Dr. Nandalal Weerasinghe, in a letter directed to the Sri Lanka Banks’ Association (SLBA) chairman, said the Central Bank would be compelled to take administrative measures in the event the banking and financial sector fails to take adequate and expeditious adjustments in this regard

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Explaining that the central bank recently dropped the policy interest rates by 450 bps on two occasions with a view to enabling the economy to reach its potential while stabilising inflation at mid-single digit levels in the medium term and easing pressures in the financial markets,”.

It is also expected that the banking and financial sector will pass on this benefit to individuals and businesses, thereby supporting the rebounding of economic activities of the country and enabling borrowers to repay credit facilities which in turn enhances the asset quality of the banking sector, he added.