Tourism sector welcomes CBSL directive to banks to extend moratoria

•  Wanted blanket relief for tourism sector, however the move is welcome – THASL 
• Extension will help revive the industry and hopefully allow it to bounce back for winter season – SLAITO 
• A welcome initiative in the short-term, providing breathing space to work out a sustainable solution on the medium to long-term - SLTDA 

By Shabiya Ali Ahlam
Tourism sector stakeholders welcomed the decision by the Central Bank (CBSL) to urge banks to extend the debt moratorium to all businesses and individuals hit from the ongoing economic crisis that emerged even before the implications stemming from the pandemic eased.

The struggling tourism sector was able to let out a sigh of relief this week as the much needed and greatly advocated breathing space was provided. 

Although the extension of the debt moratorium is not a blanket application for the sector, or any sector, tourism industry stakeholders said the move is nonetheless welcome. 

  According to the CBSL directive issued on Wednesday (July 20), individuals and businesses would have to appeal with their banks to gain some relief with regard to the loan repayments. The moratorium will be granted on a case-by-case basis. 

“For the tourism sector, we wanted a blanket relief offered. The arrivals are low and we are struggling with maintaining occupancy. However, we welcome this move by the Central Bank. At least now the banks will consider providing our industry members with some relief,” The Hotels Association of Sri Lanka (THASL) President M. Shanthikumar told Mirror Business. Similar sentiments were reflected by the Sri Lanka Inbound Tour Operators who are struggling to lure international visitors to the country due to several governments having issued travel advice against visiting the island nation due to the political and economic turmoil.  While commending the CBSL for issuing the fresh directive, SLAITO said the extension will help revive the industry and hopefully allow it to bounce back for the winter season. “This is specifically helpful to the SME sector enterprises,” shared SLAITO Immediate Past President Mahen Kariyawasam.   Meanwhile, Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando told Mirror Business that it is a welcome initiative on the short-term, providing breathing space to work out a sustainable solution on the medium to long-term. 

A moratorium was offered to the tourism sector after the 2019 Easter Sunday attack for a period of six months, which then was extended thrice more due to the difficulties stemming from the COVID-19 pandemic. The moratorium that is in force came to an end on June 30.  Following a proposal made by Tourism Minister Harin Fernando, on a request made by the trade associations, Cabinet approval was given earlier this month to extend the moratorium. However, the decision has not been implemented as yet. 

The officials of Sri Lanka Tourism and trade associations met with CBSL Governor to expedite the extension, who conveyed that the financial sector regulator is unable to intervene and instruct the financial institutions to extend the moratorium due to the prevailing economic crisis.