Partial suspension of parate law an election ploy says SJB

Thursday, 29 February 2024 03:42 - - {{hitsCtrl.values.hits}}

MP Eran Wickramaratne

Asks SL’s business community to not be deceived by Govt. tactics
Says partial suspension of parate executions until Dec will offer little benefit to businesses
Urges CBSL to ensure independent appraisals are carried out on properties to be auctioned by lenders
Stresses that rights of borrowers must be protected and any action by banks must be just

The Samagi Jana Balawegaya (SJB) MP Eran Wickramaratne yesterday claimed the Government’s decision to partially suspend the operation of parate executions until December this year is nothing but an election ploy.

Speaking at a press conference the MP asserted that the Government’s decision was solely motivated by the upcoming election year and emphasised that its suspension until December would offer little benefit to businesses.

“We urge the business community not to be deceived by these tactics. It is nothing but a political manoeuvre,” he emphasised.

“If the parate law is abolished, the amount of credit available to the private sector is expected to decrease. However, abolishing the parate law alone is not a fair solution. The current implementation of parate law leads to significant injustice for persons who have taken loans. Business owners and small to medium enterprises have secured loans by providing real estate assets as collateral to banks,” he added.

The MP emphasised that in certain circumstances, these assets are valued higher than the debt owed, leading to accusations that financial institutions reap substantial profits by auctioning off the assets to recover their debts.

“There is an injustice against those who took out loans. The banks that provided the loans must act fairly,” he said.

“Justice should be done to the borrowers. Before auctioning the property, independent appraisals should be conducted on the property. The Central Bank has a responsibility to ensure this,” the MP urged.

The MP said the situation forces those concerned to question the Central Bank on the number of properties auctioned under the parate law in the last three years and their corresponding total value.

“There is a need for a permanent solution to the parate law. Temporary measures are ineffective. Independent valuations should precede any property auctioning. The borrower’s rights must also be safeguarded. Justice is attained through such measures,” he emphasised.