CoPF approves suspension of Parate Law until December 15, 2024

Parliament, May 02 (Daily Mirror)- The Committee on Public Finance (CoPF) approved the Recovery of Loans by Banks (Special Provisions) (Amendment) Bill which was amended to facilitate legal provisions for the suspension of the Parate Law till December 15, 2024.

The approval was granted subject to conditions.

"Accordingly, the banks’ practice of acquiring properties of those whose loans are yet to be paid off will be suspended till December 15 and the Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990 will be amended to facilitate the necessary legal provisions," the CoPF said.

The approval was given when the Committee on Public Finance met in Parliament recently under the chairmanship of MP Dr. Harsha De Silva.

Officials representing the Ministry of Finance said they hope to provide temporary relief to the creditors. 

The committee questioned the officials on what action will be taken in this regard after December 15. However, the officials present failed to give a clear answer in this regard and the committee recommended to provide a road map for the actions to be taken after December 15 to those subject to Parate Law.

The committee also recommended that all parties who have done business with the banks subject to the Parate Law be given a fair opportunity to negotiate with the banks.The committee also questioned the officials about the distribution of loans under the Parate Law.

The chair of the committee inquired about the manner in which the micro, small scale and medium scale enterprises in particular have received loans under this law and the criteria under which they are classified. 

The officials did not have the correct data on this and the chair of the committee instructed the officials to provide this data to the committee.