Friday Nov 15, 2024
Friday Nov 15, 2024
Monday, 28 October 2019 01:08 - - {{hitsCtrl.values.hits}}
A regime under the Sri Lanka Podujana Peramuna (SLPP) is to offer an 18-month moratorium and reform the Credit Information Bureau (CRIB) as part of helping businesses who are in default for failure of the current Government than of their own.
“The Government hasn’t managed the economy hence people cannot be held responsible,” claimed President Mahinda Rajapaksa regime Central Bank Governor Nivard Cabraal on Friday at a public forum supporting SLPP’s presidential aspirant Gotabaya Rajapaksa.
Cabraal said if as Gotabaya Rajapaksa stated that the next Government will have to do 15 years work in five years, the country needs to energise businesses.
“However most businesses are in the CRIB and flagged off for default not due to personal failure but collapse of the economy. As a result they can’t borrow further to fund their businesses,” Cabraal said.
“We need the private sector to think of projects. The Government cannot and shouldn’t do it. For businesses to do it, we will help. We will take businesses out of the mess they are in. Thousands of entrepreneurs and businesses are in difficulty today,” he added.
As a solution, Cabraal said CRIB will be reformed and restructured in a way those who have shown good results in the past but had difficulties in repaying loans due to the downturn in the economy are given protection. “They will be given some leeway to resume business,” he said adding they will be given an 18-month moratorium as far as repayment of capital of the loan but encourage to pay interests.
The former Central Bank Chief also said SLPP will make sure interest rates come down as in the current level people can’t do business.
He said in 2014, the Average Weighted Prime Lending Rate (AWPLR) was 6.2%. Today it is 12%.
Cabraal said banks were now busy giving targets to file action on defaulters as opposed to goals on loans and deposits. “We are experiencing something new,” he added.
Claiming that SLPP will be in a position to hit the deck running from 16 November onwards, Cabraal said. “We are going to set the stage for you. We are expecting you to do it and do well in your business. We want you to tell you have made super profits. We are ready for exciting time which you can look forward to so your children won’t come and tell you they want to go abroad.”
Whilst extending support to borrowers, Cabraal said measures to protect financial institutions will be pursued in parallel as well. “We set up a Deposit Insurance and Liquidity Support Fund in 2007 with Rs. 1 billion and today it has grown to Rs. 60 billion. We need to use the Fund to protect some of the businesses which are more vulnerable today.
“If the financial sector is not strong other businesses cannot lean on it. We will look after the financial sector and make it stronger to withstand the current shocks,” Cabraal said.
Ensuring the stability of the rupee was another key focus. He said the rupee has depreciated by Rs. 30 in one year from Rs. 150 to 180 whereas during the nine-year tenure as CB Chief it was only Rs. 29.
