The Committee on Public Finance (COPF) convened today for a crucial discussion centered on Parate Execution (PE) and its implications for Sri Lanka’s economic recovery and the welfare of Micro, Small, and Medium Enterprises (MSMEs). COPF Chairman Dr. Harsha de Silva highlighted a key outcome of the meeting: the temporary suspension of PE until December 15, 2024, pending parliamentary approval. This decision aims to provide much-needed relief to struggling MSMEs navigating the aftermath of various crises, allowing them vital time to stabilize and restructure.
Dr. de Silva emphasized the COPF’s commitment to fairness in loan recovery processes, citing data from the Central Bank of Sri Lanka (CBSL) that showed only 57% of PE cases received concessions over five years. As part of ensuring equitable treatment, COPF has requested a detailed breakdown of Non-Performing Loans (NPLs) by sector and category, with a focus on extending support to sectors such as tourism experiencing rapid recovery. The committee stressed the importance of targeted support measures to nurture the ongoing revival of the MSME sector.
Furthermore, COPF urged the CBSL and Ministry of Finance (MoF) to reevaluate NPLs, particularly for MSMEs and individuals facing challenges beyond their control. The discussion also explored the delicate balance between economic recovery and responsible lending practices. Despite concerns about potential impacts on bank recovery periods due to PE suspension, COPF highlighted a significant increase in bank profits during Q4, totaling Rs. 400 billion.