Banks affirm strong support for SMEs while reiterating the need to protect customer deposits

The Sri Lanka Banks’ Association (SLBA), representing all licenced commercial banks in the country, today issued a statement firmly rejecting attempts by a small group of borrowers to create alarm and confusion over the potential use of parate laws, and assuring the business community and the public that banks have no intention of launching widespread parate proceedings now that the grace period has ended.

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Following the suspension of parate laws by the Government up to 31st March 2025, the banking sector voluntarily extended the moratorium for a further three months, enabling borrowers in difficulty to engage with banks and restructure their loans. As a result, many borrowers obtained further relief on repayments, in some instances extending the grace period up to December 2025.

With this period now concluded, a handful of borrowers has resumed agitation, seeking to whip up panic about a purported imminent flood of parate actions and auctions of mortgaged assets. The SLBA categorically states that these claims are not only exaggerated but are dangerously counterproductive at a time when the majority of borrowers are working constructively with banks to revive their businesses.