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Suspension of Parate Law Raises Concerns and Hopes, says SLNCC President

March 09, Colombo (LNW): Duminda Hulangamuwa, the President of the Sri Lanka National Chamber of Commerce (SLNCC), expressed his views on the recent decision to suspend the implementation of the Parate Law. He believes that this decision will bring much-needed relief to small and medium-scale industrialists and businessmen grappling with the challenges of loan repayments and interest payments.

In response to a query from the Daily News regarding SLNCC’s stance on the decision, Hulangamuwa highlighted the potential relief for those genuinely struggling to meet their financial obligations. However, he also pointed out that some individuals intentionally default on loan payments, taking advantage of the situation. The temporary suspension of the Parate Law may inadvertently provide relief even to those engaging in fraudulent practices.

Hulangamuwa cautioned that such concessions might not fully align with the intended objectives. He emphasized the symbiotic relationship between commercial banks, financial institutions, and their customers, stating that credit facilities are extended from customer deposits. When loans are not repaid, financial institutions face challenges in returning customers’ deposits upon request.

The SLNCC President acknowledged the empowerment that banks derive from the Parate Law, enabling them to recover loans efficiently. He warned that if loan recovery becomes challenging, financial institutions may be reluctant to offer loans at low interest rates, potentially impacting small and medium enterprises’ access to credit.

In conclusion, Hulangamuwa urged a comprehensive examination of the decision’s broader consequences. While acknowledging the need to uplift businesses struggling for several years, he stressed the importance of providing encouragement and support to businessmen to achieve meaningful and sustainable economic recovery.

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