Tourism debt moratorium lapses with industry asked to talk with banks 

Tourism Minister Harin Fernando

The debt moratorium extended to the triple-hit tourism industry ended yesterday, with the Tourism Minister Harin Fernando and Sri Lanka Tourism Development Authority (SLTDA) assuring to present matters to the Cabinet seeking further extension. 

SLTDA said that it and the Tourism Ministry will endeavour to continuously lobby in the interest of the industry. 

However the SLTDA has requested the industry to initiate one-to-one discussions with the financial institutions over their debt. 

“SL TDA will be writing to the respective banks on behalf of those who had sought intervention as a follow-up measure. The Tourism Ministry, through the Minister of Tourism and Lands, will present matters to the cabinet seeking further intrusion,” said a communiqué by SLTDA Chairman Priantha Fernando.

Earlier this week, leading industry associations urged for the extension of the Rs. 500 billion debt moratorium by additional six months till December, noting it was critical for the 3 million-dependent industry and to tap prospects for more forex-boosting visitors in the upcoming winter season.

Subsequent to the Easter Sunday terror attacks in April 2019, initially a moratorium servicing of borrowed capital and related financial cost was arranged for six months from July to December 2019. Thereafter, due to global COVID pandemic the financial moratorium was extended on three occasions till 30 June 2022.

The SLTDA, Tourism Ministry, together with the industry associations held a series of meetings with authorities to consider extending further six months given the ongoing economic crisis.

The Tourism Ministry also submitted several Cabinet papers recommending the extension of the moratorium till 31 December 2022, explaining the current status of the industry and the inability of the majority of stakeholders to recommence servicing of borrowings and accumulated interest.  

During the last meeting held with Central Bank Governor and officials, they were of the opinion that it is a matter to be decided by the respective financial institutions. The Tourism Ministry and SLTDA was requested to discuss the matter directly with the banks and finance companies.

The general consensus was that the banks and finance companies were prepared to discuss each case on an individual basis and assist with tailor-made packages or solutions, but the banks and financial companies cannot extend a blanket solution. 

All financial institutions were of the firm view that they could not agree to an extension of the moratorium as requested. They explained at length of the adverse impact of further extension would have on the entire banking system, as well as on the economy. However, all banking and finance companies assured to speak to individuals or companies and assist in whatever way possible.

In this context, SLTDA called on registered membership to initiate one-to-one discussions with the financial institutions, whilst assuring that it will continue to write to the respective banks and financial institutions on behalf of those who had sought intervention as a follow-up measure.