The Hon. Ravi Karunanayake

¶ 01 Mr. Speaker, under Standing Order 27(2), I rise to draw the attention of this august House to the urgent need for reform in the leasing industry, which has become highly protected and lopsided, with minimal accountability and favoritism towards institutions over citizens.

¶ 02 Leasing companies, particularly Central Bank-licensed finance companies, resort to forceful recovery of leased assets, even where 60–70% of dues have been paid, often without transparency or fairness. Current regulations permit seizure after 90–150 days of delay without considering whether default is willful or due to hardship such as job loss, illness or macroeconomic shocks. When the country went bankrupt and interest rose from about 10% to 30%, this also worsened matters.

¶ 03 This erodes trust, increases poverty and undermines the Central Bank’s role. We need a humane, tiered framework distinguishing bad-faith defaulters from those in genuine difficulty.

¶ 04 Sometimes vehicles are seized on the road or people are thrown out of their homes. I raise this on humanitarian grounds.

¶ 05 Accordingly, I seek urgent responses and policy clarity on: 1. What protections exist under Central Bank directions for borrowers in involuntary default? 2. Data on annual repossessions, and how many involve hardship rather than willful non-payment? 3. Why is seizure permitted after 90–120 days without assessing hardship, intent or willingness to negotiate? 4. Will guidelines be introduced to differentiate willful defaulters and mandate restructuring/settlement efforts before seizure? 5. Has a mandatory grace-period mechanism or mediation been considered prior to seizure, especially for MSMEs? 6. What legal remedies exist for unfair repossessions? Has the Central Bank intervened where institutions acted with undue haste or without restructuring options? 7. Market breakdown of leasing contracts by institution; do large finance companies dominate due to regulatory asymmetry or monopolistic practices? If so, what steps will ensure a level playing field for consumers?

¶ 06 Thank you.