Bank of Ceylon (BOC) adopts a novel humanitarian approach in debt recoveries through a special recovery unit. In Sri Lanka, all commercial banks are governed by a set of rules and regulations in lending and recoveries set out by the Central Bank.

However recent unexpected happenings globally as well as locally, affected activities in the Sri Lankan economic landscape causing major setbacks to domestic as well as other investments in an unprecedented manner.

In this backdrop the Sri Lankan economy faced severe hardships due to the stand still and the crippling effect on the vital economic indicators of the country. This occurred due to the extraordinary spread of new COVID – 19 Pandemic which affected nations across the world and the Easter Sunday terror attack two years ago in Sri Lanka.

Deputy General Manager – Recovery Provinces, Business Revival & Rehabilitation, of BOC Rohana Kumara explained the novel mechanism which the bank adopts to recover advances made to the bank’s loyal business customers in an amicable and more prudent manner. This was very difficult than the stringent recovery policy which banks are normally supposed to adopt in recovery of advanced money from the so called past-due or defaulted customers.

Rohana noted that as a government sector institution the bank’s recovery policy took a new turn from the conventional banking practices and adopted a different approach by viewing the business in a more progressive manner.

Explaining further Mr Rohana noted, most of the corporate businesses which were affected very badly by the Easter Sunday terror attack and the Covid-19 outbreak were helpless. They faced a situation where they could not recover due to the sinking nature, they face in the economy with either curtailed or limited avenues to pursue in their normal activities- the situation was forcing them into insolvency. Many among these were well to do businesses which had generated employment opportunities to many and all those were faced with a debacle that would become a burden to the economy.

The Government and the Central bank introduced many concessionary loan schemes to uplift these falling businesses. However, considering the losses incurred by these businesses, it was essential to assist the Government with its economic revival agenda going beyond the assistance provided by working capital loans under ” Saubhagya” scheme.

Customers with long lasting unblemished relationships with BoC cannot be left alone “it is prudent to think outside the box and help them” Rohana said. BoC decided to review these customers’ businesses and help them to get into the main track of profitability, Mr Rohana stressed.

Adhering to normal banking procedure in such a scenario these businesses will be considered as defaulters and face the inevitable end of extinction. “As a responsible bank we do not want that to happen to the loyal and long-standing customers hence the main intent of the bank is to revive them where both parties will be benefited”.

With this unique vision in mind bank decided to establish a special unit separate from the regular banks’ recovery division and transferred all these selected corporate level business customers with a view of to reviving them. These businesses are not viewed as past due customers with defaulters’ intent but businesses with genuine recovery ability and intent.

The Bank of Ceylon has commenced activities of this unit in January 2021, and in March ’21, about 14 categories were identified for revival and more than 10 are within the final phase of recovery. Total debt with direct and indirect facilities so far revived is over Rs. 30 billion. Mr.Rohana further stressed that the bank has plans of extending these services to provinces and small and medium scale business as well in the future and the indication is this is getting more popular day by day among genuine customers.

At present a new credit policy to accommodate special concessions and terms is completed and presented for the approval he said. Once the approval is granted the bank intends expanding this business revival policy to many sectors and accommodates the regions. These reviews do not offer total interest waivers but some possible waivers and some other special concessions Mr Rohana explained.

The prerequisite in the revival scheme is the businesses should be able to submit to the bank an acceptable business plan. However, if any business needs guidelines and help to provide such a plan the bank is willing to help them to do so. Rohana was very positive about the success of this revival scheme and quipped customers revived during the last couple of months have paid their dues on time and this is a very positive indicator towards this scheme’s success.

“the industries for revival are selected through a very stringent review process following all the financial guidelines, also the credit committee of the bank which is headed by the General Manager and consisting of many DGMs have the final review on all the credit concessions and revival decisions this unit takes.” Rohana noted. “The Chairman of the Bank and the members of the Board of Directors too are very keen on the progress of the revival plans approved and regularly review the position of the reviewed businesses. Most of the selected revivers’ balance sheets and debt ratios are not within normal banking norms but if our review indicates going by their past behavior pattern, a revival is possible within a two to three years’ period, the bank considers them as a suitable business for revival” he further explained.