Sri Lanka Central Bank requests licensed banks to grant concessions to revive tourism industry

(COLOMBO, LANKAPUVATH) –The Central Bank of Sri Lanka has requested the country’s licensed banks to grant several concessions to those individuals and entities in the tourism industry to revive the industry that took a severe blow after the Easter Sunday suicide attacks on churches and hotels.

In a circular issued May 21, 2019, the Central Bank said In view of the adverse impact on tourism industry due to the current situation of the country, Licensed Finance Companies/Specialized Leasing Companies (LFCs/SLCs) are requested to grant the following concessions to those individuals and entities in the tourism industry, who wish to avail such concessions.

Following are the concessions:

(i) LFCs/SLCs may grant a moratorium to individuals and entities who have registered with Sri Lanka Tourism Development Authority or any other authority/agency to provide services to tourism, on a case-by-case basis (Annex I)

(ii) | The moratorium shall be granted for performing loans (both capital and interest) till March 2020, in respect of outstanding credit facilities as at 18 April 2019.

(iii) The Board of Directors of the LFCs/SLCs or any authority delegated by the Board of Directors shall approve the granting of moratorium.

(iv) LFCs/SLCs shall convert the capital and interest falling due during the moratorium period into a term loan which shall be recovered from July 2020 onwards. A concessionary tate of interest may be charged for this facility.

(v) | LFCs/SLCs and the borrower shall agree on the repayment period and the rate of interest on the above loans.

(vi) LFCs/SLCs may maintain non-performing loans in the same category for classification and provisioning purpose, during the moratorium period.

(vii) | LFCs/SLCs shall waive off the penal interest to be charged on non-performing loans, during the moratorium period.

(viii) | LFCs/SLCs shall maintain necessary documents to substantiate the granting of such concessions.

(ix) | LFCs/SLCs shall report the moratorium availed by borrowers as per the format in Annex IJ, to the Director, Department of Supervision of Non-Bank Financial Institutions on a monthly basis by 15″ of the succeeding month.

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