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2025-01-01 | Circular No. 1 of 2025

Addendum to Circular No. 04 of 2024 on Relief Measures for SMEs

The Central Bank of Sri Lanka issued this addendum to clarify and standardize the implementation of SME relief measures across all licensed banks. It mandates the establishment of dedicated Relief Banking Units and permits the case-by-case rescheduling of eligible borrowers' credit facilities for up to ten years based on repayment capacity and agreed interest rates. Furthermore, the directive requires banks to implement transparent grievance mechanisms for property valuation disputes and submit monthly reports detailing borrower rescheduling status, interest waivers, and outstanding balances.

Sri Lanka

Central Bank of Sri Lanka

CENTRAL BANK OF SRI LANKA 01 January 2025 CIRCULAR No. 01 of 2025 1 ADDENDUM TO THE CIRCULAR NO. 04 OF 2024 ON RELIEF MEASURES TO ASSIST THE AFFECTED SMALL AND MEDIUM ENTERPRISES The Central Bank of Sri Lanka hereby issues the following Addendum to further clarify Circular No. 04 of 2024 on Relief Measures to Assist the Affected Small and Medium Enterprises (SMEs) with a view to ensuring effective implementation of the relief measures specified in the cited Circular in a consistent manner across all licensed banks. Licensed banks shall establish a Relief Banking Unit for the purpose of extending and monitoring the relief measures under the cited Circular for the effective implementation of such relief measures while the existing Business Revival Units established under Circular No. 02 of 2024 on Guidelines for the Establishment of Business Revival Units in Licensed Banks, will continue for the intended purpose thereof. The following will be inserted as Paragraph No. 1.4 and existing Paragraph No. 1.4 is renumbered as 1.5.

Features of the Relief Measures 1.4 Licensed banks may reschedule the credit facilities of eligible borrowers for a maximum period up to ten years, unless the original agreement has provided a period longer than ten years, on a case-by-case basis, considering the repayment capacity of the borrower and an acceptable revival plan. In this regard, licensed bank and the eligible borrower shall agree on the terms and conditions including the interest rates considering the prevailing benchmark interest rates. The following will be inserted as Paragraphs No. 3.3
Transparency of provision of relief measures 3.3 Licensed banks are requested to establish a transparent grievance-handling mechanism with respect to any dispute that may arise between the bank and the borrower on the valuation of auctioned properties.

[Limited Sharing]# Bank Name Annexure A Reporting as at Total Amount Considered for Rescheduling (Rs. 000s) Tenor of the Rescheduled Loan Applicable Interest Rate on Rescheduled Loan (%) Agreed Date of Commencement of Repayment (DD/MM/YYYY) Has the Repayment Commenced (Yes/No) Total Amount Considered for Rescheduling (Rs. 000s) Tenor of the Rescheduled Loan Applicable Interest Rate on Reschedul ed Loan (%) Interest Waived off by the banks on rescheduling (Rs. '000s) Agreed Date of Commencement of Repayment (DD/MM/YYYY) Has the Repayment Commenced (Yes/No) Outstanding Interest as at the Date of Rescheduling (Rs. '000s) Outstanding Charges or Fees as at the Date of Rescheduling (Rs. '000s) Charges or Fees Waived off as at the Date of Rescheduling (Rs. '000s) Rescheduled Loan for the Capital Rescheduled Loan for the Interest If Rescheduled Serial No. Monthly Reporting of Details of the Borrowers who Approached Banks to Avail the Relief Measures Provided Under Circular No. 04 of 2024 from 15.12.2024 to the Reporting Date Date of Classifying to Stage 3 (DD/MM/YY YY) Facility Number Borrower Name Amount Outstanding as at 15.12.2024 Date of Commencement of Discussion (DD/MM/YYYY) Status of the Discussion (Rescheduled/ Rejected/ Under Discussion) If Rejected, Reasons for Rejection Interest (Rs. 000's) Capital (Rs. 000's) Date of Rescheduling (DD/MM/YY YY) Outstanding Capital as at the Date of Rescheduling (Rs. '000s)