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Sri Lanka central bank announces credit relief for third Coronavirus wave

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ECONOMYNEXT – Sri Lanka’s central bank has announced credit relief as a third Coronavirus wave gripped the country involving restructuring performing loans on request at Treasury bill plus one percent.

“With the outbreak of the third wave of COVID-19 in Sri Lanka, requests from many concerned parties and Government Authorities were received by the Central Bank of Sri Lanka (CBSL) to consider granting certain concessions to the affected borrowers/customers,” the regulator said.

“Further, licensed banks may offer additional concessions to businesses and individuals affected due to the third wave of COVID-19, on their request, in a way that the overall benefits to the borrower/customer are not less than the benefits offered under this Circular.”

The full statement report is reproduced below

CONCESSIONS FOR COVID-19 AFFECTED BUSINESSES AND INDIVIDUALS

With the outbreak of the third wave of COVID-19 in Sri Lanka, requests from many concerned parties and Government Authorities were received by the Central Bank of Sri Lanka (CBSL) to consider granting certain concessions to the affected borrowers/customers.

Accordingly, with a view to meeting the challenges faced by businesses and individuals due to the third wave of COVID-19, CBSL requests licensed commercial banks and licensed specialised banks (hereinafter referred to as licensed banks), to extend the following concessions to COVID-19 affected businesses and individuals (hereinafter referred to as the Scheme).

Further, licensed banks may offer additional concessions to businesses and individuals affected due to the third wave of COVID-19, on their request, in a way that the overall benefits to the borrower/customer are not less than the benefits offered under this Circular.

Accordingly, this Circular is issued to give effect to the Scheme in a consistent manner across all licensed banks, with a view to easing the burden on the borrowers of banks that are affected by the current disruption in business /income generating activities to duly repay their loans.

1. Deferment or restructuring of existing credit facilities in the performing category as at 15 May 2021

(a) Licensed banks shall defer recovery of capital, interest, or both of the existing credit facilities of borrowers who are affected by the third wave of COVID-19, on case-by-case basis, during the period up to 31 August 2021, considering the financial difficulties faced by the eligible borrowers, such as loss of job, loss or reduction of income/salaries or sales, closure of business, etc.

(b) The deferment of capital, interest or both shall be granted for one or more of the existing credit facilities granted in Rupees or in foreign currencies, considering the financial difficulties and repayment capacity of the eligible borrowers.

(c) In the case of any Rupee facilities considered for the above deferment, licensed banks may charge an interest rate not exceeding the 364-days Treasury Bills auction rate as at 19 May 2021 plus 1 per cent per annum (i.e., 5.18% + 1% = 6.18% p.a.), for the deferred period and only on the amount deferred amount. In the case of foreign currency loans, licensed banks may charge a concessionary interest rate considering the prevailing low interest rates.

(d) Alternatively, licensed banks may restructure the existing credit facilities over a longer period, considering the repayment capacity of the borrower and an acceptable revival plan. In this case, the licensed bank and the borrower shall agree on an interest rate, considering the prevailing low interest rates.

(e) Licensed banks shall extend the due dates of revolving credit facilities, including but not limited to facilities such as working capital, pawning, temporary overdrafts, short-term trade finance facilities, etc., during the period up to 31 August 2021, provided such due dates fall during 15 May 2021 to 31 August 2021. Licensed banks may charge interest for the deferred period and only on the amount deferred amount as stated in I (c) above.

(f) Penal interest shall not be accrued or charged during the concessionary period, i.e., 15 May 2021 to 31 August 2021.

(g) Licensed banks shall accommodate any request from affected borrowers to delay the due dates of loans repayment by few days (maximum 10 working days) due to the ongoing travel restrictions, without deferring or re-structuring such facilities. Licensed banks shall not charge any additional interest or other charges for such delay.

(h) Borrowers who are currently enjoying deferment of lease repayments under Circular No. 03 of 2021 issued on 13 March 2021 or moratorium under Circular No. 04 of 2021 issued on 19 March 2021 are not eligible for concessions provided above.

2. Concessions for credit facilities in the non-performing category as at 15 May 2021

(a) Licensed banks may reschedule the existing non-performing credit facilities as at 15 May 2021, over a longer period, considering the repayment capacity of the borrower and an acceptable revival plan. In this case, the licensed bank and the borrower shall agree on the terms and conditions including the interest rate.



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Business

SL youth eligible for employment in Korea, to get the opportunity shortly

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The Korean Ambassador to Sri Lanka Woonjin Jeong assured the Foreign Minister that the facilities required for the Sri Lankan youth who are eligible for employment in Korea to travel to Korea will be provided shortly. He was speaking at a discussion on the delays faced by young people who are eligible for jobs in Korea, chaired by the Foreign Minister Dinesh Gunawardena at the Foreign Ministry on 16 June, 2021. State Minister of Foreign Employment Promotion and Market Diversification Priyankara Jayaratne, Secretary to the State Minister of Foreign Employment Promotion and Market Diversification Suntharam Arumainayaham, Chairman Kamal Ratwatte, Director Nimal Thibbatumunuwa and Deputy General Manager Mangala Randeniya of the Foreign Employment Bureau were also participated in the discussion.

The Foreign Minister pointed out that those who have qualified for jobs in Korea have been expecting to leave for jobs in Korea for a long time; however it has been avoided day by day due to the COVID pandemic. The Minister also pointed out that they are under severe mental stress due to this.

The Korean Ambassador to Sri Lanka explained the position of the Korean Government and stated that it has been planned to provide employment opportunities in Korea to all those who are eligible for employment in Korea. He said there is a delay in providing those opportunities due to the COVID pandemic; however assured that he is focussed on sending them to Korea at the earliest available opportunity.

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Sterilizer device launched in Sri Lanka

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At a time when the Covid-19 epidemic is spreading around the world, you will no doubt be happy to hear that those invisible germs that collect in such a closed environment can now be destroyed by a small device called STERIONIZER introduced to Sri Lanka by ABC Trade & Investments.

This small device has made life easy for many as you can clean your home or any other place (specially closed environment) by plug-in the STERIONIZER.  

STERIONIZER system keeps air ducts, air heat exchangers and machinery clean and supplies sanitized air in enclosed areas and each ionizing device is completely maintenance free and connected to a data-bus for supervision and monitoring.

STERIONIZER is priced at Rs. 35,000. Phone 070 3 525 525 or 070 1 853 529 for more information.

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Indian assistance to implement solar power project

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It is expected to provide financial benefit to low-income households

 

Measures have been taken to increase the contribution by renewable energy sources to the national power grid by enhancing solar power generation as per the National Policy Framework.A key plan of the Government is to generate solar power by obtaining the contribution of state-owned buildings, places of worship and houses of the low-income families.

It is expected to provide financial benefit to low-income households and to curtail the expenses incurred by the state institutions for electricity, from the project. Steps will also be taken to provide facilities to store solar energy in batteries for the low-income families that are unable to access the national power grid.

The project also includes generating power by installing floating solar panels as a solution to land scarcity. Under the first phase of this, plans have been initiated to generate electricity required for the Parliament centering the Diyawanna Lake as a model project.The Government of India, one of the main stakeholders of Sri Lanka for this project, has entered into a bilateral loan agreement by agreeing to grant a Line of Credit amounting to US$ 100 million through the Export Import Bank of India.The agreement for the Line of Credit signed by the Sri Lankan Government and the Export Import Bank of India was exchanged between Finance Secretary S. R. Attygalle and Indian High Commissioner Gopal Baglay in the presence of President Gotabaya Rajapaksa and State Minister Duminda Dissanayake at the Presidential Secretariat recently.

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