9 November 2021 09:49 am Views - 123
The relief measures implemented by the Central Bank of Sri Lanka (CBSL) and extended to the local businesses impacted by the COVID-19 pandemic have crossed the Rs.4,000 billion mark, with the Saubagya loans amounting to over Rs.179 billion.
In an effort to provide breathing space to the hard-hit sectors from the implications stemming from the global pandemic, under its supervision, the CBSL implemented several relief schemes to assist the COVID-19-affected borrowers. The concessions that included extended repayment periods, concessionary rates of interest, working capital loans, debt moratoriums and restructuring/rescheduling of credit facilities for affected borrowers, allowed the SMEs of sectors such as tourism, apparel, plantation and private sector borrowers, among others, to stay afloat.
Under the CBSL scheme, the financial institutions (FIs) have approved over 2.9 million requests for concessions, amounting to a total of Rs.4,083.8 billion, prioritising the micro, small and medium enterprises. The concessions, which were extended until December 21, 2021 by the licensed banks and until March 31, 2022 by the non-bank financial institutions (NBFIs), have helped to support the segments of the economy that were facing financial difficulties, the CBSL said in a statement yesterday.
The tourism sector, which took a hit from 2019, due to the Easter Sunday attacks, was offered special concessionary schemes and the relief efforts were granted from time to time. As the sector came close to a standstill state, the moratoriums by the licensed banks were extended until June 30, 2022 and those by the NBFIs were extended until March 31, 2022. The tourism sector alone had
24,831 requests approved.
The requests for specific concessions such as moratoriums for lease facilities, granted to COVID-19-affected businesses and individuals in the passenger transportation sector, the FIs approved a total of 117,085 requests that were extended further until December 31, 2021 (licensed banks) and March 31, 2022 (NBFIs). Furthermore, in addition to debt moratoriums, the affected borrowers of the NBFI sector were also provided with the option to either restructure the existing credit facilities for a longer term or to settle the existing credit facilities early. Such requests are to be facilitated by waiving future interest, fees and applicable charges. These options have been made available for the borrowers of NBFIs, up to March 31, 2022.
FIs were requested by the CBSL to grant further concessions to ease pressures faced by the COVID-19-impacted businesses. The concessions included: waiver of accrued penal interest, restructuring of existing credit facilities, provision of interest rebates, waiver of early settlement fees and other charges, suspension of legal action on loan recoveries, extension of the validity period of cheques valued below Rs.500,000, discontinuation of certain charges usually made by FIs (for cheque returns, stop payment, etc.) and suspension of late payment fees applicable on credit cards during the concessionary period.
The financial sector regulator further requested the FIs to refrain from declining loan applications from eligible borrowers, solely based on the unfavourable Credit Information Bureau (CRIB) records. Meanwhile, to help the COVID-19-affected businesses move towards recovery, the CBSL introduced the Saubagya COVID-19 Renaissance Loan Scheme Facility (SCRF), which was rolled out in three phases. The scheme provided working capital loans at an interest rate of 4 percent per annum, with a repayment period of 24 months, including a grace period of six months.
The CBSL said that through this scheme, a total of 62,574 applications were processed, leading to the release of Rs.179,280 million. Of the funds released, the licensed banks have disbursed Rs.165,513 million among 53,152 affected businesses islandwide. Due to the subsequent waves of the COVID-19 pandemic, the CBSL extended grace periods and loan repayment periods several times.
A debt moratorium has been granted up to December 31, 2021, while the repayment period has been extended by 12 months to 36 months. Similarly, the beneficiaries of the other loan schemes such as Saubagya and Swashakthi have been provided with further relief at this crucial juncture, by the reduction of the interest rates and introduction of the debt moratorium, the CBSL said. In the six-month road map for ensuring macroeconomic and financial system stability, the CBSL announced a liquidity support grant of Rs.15 billion, which will be provided to the FIs supervised by the CBSL. The objective of the grant is to compensate part of the cost of the interest charged by them from the affected borrowers during the moratorium, with a view to providing further relief to the borrowers.
The CBSL also established the Financial Consumer Relations Department (FCRD) in August 2020, to handle the complaints by financial consumers and borrowers, who are able to submit complaints to the FCRD using the forms available on the CBSL website.