Aftershocks of Covid-19: CB sets aside Rs. 50 bn to revive corporate sector

By Sandun A Jayasekera

The Central Bank has set aside Rs. 50 billion to revive the corporate sector from the aftershocks of the COVID 19 pandemic and companies with liquidity constraints are offered soft loans for working capital at a 4% annual interest rate, Central Bank Governor, Prof. W.D.Lakshman said yesterday.   

The companies willing to apply for this loan have time up to May 15. The CB has instructed commercial banks to give priority to smaller companies applying for a sum of Rs. 10 million to 25 million. The loan facility is basically for two months,” Prof. Lakshman told the Daily Mirror.   

However, a company is free to talk to the management of the relevant bank branch and negotiate their size of the loan and repayment process, Prof. Lakshman added.  Further, where the validity period of cheques valued less than Rs.500,000 has expired, the banks are required to consider them as valid until May 15, 2020.  The eligible businesses and individuals are requested to contact their respective banks with necessary information or documents on a timely basis if they wish to avail themselves of the relief measures. These measures require the banks to extend the existing tenure of loans eligible for moratorium by the respective moratorium period. Thus, the CB urges the borrowers to repay the installments subject to the moratorium during such extended period without any additional cost, so that by receiving such funds banks will also be able to strengthen their liquidity positions.