Banks, tourism industries reach consensus

The tourism and banking industries yesterday reached consensus over the much-needed relief package at a meeting chaired by the Finance Ministry. 

The banks agreed that they will do away with “case by case” basis approach in deciding the one-year moratorium on capital and interest repayment on all performing facilities, but opt for “eligible” and “approved/registered” travel and tourism businesses. Those with trade licences can avail of the offer via a provisional registration with the Sri Lanka Tourism Development Authority, as well as those who supply products and services to registered companies.

The authorities are scheduled to release the list of eligible and approved sectors that can avail themselves of the relief package as a means to survive, following the setback caused by the Easter Sunday terror attacks on three churches and an equal number of five star hotels, which killed nearly 260 people including 45 tourists and injured over 500.  

The decision at yesterday’s meeting is a big breakthrough for the travel and tourism industry, who protested against an earlier Central Bank directive to banks, which gave discretion to financial institutions to consider relief on a “case by case” basis, whereas the industry wanted across the board blanket support. 

Another breakthrough was extending the support via finance companies with whom hotel and travel firms have existing leasing commitments as well. 

It was also agreed that banks will extend the moratorium to loans of travel and tourism industry employees. 

The Central Bank will issue a fresh directive to banks, either tomorrow or by Tuesday next week, to operationalise the relief. 

The banking sector to travel and tourism is estimated to be nearly Rs. 300 billion.  Since the Easter Sunday attacks, tourist arrivals have declined by nearly 70%, with hotel occupancy plunging to 10% from 75% previously. 

Banks will also offer two year concessionary (interest rate of 3.4%) working capital to all eligible companies.  

Ministers Eran Wickramaratne and Dr. Harsha de Silva, Central Bank Governor Dr. Indrajit Coomaraswamy and his officials, industry leaders Sanath Ukwatte, Sanjiv Gardiner, Ashok Pathirage, and M. Shanthikumar, and Tourism Task Force member Dinesh Weerakkody, were among those who were present at the meeting.