Finance Ministry, Central Bank at odds over parate execution

The government and the financial sector regulator, the Central Bank, appear to be at odds over parate execution. While the Central Bank advocates for stronger laws, the Finance Ministry seems to favour relaxing efforts. 
The monetary watchdog has consistently emphasised the importance of strengthening credit recovery measures, but the Finance Ministry’s stance appears to be contradictory.

State Minister of Finance Ranjith Siyambalapitiya this week told parliament that to provide Small and Medium Industries (SMEs) with some breathing space, the parate execution law must be suspended for a certain period.
“Amidst the economic challenges faced by SMEs, there have been calls for a review of these powers to prevent potential adverse effects on businesses. The measure seeks to provide a reprieve for struggling SMEs while ensuring the continued stability of the financial sector,” the state minister said. 

Siyambalapitiya went on to state that the proposed suspension is a temporary measure and will be subjected to confirmation in-line with the banking system’s stability. A Cabinet paper on the matter is to be submitted by next week. 

The Central Bank, strongly maintains that it will not compromise the safety of public deposits and stability of the banking sector in favour of an insignificant number of “loud” debt evaders.

In a landmark ruling, the Supreme Court recently, held that the properties mortgaged to banks, not only by an actual borrower but also by a third party for the loan granted to the actual borrower, can be sold at an auction, to recover the unpaid loan and interest thereon. 

(NR)