The Central Bank (CB) instructed licensed commercial banks and licensed specialized banks to grant a concession for lease facilities obtained by COVID-19 affected businesses and individuals in passenger transportation services for a six-month period starting from the 1st of April.
The moratorium extended on all COVID-19 affected individuals and businesses is set to expire in April this year.
Accordingly, the CB on Wednesday requested Banks to defer the lease installments for a period up to six months commencing from 1 April 2021, after considering the industry pleas.
“The lease installment (both capital and interest) shall be deferred on the request made by affected borrowers,” the CB stated.
The eligible borrowers have been instructed to submit their requests on or before 19 April 2021, for deferring the lease installments in writing or through electronic means.
However, the Banks are also advised to accept any request submitted after 19 April 2021, if the reasons for the delay in making such request is acceptable.
The eligible borrowers are Businesses and individuals engaged in providing public passenger transportation, private passenger transportation such as school transport service, office transport service, taxis including three-wheelers, etc., and providing passenger transportation services to the tourism sector.
The Banks are also urged to extend the existing tenure of lease facilities eligible for deferment by the respective period of deferment.
“Licensed banks may charge an interest rate for the deferred period only on the lease installments falling due during the deferred period, not exceeding the latest auction rate for 364-day Treasury Bills, available as at 01 April 2021, plus 1 per cent per annum,” the CB instructed.
The CB also ordered banks to report the details of deferment of lease installments availed by their borrowers to the Bank Supervision Department as of the 30th of each month, within 15 working days, commencing 01 May 2021.