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Thursday December 2nd, 2021
Banking

Sri Lanka banks asked not to auction loan security till March, interest relief

ECONOMYNEXT – Sri Lanka’s banks will be asked not to auction security given for loans till March 2021, and give some relief for interest to troubled borrowers, Central Bank Governor Nivard Cabraal said.

“We will issue directions to suspend parate execution (foreclosure by board resolution) for six months,” Cabraal said.

“Directions will be issued. We are also asking finance companies not to seize vehicles.”

He said a scheme would be announced to give interest relief of 15 billion rupees for troubled borrowers.

Possibility of providing equity to small borrowers would also be considered.

Banks should have a special desk for covid-19 distressed borrowers, he said.

Finance company consolidation should also proceed, he said.

There seems to be a ‘bubble’ developing in vehicles which are going up in price.

Loan to value ratios will be raised, even though he was not a great believer in the such rules, Cabraal said. (Colombo/Oct01/2021)

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