December 11, Colombo (LNW): The Sri Lankan Government has announced an extension of the suspension of the Parate Execution Law, which prevents banks from auctioning collateral for defaulted loans, until March 31, 2025.
The law, which was initially suspended by the previous administration, was due to expire on December 15, 2024.
However, in response to appeals from small and medium-sized enterprises (SMEs), the Government has decided to extend this relief.
Dr. Nalinda Jayatissa, Cabinet Spokesman, confirmed that the Cabinet of Ministers had approved the extension, following a proposal put forward by President Anura Kumara Dissanayake, who also serves as the Finance Minister.
The decision is part of ongoing efforts to support businesses affected by the challenging economic environment, particularly those in the SME sector.
Minister Jayatissa highlighted that the Government recognises the vital role that SMEs play in the national economy and is committed to finding sustainable solutions to help these entrepreneurs meet their financial obligations.
The Cabinet’s approval also includes the establishment of a mechanism aimed at facilitating dialogue with all relevant stakeholders, to ensure that a fair and viable approach is adopted.
The Government is exploring the development of an action plan that will enable SME entrepreneurs to repay their loans without the fear of having their assets seized.
This plan is intended to provide a more progressive and mutually beneficial solution, allowing businesses to recover and continue contributing to the economy, while also ensuring that financial institutions are able to recoup their dues.
