Sri Lanka Tourism and Ministry officials came down hard on banks, financial institutions for being slow in complying and carrying out directives of the government to provide relief to companies affected by the Easter Sunday attacks.
The Central Bank, the regulator of banks, came under criticism for not expediting the release of reports on the relief program. The regulator was urged to provide information in this regard on a weekly basis.
Officials of establishments, both large and small, attending a media briefing on the progress of the moratorium offered to tourism related institutions last week, said that small and medium scale companies have been neglected giving preference to large scale institutions in offering relief packages.
“It has been almost two months since the terrorist attacks but so far we have not received any relief from the government which is looking after the interest of only big companies affected by the attacks. Our appeals have gone unheeded and today we are here to make a strong appeal that the tourism industry cannot raise its head without supporting all affected parties equally,” tour guides said.
Tour guides said they have to now pay interest over interest besides the capital for the loans and leasing facilities they had obtained to build houses and purchase vehicles.
“There are a large number of guides who have been in the industry for a long period and this is how they are being treated. We accuse the Central Bank for not being active and pushing the banks and financial institutions to comply with the directives of the government to provide relief to affected institutions,” tour guides said.
Non Cabinet Minister for Economic Reforms and Public Distribution, Dr. Harsha de Silva said the problem of not getting the data about banks and financial institutions complying and not complying with the directives and the number of institutions that they have accommodated so far for the moratorium is the hurdle to go ahead with the relief package.
“We have given clear instructions on issuing circulars to the Central Bank and the Treasury regarding the moratorium for affected institutions. It is the national responsibility for banks and financial institutions to comply with the directives to offer relief to affected parties at a time of crisis. They cannot do what they want when there is a major national issue and when the government has come forward to assist the victims of the attacks,” Minister de Silva said adding that the Central Bank must provide a report on a weekly basis.
The issue mainly according to Tourism Development Minister John Amaratunga is from leasing companies hesitant to offer the relief to the affected clients.
Representatives of Abans Finance PLC said the company looks in to requests as and when they come in.
“We have accommodated some requests and have complied with the Central Banks request,” he said.
The Bank of Ceylon has received about 1,100 applications and have accommodated moratorium for about Rs. 8 billion.
The People’s Bank has received about 1,000 applications and it is in the process of evaluating them.
The total exposure of about 1,055 applications received by banks as of May 31 is about Rs 220 billion of which tourism exposure is about Rs. 62 billion. So far the amount evaluated for tourism moratoriums is Rs. 26 billion.
“This may not be the actual number which could be much higher. We would know the real number in a months time when we get the data,” Minister De Silva said.
Company representatives said that they are not getting the benefits of the Sancharaka Poddan relief scheme under the Enterprise Sri Lanka loan scheme launched by the Finance Ministry.
“This scheme is supposed to relieve the the small scale businesses but it has not provided us relief so far. Two months have already passed and the question is when will we get the relief for our woes? We request the Finance Ministry to expedite the issuance of relief and take action on those who delay in granting the relief,” a company representative said.
Responding to the accusations, a Treasury official said that the government has to bear 75 percent of the interest of the moratoriums. Therefore, the process needs time.
According to a Central Bank official only four out of 19 banks have signed the MoU for the Enterprise Sri Lanka ‘Sancharaka Poddan’ program.
Sancharaka Poddan, the small timers of the tourism could avail themselves up to Rs. 500,000 interest free loans under the ‘Enterprise Sri Lanka’ Loan scheme from June 10 from the Regional Development Bank with a 12 months grace period until the industry bounces back.
Loans up to Rs. 10 million at a 3.46 percent interest to purchase luxury buses for tourism where the government will bear 75 percent of the loan concession and working capital for musicians who were affected by the attacks with a two- year grace period from June 10 are some of the relief measures announced by the ministry m to revive the tourism industry. Relief for those who lost income from the cancellation of Vesak celebrations including pandal makers and other decoration manufactures has also been discussed and measures will be proposed soon according to the Finance Ministry.
It has been estimated that the loss to the tourism industry following the Easter attacks is around US$ 1.5 billion with a 30 percent drop in arrivals anticipated this year. Sri Lanka Tourism estimated the number of arrivals had dropped by around 70 percent in May.
“These four to five banks that have singed-up control 60- 65 percent of the market,” Minister de Silva said.
However, the small and medium sector companies affected by the Easter carnage said various sunshine stories are being told about tourism that number of arrivals are growing, Sri Lanka is no more under terrorist threats and relief has been granted to all affected sectors.
“We are ready to take anyone to the airport to show the real number of travellers that visit the country a day. The Ministry of Tourism says from this month onwards about 2,000 visitors have been coming to Sri Lanka a day. This is a fabrication. The actual number of visitors is much less than these figures,” tour guides said.
“We will not sideline any one. All sectors irrespective of the size will be provided relief,” Minister Amaratunga said.
