The Central Bank of Sri Lanka (CBSL) is considering extending the request submitted by several sectors to extend the moratorium on local leasing on seizing vehicles which is to expire soon, The Morning Business learnt.
Speaking at the press conference on Monetary Policy Review 2021 yesterday (4), CBSL Deputy Governor T.M.J.Y.P Fernando stated that currently discussions are being held with relevant bank and financial authorities in order to extend the debt moratorium.
“We have received few requests from certain sectors, therefore discussions are currently taking place, once the final approval is given within a few more days, it will be announced to the general public,” Fernando said.
Commenting on this regard, Fernando added that a total moratorium will not be given: “Since the economic activity has just started, certain businesses are being revived so we can give a total moratorium because banks have to also get their income if they are to continue their payments of deposit interest, hence to not cause an undue burden on the customer and the borrower we have structured.”
Speaking to The Morning Business, Fernando elaborated that the “previous moratorium and the current existing loan is again deferred so when they are paying, we are going to structure it in a way that they would not be overburdened; however they will have to start payments also at a relatively lower level”.
However, CBSL has received a positive response from the bank and also from the finance association as they are very cordial to help CBSL to develop the new structure.
In June last year, President Gotabaya Rajapaksa instructed the Police to prevent leasing companies from seizing three-wheelers under the Government’s relief scheme. He said that leasing companies must follow the 116/2020 Circular issued on 23 March, announcing that charging instalments from three-wheeler owners should be suspended for six months.
The President pointed out that the process of forcefully seizing vehicles of payment defaulters was illegal, adding that currently leasing companies forcefully seize vehicles of payment defaulters and then lodge a complaint with the Police. He said the Police were not informed before the seizure. Hence, the President instructed the Police not to accept complaints lodged following seizure of vehicles until further notice.
Meanwhile, on 12 June last year, MP Dr. Wijeyadasa Rajapakshe PC said that Parliament will take up the matter of forced seizure of vehicles by leasing companies.
“Seizing vehicles using thugs and the underworld must be brought to an end. We hope to talk to the President and the Prime Minister, and bring amendments in the next Parliament, making it mandatory that leasing companies obtain a court order before they seize vehicles of payment defaulters,” Dr. Rajapakshe added.
Speaking to us People’s Leasing and Finance Chief Manager of Recoveries Nandana Weerakkody said that they have granted Rs. 84 billion worth of moratoriums for their customers and the number of customers who got benefited from the moratorium was around 64,000. He added that his company has abided by the circular issued by the Central Bank, and even after the expiry of the extension, they are not in a hurry to re-possess defaulted lease assets.
“We keep in touch with the customer. We are managing it properly. It is the responsibility of the people to settle the payments,” Weerakkody added.
Central bank considers debt moratorium
05 Mar 2021
Central bank considers debt moratorium
05 Mar 2021
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