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Parate execution is the last resort to protect depositors’ funds – SLBA

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Banks exercise their legally-enshrined right to Parate Execution as a last resort and the overarching objective is the protection of depositors’ funds that have been lent to borrowers, the Sri Lanka Banks Association (SLBA) has said in a statement to the media.

Responding to what it termed as lobbying by a group of defaulting borrowers espousing the removal or weakening of the protection of depositors’ funds, the Association said the Parate Execution remedy is aimed at recovering mortgaged assets from wilful defaulters and businesses that are no longer viable.

The SLBA, which represents all the licensed banks in the country, emphasized that banks have extended moratoriums on debt repayment for a long period exceeding 48 months in some cases, and that in instances of wilful default by borrowers, the banks owe a duty to their depositors’ whose funds are at risk, to recover the debts overdue and minimize the losses on loans granted.

The Association pointed out that the funds used to grant loans are placed with the banks by their depositors and that depositors are paid interest out of the interest charged from loans granted  to borrowers. “Banks are responsible to manage this intermediary role in a very careful manner to avoid deterioration of depositor confidence which can lead to many negative economic consequences,” the SLBA statement said.

“When borrowers face difficulties in repayment, the lending banks review the causes for the inability to repay interest and/or capital, and assess how the situation needs to be remedied to restore the borrower to being able to repay loans and carry on business/economic activity,” the SLBA said. “In such instances it is common for the banks to exercise empathy as a “partner” and assist the borrowers to come out of their challenging financial situation, and it is common for the banks to consider extension of loans, provide moratoriums, consider interest concessions and restructure the loans to suit the future cash flows of the employment or the business.

Banks take this course as the preferred alternative to liquidating the assets of the borrower under loan security arrangements. This is because it is beneficial for the customer as well as the bank to revive a business to good financial health than to shut it down and take whatever residual value is left, which in majority of cases is less than the value of the amounts due to the bank and kills the economic activity that was being financed. The banks therefore take the option of a win-win for all and support the borrowers when they face difficulties.”

“When assessing the condition of the overdue loans and their ability to be revived, banks have to accept that certain cases are beyond revival and/or that the default is wilful and in fraud of the lender. In these limited circumstances banks as responsible financial intermediaries must necessarily invoke the remedies available under the law and this includes ‘Parate Execution’ which is a measure to protect the depositors’ funds from wilful defaulters.”

The Association explained that: “As a natural consequence of investing in a business, a businessman may encounter strains principally on his ability to repay loans that cannot be sustained by bank depositor’s funds i.e. bank financing alone. A decline in the economy as in Sri Lanka due to social and political disturbances, pandemic conditions and an overwhelming public debt burden can also cause businesses to fail.

There has been governmental and external institutional aid to tide over these difficult times but the main reliance has been on the banks that have extended moratoriums on debt repayment for a long period, exceeding 48 months in some cases. The banks provide concessions and interest waivers during these difficult times to borrowers while maintaining interest payments to depositors to maintain confidence.”

“All should acknowledge the fact that the banks, guided by the Central Bank of Sri Lanka, extended their fullest support to weather a very challenging period from the Easter Sunday attacks to the pandemic, and the economic crisis that followed.”

“Parate Execution against assets securing bank debt (depositors’ funds) is the last resort. This is when all efforts at resolution of borrower’s insolvency are met with refusal to review/negotiate, usually by malicious abuse of judicial proceedings which is a common dilatory tactic.”

“It now appears that a group of defaulting borrowers in various sectors have engaged lobbyists of varying degrees of influence to espouse the removal/weakening of the protection of depositors’ funds from wilful value destruction by owners of non-viable businesses where repayment delays are deliberate.”

“Therefore, the banks wish to state the position in relation to reliefs claimed by the borrowers and the cost to the depositors who provide the funds, if recovery actions are taken away:

* Banks are always open to have one-on-one discussions with any borrower who has faced difficulties in meeting debt obligations to have alternative options for loan repayments. This is in the best interest of all stakeholders.

* If there is no source of repayment, postponing recovery action will not solve the issue and ultimately the depositors’ funds will not be returned to the banks.

* The Parate Execution remedy is aimed at recovering mortgaged assets from wilful defaulters/businesses that are no longer viable.

* The overarching objective is to protect depositors’ funds that have been lent to wilful defaulters/ borrowers.

* Depositors’ confidence is of paramount importance for economic growth which is much needed in the Sri Lankan context.

* If Parate Rights are taken away, banks will be compelled to be extremely selective in lending and the availability of finance will be to a narrowing segment of entrepreneurs, resulting in credit to the private sector shrinking, contrary to Government and regulatory policies.



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Sun directly overhead Neriyakulam, Punewa, Kebithigollewa, Pankulam and Sinhapura at about 12.10 noon today (31)

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The sun is going to be directly over the latitudes of Sri Lanka from  28th of August to 07th of September due to its apparent southward relative motion.

The nearest places of Sri Lanka over which the sun is overhead today (31) are Neriyakulam, Punewa, Kebithigollewa, Pankulam and Sinhapura about 12.10 noon.

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BASL takes exception to Justice Ganepola being denied a place in SC

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… highlights injustice caused to Justice R. Gurusinghe

The Bar Association of Sri Lanka (BASL) has alleged that due to the failure on the part of President Anura Kumara Dissanayake to fill the existing vacancies in the Supreme Court, a Senior Justice of the Court of Appeal, Justice Dhammika Ganepola, retired at the age of 63 without being considered for, or granted, a promotion to the Supreme Court, to which he was well entitled. The BASL pointed out at the time of Ganepola’s retirement there were four vacancies in the Supreme Court.

In a letter dated 17 August, 2026, addressed to President Dissanayake, the BASL declared that the failure to promote and recognise Ganepola’s distinguished judicial service, resulting in his retirement at the age of 63, is indeed a loss to the Judiciary.

A top BASL spokesman told The Island yesterday (30) that the Bar Council, over the weekend, had decided to release the hitherto confidential letter.

The official said that they also wanted to remind the President of his assurance given to BASL, on 12 August, 2026, that vacancies in the Supreme Court and Court of Appeal would be filled as soon as possible, within a month.

The following is the text of the BASL letter, signed by  Rajeev Amarasuriya, President, BASL, and its Secretary Nalin De Silva: “We write further to our letters dated 29th December 2025 and 30th June 2026 in relation to the above, to which we have not received any response.

We also refer to our meeting with Your Excellency on 12th August. As discussed during the meeting, there have been vacancies in the Supreme Court since May 2025, and the number of vacancies has now increased to four (04). There are also four (04) vacancies in the Court of Appeal. These are all matters we have already written to Your Excellency about.

Your Excellency informed the BASL Delegation when we met that you would be taking steps to make recommendations to fill these vacancies as soon as possible, within a month.

We write to reiterate the importance of giving due consideration to the criteria set out in our aforesaid letter dated 29th December 2025. We also wish to emphasise that, in making judicial appointments and promotions, seniority should be given due priority, in keeping with longstanding practice, until such time there are objective and defensible guidelines governing the assessment of merit.

The only justifiable departure to this criterion would be where there exists a specific and recognized demerit in respect of the particular Judge concerned or such other known compelling circumstances that are objectively identifiable such as where a Judge has previously been overlooked for promotion unfairly or conversely, where a Judge has been unfairly previously granted promotions above others.

This approach will safeguard both the integrity of the Judiciary and the trust reposed in it by the public.

Further, while there has been considerable discussion and representation by the Government regarding the importance of retaining experienced judges, as reminded to Your Excellency at our said meeting that, only a few months ago on 8th May 2026, a Senior Justice of the Court of Appeal, Justice Dhammika Ganepola, retired at the age of 63 without being considered for, or granted, a promotion to the Supreme Court, to which he was well entitled, and in which there were four vacancies at the time.

The failure to promote and recognise his distinguished judicial service, resulting in his retirement at the age of 63, is indeed a loss to the Judiciary.

We also drew Your Excellency’s attention at the said meeting to the fact that the Senior-most Justice of the Court of Appeal, Justice R. Gurusinghe, who joined the Judicial Service in 1996, who also Acted in the Office of President of the Court of Appeal (appointed by Your Excellency) on 11th May 2026, is due to retire at the end of this month. In fact, we learnt through the Media that Her Ladyship then Chief Justice Justice Murdu Fernando, PC, had previously in July 2025 recommended to Your Excellency the promotion of Justice R. Gurusinghe to the Supreme Court, but the same is pending from that time.

 He too is well deserving of promotion to the Supreme Court and has already been recommended by the former Chief Justice, and his case must also receive due and urgent consideration before his impending retirement.

We hope that Your Excellency will take due note of and give due regard to the concerns of the Bar, as well as to the established principles, practices and conventions governing judicial appointments, when taking steps to fill these vacancies.

On this, Your Excellency is already open to the accusation that these vacancies have been kept open, to fill with favourites of the Government which is yet another serious indictment on the independence of the judiciary which accusation would be confirmed if recommendations are made outside established practice.

Moreover, the BASL expresses grave concern that withholding promotions of Judicial Officers for extended periods of time places undue pressure on Judicial Officers in the discharge of their duties and constitutes both directly and indirectly, interference with the independence of the Judiciary, in addition to the strain obviously caused to the dispensation of justice in other Courts and the stifling and delay of career progression of Judges legitimately entitled to promotions.

We do hope that Your Excellency would take due note and cognizance of the foregoing when effecting these judicial promotions which have been long overdue and which have already adversely impacted the efficiency and effectiveness of the administration of justice.”

The BASL has copied the letter to Prime Minister Dr. Harini Amarasuriya, Speaker Dr. Jagath Wickremaratne, Opposition Leader Sajith Premadasa and all members of the Constitutional Council.

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Sajith challenges govt. to hold PC polls

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Sajith

Opposition Leader Sajith Premadasa on Saturday (29) challenged the government to hold the long-delayed Provincial Council elections, saying the polls would provide an opportunity to gauge the level of public support enjoyed by the administration.

Addressing a farmers’ meeting in Tissamaharama, Hambantota, Premadasa also criticised the latest Rs. 17 per kilogram increase in wheat flour prices, warning that it would push up the prices of bread, bakery products and other flour-based food items and place further pressure on households already struggling with the rising cost of living.

He said Sri Lanka ranked 120th among 130 countries in an international comparison of minimum wages, arguing that wages remained inadequate to meet the escalating cost of living.

Premadasa also questioned official assessments of living standards, asking whether a person could survive for an entire month on Rs. 17,315, a figure he attributed to the Department of Census and Statistics.

He claimed that between 30 and 40 percent of the population was living in poverty and called for a clear programme to help affected families improve their economic conditions.

Turning to the proposed 22nd Amendment to the Constitution, which seeks to increase the retirement age of superior court judges, the Opposition Leader accused the government of attempting to undermine judicial independence and interfere with democratic institutions.

He also criticised the government’s handling of poverty, employment, agriculture, healthcare and investment, saying more effective measures were needed to provide relief to people facing economic hardships.Premadasa called for stronger policies to attract foreign direct investment and urged the government to formulate a national strategy for developing the tourism industry.

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