Sri Lanka shipping policy to encourage ship finance
ECONOMYNEXT – Sri Lanka’s new national policy for its maritime and logistics sectors has recommended several measures to encourage ship financing such as removing single borrower credit limits.
It aims to encourage Sri Lankan banks to finance ship acquisitions to promote ship ownership among Sri Lankans and create an eco-system of ship owners in Sri Lanka.
The final draft of the national shipping policy was presented to Minister of Ports & Shipping and Southern Development Sagala Ratnayaka last month.
Awareness of ship finance will be enhanced to facilitate financing at interest rates equivalent to international rates, the report said.
It recommended removal of the single-borrower credit limit for ship building and purchasing.
This was because large investments are needed for ship building and ownership with only a limited number of banks in Sri Lanka involved in the sector.
The shipping policy also aims to create a recognition among local banks for ship finance by accepting the vessel as collateral.
It also recommends direct government fiscal policy initiatives to incentivise ship-owners to register their vessels in Sri Lanka and streamline local taxes applicable on ship-owners and charter hire incomes.
(Colombo/February 12/2019 – SB)