Mar 16, 2009 (LBO) – Defaulters in Sri Lanka whose leased assets have been seized by financial institutions will be given a one month window to pay a quarter of their outstanding debt and get back assets without penalties, officials said. When the Central Bank presented to the cabinet of ministers a bailout package to stabilize finance companies and protect depositors whose own savings were tied in finance and leasing firms, politicians wanted to score with defaulters as well.
The cabinet of minister instructed officials to find way to help defaulters.
Deputy central bank governor Ranee Jayamaha said under the scheme, defaulters will get a one month window to talk to leasing and finance companies and get back seized assets without paying seizing charges or penal interest.
But 25 percent of the outstanding balance as well as the arrears will have to be paid upfront.
“For many borrowers who had paid up a large part of their capital, only a small part remains to be paid,” Central Bank Governor Nivard Cabraal said.
“This is a fair scheme to get the assets back to work in the economy.”
Sri Lanka’s lending rates which were around 10 to 14 percent in 2003 rose to above 20 percent after 2004 when fiscal policy reve