CBSL directs banks on debt relief for disaster-hit borrowers

THE Central Bank of Sri Lanka (CBSL) as the regulator has directed all licenced banks to implement a series of relief measures for individuals and businesses whose income or operations were directly affected by the recent cyclonic-related natural disasters.

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The directive, issued through Circular No. 04 of 2025 on 5 December, follows proposals submitted by the Sri Lanka Banks’ Association and aims to support borrowers without undermining financial system stability.

In the first nine months of this year, credit to private sector expanded by Rs. 1.36 trillion as per the CBSL data, reflecting a growth of 22.1%. In the past four months, from June to September, private sector borrowing averaged over Rs. 200 billion.

The circular instructs banks to provide the specified relief measures upon receiving written or electronic requests from affected borrowers by 15 January 2026.

According to the directive, banks are required to offer temporary debt relief by suspending repayments of capital and interest on existing credit facilities for a period of three to six months on a case-by-case basis.