Banks in Sri Lanka Move to Aid SMEs

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Central Bank (CB) Governor Nandalal Weerasinghe of Sri Lanka announced during a press conference plans to boost the bank business revival units established during the COVID-19 pandemic to support small and medium enterprises (SMEs) with bad loans. The units will now operate independently under normal circumstances to assist struggling SMEs in sustaining their operations.

New guidelines will be issued by the Central Bank next week to reinforce these units, facilitating the revival of enterprises affected by the economic crisis. Banks will be required to provide concessionary loans to restructure business entities impacted by recent macroeconomic challenges

Weerasinghe emphasised the importance of leniency in granting loans at current interest rates and urged banks in Sri Lanka to extend loan facilities to SMEs. While acknowledging the temporary suspension of parate executions, he highlighted the necessity for banks to support SMEs despite initial reluctance.

Senior Deputy Governor of the Central Bank, Yvette Fernando, elaborated on the policy measures, stating that the monetary board approved expanding the scope of the bank business revival units with technical assistance from the World Bank. These units will operate independently under a deputy general manager, implementing frameworks to facilitate affected entities resuming normal loan payment schedules.