Lower than expected revenue collection is likely to challenge the achievement of the targeted budget deficit for 2018. However, the primary balance is expected to record a surplus for the second consecutive year in 2018. This would be only the third time since 1955. Continued fiscal consolidation remains essential to build on the achievements already realised in the fiscal sector and to support the conduct of monetary and exchange rate policies without any fiscal forbearance. As announced in last year’s Road Map, the Central Bank is progressing towards implementing flexible inflation targeting (FIT) as its new monetary policy framework by 2020. We have taken several policy initiatives to facilitate the transition to FIT during 2018. While maintaining appropriate policy coordination 7  with the government, we initiated the drafting of necessary legal amendments to strengthen the mandate of the Central Bank to maintain low inflation, while strengthening its autonomy, transparency and accountability. During 2018, we were also able to implement several policy measures with a view to maintaining a stable financial system with subdued macroprudential concerns, while increasing the resilience of the financial system to global and domestic shocks. In order to strengthen the legal and regulatory framework of the financial institutions, a new Banking Act is being drafted, while also initiating amendments to other legislation related to the financial sector. Resolution actions for distressed companies were taken in the form of imposing stringent regulatory actions such as restriction on business as well as suspension and cancellation of licences.
Initiatives are being taken to resolve remaining distressed companies, as per the provisions of the Finance Business Act (FBA), No.42 of 2011. Licenses of two distressed companies were cancelled and the settlement of the liabilities of existing depositors under the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) is currently underway. Amendments are proposed to the FBA to facilitate expeditious resolution actions in respect of distressed finance companies. During 2018, the Central Bank continued its efforts to strengthen the payment and settlement infrastructure of the country, while developing an efficient national payment and settlement system, which is capable of catering to the growing payment needs of the economy. Let me mention some of these initiatives briefly. Approval has been granted to LankaClear (Pvt) Ltd to implement a National Card Scheme (NCS) under the brand name 'LankaPay' in partnership with an international card scheme. This system was launched 2018 with a licensed commercial bank commencing to issue LankaPay cards. As a result of the emergence of new payment technologies across the globe and the interest shown by local institutions to keep abreast of these technologies, the National Payments Council, which is the consultative 28  committee on payment and settlement systems, appointed two committees to study developments in the Financial Technology (FinTech) sector and Blockchain technology.