Sri Lanka’s two main state banks, the Bank of Ceylon (BoC) and the Peoples Bank (PB) are to proceed with tough measures to recover thousands of loans taken by businessmen, companies and persons with high political connections since 2011 in which the debtors have not made scheduled payments (for at least 90 days) and was either in default or close to default, official sources disclosed.
Any property mortgaged to the banks as security for any loan in respect of which default has been made will be sold by public auction in order to recover the whole of the unpaid portion of such loan, together with the money and costs recoverable.
Some 33,720 persons comprising both political and non-political loans) have defaulted the BoC in a sum of Rs. 396.78 billion with most not paying a single installment since 2011, a senior official said adding that this was also highlighted in the COPE report released recently.
Four companies and two Non-Governmental Organisations had to re-pay Rs.950 million to the BoC in loans taken this year, he added.
The PB has non-performing loans, with interest, amounting to Rs. 25.865 billion, due from 52 debtors defaulting on their loans, he disclosed. Legal action has been taken against 25 of the defaulters and the others were given an opportunity to pay back the loan under a loan restructuring scheme. They would also be given a grace period to repay the loans, he added. The two state banks will have to write off some these loans if there was no way to recover it from debtors, he said adding that some of these debtors are no more (dead) and several others were absconding.
A senior official of the Central Bank said that because of the non-performing loans ratio going up as a result of default of gold-backed loans and higher interest rates, loan expansion had been affected.
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Any property mortgaged to the banks as security for any loan in respect of which default has been made will be sold by public auction in order to recover the whole of the unpaid portion of such loan, together with the money and costs recoverable.
Some 33,720 persons comprising both political and non-political loans) have defaulted the BoC in a sum of Rs. 396.78 billion with most not paying a single installment since 2011, a senior official said adding that this was also highlighted in the COPE report released recently.
Four companies and two Non-Governmental Organisations had to re-pay Rs.950 million to the BoC in loans taken this year, he added.
The PB has non-performing loans, with interest, amounting to Rs. 25.865 billion, due from 52 debtors defaulting on their loans, he disclosed. Legal action has been taken against 25 of the defaulters and the others were given an opportunity to pay back the loan under a loan restructuring scheme. They would also be given a grace period to repay the loans, he added. The two state banks will have to write off some these loans if there was no way to recover it from debtors, he said adding that some of these debtors are no more (dead) and several others were absconding.
A senior official of the Central Bank said that because of the non-performing loans ratio going up as a result of default of gold-backed loans and higher interest rates, loan expansion had been affected.
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