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Over three-year-old tourism moratoriums come to end 

01 Jul 2022

   
  • Banks, finance companies turn down industry requests for a six-month extension
  • Extension refused, citing impact on banking system, says SLTDA Chair
  • Notes will continue to lobby authorities for an extension
    By Imesh Ranasinghe    Banks and finance companies have not agreed to continue with the moratoriums granted to the tourism industry, which came to an end yesterday (30), citing the impact it would have on the banking system and the economy, stated Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando. In a statement, Fernando said that at a meeting with the banks and finance companies, the latter did not agree to continue the moratorium, and had said that they are prepared to discuss each case on an individual basis and assist with tailor-made packages/solutions, but could not provide a blanket solution. The Ministry of Tourism submitted a Cabinet paper on 30 May 2022, recommending the extension of the moratorium granted to the tourism sector until 31 December 2022, citing the current status of the industry and the inability of the majority of the stakeholders to recommence the servicing of borrowings and accumulated interest. As revealed by Fernando earlier, the industry has incurred a debt of about Rs. 480 billion to banks and finance companies. Cabinet approval was granted to the proposal based on the condition that an extension of the moratorium should be done in consultation with the Governor of the Central Bank of Sri Lanka (CBSL). Fernando said that on 10 June, the SLTDA and industry stakeholders met President Gotabaya Rajapaksa and briefed him on the inability of the industry to service its borrowings and accumulated interest. On 11 June, they met with CBSL Governor Dr. Nandalal Weerasinghe, where the Governor had stated that the matter would have to be decided by the respective financial institutions, and noted that the Central Bank would refrain from direct intervention or influencing the individual responses of banks and financial companies. Dr. Weerasinghe thus requested the Ministry of Tourism and the SLTDA to discuss the matter directly with the respective banks and finance companies. Based on this, a meeting was scheduled on 20 June, with 39 banks and finance companies, but since “participation from banks and finance companies was poor and many excuses regarding the inability to participate”, a meeting was held via zoom on 28 June, where only 30 financial institutions participated. “All financial institutions were of the view that they could not agree on the extension of the moratorium as requested,” Fernando said in his statement, and added that the bankers explained the impact such a decision will have on the entire banking system as well as the economy. The statement said that the SLTDA and the Ministry of Tourism will endeavour to continuously lobby in the interest of the industry and request operators to initiate one-to-one discussions with financial institutions. Moreover, he said that the SLTDA will write to the respective banks on behalf of those who had sought intervention as a follow-up measure, and present matters to Cabinet seeking further intervention.


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