In a recent session, the Committee on Public Finance (CoPF) granted approval for the amendment of the Recovery of Loans by Banks (Special Provisions) (Amendment) Bill. The amendment aims to introduce legal provisions for the suspension of the Parate Law until December 15, 2024, signaling a temporary reprieve for borrowers facing property acquisition by banks due to outstanding loans.

The approval, however, comes with stipulated conditions set forth by the CoPF. The suspension of the Parate Law, which enables banks to acquire properties from borrowers with unpaid loans, will remain in effect until the specified deadline. The amendment to the Recovery of Loans by Banks (Special Provisions) Act No. 4 of 1990 will facilitate the necessary legal framework to enforce this suspension, as confirmed by the CoPF.

Chaired by MP Dr. Harsha De Silva, the Committee on Public Finance convened in Parliament to deliberate on the matter. Officials representing the Ministry of Finance emphasized the intent to provide interim relief to creditors during the suspension period.

During the session, committee members raised concerns about the lack of clarity regarding post-December 15 actions. Despite inquiries from the committee, officials were unable to provide definitive answers regarding future measures. As a result, the committee recommended the development of a comprehensive roadmap outlining the course of action beyond the deadline, particularly for parties affected by the Parate Law.

Furthermore, the committee advocated for equitable treatment of all entities engaged in transactions with banks governed by the Parate Law. It stressed the importance of affording fair negotiation opportunities to such parties.