As its commitments to providing relief to businesses affected by the COVID-19 pandemic continue to grow exponentially, the Commercial Bank of Ceylon has announced the launch of ‘Arunella’ – a Financial Support Schemed that will bring together its multiple initiatives in this sphere, enabling sharper focus and better integration of schemes.
The Bank said the Arunella Financial Support Scheme would encompass 11 different programmes already implemented by the Bank for affected businesses and individuals as well as a 12th initiative just unveiled to provide relief beyond the expiry of current debt moratorium periods.
The latest relief programme consists of Special Payment Relief Schemes that will extend special concessions for several months beyond the existing debt moratoria to help customers that continue to be affected by the economic fallout of the COVID-19 pandemic.
These concessions include flexible payment options, up to 20% rebates on accrued interest during the moratorium periods, extension of moratorium periods for up to another six months, further reductions on Credit Card repayments and applicable interest rates, and Debt Consolidation Plans.
Home Loan and Personal Loan customers, Leasing customers, Credit Card customers, and SME borrowers of the Bank will be eligible for these concessions, in addition to the relief the Bank has already provided through special loan schemes and cuts in lending rates across all categories of loans, the Bank said. It said this scheme has been planned after analysing and discussing the problems faced by customers, with the intention of offering them payment options that address their varied needs.
“We are very conscious of the fact that a large number of borrowers are going to need support longer than originally envisaged when the Central Bank announced the moratorium periods for different categories of borrowers,” Commercial Bank Managing Director Mr S. Renganathan said. “Our relationships with our customers are for the long term, and must carry them through good times and bad. This is the thought behind the formulation of this latest Payment Relief Scheme as well as the launch of Arunella.”
The new Payment Relief Scheme offers eligible customers flexible payment options to settle their debts. These include options to make one-time payments of the accrued interest, extension of loan repayment periods, interest rebates of up to 20% and options to pay the value of interest accrued while continuing to pay existing monthly installments.
The Bank has also designed several options for Equated Monthly Installment (EMI) loans for borrowers eligible for concessions under criteria announced by the Central Bank of Sri Lanka (CBSL) as well for those who do not fall within CBSL eligibility criteria.
These schemes offer interest-free loans of up to 90% of the value of accrued interest, for up to 24 months or the balance tenor of the original loan. An option to pay the accrued interest at the end of the extended tenor of the loan is also available, the Bank said.
For borrowers that do not meet CBSL eligibility criteria, Commercial Bank will offer interest-free loans for accrued interest for a maximum period of six months.
Further, the capital moratorium will be extended up to a maximum of another six months, commencing from the expiry of the present moratorium period, the Bank disclosed. This benefit will also be offered to those who have suffered loss of employment or loss of total income. This is to ensure these customers avoid late payment of interest that could lead to permanent black marks on their CRIB records.
Special concessions to Credit Card holders include a reduction in the monthly minimum amounts payable for Credit Card outstanding bills, from the current 2.5% to 1% for the first six months and up to 2% for the next six months.
Additionally, the Bank has also introduced a Special Card Repayment Plan with reduced interest rates to lessen the burden of payment on customers already in the non-performing category and customers whose future income is affected by COVID-19. These customers can apply for the Special Interest Rate facility to settle their current Credit Card outstanding bill in full within a period of three to 24 months.
Special interest rates applicable to those who apply are 2% for full settlement within three and six months, 6% for settlement within 12 months, 9% for within 18 months, and 12% for within 24 months.
The Bank has also launched Debt Consolidation Plans as part of the new Payment Relief Scheme. Under this option customers can convert all existing loans, irrespective of whether they are short term or long term, into one Term Loan and arrange to have an equated or reducing balance monthly installment, depending on their new business income. They could also choose to combine the interest accrued with the outstanding loan amount or arrange for a separate repayment. This scheme allows them to consolidate all facilities and pay over a period of five years.
Furthermore, if the loan capital is proposed to be settled from cash flow expected from the disposal of any asset owned by the borrower, this debt amount can be converted to a separate loan and be repaid from the sale of said asset within the period of a year. Interest on this facility should be paid if sufficient cash flows are expected. If not, loan capital together with interest accrued can to be settled from sale proceeds within one year, the Bank said.
Under the working capital loan scheme launched by CBSL, Commercial Bank submitted 4021 applications with a total value of Rs 19.6 billion. Approval was granted for 734 applications with a value of Rs 2.8 billion. The Bank has already granted 665 loans at a value of Rs 2.6 billion and has also received requests for refinance valued at approximately Rs 1 billion. The funds are being disbursed to customers once the applications are registered at CBSL and approval is granted, before refinancing is received, the Bank said. The Bank is in the process of applying for the second tranche of this scheme and has already submitted applications of approximately 3,200 borrowers valued at Rs 15.5 billion to the Central Bank.
The Commercial Bank of Ceylon has also launched two separate bank-funded support loan schemes since May 2020 to support COVID-19 affected SMEs and micro enterprises. These loans were provided to those who missed out on the benefits of the CBSL supported relief schemes.
Additionally, Commercial Bank has taken action to reduce advances rates by up to 4% in some categories within the year.
Among other concessions, the Bank also provided a Special Card Repayment Plan for its Credit Card holders charging a maximum interest rate of 15% on local Credit Card transactions up to Rs 50,000, reducing the minimum monthly payment by 50%, and extending the repayment of Credit Card balances of up to Rs 50,000, until end of April 2020. Customer on-boarding fees for digital services have also been waived off by the Bank.
Following the CBSL’s COVID-19 Relief Scheme Circular in April, Commercial Bank announced a series of concessions for borrowers whose loans had already been classified as non-performing. This included a six month moratorium on the lease rentals of three-wheelers, school vans, lorries, small-goods transport vehicles, and buses operated by the self employed; a moratorium until 30th May on personal loans granted to private sector non-executive employees; a three-month moratorium for all personal loans and leasing rentals less than Rs 1 million, and a six-month debt moratorium for affected businesses in tourism, apparel, plantations, IT, and logistics services.
The first Sri Lankan Bank to be listed among the Top 1000 Banks of the World and the only Sri Lankan bank to be so listed for 10 years consecutively, Commercial Bank is celebrating its 100th anniversary this year. The Bank, which won more than 50 international and local awards in 2019, operates a network of 268 branches and 865 ATMs in Sri Lanka.
Commercial Bank’s overseas operations encompass Bangladesh, where the Bank operates 19 outlets; Myanmar, where it has a Representative Office in Yangon and a Microfinance company in Nay Pyi Taw; and the Maldives, where the Bank has a fully-fledged Tier I Bank with a majority stake.