Don’t panic! Banks tell SMEs as parate relief ends

Colombo, July 2 (Daily Mirror) - Licenced commercial banks have pushed back against what they describe as attempts by a small group of borrowers to stir “alarm and confusion” over the potential use of parate laws, saying there is no plan to initiate widespread property seizures following the end of the debt relief period.

In a statement released yesterday, the Sri Lanka Banks’ Association (SLBA), which represents all licenced commercial banks, stressed that most borrowers continue to engage constructively with banks to reschedule and repay loans.

“The reality is that only a very small fraction of borrowers default to the extent that they become eligible for parate execution,” the SLBA said.

“Banks prefer to retain their customers and recover loans through cooperation rather than enforcement.”

The association said banks had shown flexibility by voluntarily extending the grace period beyond the government’s 31 March deadline, with some borrowers receiving relief through to December 2025. However, with the window now closed, the SLBA warned that public confidence could be undermined by misinformation.