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flag Fitch warns Sri Lanka's state banks may face weaker capital ratios due to a new reserve requirement.

flag Fitch Ratings warns that Sri Lanka's state banks, despite being more profitable, may show weaker regulatory capital ratios compared to private banks due to a special reserve requirement. flag This reserve, set at 15% of foreign-currency exposure and aimed at mitigating settlement risks, is not counted in capital adequacy measures. flag The Central Bank mandated this reserve, which will affect state banks' capital after a six-month period starting from the end of 2024.

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