Finance Minister proposes to appoint mediator for property auctions of banks

Prime Minister and Minister of Finance, Mahinda Rajapaksa emphasizes the need to appoint an authorized person to look into the process of property auctions carried out by the banks due to defaults. The Prime Minister pointed out that it is essential to look into the reason for the auction and the financial history of the borrower before the auction.

The premier has pointed out the need to amend the existing ordinances so that property cannot be auctioned without the approval of a relevant authority. The Prime Minister was addressing a meeting at the Ministry of Finance today (15) to discuss the problems faced by industrialists.

He emphasized that the method of auctioning property by banks should be revised and pointed out the need for a third party to mediate in such a situation instead of both the banks and the borrowers. He emphasized the need for an authorized ombudsman to intervene in such cases and instructed the authorities to prepare the necessary legal framework.

He also said that when issuing loans with a property as collateral, the borrower should look into whether the house where they live is being pledged. The Prime Minister said that if the house had to be auctioned off for any reason, the country would be left with another homeless family even if the bank concluded its transaction. The premier also advised looking into the possibility of a revision of the current methodology.

Meanwhile, the Banking Act is to be amended to strengthen the powers of the current financial ombudsman. 

Minister Wimal Weerawansa, State Ministers Ajith Nivard Cabraal, Shehan Semasinghe, Secretary to the Treasury R. Attygalle, and representatives of the Central Bank, People’s Bank, Bank of Ceylon, Regional Development Bank were present at the discusssion.