CBSL urges licensed Banks to give relief

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The Central Bank of Sri Lanka (CBSL) has urged licensed banks to provide appropriate concessions, for a period of six months, to borrowers whose income or businesses have been adversely affected due to the current macroeconomic conditions and due to the Covid-19 pandemic.

With the outbreak of the pandemic, CBSL introduced several concessionary schemes from March 2020, to assist affected borrowers. 

Such concessions include concessionary debt moratoriums, loan restructuring/rescheduling, suspension of recovery actions, low-cost working capital loans and waivers of fees and charges for certain banking transactions. 

These concessions were provided to individuals including private sector employees and small and medium enterprises (SMEs) and other businesses engaged in tourism, transportation, manufacturing, services, agriculture, construction, apparel, IT, and related logistic services. 

Accordingly, the last phase of the moratorium granted to Covid-19 affected borrowers ended on 31.12.2021, while the last phase of the moratorium granted to the tourism sector ended on 30.06.2022. Meanwhile, CBSL has requested licensed Banks to set up post
Covid-19 revival units to identify and assist under-performing and non-performing borrowers affected by the pandemic to revive viable businesses with the potential of contributing to national economic growth, thus facilitating the unwinding of moratorium in a sustainable manner.

Considering the current macroeconomic challenges and the requests made by several stakeholders including State Institutions, CBSL said it has requested licensed Banks to provide appropriate relief, for a period of six months, to borrowers whose income or businesses have been adversely affected due to the current macroeconomic and or due to the pandemic while preventing any undue stress on the stability of the banking sector.

These concessions are provided on a case-by-case basis depending on the future repayment capacity of individuals and the viability of businesses or projects. 

By Amila Abeyratne