Credit Slip

Sri Lanka’s tsunami tragedy will affect an estimate Rs. 20 billion in loans given out by commercial banks to individuals and business in the ravaged coastal belt. Sri Lanka’s tsunami tragedy will affect an estimate Rs. 20 billion in loans given out by commercial banks to individuals and business in the ravaged coastal belt. A fraction of the estimated total will be written off as non-performing loans in the current year, on account of persons dead and damage to collateral.

Officials from some of the top Sri Lankan banks with exposure to the coastal belt however say it is still too early to asses the effect to their loan book.

The only thing for sure at the moment, an officials from one bank said is that the loans owned by survivors of the tsunami will be rescheduled, refinanced or restructured, carrying lower interest rates.

In the immediate aftermath of the disaster, the industry feared that some Rs. 44 billion in loans had been affected, but has been on the decline as the bank branches return to full service and customers come back.

Industry officials at a meeting with the Minister of National Enterprises Rohitha Bogollagama and the Chamber