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CBSL declines moratorium extension request

23 May 2021

  • Tourism Ministry seeks extension due to new wave

  • Current concessions expire in September

  • No for now, will see by Sept., says Central Bank

By Karen Hapuarachchi   The Central Bank of Sri Lanka (CBSL) has turned down a request made by the Ministry of Tourism to further extend tourism sector moratoriums and concessions in the wake of the new wave that has further aggravated the financial burden of the industry, The Sunday Morning Business exclusively learns. Speaking to us, Secretary to the Ministry of Tourism S. Hettiarachchi informed that as the moratoriums and concessions are expiring in September, a request was made to the Central Bank, requesting for an extension as the industry is helpless with consecutive waves not allowing them to restart businesses. He stated that the Ministry made a formal request last week, which was turned down by the Central Bank, stating that there is time until September to assess whether an extension is required or not. Meanwhile, talking to The Sunday Morning Business in this regard, Central Bank Deputy Governor T.M.J.Y.P. Fernando stated: “There is time to extend the tourism moratorium as it is valid till September. Thus, there is a lot of time to discuss it.” On the other hand, The Hotels Association of Sri Lanka (THASL) Chairman Sanath Ukwatte revealed that the tourism industry has come to a standstill with only a handful of hotels operating at the moment and that these hotels serve as quarantine centres for tourists who are currently in the country. “In addition to this, we have received liquor restrictions where serving guests with liquor is also limited to a certain extent, and local consumers cannot hold functions and events. Thereby, we have lost that consumer base as well. The majority of hotels are closed down and the industry has come to a standstill,” Ukwatte commented. Moreover, with the prevailing restrictions influencing a halt to operations in hotels, Ukwatte expressed his concerns over how the hotel industry is going to pay its employees and cover its costs. Accordingly, the tourism industry is in a critical state and in pivotal need of financial support, followed by a mountain of debt obligations along with the moratoriums expiring in September 2021. “The travel restrictions are also not helping the situation, and none of us are sure when these restrictions will be relaxed so that the industry can try to operate normally. To add to this, the airports are planned to be closed, so there is no way that tourists can come in as well,” he added. Last year, CBSL requested banks to provide a debt moratorium to Covid-19-affected businesses and individuals in the tourism sector for a further period of six months commencing from 1 October 2020 to 31 March 2021. This moratorium was issued by CBSL in April 2019 after taking into account the Easter Sunday terror attacks. CBSL directed banks to amalgamate the capital and interest fall due during the period from 1 April 2020 to 30 September 2020 with the capital and interest fall due during the period from 1 October 2020 to 31 March 2021, except for Equal Monthly Instalment (EMI) loans for which the interest rate for the moratorium period is capped at 7% per annum.


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