🇱🇰 Major Restructuring for State Housing Finance Banks Approved 📈

• The Cabinet of Ministers has approved the restructuring of two State-affiliated housing finance institutions: the Housing Development Finance Corporation Bank (HDFC) and the State Mortgage and Investment Bank (SMIB). • The decision was prompted by Central Bank concerns over their unsustainable business models, weak profitability, limited capacity to raise deposits, and inability to meet minimum capital adequacy requirements. • Under the approved plan: • All Government shares of HDFC Bank will be transferred to Bank of Ceylon (BOC); HDFC will operate as a subsidiary of BOC. • All Government-owned shares of SMIB will be acquired by People's Bank; SMIB will operate as a subsidiary of People's Bank. • The move aims to strengthen the financial sustainability of the institutions, enhance their fund mobilisation ability, safeguard depositor interests, and support broader banking sector stability.