Business
SLBA calls for government engagement to facilitate debt recovery process
The Sri Lanka Banks Association (SLBA) has urged policymakers to engage with commercial banks via the Central Bank of Sri Lanka (CBSL) to ensure a comprehensive and well-coordinated approach to alleviating the stress felt by the industrialists in loan default, following the COVID-19 pandemic and the economic crisis.
The Association, which represents all Licensed Banks in Sri Lanka, said in a statement that the unusually high number of debt recovery (parate execution) actions within the first four months of 2023 is due to an accumulation of legal actions that were suspended as per the general moratorium granted by CBSL since COVID in 1Q 2020 (3 years) and to the tourism industry since the April 2019 attacks, where banks had to desist from debt recovery action/‘parate execution.’
In this context, the SLBA said a worthy initiative for parliamentary attention would be to improve management of troubled debt / borrowers (SMEs in particular) to develop an effective insolvency regime, to save distressed firms, when possible, through robust restructuring frameworks or alternatively, to facilitate the exit of non-viable firms as efficiently as possible in order to reallocate productive assets.
“Of approximately Rs 10.8 trillion in gross loans extended by the banking sector as at March 31, 2023, relief by way of moratoriums, restructurings and other forms of payment relief offered over the last three years amounts to well over Rs 2 trillion,” the Association noted. “As per estimates, this has benefitted well over one million customers across both the retail and corporate segments in one form or another. This also includes approximately Rs 1.3 trillion in facilities with deemed elevated levels of risk, and we have not hit the bottom yet.”
“SLBA’s main aim is to help develop and maintain stability of the banking system within the Central Bank (CBSL) regulatory framework. Protecting the safety of customer deposits and investor/shareholder capital, is crucial to achieving this goal,” the statement said.
“Certain businesses and individuals who have borrowed from banks are unable to repay their debts. Debt repayment default has many origins, including disruption of the economy due to internal and external causes such as the global COVId-19 pandemic.”
“A segment of the borrowers in default have engaged lobbyists in the hope of initiating legislative intervention on a preferential basis without evaluation of the macro-economic impacts on the nation,” the SLBA noted, cautioning that “preserving the status quo of the failed borrowers at the expense of depositors who lent them the money is not sustainable. This approach threatens the stability of the banking sector and the entire economy that banks support.”
“It is therefore hoped that the lobbyists who appear to have been engaged by the troubled borrowers / businessmen will encourage a Central Bank led engagement with the commercial banks to ensure that the decision-making process is comprehensive and well-coordinated in alleviating the stress felt by the industrialists in default,” the Association statement said.
The SLBA noted that to ease the impacts of the April 2019 terror attacks, March 2020 Covid-19 pandemic, and the 2021 economic crisis that continues to stress the people who live in Sri Lanka, several debt repayment moratoriums (postponements) have been granted and renewed by banks and funded (mainly) from their own resources. “This has raised the level of non-performing debts and has subdued capital formation and ability to provide credit to the economy. Complacency that capital and liquidity measures currently exceed regulatory minimum criteria is a false comfort,” the statement cautioned.
“When credit quality continues to deteriorate year on year and deposits continue to provide the main source of funding, the banking sector has no space to manage a suspension or delay of debt recovery.”
The SLBA pointed out that “Parate execution has been available to the state banks under their respective instruments of incorporation. This option to mitigate loan default losses by facilitating efficient debt recovery and reducing cost of financial intermediation was thereafter extended to all of the Licensed Commercial Banks by the ‘Recovery of Loans by Banks (Special Provisions) Act No 04 of 1990.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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