CBSL says aggrieved SMEs can lodge complaints of any lack of banking support

• Says so far only 500 SMEs have sought formal banking support; claims low number suggests no major issues
• Issues fresh statement on relief measures to assist impacted SMEs with contact details
• Borrowers encouraged to contact their banks before deadline of 31 March 2025
• Banking sector Non-Performing Loans reduce from nearly 14% to 12%

The Central Bank (CBSL) yesterday assured that any borrower aggrieved over lack of support for restructuring their loans from financial institutions can report any complaints to the Financial Consumer Relations Department (FCRD).

This was revealed by CBSL Governor Dr. Nandalal Weerasinghe in response to a Daily FT question over complaints by small and medium-sized entrepreneurs and enterprises (SMEs) of lack of proper support from the banking sector. 

The Governor, however, said that judging by the number of requests made for help from banks, which was around 500, there seems to be no serious issue. 

He said that SMEs have been helped throughout by the banking sector during the height of the economic crisis, as well as being aided by the low interest rate and inflation regime and recovery in the economy in recent months. He also said the banking sector Non-Performing Loans (NPLs) have reduced to the 12% level from near 14% previously. 

Separately, the CBSL in a statement said as agreed with the Sri Lanka Banks’ Association (Guarantee) Ltd. (SLBA), to provide relief measures to affected SMEs by licenced commercial banks and licenced specialised banks, Circular No. 04 of 2024 dated 19 December 2024 and its addendum, Circular No. 01 of 2025 dated 1 January 2025, were issued by the CBSL to ensure effective implementation of the relief measures specified in the cited Circulars in a consistent manner across all licenced banks.

Given the limited time remaining to access these relief measures, borrowers are encouraged to contact their banks before the deadline of 31 March 2025, which is four days from today.

“In case of any rejections or disputes, borrowers are requested to contact the respective banks and to appeal to the Director, FCRD of CBSL, if required, through the following channels,” the CBSL said. “They are hotline 1935; other contact telephone numbers 0112477000; fax 0112477744; postal address: Director, Financial Consumer Relations Department, Central Bank of Sri Lanka, No. 30 Janadhipathi Mawatha, Colombo 1; or website www.cbsl.gov.lk/fcrd.

The CBSL said based on the repayment capacity and the submission of an acceptable business revival plan by the borrower, the relief measures extended to affected SMEs include rescheduling of credit facilities up to a period of 10 years, extending the time to commence repayments based on the capital outstanding, waiving off unpaid interest subject to conditions, and providing new working capital loans. Despite the availability of the above relief measures, a limited number of borrowers had approached licenced banks to avail themselves of these benefits to date.

In addition to the above measures, with the gradual recovery of the economy, in order to facilitate the sustainable revival of businesses that were adversely affected during the recent past, several other measures were taken by the CBSL together with the banking industry.

Accordingly, inter alia, strengthening the post-COVID 19 revival units of licenced banks and the CBSL-issued Circular No. 02 of 2024 dated 28 March 2024 on ‘Guidelines for the Establishment of Business Revival Units of Licenced Banks’ mandating banks to establish Business Revival Units (BRUs) to assist viable businesses that are facing financial and operational difficulties.

Under BRUs, banks may provide support to viable businesses, such as restructuring and rescheduling of credit facilities including the adjustment of interest rates, maturity extensions, providing interim financing, advisory services etc., subject to the condition that such borrowers are required to submit acceptable business plans and feasible repayment plans. As reported by banks, by the end of 2024, around 6,000 facilities had been facilitated through these BRUs.

The above cited circulars and guidelines can be accessed via https://www.cbsl.gov.lk.