The Hon. Wasantha Samarasinghe – Minister of Trade, Commerce, Food Security and Cooperative Development

¶ 01 Hon. Deputy Chairperson of Committees, I am pleased to speak at the conclusion of the debate on this very important Bill. Some Opposition Members said we brought this a little late. Let me note: our Government has been in office for about one and a half years, and in that time we have passed a significant number of laws.

¶ 02 Today we debate the Rescue, Rehabilitation and Insolvency (Corporate and Personal) Bill because this is a pressing problem. When businesses become bankrupt or weak due to various reasons—COVID, the global crisis, interest rates rising to 29–33 per cent—loans doubled or tripled in two or three years, making it impossible to carry on. Moratoria were granted, yet many could not recover and some businesses collapsed.

¶ 03 Previously, I highlighted that in Anuradhapura District alone there are around 800 hotels of different sizes linked to tourism; about 90 per cent had loans; over 75 per cent were seized by banks. Now there is no hotel or business—only buildings, with doors and windows removed, A/C units gone; and boards saying “Property of bank.” Ultimately, due to vandalism and theft, both the business and bank lose value. The National People’s Power Government identified this problem. Small and medium entrepreneurs lacked protection and facilities. Therefore, as a Government, we decided not only to provide credit concessions but also various relief packages to ensure that businesses established on this soil do not disappear. We looked at joint ventures or bringing in new partners to revive them. This Bill recognizes two sides—individuals and companies—and proposes the establishment of an Insolvency Regulatory Authority so that those becoming bankrupt can notify the Authority and seek an orderly pathway.

¶ 04 There are long-standing family businesses that became distressed due to the recent economic crisis; some even lost their homes to banks. With CRIB listings, they cannot even obtain a small loan or a lease for a bicycle. Understanding this, we brought this Bill to provide answers.

¶ 05 About 180 of 190 countries have robust insolvency regimes; Sri Lanka, too, has provisions in the Companies Act, No. 07 of 2007, but this Bill goes beyond those clauses. Especially, parate execution under our laws has stripped many assets from the national economy. This Bill reassesses such processes and creates opportunities for reactivation instead of destruction.

¶ 06 Under this Bill, we look at the extent of liabilities of the debtor—individual or company—and require full disclosure. If someone borrowed to build a hotel but gambled it away at casinos or bars, that must be known. If the business failed due to the economic crisis, all facts of borrowings and repayments must be disclosed; the Authority will then intervene to keep the business as a going concern where possible.

¶ 07 Some in the Opposition said issues with banks and suspicious transactions will erode investor confidence. No. We create confidence even before investors come by assuring that if their investment later faces distress, there is an Authority they can approach for a second chance within the law.

¶ 08 Our entrepreneurs typically get only one chance: they mortgage property, take the maximum loan; once seized, their chapter closes. This provides a second chance—report to the Authority, seek time, bring in a partner or form a joint venture, and, if you cannot continue, at least ensure an orderly transfer at minimum loss.

¶ 09 The Opposition fabricates lies as usual. Even now, they should at least understand our purpose: this is preparation. We build investor confidence that a second chance exists under this framework. Otherwise, under current law, all collateral is seized by banks and others, leaving people even without a home. We are establishing a law that builds trust among investors, businesspeople, and especially SMEs.

¶ 10 I also heard Hon. Rauff Hakeem claim the Government failed during “Ditwah.” He said only Rs. 500,000 was given. That is false. For houses completely destroyed by the cyclone, Rs. 5 million was provided; moreover, Hon. Anura Dissanayake, the President’s brother, laid the foundation stone and within three months and nine days built the first house where Sinhala-Hindu New Year customs were observed. We stated: for a fully destroyed house, Rs. 5 million; if no land, Rs. 5 million to buy land; for partial damage, up to Rs. 500,000 depending on extent. Before that, Rs. 50,000 was given to purchase essentials; Rs. 25,000 for cleaning; Rs. 25,000 for small vendors by the roadside who lost their carts; Rs. 200,000 for damaged business inventory; up to Rs. 1 million for livestock losses; compensation for fishermen’s boats; compensation for farmers’ crop damage. If Hon. Hakeem said only Rs. 500,000 was given, he should specify where; we would rectify it. As of now, more than 98 per cent of claimants have received all due assistance. In 2025 we disbursed Rs. 270 billion; for 2026 we have allocated Rs. 500 billion for roads, tanks, canals and compensation. We have supported all our people without ethnic, caste or religious discrimination.

¶ 11 Regarding facilities for business, we build confidence by ensuring a second chance. In 2026 alone, under various projects and concessional credit, we have programmes for SMEs to obtain loans up to Rs. 50 million, at interest rates of 4–7 per cent, amounting to about Rs. 97 billion through banks. Entrepreneurs can apply via Divisional Secretariats with their project details—whether new or an expansion.

¶ 12 On procedure and timelines: Hon. Ravi Karunanayake suggested two months is too short and proposed 180 days. If two months proves insufficient, we can review. For now, we have at least given two months and created the Authority. Matters reach the Authority after discussions; parties can say they have a partner and ask for two months to proceed, or propose a joint venture. If time is insufficient, we can amend later. Laws are not carved in stone; Parliament can amend as needed. For now, we bring what the country needs most.

¶ 13 This Bill gives hope to businesspeople and even farmers who faced loss of businesses or homes due to debt. It ensures both rescue and rehabilitation: not erasure, but recovery and re-establishment as going concerns.

¶ 14 We will continue to bring new and amending laws to ease people’s lives and build a prosperous country. Through such reforms, we overcome past weaknesses and create an environment where businesspeople and citizens can live with confidence.

¶ 15 Finally, we have also established mechanisms to curb large-scale online lending rackets. There are online mafias disbursing “instant loans” without collateral; some bank accounts receive hundreds of millions daily. The Financial Intelligence Unit and banks have responsibilities to monitor suspicious flows. We are setting up the necessary authority to check these activities, protect ordinary people who cannot access formal loans, and create a safer environment.

¶ 16 The Rescue, Rehabilitation and Insolvency (Corporate and Personal) Bill is being brought to strengthen investor confidence and establish an environment conducive to engagement in business and industry. I conclude with that assurance.

¶ 17 Thank you, Hon. Deputy Chairperson of Committees.