93. Interpretation

In this Act, unless the context otherwise requires–

"abandoned property" means the property as defined in Part IX of the Banking Act and dormant deposits as specified in section 23 of the Finance

Business Act;

"Bank of Ceylon Ordinance" means the Bank of Ceylon

Ordinance (Chapter 397);

"Banking Act" means the Banking Act, No. 30 of 1988;

"bridge bank" means an institution established by the

Central Bank to take over and continue operations of certain critical functions and viable operations or to transfer shares, any one or more of the assets, liabilities, legal rights and obligations or other property instruments owned or issued by a licensed bank subject to resolution, which, in the opinion of the Central Bank, is having systemic importance or impact;

"Central Bank" means the Central Bank of Sri Lanka established by the Central Bank of Sri Lanka Act,

No. 16 of 2023;

"close-out netting" means a contractual provision, including a provision in a collateral arrangement, or, in the absence of any such provision, any statutory rule, on the basis of which, upon the occurrence of a predefined event in relation to a party to the contract, the obligations owed by the parties to the contract to each other that are covered by the provision, whether or not they are at that time due and payable, are automatically or at the election of one of the parties to be immediately due, reduced to or replaced by a single net obligation, whether by way of novation, termination, set-off or otherwise, representing the aggregate value of the combined obligations, which is thereupon due and payable by one party to the other;.

"Companies Act" means the Companies Act, No. 07 of 2007;

"court" means the High Court established under Article 154P of the Constitution for a Province, empowered with civil jurisdiction by Order published in the

Gazette under section 2 of the High Court of the

Provinces (Special Provisions) Act, No. 10 of 1996, within the Province for which such High Court is established, or where any such High Court vested with such civil jurisdiction is not established for any Province, the High Court established for the

Western Province;

"crisis times" means a period of time in which the financial system is unable to perform its key functions including intermediation of financial funds, management of risks, and settling of payments efficiently, and non-crisis times shall be construed accordingly;

"critical functions" means activities performed by a licensed bank for and on behalf of third parties other than the licensed bank, where the failure to perform any such activities would lead to a disruption of banking services which are essential for the functioning of the real economy or for ensuring financial system stability, due to the size or the market share of such licensed bank, external and internal interconnectedness, complexity or cross-border activities of such licensed bank;

"critical shared services" means activities performed by a licensed bank itself or outsourced to be performed by any third party service provider, where the failure to perform any such activities would lead to an inability on the part of the licensed bank to perform critical functions and, thereby disrupting services which are essential for the functioning of the real economy or for ensuring financial system stability;

"extraordinary public financial support" means infusion of capital for a licensed bank having a systemic importance or impact, through funds other than the funds of the Central Bank;

"Finance Business Act" means the Finance Business Act,

No. 42 of 2011;

"financial sector" means a subsector of the economy which comprises institutions that manage funds on behalf of customers, either corporate or retail, or provide financial intermediary services to transfer and allocate funds in an economy;

"Housing Development Finance Corporation Bank of Sri

Lanka Act" means the Housing Development

Finance Corporation Bank of Sri Lanka Act, No. 7

of 1997;

"insolvency" means a situation where the liabilities of a licensed bank are higher than the assets of such licensed bank as reflected in its balance sheet;

"insured deposits" means all eligible deposits, subject to the maximum compensation payable to a depositor under section 44;

"insured depositors" means holders of eligible deposits, subject to the maximum compensation payable to a depositor under section 44;

“international financial institutions” includes the Asian

Development Bank, the International Bank for

Reconstruction and Development, the International

Development Association, the International

Monetary Fund or similar institutions;

"key management personnel" means the employees of a licensed bank who are primarily responsible for the overall management and operation of such licensed bank, including the heads of the functions of credit, finance, treasury, operations, compliance, audit, risk management, company secretariat, information technology, information security and such other function as may be determined by the Central Bank, from time to time;

"licensed bank" means a commercial bank or a specialised bank licensed by the Monetary Board of the Central

Bank under the Banking Act, and includes a branch of a foreign bank incorporated outside Sri Lanka;

"licensed exchange" means an exchange, licensed under the provisions of the Securities and Exchange

Commission of Sri Lanka Act, No.19 of 2021;

"Minister" means the Minister assigned the subject of

Finance in terms of Article 44 or 45 of the

Constitution;

"Monetary Board" means the Monetary Board established by the Monetary Law Act (Chapter 422);

"National Savings Bank Act" means the National Savings

Bank Act, No. 30 of 1971;

"netting" means determination of net claims or obligations after setting-off or adjusting all the claims or obligations based on or arising from mutual dealings between the parties to a contract;

"non-bank financial institutions" means finance companies licensed by the Monetary Board under the Finance Business Act;

"People’s Bank Act" means the People’s Bank Act, No.

29 of 1961;

"Pradeshiya Sanwardhana Bank Act" means the

Pradeshiya Sanwardhana Bank Act, No. 41 of 2008;

"recovery plan" means a plan which provides for measures to be taken by a licensed bank in the event of a deterioration of its financial position prior to the

Central Bank taking resolution action on such licensed bank;

"Registrar-General of Companies" means the Registrar-General of Companies or other officer performing the duty of registration of companies under the

Companies Act;

"resolution" means, restructuring of a licensed bank by the Central Bank through the exercise of resolution powers of the Central Bank in order to safeguard the public interest, including the continuity of the critical functions of such licensed bank, securing financial stability and ensuring minimal costs to taxpayers;

"resolution plan" means a plan designed by the Central

Bank for each licensed bank having systemic importance or impact, in accordance with the international standards and best practices available for resolution of banks;

"State Mortgage and Investment Bank Law" means the

State Mortgage and Investment Bank Law, No. 13

of 1975;

"subordinated debt holder" means a holder of debt having a claim against the issuer’s assets which are of lower ranking, or junior to all other obligations of a licensed bank and is paid after claims of holders of senior securities are paid;

"temporary financial assistance" means the financial assistance to contribute to the funding of the resolution of a licensed bank, or to a bridge bank by the Government for a temporary period;

"wind-down" means gradually reducing or closing down of business; and

"write-down" means reducing the value of an asset to offset a loss or an expense.