Press briefing of Cabinet Decision taken on 2024-12-09 (Subject to Confirmation at the next Meeting)

Extension of the Suspension Period of Parate Execution by the Banks

- The economic crisis faced by Sri Lanka during the past four (04) years has severely affected the Small and Medium Scale Enterprises (SME) Sector and it has been reported that the Small and Medium Scale Entrepreneurs have encountered difficulties in settling the loans taken from Banks. Since an environment had been created under this situation, where the properties of a significant number of businessmen have been taken over by Banks and auctioned due to the default of loans, the sale of properties by public auction has been suspended temporarily up to 2024-12-15 through an amendment to the Recovery of Loans by Banks (Special Provisions), Act No.4 of 1990. Requests have been made by Associations related to the SME Sector for further extension of the suspension of the Parate Execution Law. The Government has observed that it would be more suitable to create the necessary environment whereby a reasonable solution to both parties could be achieved through the introduction of an Action Plan for the repayment of such loans, instead of permitting the auctioning of properties. Accordingly, the proposal made by the Hon. President, in his capacity as the Minister of Finance, Planning and Economic Development, to extend the suspension of the implementation of the Parate Law up to 2025-03-31 and for the Central Bank of Sri Lanka, with the active participation of State and Private Banks and all other parties including State Institutions, to formulate a multi-dimensional mechanism to resolve this issue, was approved by the Cabinet.