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Banks affirm strong support for SMEs while reiterating the need to protect customer deposits
Tuesday, 1st July 2025: The Sri Lanka Banks’ Association (SLBA), representing all licenced commercial banks in the country, today issued a statement firmly rejecting attempts by a small group of borrowers to create alarm and confusion over the potential use of parate laws, and assuring the business community and the public that banks have no intention of launching widespread parate proceedings now that the grace period has ended.
Following the suspension of parate laws by the Government up to 31st March 2025, the banking sector voluntarily extended the moratorium for a further three months, enabling borrowers in difficulty to engage with banks and restructure their loans. As a result, many borrowers obtained further relief on repayments, in some instances extending the grace period up to December 2025.
With this period now concluded, a handful of borrowers has resumed agitation, seeking to whip up panic about a purported imminent flood of parate actions and auctions of mortgaged assets. The SLBA categorically states that these claims are not only exaggerated but are dangerously counterproductive at a time when the majority of borrowers are working constructively with banks to revive their businesses.
“We wish to reassure existing and potential borrowers that there is no intention by banks to rush into parate action,” the SLBA said. “The reality is that only a very small fraction of borrowers default to the extent that they become eligible for parate execution. Of that fraction, the overwhelming majority are still assisted by their banks to reschedule loans and avoid asset sales.”
To illustrate this point, the SLBA pointed out that in the five years prior to the suspension of parate laws – between 2019 and 2023, which were among the most challenging years for debt servicing in Sri Lanka – less than 1% of non-performing loans were ultimately subjected to parate action. This data underlines that parate execution is used strictly as a last resort when all attempts at resolution have failed.
“The attempts by some parties to portray parate laws as an aggressive first response by banks are both misleading and unhelpful,” the SLBA said. “In truth, parate laws exist to protect depositors’ funds, which are lent in good faith to support individuals, SMEs, and larger enterprises alike. Banks prefer to retain their customers and recover loans through cooperation rather than enforcement.”
The Association further noted that the banking sector has shown significant patience and flexibility, supporting thousands of businesses affected by the Easter Sunday attacks, the COVID-19 pandemic, and the economic crisis. Even now, all banks maintain dedicated Business Revival Units to help distressed borrowers restructure loans and re-establish viable operations, and are even working with borrowers who are outside the parameters established to support customers impacted by adverse economic events since 2020, the Association said.
“It is deeply regrettable that instead of engaging with these mechanisms, a small number of borrowers are seeking to incite fear and erode public confidence in the financial system,” the SLBA said. “Such actions risk undermining both the stability of the banking sector and the prospects of genuine borrowers who are committed to meeting their obligations.”
The SLBA concluded: “We urge all borrowers facing difficulties to approach their banks without delay, to explore solutions in a transparent and proactive manner. The strength and stability of the banking system – on which depositors, investors and the wider economy rely – depend on responsible behaviour and constructive engagement, not misplaced panic.”
News
President Commissions Offshore Patrol Vessel ‘Samudra Vijaya’ into Sri Lanka Navy
The commissioning ceremony of the deep-sea patrol vessel as Samudravijaya, gifted to the Sri Lanka Navy by the United States Coast Guard to enhance the Navy’s operational capabilities, was held under the patronage of Commander-in-Chief of the Armed Forces, President Anura Kumara Dissanayake, on Thursday afternoon (04) at the Eastern Terminal premises of the Port of Colombo.
The vessel was officially handed over to Sri Lanka by the United States Coast Guard on 2 December 2025. Following modifications to meet the operational requirements of the Sri Lanka Navy, the vessel commenced its voyage to Colombo on 20 February 2026 from the United States Coast Guard Yard in Baltimore, Maryland.
The induction of the vessel marks a significant step towards further strengthening the operational capabilities of the Sri Lanka Navy and enhancing the country’s maritime and national security. The vessel is expected to make an important contribution to maritime surveillance, search and rescue operations, protection of fisheries resources, environmental monitoring and the enforcement of international maritime laws and conventions. In particular, it will serve as a vital asset in combating narcotics trafficking and other transnational maritime crimes, which remain major challenges for both Sri Lanka and the wider region.
During the ceremony, President Dissanayake presented the official commissioning warrant to the vessel’s Commanding Officer, Captain Gayan Wickramasuriya. The President subsequently unveiled the vessel’s name board and official insignia before undertaking an inspection tour of the ship. The Commander of the Navy briefed those present on the vessel’s operational readiness, systems and capabilities.
President Dissanayake also signed the vessel’s Distinguished Visitors’ Book and was presented with a commemorative plaque featuring a replica of the vessel.
Among those present were Minister of Ports and Civil Aviation Anura Karunatilaka. Deputy Minister of Defence, Major General Aruna Jayasekara (Retd.), Secretary to the Ministry of Defence, Air Vice Marshal Sampath Thuyacontha (Retd.), Admiral of the Fleet Wasantha Karannagoda, Commander of the Army, Lieutenant General Lasantha Rodrigo, Commander of the Air Force, Air Vice Marshal Vasu Bandu Edirisinghe. Commander of the Navy, Vice Admiral Kanchana Banagoda, Inspector General of Police, Attorney-at-Law Priyantha Weerasooriya, Charge d’affaires to the U.S. Embassy Ms. Jayne Howell, Senior Defence Official and Defence Attache with Spouse Lieutenant Colonel Matthew House, representatives of the Embassy and senior officers of the Sri Lanka Navy.
(PMD)
News
Elders’ home devastated by fire was a ‘house of horror’: Witnesses
Death toll rises to 12: Director remanded
Some residents were allegedly chained
Police have come under public pressure to investigate allegations of inhumane treatmenf the residents at an elders’ home in Batagoda, which was also reportedly used as a care centre for persons with special needs, following a devastating fire that has so far claimed 12 lives.
Eyewitnesses who were among the first responders told the media that several residents had been chained inside rooms at the Senehase Kedella Elders’ Home when the fire broke out on Wednesday. They claimed that rescue efforts were hindered as iron chains could not be removed, and that some residents died while being restrained.
Authorities have not yet verified these claims, and Police said investigations are continuing.
Police spokesman ASP F.U. Wootler, contacted for comment, said there were rumours to that effect, but the Police were not in a position to verify the claims until a report from the Government Analyst was received. He said eight survivors with burn injuries were being treated in hospital.
Meanwhile, the Director of the facility had been arrested and was due to be produced before the Horana Magistrate’s Court, Police said adding that he was remanded till June 11.
The death toll from the fire has risen to 12 as of Thursday morning following the recovery of additional charred remains during ongoing forensic examinations at the site. Six others sustained serious injuries and are being treated at the Horana Base Hospital.
Police said 72 residents were inside the facility at the time of the blaze. Of them, 10 died inside the building, seven were injured and hospitalised, while 51 were rescued and relocated.
Survivors were initially housed at Batagoda Junior School before being transferred with Army assistance to another branch of the same care network in Galpatha.
A magisterial inquiry was conducted on Thursday morning. Horana Magistrate Lakmini Vidanagamage visited the scene. The burnt remains were examined and removed under judicial supervision.
Separately, allegations have emerged that residents were required to pay an admission fee of Rs. 75,000, along with a monthly charge of Rs. 35,000 to the centre. Police have not commented on these claims.
The director was taken to the scene as part of ongoing investigations, while forensic experts continue examinations to determine the cause of the fire, which remains undetermined.Anguruwatota Police are conducting investigations.
By Norman Palihawadane and Nishan S Priyantha
News
CERT : AI-generated videos depicting Prez, PM lure public into financial scams
Sri Lanka CERT has issued a public warning over the circulation of artificial intelligence (AI)-generated videos falsely depicting President Anura Kumara Dissanayake, Prime Minister Harini Amarasuriya and several other prominent personalities to promote fraudulent investment schemes online.
According to complaints received by the national cyber security agency, the videos have been created using deepfake technology and are being used as part of attempts to defraud members of the public through financial scams.
The images of famous sports personalities and other public figures have also been misused in the deceptive content.
The agency has warned that similar AI-generated material has been used to spread false information relating to investment opportunities, employment offers, as well as matters concerning the country’s economy and tax policies.
According to Sri Lanka CERT, the videos are being widely shared across online platforms and frequently contain links urging viewers to make investments in return for purported profits.The agency has cautioned that these links may redirect users to fraudulent websites designed to steal personal information, financial data and money from unsuspecting victims.
Sri Lanka CERT has urged the public to exercise extreme caution when encountering such content online and advised against clicking on suspicious links or sharing personal information through unverified websites.
“The public should remain vigilant and avoid becoming victims of false information and online fraud schemes,” the agency said.
Sri Lanka CERT has also encouraged internet users to verify information through official sources before acting on any investment, employment or financial offers circulated via social media or other online platforms.
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