MANILA: The Asian Development Bank (ADB) approved a policy-based loan of $200 million to help Sri Lanka strengthen its financial sector.
On Tuesday, the ADB said that the second subprogram of its Financial Sector Stability and Reforms Program built on the stabilisation and crisis management measures put in place under the first subprogram approved in 2023, Xinhua news agency reported.
Policy reforms under the second subprogram will improve the Central Bank of Sri Lanka's (CBSL) regulatory supervision of banks to ensure financial stability.
The move included an improved early warning system to identify banks' weakening processes and introduce corrective actions, the Manila-based bank said.
According to the ADB, the CBSL will implement a new stress testing model to monitor solvency issues and liquidity stresses.