Mahinda meets Sri Lanka banks on debt relief, proposal in a week

ECONOMYNEXT – Prime Minister Mahinda Rajapaksa who is also Finance Minister has met top executives of Sri Lanka’s banks to discuss giving a debt moratorium to troubled companies, a top official said.

“The banks promised to come back with a proposal within a week,” Senior Economic Advisor to the Prime Minister Nivard Cabraal said.

Any such relief will also have to be discussed with the Central Bank, he said.

Cabraal had proposed before the election that a relief of up to 18 months be given to borrowers whose loans had fallen into default, provided they keep on paying interest.

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He had also proposed changing the rule of a credit information bureau to allow troubled companies to continue to borrow.

Bad loans in Sri Lanka’s banks grew to 4.8 percent in the second quarter, after the collapse of the rupee in 2018 and Easter Sunday suicide blast. (Colombo/Nov29/2019)