Sajith charges banks disregarding Govt.’s parate suspension move

• Claims commercial banks continue auctions despite suspension of parate law till 15 December 
• Urges Central Bank to issue circular to enforce suspension, prevent property auctions
• Opines failure to implement law undermines Govt.’s authority and credibility
• Reveals economic crisis and pandemic led to temporary closure of 59,100 businesses, permanent closure of 204,100 enterprises
• Medium-scale businesses hit hardest with 48.3% closures since 2018, resulting in loss of livelihoods
• Raises concerns over impact on women entrepreneurs, with thousands of closures reported
• Total of 245,400 jobs lost in MSMEs from 2018 to 2022
• Highlights need for comprehensive study to understand consequences of closures and job losses
• Insists on managing trained workers to avoid labour shortages in restarting businesses

Opposition leader Sajith Premadasa

Opposition leader Sajith Premadasa yesterday renewed his call for the Government to direct the Central Bank to issue a circular to enforce the suspension of the parate law and prevent property auction. Speaking in Parliament he claimed that despite the Government’s decision to abolish the parate law, the banking system seems reluctant to comply with directives, leaving micro, small and medium-scale enterprises (MSMEs) in dire straits amidst the ongoing economic crisis.

“Despite the Cabinet decision to suspend the parate law till 15 December, commercial banks continue to conduct auctions, making it difficult for enterprises to obtain further financing,” he claimed. 

Earlier this week also he highlighted the Government’s failure to initiate a benign economic program for the businesses affected by the crisis, despite repeated requests.

The Opposition leader urged the Central Bank to raise awareness and issue a circular promptly to halt auctions conducted in violation of the suspended parate law. 

“Failure to implement the law would undermine the Government’s authority and credibility,” Premadasa added.

In response, the leader of the House and Minister Susil Premajayantha said that the Central Bank has a separate Bank Supervision Department and they are bound to monitor the implementation of the Government decisions. 

Premajayantha assures that the matter will be convened effectively to the Finance Minister and the officials for immediate action.

Citing a survey conducted by the Department of Population and Statistics, he said the economic crisis and the COVID-19 pandemic have led to the temporary closure of 59,100 businesses and the permanent closure of another 204,100 enterprises. Particularly concerning is the impact on women entrepreneurs, with 10,700 temporary closures and 27,600 permanent closures reported among businesses owned by women.

Premadasa stressed that 48.3% of medium-scale businesses have closed down since 2018, resulting in a loss of livelihoods for numerous employees. He underscored the urgent need for a comprehensive study to understand and address the consequences of these closures.

He also said that the survey revealed a staggering decrease of 245,400 jobs in MSMEs from 2018 to 2022. 

Premadasa emphasised the importance of creating opportunities for those who have lost their jobs, as well as ensuring proper management of trained workers to avoid labour shortages in restarting businesses.