Optimum Banking - Sri Lanka

CBSL extends concessions for Covid-19 affected businesses and individuals*

In light of the Covid-19 outbreak, CBSL has requested Licensed Commercial Banks (LCB’s) and Licensed Specialised Banks (LSB’s) to extend concessions towards affected parties.

1. Deferment or restructuring of existing credit facilities in the performing category

• Licensed Banks shall defer recovery of capital, interest or both of the existing performing (for one or more) credit facilities of borrowers affected by the pandemic up to 31st December 2021.

• Priority to be given towards accommodating requests for concessions made by borrowers in the Micro, Small and Medium Enterprises (MSME) sector.

• Banks may charge an interest rate not exceeding 6.93% (1-Yr T-Bill + 1%) on LKR facilities while banks may charge a concessionary interest rate on foreign currency loans.

2. Concessions for credit facilities in the non-performing category

• Licensed Banks may reschedule the existing non-performing loan (as at 1st September), on a case by case basis, over a long period considering the repayment capacity of the borrower and an acceptable revival plan.

• Licensed Banks may waive off penal interest accrued or charged during the period between April 1st 2020 to 1st September, provided such facilities are considered under the restructuring scheme.

• Licensed Banks shall suspend all types of recovery actions until 31st December 2021 against all credit facilities that have been classified as non-performing on or after April 1st 2021.

• Licensed Banks shall not levy excessive fees or charges in relation to granting concessions and shall inform such fees or charges to the borrower.

Source - CAL Research

In certain cases, the customers who had applied for a debt moratorium had been burdened with additional interest payments on loans and leasing companies too were forced the customers to pay their instalments despite a circular issued by CBSL for moratorium. If any of you, have any conflicts please clarify with respective financial institutes. If no proper response received, approach National Movement for Consumer Rights Protection (NMCRP) or CBSL’s Financial Consumer Relations Department

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Monetary Law Act Order No. 02 of 2021 on Maximum Interest Rates on Foreign Currency Deposits of Licensed Commercial Banks.

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Circular No. 7 of 2021 on Provision of Banking Services during the On-going Quarantine Curfew Period

Accordingly, banks are required to open branches to provide only essential services such as trade financing, treasury operations, clearing activities, salary payments and any other urgent customer requests by adhering to strict health guidelines.

Branches are allowed to be opened on specific days based on specific requirements of customers of each branch.

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According to the Central Bank of Sri Lanka’s latest payment bulletin, cash remains the popular mode of payment for retail payments (link in first comment). The coronavirus pandemic has seen a surge in options for customers to make digital payments. Given the fact that virus can spread through physical cash.

Smartphones changed almost every aspect of our lives. However, unlike the rest of the world, we were still burdened with carrying a wallet stuffed with cards, notes and coins.

The payment method will soon transform. Urbanized people already spend larger amounts of money digitally. It’s lead to future of money as digital. CBSL working hard to clear a path to make it a reality. With the government’s support for the proliferation of digital payments and the onset of 5G adding to the mix, a lot of retailers are moving into the eCommerce space and creating a new environment for the modern consumer to live in. Mobile-based payment app, an Internet Payment Gateway, support for remote payments with a link, and QR payment acceptance systems are increasing. Fraud prevention mechanisms have been built in throughout the development process and still continue to be enhanced in line with new tech improvements.

The growth of the tech industry directly translates into the digital transformation of other sectors. Also, as a nation, Sri Lanka should actively invest in developing the export potential of the technology industry.

As the Sri Lankan technology industry grows, the credit scoring framework by ICTA and PwC removes a key barrier for the continued growth of startups. The new credit scoring framework helps bridge the gap between Sri Lankan banks and startups. ICTA had developed it working with PwC alongside an industry-led steering committee. The framework evaluates startups based on four key factors. They are as follows:
The capability of the founders and management team
The market potential of the startup
The product/service itself
The financial health of the startup

By focusing on these four factors, it’s now possible for banks to analyses a startups’ intangible assets when assessing its creditworthiness. Currently, six banks have started looking at implementing the framework to give loans to startups.
The road ahead looks optimistic.



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ICTA and PwC frame credit scores to support IT sector financing | Daily FT Sri Lanka’s technology sector is set to receive a vital boost as several local banks come forward to offer debt facilities without the need for tangible collateral. ..

All branches of main private commercial banks will remain closed from next week due to current travel restrictions.

Special Notice from Private Banks : Branches to close next week

Central bank is offering some relief to borrowers who are having difficulties in making loan repayments due to a third coronavirus wave.

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Online banking and mobile banking allow banks to deploy new banking capabilities and upgrades cost-effectively, improving speed to market. Due to the travel restrictions imposed, every bank encourages customers to use digital platforms.

Stay safe, stay contactless & be digital!

Bank from home!