has shifted from a technical function to a monthly Board-level deliberation. • Sector Outlook State banks and private lenders like HNB and DFCC are strengthening capital buffers. System-wide improvement reported in capital adequacy and profitability following the 2022 "stress event."