Friday Nov 08, 2024
FT
Friday Nov 08, 2024
Friday, 12 January 2024 00:24 - - {{hitsCtrl.values.hits}}
Central Bank Governor Dr. Nandalal Weerasinghe disclosed that Licenced Commercial Banks (LCBs) would be required to set up business revival units in the wake of recent challenging macroeconomic conditions.
“To address the increased levels of impaired assets in licensed banks and enhance their role in the recovery of businesses, particularly Small and Medium Enterprises (SMEs) and corporates, the Central Bank is set to issue comprehensive guidelines for the establishment of Business Revival Units,” he said unveiling the ‘Annual Policy Statement 2024’ on Wednesday.
These specialised units within licensed banks are designed to provide targeted support and facilitate the recovery of businesses grappling with economic challenges. “SMEs, in particular, are expected to benefit significantly from these initiatives, promoting their resilience and contributing to overall economic stability,” the Governor opined.
In tandem with these efforts, he said the Government is in the process of establishing a National Credit Guarantee Institution (NCGI). “The institution will play a crucial role by offering credit guarantees to boost the SME sector while simultaneously mitigating potential credit risks associated with lending to SMEs.”
By providing a safety net for financial institutions, the NCGI aims to encourage increased support for SMEs, fostering their growth and sustainability.
Dr. Weerasinghe also said incentive mechanisms will be introduced to encourage licensed banks to actively participate in sustainable and climate finance activities, aligning with the Sustainable Finance Roadmap.
“These initiatives are poised to contribute significantly to the economic recovery and resilience of businesses, with a particular emphasis on supporting SMEs, which are integral to the fabric of Sri Lanka’s business landscape,” he added.
