The government grace period for non-payment of loans and interest installments on loans and leasing facilities obtained by travel service providers from banks and financial institutions will be extended up to December 2021, Tourism Minister Prasanna Ranathunga told Parliament yesterday (8).
Minister Ranatunga noted that the decision was made following a meeting held on June 29, 2021 with the Central Bank of Sri Lanka and tourism industry stakeholders.
Minister Ranatunga in reply to a question raised by the National People’s Power Leader Anura Kumara Dissanayake under the Standing Order 27 (2) observed, “Since March 2020, certain reliefs have been provided for those who are involved in tourism industry regarding loans and leasing facilities obtained from the banks. Due to the epidemic situation, and in view of the prevailing circumstances, action has been taken to provide the necessary facilities in consultation with the relevant parties as and when required. According to the agreements reached during the discussion held between the Central Bank of Sri Lanka and the relevant stakeholders on 29.06.2021, this relief has been granted till 31.12.2021 and considering the nature of the global epidemic, the relevant concessions will be reviewed with the Central Bank in a timely manner and further extensions will be considered.”
The government is already intervening to prevent the acquisition of vehicles, Minister Ranatunga observed. “We are currently working on this and we are working with the Central Bank of Sri Lanka on this matter as well. Accordingly, the Central Bank of Sri Lanka has issued several circulars from time to time. (Private leasing companies are regulated by the Central Bank of Sri Lanka) Also, the IGP has been informed not to allow such forcible acquisitions.”
Minister Ranatunge observed, “At present, the total loans given by the commercial banks to the tourism sector are over Rs. 300 billion. At the same time the interest rate has increased proportionately. Therefore, as a long term solution to this, a future plan for the repayment of this loan has been prepared by tourism experts in collaboration with the Central Bank of Sri Lanka and submitted to the Ministry of Finance. It is currently being studied by the External Resources Department and a concessional loan scheme by the World Bank or the Asian Development Bank will be used to repay the loan to the relevant banks and convert the loan to be repaid by the travel agency to the bank at a minimum interest rate commensurate with the current interest rate and is also considering providing an additional grace period to pay that amount.” Minister Ranatunga also said that steps have been taken to formulate a formal social security scheme to encourage travel providers. “A draft has been prepared and submitted by the Tourist Associations in this regard. In addition, the International Labor Organization (ILO) has come forward to study the issue as well.” Ranatunga added.