The term corporate governance built up its audience post-financial crisis at the beginning of the 21st century due to the common belief that good corporate governance standards lead to stability in the financial system, which is one of the key factors of a healthy society. Pursuant to this financial crisis, financial regulators in Sri Lanka also came up with certain minimum standards on corporate governance applicable to firms and companies. In Sri Lanka there are two types of banks Licensed Commercial Banks (LCBs) and Licensed Specialized Banks (LSBs). These two types of banks control Sri Lankas financial system and represent the largest portion of its total assets. The banking sector regulator, the Central Bank of Sri Lanka (CBSL), introduced key regulations on corporate governance in 2007 as a preliminary step towards banking sector stability. Also, banks as limited liability companies are also governed by various other corporate governance standards introduced by institutions like the Colombo Stock Exchange (CSE) and the Institute of Chartered Accountants of Sri Lanka (ICASL) etc. This paper intends to discuss the history of corporate governance in Sri Lanka and expose and examine the corporate governance rules, regulations, and codes and their primary objectives that are applicable to the Sri Lankan banking industry. The data have been extracted carefully by perusing the codified laws and regulations in the country. This article will help the readers to acquire knowledge on the corporate governance regime of the banking industry in Sri Lanka.

Sri Lanka

corporate governance

Licensed Commercial Banks