Sri Lanka has made arrangements to borrow USD 150 million from the International Development Association (IDA) of the World Bank Group to finance the implementation of Financial Sector Safety Net Strengthening Project.
In a statement, the Finance Ministry said the project is expected to strengthen Sri Lanka’s financial sector safety net with a focus on the Sri Lanka Deposit Insurance Scheme (SLDIS), which is managed by the Central Bank.
The project also aims at strengthening the financial and institutional capacity of SLDIS in line with international best practices for effective deposit insurance schemes.
The Finance Ministry says it will also support boosting the reserves of SLDIS in order to enable it to meet its payout and bank resolution obligations, safeguard the confidence of the public in the financial system and improve the capacity of the SLDIS to perform its legally mandated functions by the reduction in time required for reimbursement and by an increase in public awareness about the scheme.
The project will be implemented by the Central Bank, consistent with the project development objectives and project design.
The relevant financing agreement for the Financial Sector Safety Net Strengthening Project, amounting to USD 150 million has been signed by Mahinda Siriwardana, the Secretary to the Treasury, and Faris H. Hadad-Zervos, the Country Director for Maldives, Nepal and Sri Lanka, on January 31, on behalf of the Sri Lankan government and IDA, respectively.