Strict laws to recover Rs.25 b unpaid loans

Ranil Wijayapala

COLOMBO: President Mahinda Rajapaksa yesterday declared that new laws would be passed to recover more than Rs.25 billion due from large-scale loan defaulters to State banks.

Such monies will be channelled to the coffers for the country's development, President Rajapaksa said.

Speaking at a gathering at Temple Trees, the President also announced a series of measures for the benefit of small and medium scale entrepreneurs who have failed to repay loans less than Rs.5 million. He said the Government aims to uplift the country's economy by extending a hand to such emerging entrepreneurs facing stumbling blocks.

"It is not the view of this Government to discourage entrepreneurs by denying them further bank loans but to encourage them to rise from their current positions by extending a hand after clearing the barriers for them to obtain loans," the President remarked.

He said bankers were somewhat reluctant to support those who failed to repay their small loans. The Government aims to encourage the banks to issue loans for them despite their failure after bringing new laws before Parliament.

"Repayment is very high among those who had obtained loans less than Rs.5 million. Only 28 per cent defaulters can be found among them against the 78 per cent defaulters among those who have obtained large scale loans," the President pointed out.

President Rajapaksa said he as the Finance Minister had taken steps to bring a number of Financial Bills before Parliament today for the benefit of those who failed to repay small loans less than Rs.5 million.

The Parliament is due to debate six vital bills relating to the finance and insurance sector today in Parliament.

The Recovery of Loans by Banks (Special Provisions) (Amendment) Bill, Banking (Amendment) Bill, Non-performing Assets (Recovery) Bill and the Payment Devices Frauds Bill will be among the Bills that are to be debated today in Parliament.

In addition, the National Insurance Trust Funds Bill and Gaming (Special Provisions) Bill will also be debated in Parliament today.

President Rajapaksa handed over cheques for 10 industrialists who consented to start factories outside the Western province under 'Gamata Karmantha' programme under the 'Gamata Naya' programme initiated by the Bank of Ceylon only for this purpose.

Adding to the points made by the President, Deputy Finance Minister Ranjith Siyamabalapitiya also said a new Bill to re-establish the now defunct Pramuka Bank under Sri Lanka Savings Bank will also be brought before Parliament this week for the benefit of 16,000 account holders.

"We are re-launching the Pramuka Bank under a new name to protect more than 16,000 account holders and to recapture the eroding public confidence in the banking system," the Deputy Minister said.