The World Bank’s Board of Executive Directors on Thursday (Nov. 09) approved $150 million in financing for Sri Lanka to strengthen the resilience of the financial sector.
“Sri Lanka’s economic crisis highlights the need for strong safety nets to support the financial sector. Stable and reliable banking sector is essential for the economy, businesses and individuals, small businesses and poor households,” said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka.
“Strengthening the Deposit Insurance Scheme will help protect the savings of smaller depositors, including women and people living in rural areas. It will also sustain the confidence in Sri Lanka’s financial system, a critical part of building the country back better,” he added.
The Financial Sector Safety Net Project is designed to boost the financial and institutional capacity of the Sri Lanka Deposit Insurance Scheme (SLDIS), which is managed by the Central Bank of Sri Lanka.
“Strengthening the financial sector safety net is crucial for maintaining financial stability during a macro-debt crisis,” said Alexander Pankov, Lead Financial Sector Specialist and the Task Team Leader for the project. “A robust deposit insurance system, along with enhanced supervision and resolution frameworks, will safeguard public confidence in the financial system and protect people’s savings.”