Extension comes despite CBâs assurance in six-month road map to unwind debt freeze
Tourism sector stakeholders have time till June 30, 2022 to start paying their loans
In what is seen as the latest move to extend relief to the pandemic-affected borrowers, the Central Bank has asked the banks to extend the pause on the recovery actions on loans and leases till March 31, 2022.
In a fresh circular issued last week, the Central Bank requested the banks âto suspend all types of recovery actions, including parate execution and forced repossessions of leased assetsâ.
The moratorium was set to expire on December 31, 2021.
The tourism sector borrowers have already received an extension to their debt freeze till June 30, 2022.
The Central Bank in its six-month road map on October 01 announced that it had no intention to extend the moratoria beyond the already stipulated time frames, considering the undue pressure that could inflict on the health and stability of the financial system of the country.
The broader businesses and individuals are under payment holiday now for 21 months while the tourism sector has been under the relief scheme from as way back as in April 2019.
In the road map, the Central Bank said it would replace the moratoria with a liquidity support scheme worth of Rs.15 billion to facilitate financing of the interest accrued in loans that have been under moratoria to enable financial institutions to deal with the effect of the moratoria in a sustainable manner.
Further, the Central Bank said it would put in place in an âEmergency Lending Facility Frameworkâ.
The decision to extend the suspension on the recovery efforts may have been prompted by the hardships still being faced by the borrowers and particularly those in the travel and tourism sector.
The pause on recovery efforts would also allow more time for banks and borrowers to come into arrangements agreeable for both parties in servicing the loan facilities.
As per the Central Bank estimates, the ongoing debt moratoria by banks and non-bank financial institutions amounts to Rs.780 billion. This is in addition to Rs.165.5 billion by way of concessionary working capital under the COVID-19 Saubagya Refinance Scheme.
As at end-August 2021, the banking sector loans amounted to Rs.10.4 trillion, up by 18 percent from end-2020.
President Anura Kumara Dissanayake stated that if the current government fails to meet the expectations…
There have been abuses in the issuance of permits for expatriate workers to import electric…
The International Monetary Fund (IMF) reached a staff level agreement with Sri Lankan authorities, paving…
Sri Lanka Embassy in Brussels participated at the European Parliament “Fair Trade Breakfast-2024”, on 13…
etstar Asia yesterday launched its Colombo-Singapore direct route positioning itself as the only low-cost carrier…
Solo travellers are getting older and are increasingly drawn to Asian destinations – with Sri…