COLOMBO, June 15 -- Fitch Ratings said Sri Lanka's revised capital requirements for gold-backed lending are expected to have a manageable impact on the capital positions of banks and finance companies, while strengthening the sector's overall risk profile.

The rating agency said the Central Bank's new directive, which increases risk weights applied to gold-backed loans, will affect finance companies more significantly than banks because such loans account for a larger share of their lending portfolios and have generally been underwritten more aggressively.

Under the revised framework, gold loans with loan-to-value (LTV) ratios below 70% will attract a 10% risk weight for both banks and finance companies, compared with a previous zero-ri...