14. Section 19 of the principal enactment is hereby amended as follows : -
| (1) by the repeal of subsections (1), (2) and (3) of that section, and the substitution therefor of the following subsections: -
| | "(1) Subject to the provisions of sub-section (3), every licensed commercial bank-
| | | (a) which has been issued with a licence prior to the date of commencement of this section, shall at all times maintain an equality capital in an amount nut, less than twenty-five million rupees; |
| (b) which has been issued with a licence after the date of commencement of this section, shall at all times maintain an equity capital in an amount not less than one hundred million rupees at sum other amount as the Monetary Board may, having regard to till. Viability and stability of the banking system and the interest of the national economy and with the concurrence of the Minister, determine from time to time. |
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| | (2)" equity capital" shall mean-
| | | (a) paid up capital if it is a licensed commercial bank incorporated or established in Sri Lanka by or under and written law ; |
| (b) the amount assigned to such bank by the head office, if it is a licensed commercial bank incorporated or established outside Sri Lanka. |
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| | (3)
| | | (a) The Monetary Board may, having regard to the deposit liabilities or to the total. liabilities including contingent liabilities or to the total assets or to any specified category of assets of a bank, vary from time to time the amount specified as the minimum amounts required to maintained by a licensed commercial bank at. Equity capital under subsection (1) of this section. |
| (b) For the purpose of computing the minimum required equity capital, when such amount it prescribed in reference to liabilities or assets, book capital and liabilities or assets shall be of such kind and computed in such manner as the Monetary Board may from time to time determine having regard to the interest of national economy. |
| (c) The Monetary Board shall, in writing, communicate to all licensed commercial bank any variation made by it in respect of the equity capital required to be maintained by a licensed commercial bank. |
| (d) Where any licensed commercial bank required by such variation to augment its equity capital, it shall upon application to the Monetary Board, be afforded a period of twelve months, or such longer period as may be granted by the Monetary Board, in which to comply with that requirement."; |
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| (2) by the repeal of subsection (5) of that section, and the substitution therefor of the following subsection :-
| | "(5) A licensed commercial bank shall not reduce its equity capital without the prior written approval of the Monetary Board.". | | |
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| (3) by the repeal of subsection (7) of that section and the substitution therefor of the following subsection:-
| | "(7)
| | | (a) Every licensed commercial bank shall at all times maintain a capital adequacy ratio as may be determined by the Monetary Board, which shall in determining such ratio to be maintained, as for as practicable adopt the guidelines for capital adequacy set out by Bank for International Settlements in Basic. |
| (b) Any variation in the capital adequacy ratio referred to in paragraph (a) shall be communicated to every licensed commercial bank by that Monetary Board in writing, provided that every licensed commercial bank which is required by such variation to augment its capital, shall be afforded a period of twelve months or such longer period as may be granted by the Monetary Board, in which to comply with such requirement."; |
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| (4) by the repeal of subsection (8) of that section; and |
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| (5) by the substitution in subsection (9) of that section, for the words " the capital or capital funds", of the words" the equity capital or capital funds ". |
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Sri Lanka Consolidated Acts