CoPF Grants Conditional Approval to Suspend Parate Law Until December 15


The Committee on Public Finance (CoPF) has granted conditional approval to suspend Sri Lanka's parate execution law until December 15, 2024. The approval comes with conditions attached to the Recovery of Loans by Banks (Special Provisions) (Amendment) Bill, which was amended to facilitate legal provisions for the suspension of the parate law. This decision effectively halts banks' practice of acquiring properties of loan defaulters until December 15, pending the necessary legal amendments.

The approval was given during a recent meeting of the Committee on Public Finance in Parliament chaired by Member of Parliament Harsha De Silva. While the Ministry of Finance expressed hopes of providing temporary relief to creditors, questions regarding post-December 15 actions remained unanswered. The committee emphasized the need for fair negotiations between creditors and banks, especially for parties affected by the parate law.

Officials were also questioned about the distribution of loans under the parate law, particularly to micro, small, and medium-scale enterprises, but lacked sufficient data for a comprehensive response. The committee requested further information on the impact of the parate law during economic recessions, particularly amid the COVID-19 pandemic.

Additionally, the committee approved orders under the Foreign Exchange Act No. 12 of 2017 and regulations under the Sri Lanka Securities and Exchange Commission Act No. 19 of 2021, along with regulations under the Import and Export (Control) Act No. 1 of 1969. State Minister Suren Raghavan and MPs Premnath C. Dolawatta and Madhura Withanage were among the attendees, along with officials from various government institutions such as the Ministry of Finance, the Central Bank of Sri Lanka, and Sri Lanka Customs.