CBSL grants concessions for COVID-19 affected businesses & individuals

The Central Bank of Sri Lanka (CBSL) has taken steps to grant certain concessions with a view to meeting the challenges faced by businesses and individuals due to the third wave of COVID-19.

Accordingly, the borrowers affected by the expansive restrictions imposed to control the COVID-19 third wave have been granted with another round of relief, the fourth round since the outbreak of the virus in March 2020 as the Central Bank has been seeing a flood of requests seeking relief on loans.

Issuing a circular to licensed commercial and specialised banks, the Central Bank said affected borrowers could seek to defer installments on their loans till August 31, 2021 for facilities which remained in the performing status through May 15, “considering the financial difficulties faced by eligible borrowers, such as job losses, loss or reduction of income/salaries or sales, closure of business etc.”

On the loans, which were on non-performing category as at May 15, banks may reschedule them over a longer period considering the repayment capacity of the borrower and an acceptable revival plan. The bank and the borrower could agree on the terms and conditions of this rescheduled loan, including its interest rate.

“The deferment of capital, interest or both shall be granted for one or more of existing credit facilities granted in Rupees or in foreign currencies, considering the financial difficulties and repayment capacity of the eligible borrowers,” it said.

Besides this new set of relief, the Central Bank said banks on their own accord can offer additional concessions to borrowers affected by the current restrictions, but added that such relief cannot be less than the benefits stipulated in the circular.

Also, while banks are barred from charging penal interest from May 15 to August 31, they have also been asked to accommodate requests from borrowers to delay their installment by no more than 10 working days due to ongoing travel restrictions with no additional interest or charge.

Further, banks can charge no additional fee or levy against the borrower for extending the latest round of relief.

In other relief, banks have also been asked to extend the validity period of the cheques valued less than Rs.500,000 until June 30 and discontinue charging for cheque returns and stop payments on all cheques until June 30.

Meanwhile, banks have also been instructed to do away with any early settlement fee if any borrower chooses to pre-settle a facility before its due date instead of opting for the relief.

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