Regulatory Alerts2020-07-03 | Operating Instruction No. 35/03/023/0001/002Liquidity Facility to the Construction Sector Upon Letter of Acceptance of Payments of Outstanding Bills Due to Contractors Issued by the Treasury
The Central Bank of Sri Lanka issued Operating Instructions establishing a liquidity facility to support construction sector enterprises by enabling Licensed Commercial Banks to obtain concessional loans backed by Treasury-issued Letters of Acceptance of Payments. Licensed Commercial Banks must pledge Treasury bills and bonds to the Central Bank to access credit at a 1% interest rate, which they can then on-lend to contractors at a maximum rate of 4% to address outstanding government dues. The directive mandates strict operational procedures for pledging securities, fund disbursement, and fortnightly reporting to ensure the exclusive utilization of funds for the targeted sector.
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