Loan Relief

Aug 30, 2012 (LBO) – Several banks in Sri Lanka will suspend recovering farmer loans in drought stricken areas on an order made by President Mahinda Rajapaksa, information minister Keheliya Rambukwella said. The moratorium came after representations made by farmers when President Rajapaksa visited drought stricken areas recently, minister Rambukwelle said.

The debt moratorium applies to cultivation loans and money borrowed through pawning (loans taken against gold and other items as security), he said.

The finance ministry has instructed state-run Bank of Ceylon, National Savings Bank, Regional Development Bank and Rural Co-operative Development Bank to stop recoveries, he said.

Farmers in Sri Lanka’s north central area in particular had been hit by drought.