The Hon. (Dr.) Harshana Suriyapperuma - Deputy Minister of Finance and Planning

¶ 01 Hon. Speaker, on behalf of the Minister:

¶ 02 (a) (i) SANASA Development Bank (SDB) is a licensed specialized bank subject to regulation by the Central Bank of Sri Lanka. (ii) SDB introduced a loan scheme titled “Uththamachara” for military officers who have suffered disabilities. (iii) Total number of recipients: 6,368; total amount disbursed: Rs. 41.1 billion. (Scheme commenced in 2014.) (iv) From 2020 to 2024: number of recipients 5,303; total amount Rs. 28.2 billion. (v) The scheme is for disabled military personnel based on salary; it is not granted to retirees. Therefore, pension percentage is not applicable. (vi) Minimum repayment period is 1 year; maximum 10 years. For a short period, loans were granted up to 12 years. Repayment tenors may vary during restructurings.

¶ 03 (b) (i) The total interest paid over a loan depends on principal, interest rate and repayment period. Under variable interest rates with equated monthly instalments (EMI), when rates change per the offer letter, if the instalment amount is kept unchanged, the repayment period is adjusted. In limited cases where repayment periods become significantly extended, interest paid can exceed principal. (ii) As per offer letters under variable-rate EMI loans, when rates vary, the tenor is adjusted while keeping the instalment constant. Borrowers who wish to shorten tenor may request an increased instalment. Such restructurings were effected without additional charges. (iii) Interest for the scheme has been reduced retrospectively to 13%. Further, interest is not charged on unpaid interest (no interest-on-interest). (iv) Restructurings are done based on mutually agreed terms and conditions between the bank and the customer. If a borrower remains aggrieved, he or she may engage the bank further, and if unresolved, may complain to the Central Bank’s Financial Consumer Relations Department.

¶ 04 (c) Does not arise.