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Central Bank requests bank loan borrowers to seek relief before July 31

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ECONOMYNEXT –Sri Lanka’s central bank requests bank loan borrowers to apply to a concession scheme it has introduced to businesses adversely affected by the ongoing economic crisis who were already aggravated by the COVID-19 pandemic before July 31.

Affected borrowers must apply to the concession in writing or through electronic means on or before July 31st, 2022 to their respective banks.Banks are required to respond to the applicants within one month of the receipt of the request.

“Considering the current macroeconomic challenges …CBSL has requested the licensed banks to provide appropriate concessions, for a period of six months, to borrowers whose income or businesses have been adversely affected due to the current macroeconomic and/or COVID-19 pandemic while preventing any undue stress on the banking sector stability,” a statement from the central bank said.

“These concessions are provided on a case-by-case basis depending on the future repayment capacity of the individuals and the viability of businesses/ projects.

CB said that if the application of a borrower is rejected, the respective bank should inform the applicant the reasons for the rejection.The rejected borrower has the opportunity to appeal against such rejection to the Director, Financial Consumer Relations Department of the Central Bank of Sri Lanka.

Central bank has also directed licensed banks to set up post COVID-19 revival units to assist under-performing and non-performing borrowers affected by the pandemic.The concessions are offered under eight categories.

Some features of the scheme include a 6-month grace period for performing loans, licensed bank advised not to take recovery action on non-performing loans, and repayment plans, among others.

a. Concessions for performing credit facilities: Borrowers can avail of appropriate concessions (i.e., grace periods for capital or interest or both capital and interest or part of the capital or interest, re-structuring of credit facilities, or any other concession) for a period of six months.

b. Concessions for non-performing credit facilities: Borrowers can request for rescheduling of existing non-performing credit facilities over a longer period. Further, licensed banks are requested to suspend recovery actions against credit facilities classified as non-performing after 01.01.2020. SME paddy millers are given further concessions subject to conditions.

c. However, these concessions are not available for wilful defaulters, defaults due to diversion of funds, misuse of funds, mismanagement and/ or frauds and unviable projects.

d. Repayment plans: In the case of regular instalment loans, the new instalment amount should not exceed the contracted instalment value of the existing loan. In the case of other credit facilities, the licensed bank and the borrowers should mutually agree on an appropriate repayment plan.

e. The interest rate applicable for the amount for the period of concession: In the case of Rupee credit facilities, the interest rate to be charged on the amount for the period of concessions, should not exceed the latest contracted rate of interest (i.e., in the case of variable interest credit facilities, the latest repriced interest rate as at 07.07.2022 or in the case of fixed interest credit facilities, the interest rate agreed at the time of granting the facility) or the current Standing Lending Facility Rate (i.e., 15.5%), whichever is higher. With regard to foreign currency facilities, the licensed bank and the borrowers should mutually agree on the rate of interest.

f. Opportunity to settle the loans early without any additional cost: Licensed banks have been requested to consider, on case-by-case basis, the requests made by borrowers to settle their credit facilities early, without paying any additional fee. In the case of lease facilities, recovery of future interest will also be waived off. Borrowers who intend to avail the early settlement options should make such a request to the bank on or before 30.09.2022.

g. Licensed banks have been requested not to decline the new loan applications from eligible borrowers under this scheme solely based on adverse CRIB records.

Details on the loan concessions can be obtained at this link: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/laws/cdg/bsd_circular_no_2_of_2022 _e.pdf

Details on the COVID-19 units: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/laws/cdg/bsd_circular_no_1_of_2022 _e.pdf



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Fuel crunch looms

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Govt. tells fuel distributors to maintain stocks to ensure uninterrupted supplies

by Saman Indrajith and Norman Palihawadane

The government had instructed private fuel distributors to maintain minimum stocks and ensure uninterrupted supplies to the market, Energy Minister Anura Karunathilaka told Parliament yesterday (06).

Karunathilaka said the Ministry of Energy Secretary had notified the relevant companies of the requirement, following a reduction in supplies by some private distributors, amid higher international fuel prices.

The Minister said private companies had informed the government that they were facing losses because international prices had risen while fuel was being sold, locally, at prevailing prices. As a result, some companies had reduced the volumes released to the market.

The reduced supplies had increased the burden on the Ceylon Petroleum Corporation (CPC), whose share of the diesel market had risen from about 54% to 82%, the Minister said.

“The CPC currently holds an 82% share of the market,” he said, adding that it had increased its supplies, compared with February, to compensate for the reduction by private distributors.

Karunathilaka said the government could not, under the existing agreements with private companies, specify the quantities they should supply to individual filling stations. However, it could require them to maintain minimum stocks in the country.

The Minister said the Energy Ministry had already instructed companies that had failed to maintain the required stocks to take steps to prevent supply disruptions.

The Minister attributed the queues reported at some filling stations to reduced supplies from private distributors, as well as normal variations in fuel distribution. He also said demand for CPC fuel had increased because private companies generally did not provide fuel to dealers on credit, while the CPC offered a three-day credit facility.

“We expect that, as the Ceylon Petroleum Corporation takes on this additional burden, the problem will ease to some extent by Wednesday or Thursday,” Karunathilaka said.

He said instructions had also been issued to increase supplies to CPC filling stations. A special discussion on the issue is scheduled for today (07), with officials of the Energy Ministry and CPC expected to participate,

along with President Anura Kumara Dissanayake.

Meanwhile, Petroleum Dealers’ Association officials have called for an early solution to the supply issue. Association Chairman D.V. Shantha Silva said queues had been reported at many filling stations, mainly those operated by private distributors.

He said the situation was not due to an overall shortage of fuel, but was linked to reduced orders by Lanka IOC, Sinopec and R.M. Parks amid concerns over losses incurred on fuel sales.

The Ceylon Petroleum Private Tanker Owners Association has urged motorists to refrain from panic buying, saying there was no nationwide disruption to fuel supplies.

The government earlier increased fuel prices and introduced a per-litre diesel subsidy following concerns raised by distributors over rising international prices.

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Gnansara Thera to be assigned to prison printing section: Officials

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Bodu Bala Sena General Secretary Ven. Galagodaaththe Gnanasara Thera, who was taken into custody to serve the remainder of his prison sentence, was produced before the Colombo High Court yesterday by prison officials in connection with a warrant issued by the court. He appeared before the court in layman’s clothes. Pic by Nishan S. Priyantha.

by Norman Palihawadane

Bodu Bala Sena General Secretary Ven. Galagodaatte Gnanasara Thera, who has been ordered by the court to serve the remainder of his prison sentence, is to be assigned to the prison ‘printing work party’, prison officials said yesterday.

The monk was produced before the Colombo High Court yesterday by prison officials in connection with a warrant issued by the court.

He appeared before the court in civilian attire.

Prison sources said arrangements were being finalised for his detention and that he would subsequently be assigned to the printing work party.

The Thera initially objected when prison officials instructed him to change from his robes into the attire worn by convicted prisoners.

He later agreed to wear the prescribed prison clothes, sources said.

The Supreme Court, in September, annulled the presidential pardon granted to Gnanasara Thera in 2019. He had been serving a six-year prison sentence imposed following his conviction for contempt of court but had served only about nine months when then President Maithripala Sirisena granted him a presidential pardon in May 2019.

Following the Supreme Court ruling, the Thera was required to serve the remainder of his sentence. He was subsequently reported missing, prompting the Court of Appeal to issue an open warrant for his arrest.

The Court of Appeal on Monday ordered the authorities to enforce the remainder of his prison sentence.

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Speaker rejects Ajith Perera’s privilege complaint

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Speaker Dr. Jagath Wickramaratne yesterday ruled that a privilege complaint submitted by SJB Kalutara District MP Ajith P. Perera did not constitute a prima facie breach of parliamentary privilege.

The ruling was made in response to a notice of privilege submitted by Perera on October 02.

Perera alleged that his parliamentary privileges had been breached over the failure to take formal action or reach a final decision on a written request submitted on August 03 by 18 Opposition MPs seeking the appointment of a Special Select Committee to investigate delays in the judicial system and prison overcrowding.

He had also requested that the matter be referred to the Committee on Ethics and Privileges for investigation and recommendations.

In his ruling, Speaker Wickramaratne said the Speaker, as the Presiding Authority and guardian of the powers, rights and privileges of Parliament, could not be subjected to a privilege complaint or disciplinary inquiry by a committee subordinate to the Chair in respect of actions taken in an official capacity.

He said that, under the Standing Orders, the Speaker was required to independently determine whether a prima facie case of breach of privilege existed.

Referring a complaint against the Speaker to a committee functioning under the Speaker’s authority would, therefore, create a procedural contradiction, he said.

Accordingly, the Speaker ruled that Perera’s notice did not constitute a prima facie breach of parliamentary privilege and disallowed the request to refer the matter to the Committee on Ethics and Privileges.

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