The Bank Supervision Department of the Central Bank of Sri Lanka (CBSL) amending the Frequently Asked Questions (FAQs) No. 2 of 2020 on 19th June 2020, provided further clarifications on Circular Nos. 4, 5 and 6 issued to Licensed Commercial Banks, Licensed Specialized Banks (LSBs), Licensed Finance Companies and Specialized Leasing Companies (Financial institutions) on concessions offered to businesses and individuals affected by Covid -19.

In terms of the amendments, a borrower eligible for concessions under the mentioned circulars, is exempt from both Capital and Interest repayment of the loan during the concession/ moratorium period (Concession Period) with the agreed terms of payment of loan kicking in thereafter.

Subject to condition explained below CBSL has permitted an additional interest of 7% on Equated Monthly Installments (EMI) to be charged by Licensed Banks on deferred Term Loans. The claim for interest, may however be invoked only at the end of the extended remaining tenure of the loan and not immediately upon the end of the Concession/ moratorium Period. The concessionary interest rates for differed installments in respect of other types of facilities (Non- EMI Loans) either in rupee or foreign currency would be as agreed between the bank and the borrower.

Permanent overdraft facilities (PODs) falling due for settlement or maturing up to 30th November 2020 may be settled by the end of the applicable Concession Period. The expiry periods for Temporary overdraft facilities (TODs) as at 25th March 2020 have been extended by two months for eligible borrowers with the interest rates for TODs during such extended period capped at 13% per annum. Overdraft facility holders will not be required to service the interest during the Concession Period but may opt to do so at their discretion.