Regulatory Alerts2020-06-09 | Explanatory Note No. 4 of 2020Amendments to Interest Accrual during the Moratorium Period
The Department of Supervision of Non-Bank Financial Institutions at the Central Bank of Sri Lanka issued Explanatory Note No. 04 of 2020 to amend interest accrual rules for Licensed Finance Companies and Specialised Leasing Companies. The regulation mandates that these institutions recover interest-free term loans using either a two-year equated monthly installment schedule or installments not exceeding the original contract amount, subject to a maximum concessionary rate of 11.5% per annum. Borrowers must provide informed consent for the selected repayment option after the institution explains the financial implications, including total interest costs and the time value of money.
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