The Government through the Central Bank will request local banks not to take any new legal action against defaulters until March 31 as Parate Execution has been extended, Deputy Minister of Finance Harshana Sooriyapperuma.
Instead of merely postponing the parate execution date, the Government engaged with stakeholder groups to ensure acceptable solutions were found for this long-standing issue. “As a result, parate execution has now been extended until March 31, 2025 and we have requested not to engage in new legal action against defaulters. He said that they have also received information that when it comes to selling assets or properties by banks to recover their money most of them have been sold at lower prices and below the true market value. “We also want this to be corrected.”
The relief for businesses is not only in the form of an extension of time.
This relief package, proposed by the Government and to be implemented through the Central Bank, also includes several other important measures, such as easing the credit rating status, extending the repayment period, offering low interest rates for restructured debt, and providing a transparent mechanism to resolve valuation disputes.
This package aims to ensure that the SME sector can actively contribute to the economy while also protecting the interests of the banks.
The country also is in debt around USD 300 million to Kuwait, Saudi Arabia, Iran and Pakistan and this is representing about 1% total external debt. “All other bilateral creditors have already agreed for restructuring within the agreed framework.”
