Cabinet nod for draft Bill on Parate Law amendment
Cabinet Spokesman, Mass Media Minister Dr. Bandula Gunawardhana yesterday said that the Cabinet of Ministers has also given its approval to publish the Draft Bill of the Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990, which was amended to facilitate legal provisions for the suspension of Parate Law until December 15 this year.
The Minister was speaking at the Cabinet media briefing held yesterday at the Government Information Department.
The Attorney General has approved the Bill drafted by the Legal Draftsman. Accordingly, the Draft Bill of the Loans by Banks (Special Provisions) Act will subsequently be tabled in Parliament for approval.
The Minister further said that this decision was taken to protect the small and medium enterprises which are the most affected sector due to the economic crisis.
He said that the Parate Law is a law that should exist to protect the banking system and the government has decided to suspend the Parate Law for a short period at this difficult time.
As per the Cabinet’s decision, the banks’ practice of acquiring properties of whose loans are yet to be paid off will be suspended until December 15 and Section 4 of the Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990 will be amended to facilitate the necessary legal provisions.
Commenting further on this, the Minister said that at this difficult time, it has been decided to suspend the Parate Law for a short time. This Bill should be passed soon. This decision has been taken to reduce the pressure on small and medium scale industrialists especially due to the recent economic crisis. It is not for the purpose of giving an advantage to large scale businessmen.
“The small and medium scale industrialists continued to make requests to intervene in this matter. If the depositors fail to pay the money, the banking system will collapse and great injustice will be done to the depositors. Some relief should also be provided to those who find it difficult to repay their loans,” the Minister said.
The Minister further said that the banking system holds large amounts of public deposits. Loans are given on the basis of those deposits. If the loan cannot be recovered, the deposits of the depositors cannot be refunded. If the banks collapse in that situation, a great injustice will be done to the majority.
The Cabinet of Ministers in February approved the proposal tabled by the President to put a temporary halt to the acquisition of properties of loan defaulters by banks and to amend the Recovery of Loans by Banks (Special Provisions) Act.
The post Cabinet nod for draft Bill on Parate Law amendment appeared first on DailyNews.