Sri Lanka’s cabinet has approved a proposal to amend the State Mortgage and Investment Bank (SMIB) Act, saying that limitations in the current law have prevented the state-owned lender from achieving its objectives and maintaining expected profits.
The SMIB was established under Act No. 13 of 1975 and began operations in January 1979 following the merger of the Ceylon Mortgage Bank and the Agricultural and Industrial Credit Corporation. The bank is the principal state-owned housing lender, distinct from the Housing Development Finance Corporation and the National Housing Development Authority.
“Due to certain limitations of the current Act, the Bank has not been able to achieve its objectives and maintain its expected profits,” a cabinet statement said. Amendments are needed to align the legislation with the current business environment and allow the bank to meet its development targets, the statement added.
Drafting of the amended Act has been entrusted to the Legal Draftsman, with the cabinet decision published on Tuesday. The government has been moving to consolidate and rationalise state financial institutions as part of its broader fiscal reform agenda under the IMF programme.
EconomyNext reported the cabinet decision on Tuesday afternoon.
