Cabinet nod to be sought to suspend parate law

State Minister of Finance Dr. Ranjith Siyambalapitiya said in Parliament yesterday (21) that measures will be taken to suspend parate execution rights for a specific period with the aim of protecting small and medium-scale entrepreneurs in the country. He said that the related Cabinet Paper will be submitted for the approval of the Cabinet of Ministers next week.

The State Minister pointed out that the Government has taken various measures to protect small and medium-scale enterprises affected by the economic crisis and the Central Bank has so far issued 15 different circulars. Pointing out that there has been a discussion in the country regarding parate execution rights, the State Minister said that parate execution has been introduced for the safety of the banking system. The relevant Cabinet paper will be submitted for the temporary suspension of parate execution rights ensuring the safety of the banking system as well.

‘Parate execution’ basically means a debt recovery process outside the ordinary law. The main objective in extending this power to all licensed commercial banks was to provide a greater level of security and flexibility to the banking system and to deter willful defaulters, towards expediting the recovery of the outstanding payments from the borrower. Banks could go for ‘parate action’ only if all their action towards the recovery of the loan has not had the desired effect and all available options have been fully exhausted.

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