While revealing that the total value of non-performing loans of all 30 banks functioning in Sri Lanka currently is Rs 1.4 trillion, the State Minister of Finance Ranjith Siyambalapitiya today assured that steps would safeguard the economy.
“It is the banks that safeguard the country’s economy. More than 60 per cent of the total deposits in banks in Sri Lanka are less than Rs 5,000. Most of the deposits in banks are held by the poor people of the country. Therefore, the government will always safeguard them.” the State Minister told Parliament.
“Banks have recovered only a total of Rs 17 billion through Parate Execution during the past few years. Parate execution right is the rights given to banks to recover non-performing loans by auctioning assets which the borrowers had kept as collateral when obtaining loans. Banks have the legal rights to perform Parate execution to recover loans more than Rs 5 million,” the State Minister said.
“There are also particular procedures which the leasing companies should follow when seizing assets which are given on loans. They are legally bound to inform the OIC of the Police Stations in the areas where the person who had leased an asset resides. The lender has to accompany the police when he goes to recover the assets. Also, an asset could be seized only with the consent of the person who had obtained a lease. We will bring in amendments to leasing laws soon,” he added. (Yohan Perera and Ajith Siriwardana)