A.M.P. Adikari
Financial liberalization includes several elements, as it reflects a variety of restrictions that were imposed. This can include capital account liberalization, banking sector liberalization and stock market liberalization. In the late 1970s, financial reforms began to introduce by most developed and developing countries. The Sri Lankan economy prior to 1977 was mostly characterized by stringent administrative controls on the exchange and trade system, financial sector, resource allocation and price determination resulting in a poor growth performance. The change of government in 1977 marked a turning point of economic policies in Sri Lanka (Peiris, 2005).Financial reforms in Sri Lanka initiated with the introduction of open economic policies in 1977.Financial reforms such as introduction of new financial institutions, instruments and markets, revisions of interest rates, modification of credits, exchange rate controls, increasing private sector ownership of financial institutions, introduction of prudential regulations were launched under this financial reforms. The objective of this study is to examine the major reforms introduced in banking sector and evaluate their performance.
The study investigate financial reforms during the post economic reforms period (1977-2012).The data mainly collected from the annual reports of the Central Bank of Sri Lanka. The researcher used graphical and tabular data presentation techniques to illustrate the financial reforms on the banking sector. The results shows that the banking sector has improved significantly as a result of financial reforms initiated in 1977 with open economic policy reforms.
Key Words : Financial reforms, Banking Sector
Field of Research : Economics
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Ms. A.M.P.Adikari, M.Phill student, Faculty of Graduate Studies, University of Kelaniya, Sri Lanka.
Priyangani.adikari@yahoo.com