Central Bank Extends Loan Holiday To June 2022 
Posted 22,September

By Chaveendra Dunuwille

In Local News

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In an attempt to relieve some pressure from the battered tourism sector, the Central Bank of Sri Lanka extended the loan repayment holiday last week. 

In a circular released, the CBSL extended the loan repayment holiday for the tourism sector from October 1st, 2021 to June 30th, 2022. The extra nine months make this the most prolonged relief period since April 2019 after the Easter Sunday attacks. The circular also called for all licensed banks to extend their current moratorium on capital and interest loans. The CBSL offered a similar relief for all other sectors by raising the loan holiday from August 31st, 2021, to December 2021. 

Furthermore, the CBSL is to suspend all recovery attempts against non performing loans until June 30th, 2022. 

The global pandemic directly affected Sri Lanka’s lucrative tourism industry resulting in nearly $9 billion worth of foreign earnings lost in the last two years. This loss also affected the income of over 3 million direct and indirect dependents. The loss of tourism resulted in one of the worst foreign exchange liquidity crises Sri Lanka has ever faced.