Business

‘Organised defaulters’ may make bank loans harder for genuine businesses

Published

3 years ago

2024/01/1

Thilina Walpola

Dr. Nandalal Weerasinghe

By Sanath Nanayakkare

Officials of the Central Bank have to grapple with ‘growth versus inflation’ dynamics to determine Sri Lanka’s economic future in another challenging New Year which has just begun. In addition to that they have found another unenviable task in encountering vociferous opponents of the banking system’s parate execution which is apparently being enforced as a last resort.

This was evident during the Q& A session the media had with Central Bank Governor Dr. Nandalal Weerasinghe on Friday where the Bank released its first-ever Financial Stability Review after gaining independence from Sri Lanka’s elected officials.

“A handful of organized loan defaulters are engaged in a vociferous campaign these days to avoid repaying loans they have taken from the banking system. But the Central Bank has a duty to recover the depositors’ money which has been lent to them, or else, the banks may become reluctant to loan money to even good borrowers in the future”, Dr. Weerasinghe warned.

“The Central Bank’s view is that parate execution is more important and essential for the protection of depositors’ money than for the stability of the banking system. The banking system distributes deposit funds of the general public among businesses as loans to stimulate the economy. However, when one borrows money from that deposit base and not repay it, the depositor’s money is at risk,” he said.

The Governor pointed out that the entire banking system has a deposit base of Rs. 16 trillion and depositors’ money account for 81% of the banking system’s liabilities.

“Bank shareholders have only a stake of 7% in this deposit base. So if any borrowers say that the money they have borrowed can’t be repaid or shouldn’t be recovered under parate execution, it is an unjustifiable claim. Now we hear the voices of an organized group that have the capacity to afford formal media events and say their defaulted loans shouldn’t be recovered under parate execution. This is akin to telling the depositors that ‘we have borrowed your money but we can’t pay it back.” If the depositors agree to that, it’s justifiable.

But the depositors won’t agree to that. The depositors are a silent majority community and their voices are not heard. Parate execution is enforced only when borrowers default on their loans; it is not enforced on those who make suitable arrangements to repay their loans. When the banks can’t recoup its losses under parate execution; they would be reluctant to give loans in the future even if one provides a property as collateral for repayment. So, the Central Bank has a responsibility to recover the money that belongs to the general public. If anyone is trying to disrupt the process, it’s a violation of depositors’ rights,” he said.

The governor pointed out that mainly short term deposits are used in giving long term loans and in the past 11 months, parate execution has been enforced on 557 persons recovering Rs. 38 billion.

“At a glance, it appears to be a big sum of money. But that is only 0.4% of the total bank loan portfolio. At present Stage-3 impaired loans stand at 13% which is a sum of Rs.1.4 trillion. Out of Rs. 1.4 trillion worth impaired loans, Rs. 38 billion came from parate executions. This means only 2.7% has been recovered under parate executions. If the banking system finds it unable to keep the enforcement of parate execution in effect, it will be a great injustice to the depositors because their money is borrowed and not repaid. Also, it will be an injustice to potential genuine borrowers because banks will be reluctant to give them money on credit.”

“These days you hear the voice of defaulters who make statements against parate execution at media events they have organized. And you will only see the depositors come to the picture when they find their savings are used in messy transactions. ETI, Golden Key and The Finance are good examples for this where depositors finally grouped up to make their collective voice heard. So, if the savings of millions of innocent people are misapplied by a handful of people and if they band together to prevent parate execution from being enforced, I think it would be great injustice.”

“The economic crisis brought its consequences without sparing anyone; not only borrowers, depositors were affected too. When inflation was 70%, depositors got a maximum interest rate of about 25%. That is how borrowers had to pay 30% interest rate. The Central Bank has issued 8 circulars with effect to giving crisis-hit businesses necessary moratoriums, relief measures, spreading out repayments, SME loans from ADB etc. And if the borrowers still have any grievances against their respective banks, there is a separate unit at the Central Bank to discuss such issues and see if a particular bank is deviating from the given norms.”

“But if it is identified that someone is shirking repayments, it is our duty to recover that money on behalf of the depositors and taxpayers because in the event of a crisis in the banking system, it will need to be borne by taxpayers and depositors,” he said.

The Governor went on to defend the banks making a decent profit through the activity of deposit taking, deposit interest payments and lending money at market rates throughout a financial year while robustly supporting the economy.

“When a bank makes profits, it has more capital to give as loans. That is why Rs. 450 bn has been allocated by the Budget from taxpayers’ money to strengthen the capital position of the state banks”, he pointed out.

The Governor urged sections of the media to not only highlight the story of the loan defaulters but also to train their cameras at the depositors and taxpayers.

“Are taxpayers willing to pay more taxes to give relief to a handful of loan defaulters or are depositors willing to sacrifice their funds to give relief to loan defaulters? That is the fundamental question we have before us and the general public needs to be made aware of it,” the Governor said.

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SLEIS 2026 to examine how Sri Lanka can strengthen its place in Asia’s growth networks

Published

8 hours ago

2026/09/16

Sahan Weerasooriya

Ambassador Akio ISOMATA / Chathuranga Abeysinghe / P.D. Singh

As Asia continues to account for a growing share of global economic activity, Sri Lanka faces an important opportunity to strengthen its links with regional trade networks, supply chains and economic corridors. How the country can make better use of these connections to attract investment, expand trade and strengthen its position in regional value chains will be among the key questions at the Sri Lanka Economic & Investment Summit 2026, organised by The Ceylon Chamber of Commerce on 12-13 October 2026.

Titled “Linking Sri Lanka to Asia’s Growth Networks: Trade, Corridors, and Value Chains,” the session will examine the opportunities for Sri Lanka to deepen its integration with the wider Asian economy and build stronger connections with regional and global markets.

The session keynote will be delivered by P.D Singh – Chief Executive Officer, India and South Asia, Standard Chartered Bank. He will be joined for a panel discussion by Chathuranga Abeysinghe – Deputy Minister of Industry and Entrepreneurship Development, Akio ISOMATA – Ambassador of Japan to Sri Lanka, MASAAKI Kawabata – Chairman – Toyota Lanka (Private) Limited, and Ravi Jayawardena – Group Chief Executive Officer-Maliban Biscuits (Private) Limited. The session will be moderated by Ms. Subhashini Abeysinghe – Research Director- Verité Research.

For Sri Lanka, stronger regional integration can open opportunities beyond traditional export markets. Greater participation in regional supply chains, improved trade connectivity and closer links to economic corridors can support investment in areas such as logistics, manufacturing, export services and other sectors connected to international production networks.

The discussion will consider what Sri Lanka needs to do to strengthen its position within these networks, including improving trade connectivity, attracting investment and creating a business environment that enables companies to participate more effectively in regional and global value chains.

It will also look at the experience of businesses and international institutions operating across the region, providing perspectives on how companies assess markets, build supply chains and identify locations for investment. With supply chains and investment flows increasingly shaped by regional connectivity, the session will also consider the partnerships and strategies needed to position Sri Lanka as a more competitive participant in Asia’s growth networks, while creating opportunities for trade, investment, innovation and economic growth.

The session will form part of the second day of SLEIS 2026, held under the theme “Positioning Sri Lanka in a Changing Global Economy: Resilience, Reform, and the Future of Economic Policy.”

The Sri Lanka Economic & Investment Summit 2026 is supported by its valued sponsors and partners. Platinum Sponsor – Standard Chartered Bank Sri Lanka, Gold Sponsor – VISA Worldwide (Pvt) Ltd., Bronze Sponsor – South Asia Gateway Terminals (Pvt) Ltd., Strategic Development Partner – Asian Development Bank, Telecommunication Partner – Dialog Telecommunication, Television Partner – Dialog Television, Session Sponsors – David Pieris Motor Company (Pvt) Ltd., Hemas Holdings PLC, Sunshine Holdings PLC, International Construction Consortium (Pvt) Ltd., Official Logistics Partner – Hayleys Advantis Limited, Official Airline – SriLankan Airlines Ltd., Official Hospitality Partner – Shangri-La Colombo, Airline Partner – China Eastern Air Holding Co. Ltd.

Registrations are now open at https://sleis.chamber.lk/. For more information, contact Alikie on 011 558 8805 (alikie@chamber.lk) or Shanuka on 0701082541 (events.division@chamber.lk).

Business

AAC launches seat belt safety awareness initiative with RDA Colombo

Published

8 hours ago

2026/09/16

Sahan Weerasooriya

The Automobile Association of Ceylon (AAC), in collaboration with the Road Development Authority (RDA) and Police – Traffic Division, will conduct a special Road Safety Awareness Programme to promote the importance of wearing seat belts in vehicles specially on the express highways in order to reduce road fatalities and serious injuries.

The official handing-over ceremony took place at the Chairman’s Office of the Road Development Authority on 14th September 2026, where specially designed Seat Belt Safety Hanging Tags & Stickers prepared by the Automobile Association of Ceylon were handed over to the RDA for distribution to motorists at entry points to the expressways.

The initiative is being conducted in connection with the seat belt law coming into effect on 19th September 2026 and is intended to create greater public awareness of the importance of wearing seat belts in both the front and rear seats of vehicles.

Representing the Automobile Association of Ceylon at the ceremony Dhammika Attygalle, President; Prasanna De Zoysa, Sectional Chairman – Road Safety; and Devapriya Hettiarachchi, Secretary, Senior Superintendent of Police -Traffic Sisira Peththrathanthri, participated in the programme.

The Automobile Association of Ceylon has consistently maintained that road safety is one of its foremost priorities. Through awareness campaigns, educational programmes and collaboration with government authorities and other stakeholders, the Association continues to encourage responsible driving and safer behaviour among all road users.

AAC believes that the proper use of seat belts, including by rear-seat passengers, is a simple but vital safety measure that can help reduce serious injuries and save lives in the event of a road crash.

The programme further strengthens the cooperation between the Automobile Association of Ceylon, the Road Development Authority and the Police in their shared commitment towards safer roads and saving lives in Sri Lanka.

Business

Sanath Jayasuriya as Brand Ambassador

Published

8 hours ago

2026/09/16

Sahan Weerasooriya

Mr. Dasun Wickramarathna, Chairman Global Housing & Real Estate (Pvt) Ltd with Sanath Jayasuriya, World Renown Personality & Brand Ambassador

Global Housing & Real Estate (Pvt) Ltd (GHR) has announced a landmark partnership with Sri Lankan cricket legend Sanath Jayasuriya, as its Brand Ambassador as GHR enters a new chapter in its journey within Sri Lanka’s luxury real estate sector.

The partnership was officially unveiled at a press conference held at Cinnamon Life, Colombo, on 14 September 2026, bringing together industry leaders, investors and members of the media under the theme “Two Gamechangers, A New Beginning.”

The collaboration brings together two names associated with challenging convention in their respective fields: Sanath Jayasuriya, whose fearless approach transformed the dynamics of international cricket, and GHR, which has sought to introduce new approaches to property investment and luxury living in Sri Lanka.

Over the past two decades, GHR has built its presence in Sri Lanka’s real estate sector with a focus on quality, structural integrity and long-term investment value.

A significant milestone in the company’s journey came in 2016, when GHR introduced the hotel residency concept to the Sri Lankan market. The model brought together luxury hospitality and real estate investment, creating opportunities for property ownership with the potential to generate investment returns while contributing to the growth of the country’s high-end tourism offering. GHR has since continued to expand its portfolio across key destinations in Sri Lanka.

Speaking at the announcement, Dasun Wickramarathna, Chairman of Global Housing & Real Estate (Pvt) Ltd, said, “For over twenty years, Global Housing & Real Estate has strived to push the boundaries of what property development can achieve in Sri Lanka. As pioneers who introduced the hotel residency concept back in 2016, our mission has always been clear: to provide high-yield investment opportunities for our clients while taking Sri Lanka’s condominium industry into a new frontier.”

Commenting on the decision to partner with Sanath Jayasuriya, he added, “When looking for a voice to represent GHR’s ethos, Sanath Jayasuriya was the natural choice. Just as Sanath disrupted traditional international cricket and redefined how the world viewed the opening overs, GHR challenged traditional approaches to real estate and established a new benchmark in luxury living. This partnership represents a true convergence; Two Gamechangers, A New Beginning.”