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

¶ 01 Mr. Deputy Speaker, the answers are as follows.

¶ 02 1. The suspension of parate powers will not be further extended.

¶ 03 2. The Central Bank has not prepared a roadmap on the mechanism and objectives of parate execution. Parate, suspended up to 31.03.2025, is now in force again.

¶ 04 3. From 01.01.2019 to 31.12.2023, licensed banks used parate on 2,263 occasions to recover Rs. 113.7 billion. As at 31.12.2024, total Stage 3 (default) loans in the banking sector were Rs. 1,380 billion. For supervisory purposes, the Central Bank aggregates data; it does not collect customer-level personal data.

¶ 05 4. Two concessional working capital schemes have been launched for MSME revival: i. With ADB support, an MSME loan scheme for fixed/working capital up to Rs. 10 million at a maximum 8% interest with a six-month grace period and up to three years repayment. ii. From the Sri Lanka Consolidated Fund, an MSME revival facility with two components: - Component 1: Investment loans for ongoing/new MSMEs up to Rs. 15 million at max 7% interest, 12-month grace, up to 10 years. - Component 2: Working capital loans for MSMEs under the NPL (Stage 3) category up to Rs. 5 million at max 8% interest, six-month grace, up to five years.

¶ 06 iii. Since 2019, the Central Bank has issued 16 circulars granting relief to MSMEs affected by Easter attacks, COVID-19 and recent macroeconomic challenges. iv. On 28.03.2024, the Central Bank issued a circular directing licensed banks to establish Business Revival Units to assist viable businesses with working capital and revival measures. (Annex 1 tabled.) v. Circulars of 19.12.2024 and addendum of 01.01.2025 instructed licensed banks to suitably provide working capital to affected MSMEs. I table those instructions. vi. Additionally, press releases dated 20.12.2024 and 26.03.2025 from the Bank Supervision Department highlight key features of the 19.12.2024 circular; I table them.

¶ 07 Under the special relief package introduced to support MSMEs affected by recent setbacks: i. Amendment to Act No. 4 of 1990 extended the parate suspension to 31.03.2025 to allow MSMEs to enter restructuring plans. ii. For borrowers with principal due below Rs. 25 million who approached banks for restructuring before 31.03.2025: a grace window up to 31.12.2025; for Rs. 25–50 million: to 30.09.2025; and for above Rs. 500 million: to 30.06.2025. iii. For MSMEs with principal due below Rs. 25 million, repayment plans within 6, 12 or 60 months (five years) include mechanisms to write off unpaid interest as per plan. iv. Repayment periods may be extended up to 10 years based on borrower assessment. v. A formal grievance mechanism will be established to resolve disputes over valuation at auction and to maximize realized value for borrowers if foreclosure is unavoidable. vi. An Advisory Committee on MSMEs is being established under the Ministry of Industries to guide long-term policy coherence and coordinate stakeholders. vii. With CA Sri Lanka and other professional bodies, a scorecard-based capacity grading mechanism is being introduced to improve MSME financial access.

¶ 08 This framework was developed with the Central Bank, the Ministry of Industries, the Banks’ Association, private finance companies and MSME representatives. Monthly reviews since December with stakeholders have monitored effectiveness and driven outreach; the Banks’ Association also ran a trilingual media campaign to encourage MSMEs to approach banks by the 31 March deadline. Many have already obtained relief. Regarding the separate Question on reciprocal tariffs under Standing Order 27(2), fuller details will be provided there.