CBSL extends debt moratorium conditionally to all till end-December

Bringing much relief to business and the banking sector, the Central Bank has announced the extension of the debt moratorium till December subject to certain conditions.

It said with a view to meeting the challenges faced by businesses and individuals engaged in various economic sectors due to the prevailing extraordinary macroeconomic circumstances, CBSL requests licensed commercial banks and licensed specialised banks to provide concessions to affected borrowers on a need basis. These concessions are granted to devise suitable repayment arrangements based on the new repayment capacities of the borrower, on a case-by-case basis, while preserving banking sector stability by preventing any elevated strain on the financial system, CBSL said, issuing a circular to the banking sector.

CBSL said these concessions are expected to be provided to affected borrowers in all economic sectors, including but not limited to tourism, transportation, and Micro, Small and Medium scale Enterprises (MSME) engaged in business sectors such as manufacturing, services, agriculture, and construction on a case-by-case basis, for a period of six months from the date of this Circular, based on the new repayment capacity/ viability of the borrower.

It also required banks to suspend recovery actions including parate execution and forced repossession of leased assets against all credit facilities that have been classified as nonperforming on or after 01.01.2020, until 31.12.2022 in order to enable the borrowers  to arrange timely repayments.