Grace period of parate execution law to end by March 31
Both the government and the central bank would not extend the grace period of the parate execution law after March 31 2025 stressed, Deputy Minister of Finance and Planning Dr. Harshana Suriyapperuma at a special press conference in Colombo yesterday.
However for those who engage with their relative banks and present a payment plan accepted by both parties a further grace period would be offered.
He said that the bulk of the state 3 loans due for the banks have been taken by the SME sector and 99% of them are under the Rs. 25 million credit limits. “For this segment that negotiate with the banks and come to a settlement we will further provide another nine month grace period from March 31, 2025 onwards giving them a total of one year.”
The State Minister explained that for the second tier loans ranging from Rs. 25 million and up to Rs. 40 a further six month period and for those over Rs. 50 million a further three months from March 31 would be provided.
“We will also talk to the banks to see if they could waive off some of the interest and reduce them in some instances. Similarly we will also request the insurance sector to provide relief to their defaulted SME customers”
He said that unlike in the previous times this year the parate concession comes with a revival plan and in some instances providing working capital for them to kick start their business and become contributors to the economy. “A special business revival committee is being set up for the SME sector to kick start businesses.”
He said that they will also talk to the Credit Information Bureau (CRIB) and explore the possibility of taking off some of the SMEs from the default list.
Deputy Minister of Economic Development Prof. Anil Jayantha Fernando said that the parate execution is programmed after careful consolation with the central bank thus not having even a minor impact on the banking sector.
“We are all doing this as the SME sector is the backbone of the economy and reviving them would bring more economic benefits to the entire country as a whole. This package aims to ensure that the SME sector can actively contribute to the economy.”
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