Sri Lanka, June 16 -- Sri Lanka's tighter capital requirements for gold-backed lending would have a largely manageable impact on the banks and finance companies while strengthening the prudential safeguards, Fitch Ratings said, although several finance firms could face increased pressure on the already weak capital positions.

The revised framework, which takes effect on September 1, raises risk weights on gold-backed loans across both banks and finance companies, increasing the amount of capital the lenders must hold against such exposures.

"Fitch Ratings believes the Central Bank of Sri Lanka's tighter capital treatment for gold-backed lending will have a mostly manageable impact on the rated banks' and finance companies' capital rati...