Sri Lanka banks considering relief for Rs101bn in tourism debt
Thursday July 11, 2019 22:22
ECONOMYNEXT- Sri Lanka banks may give relief about 100 billion rupees in hotel borrowings for one year to help the tourism industry recover from the Easter Sunday attack, official said
Governor Indrajit Coomaraswamy said that there have been 3,641 requests to banks for a moratorium.
"The amount considered for moratorium is 101 billion rupees and so far 945 requests have been approved and 2,696 are under process for approval."
"A very high proportion of that 2,696 will be approved, because when they are taken into processing they are broadly conforming with the requirement," he said.
In total, the tourism sector has borrowed 285 billion rupees from banks.
The moratoriums are also applicable on borrowings from finance companies, which make up around 7 percent of the financial system.
Coomaraswamy said that the moratorium will not reduce bad loans in banks.
"What has happened, is that we have kind of frozen the situation as of the date (April 18) the moratorium kicked in, because the people who are eligible are those who are current on the day the moratorium was implemented."
"So people who had bad loans when the moratorium took place are not eligible for the moratorium."
Coomaraswamy said that there was some delay in implementing the moratorium, as it took time for banks to instruct their branches on moratoriums.
"Clearly it took the banks a bit of time to gear up."
"It took them time to figure out the decision making process; where decisions will be made."
"Then they had to get the messages down to their branches."
"So that took a bit of time, but we now see that banks are picking up momentum."
He said that during talks, the tourism industry has said that it is satisfied with the moratorium.
He said that the tourism industry was showing a faster recovery than expected.
Tourism firms and employees in the industry can apply for moratorium on debt. (Colombo/Jul11/2019)