The Asian Development Bank (ADB) has approved a $200 million policy-based loan to strengthen Sri Lanka’s financial sector, focusing on banking sector governance, asset quality, and financial inclusion for women and vulnerable groups. This is the second subprogram under ADB's Financial Sector Stability and Reforms Program, building on stabilization measures initiated in 2023. The program aims to enhance the Central Bank’s regulatory supervision with improved early warning systems, stress testing models, and guidance on credit concentration risks. Incentives will be provided to banks for supporting micro, small, and medium-sized enterprises (MSMEs), while women-led businesses will receive special loans and improved access to finance through a policy framework and digitized personal information. These reforms aim to ensure financial stability, resilience, and sustainable recovery in Sri Lanka.