Central Bank of Sri Lanka drives business revival efforts: Reports

This is as per reports, which added senior deputy governor Yvette Fernando disclosed that the governing board of the CBSL has greenlit a new framework for commercial banks concerning business revival units, with directives forthcoming for the financial services industry.

This initiative arises from feedback indicating that the post-COVID business revival units did not yield desired outcomes.

The new framework reportedly mandates a board-level policy for banks to effectively contribute to reviving viable businesses or customers even as criteria for classifying customers eligible for support via Revival Units must be outlined in this policy, with units headed by a deputy general manager possessing distinct staff and essential skills.

Additionally, guidelines will be established to aid customers with exposure to multiple lending institutions while collaboration with the World Bank is underway to devise new initiatives.

She also noted forthcoming benefits for SMEs, including the Secured Transactions Act and the proposed National Credit Guarantee Institution Ltd. (NCGI), funded by the Asian Development Bank (ADB).

NCGI will facilitate SMEs through underwriting guarantees, risk management, and incorporating green finance elements.

Furthermore, the central bank reduced policy rates by 50 basis points recently to stimulate the full pass-through of monetary easing measures to market interest rates. This is crucial for normalising interest rates and encouraging credit expansion in the private sector.

The monetary board reportedly anticipates further easing of monetary policy to facilitate a reduction in lending rates and support economic activity.

Fibre2Fashion News Desk (DR)