Parate Law execution suspension will relieve SMEs – SLNCC

Sri Lanka National Chamber of Commerce (SLNCC) President Duminda Hulangamuwa said that the decision to suspend the implementation of the Parate Law should definitely provide relief to the Small and Medium-scale industrialists and businessmen who have been heavily burdened due to difficulties in paying loans and interest.

Hulangamuwa said this while replying to a query from the Daily News as to what the opinion of the SLNCC was regarding the decision taken to suspend the implementation of the Parate Law.

He added that the temporary suspension of the enforcement of the Parate Law should provide relief to those who are genuinely struggling to pay their debts. But some people deliberately do not pay the loan instalments and interest relating to the loans they have obtained. Some people take loans with the intention of defaulting. With this decision of suspending the implementation of the Parate Law, even such fraudsters are likely to get relief.

“This situation does not fulfil the objectives expected by giving concessions. We must look at this from another side also. Every commercial bank and financial institution provides credit facilities from the funds of their customers’ deposits. These funds should be given back when the depositors request. But if the loans offered by the financial institutions are not repaid, then those financial institutions will not be able to return the money when the depositors ask for it. In such cases, problems arise for the financial institutions,” he said.

Therefore, the banks get some empowerment through the implementation of Parate Law. Banks and financial institutions may not offer loans at low interest rates when they find it difficult to recover loans. And sometimes banks will stop giving loans to small and medium enterprises. Therefore, when making such a decision, its results should be looked at broadly. But if the businesses that have been down for two or three years are to be sincerely uplifted, the businessmen should be given some encouragement, Hulangamuwa added.

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