Being a trusted, professionally competent and strong institution, the Central Bank is entrusted with vital agency functions. Accordingly, as per our mandate, we carried out  5  public debt management with the objective of mobilising the government’s financing requirements at the lowest possible cost and with a prudent degree of risk. The framework for public debt management was reinforced by introducing a transparent market based auction mechanism for the issuance of government securities. This has already resulted in desirable outcomes of lowering interest costs to the government, efficient price discovery and improved transmission of monetary policy signals across the benchmark yield curve. The Employees’ Provident Fund, which is the largest superannuation fund in the country, is managed by the Central Bank. It passed a significant milestone during 2017 with total assets of the Fund surpassing Rs. 2.0 trillion. The Central Bank also continued to promote financial literacy and inclusiveness and helped entrepreneurship development through our credit schemes for agriculture and livestock, as well as the micro, small and medium scale enterprise (MSME) sectors. In addition, we also adopted measures to promote a clean note policy in the country and improvements were also made in currency operations and processing. In 2017, the Central Bank implemented a new legislative and a policy framework for foreign exchange operations based on the Foreign Exchange Act, No. 12 of 2017.
The reform agenda of the government includes improving financial viability of the State Owned Enterprises (SOEs) to mitigate the budgetary implications for the government. While introducing clear frameworks and reforms in relation to monetary and exchange rate policies in 2017, we have implemented several policy measures during 2017 to address the challenges in the financial sector and maintain a stable financial system for effective monetary policy transmission and to support sustainable growth. With a view to promote a dynamic and resilient financial sector, the regulatory and supervisory framework of the Central Bank was further strengthened in line with international standards and best practices. At present, our banking sector accounts for over Rs. 10 trillion in assets, while the non-bank financial institutions sector accounts for over Rs. 1 trillion in assets. The implementation of Basel III capital standards was commenced in 2017 in order to develop a more robust banking sector. The framework to regulate the non-bank financial institutions was strengthened under challenging conditions, and resolution of distressed finance companies was also commenced. During 2017, the Central Bank continued to strengthen the regulatory framework for the microfinance sector, and continued to combat the menace of illegal pyramid schemes with the assistance of other government agencies. Several measures were adopted to strengthen and modernise the payment and settlement infrastructure in order to develop an efficient and stable payment and settlement system in the country, as well as to pave the way towards a digital economy.