The Committee on Public Finance (CoPF) has conditionally approved to suspend Sri Lanka’s parate execution law until December 15, 2024.
Accordingly, the CoPF approved subject to conditions, the Recovery of Loans by Banks (Special Provisions) (Amendment) Bill which was amended to facilitate legal provisions for the suspension of parate law until December 15 2024.
With the approval, the banks’ practice of acquiring properties of whose loans are yet to be paid off will be suspended until 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 approval was granted when the Committee on Public Finance met in Parliament recently (April 30) under the chairmanship of Member of Parliament Harsha De Silva.
While officials representing the Ministry of Finance said that they hope to provide temporary relief to the creditors, they failed to answer the committee’s questions on actions to be taken after December 15.
The committee recommended that all the parties who have done business with the banks subject to parate law should 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. When 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 said that they did not have the correct data to answer the question.
The committee also inquired into the percentage of the sectors that were most affected. Furthermore, the committee asked the officials to provide data on the implementation of the Parate Law in other periods compared to the specific period in which there was an economic recession due to the impact of the coronavirus in 2020, 2021 and 2022. The officials present mentioned that the data on this matter will be presented to the committee in the future.
Meanwhile, the committee has also given its approval for the orders under the Foreign Exchange Act No. 12 of 2017 and the regulations under the Sri Lanka Securities and Exchange Commission Act No. 19 of 2021. Also, the committee approved the regulations under the Import and Export (Control) Act No. 1 of 1969.
State Minister Suren Raghavan, MPs Premnath C. Dolawatta and Madhura Withanage participated in this meeting.
Officials representing several government institutions including the Ministry of Finance, Economic Stabilization and National Policy, the Auditor General’s Department, the Central Bank of Sri Lanka, and Sri Lanka Customs were also present in the meeting. (Newswire)
