Sri Lanka’s banks, regulators, and small and medium enterprises (SMEs) gathered at the Presidential Secretariat to address challenges surrounding parate execution (foreclosure) laws and difficulties in loan repayments. A key focus of the meeting was the suspension of the law on parate execution, which governs the auctioning of collateral for defaulted loans. The law has been temporarily suspended until December 15, providing a window for further discussions and relief measures.
The meeting highlighted the financial challenges SMEs face due to loan obligations and sought to explore potential solutions to support struggling businesses. Led by G N R D Aponsu, Senior Additional Secretary to the President for Finance and Economic Affairs, the meeting included officials from the Ministry of Finance, the Central Bank of Sri Lanka, and the Sri Lanka Banks Association (Guarantee) Limited.
The discussions emphasized how the banking sector could offer additional support to SMEs and enhance productivity across the economy. A comprehensive report will be compiled on the loans taken by SMEs from various banks, which will form the basis for designing future relief strategies. Additionally, the Central Bank and commercial banks are working to evaluate the steps needed for the temporary suspension of debt recovery under the Parate law for SME loans.
Key participants in the meeting included R R S De Silva Jayathilake, Director of Bank Supervision at the Central Bank of Sri Lanka, and A M A D Amarakoon, Senior Assistant Director at the Central Bank of Sri Lanka. Representatives from major banks, including Union Bank, Sampath Bank, Bank of Ceylon, Commercial Bank, Hatton National Bank, and Standard Chartered Bank, were also present.