Loan repayment relief extended as banks move swiftly to support cyclone-hit businesses

Saturday, 20 December 2025 00:32 - - {{hitsCtrl.values.hits}}

Banks agree to grant distressed businesses extension of between 3-6 months on existing loan repayment schedules, without any additional interest or fees
Agrees on common mechanism to resolve borrower difficulties more systematically, including provision of low-interest concessional loans recommended by CBSL

Entrepreneurship Development Minister

Sunil Handunneththi

Urgent financial relief measures were set in motion this week as Sri Lanka’s banking sector agreed to extend loan repayment periods for businesses affected by Cyclone Ditwah, offering much-needed breathing space to enterprises struggling to recover from the disaster.

The decisions were reached at a special meeting convened by the Industry and Entrepreneurship Development Ministry, held under the patronage of Industry and Entrepreneurship Development Minister Sunil Handunneththi and Deputy Minister Chathuranga Abeysinghe. The discussions brought together senior officials from commercial and State banks, credit department heads, representatives of the Central Bank of Sri Lanka (CBSL), and officials from the Development Division of the Finance Ministry, reflecting a coordinated response to the economic fallout of the cyclone.

In line with a CBSL circular, all banks agreed to grant distressed businesses an extension of between three and six months on existing loan repayment schedules, without imposing any additional interest or fees.

The relief is intended to provide immediate cash flow support to enterprises whose operations were disrupted by flooding and infrastructure damage. The decision has already been communicated to bank branches countrywide and affected businesses have been advised to formally request the concession from their respective banks.

Beyond temporary repayment relief, banks also agreed on a common mechanism to resolve borrower difficulties more systematically, including the provision of low-interest concessional loans recommended by the CBSL. Guidelines for these facilities have been issued, aiming to ensure uniform implementation across the banking system and to prevent delays in assistance reaching those in need.

To improve coordination and transparency, the Industries Ministry and the banking sector has agreed to establish a shared database to exchange verified information on distressed businesses. This mechanism is expected to streamline decision-making, avoid duplication, and ensure that support is targeted to genuinely affected enterprises. The process will be reviewed on a weekly basis to assess progress and make adjustments where necessary.

While Minister Handunneththi joined the meeting virtually, Industry and Entrepreneurship Development Ministry Secretary Thilaka Jayasundara participated in person, along with representatives from major banks including Bank of Ceylon, People’s Bank, Regional Development Bank, Hatton National Bank, Seylan Bank, Sampath Bank, DFCC Bank, Nations Trust Bank, Sanasa Development Bank, Union Bank, Pan Asia Bank, and Cargills Bank.

Officials stressed that the speed of implementation would be critical to preventing temporary disruptions from turning into permanent closures, particularly among small and medium-scale enterprises.