CBSL to set up 50 billion rupee re-financing facility

The Central Bank has set up a 50 billion Rupee six-month re-financing facility to support the implementation of wide range of fiscal and financial concessions for COVID-19 hit business activities offered by the government. Among these concessions are debt moratorium for capital and interest and a working capital loan at the interest rate of 4% per annum for eligible customers. The licensed commercial banks, licensed specialized banks, licensed finance companies and specialized leasing companies will be eligible to participate in this re-financing facility to support COVID-19 hit businesses commencing 25th March 2020. The Government has asked banks to defer capital repayments on refinance loans granted to licensed banks falling due from 01.01.2020 until 31.12.2020. However, banks are required to seek extension if required and enter into supplementary agreements with the relevant Government agency in this regard. Concessions will be given to existing performing and non-performing loans as at 25.03.2020 As a part of this new program financial institutions may grant an additional loan or a new loan facility in Rupees for working capital or investment purposes subject to the following conditions, provided that the borrower submits a credible business plan Financial Institutions are expected to have a mechanism not to decline loan applications solely based on an adverse CRIB record.