Regulatory Alerts2020-04-24 | Explanatory Note No. 2 of 2020Interpretations for Circular No. 04 of 2020 and No. 05 of 2020
The Central Bank of Sri Lanka issued this note to clarify that loan facilities with non-standard names, such as term loans or leases, are eligible for COVID-19 moratoriums if they support sectors identified in Circular No. 05 of 2020. Lending Financial Companies and Small Lending Companies are instructed to grant relief to customers who can provide sufficient documentary proof that their income or business was adversely affected by the pandemic. This directive ensures that eligibility is determined by the underlying purpose and impact of the facility rather than its specific nomenclature.
Explanatory Note No. 02 0f 2020 Central Bank of Sri Lanka 24 April 2020 INTERPRETATIONS FOR CIRCULAR NO. 04 OF 2020 ON RELIEF MEASURES TO ASSIST COVID-19 AFFECTED BUSINESSES AND INDIVIDUALS AND CIRCULAR NO.5 OF 2020 ON RUPEES 50 BILLION, SIX-MONTH RE-FINANCING FACILITY TOSUPPORT COVID-19 HIT BUSINESSES INCLUDINGSELF EMPLOYMENT AND INDIVIDUALS It was observed that that there are different loan types or different names used by different companies in addition to the general loan facilities they provided like "term loans" "leases", etc., and several customer complaints have received by us and the CBSL management that LFCs/SLCs are refusing to provide moratorium for those types of facilities saying that such loans are not covered in the cited circulars. We would like to inform you that though those different names are not mentioned in the circulars issued by CBSL, if these facilities have obtained for the sectors identified in the Section 2 of the circular No 5 of 2020, and Individual’s income/Business have been really affected by covid-19 and with sufficient proof of documents that person/Business obtained the facility for that purpose, those customers are eligible for the moratorium.. i.e., customer may have obtained a facility for tourism related activity but the loan name is not mentioned in the circular. If customer can prove that facility has obtained for the tourism related activity and his income got affected due to the current situation, he is eligible for the moratorium.