The Central Bank of Sri Lanka has issued Circular No. 01 of 2026 requesting Finance Companies to provide temporary debt relief, fee waivers and access to new concessional credit for individuals and businesses whose income or operations were directly affected by recent cyclonic and flood disasters. The measures apply where affected borrowers submit a written or electronic request by 15 February 2026. Under the framework, Finance Companies may suspend repayment of capital and/or interest on existing facilities for 3 to 6 months on a case-by-case basis, while keeping interest during the suspension at no more than the contract rate and charging no interest on deferred interest. Late payment fees, credit restructuring or modification fees and penal interest must be suspended on all affected borrowers’ credit facilities up to 28 February 2026, with system-generated charges to be refunded within three business days. New loans may be granted subject to minimum grace periods and pricing conditions, including that repayment starts only after a minimum three-month grace period beyond the end of any suspension period and that interest rates for the first two years are at least 3% per annum below the rate offered to the borrower for a similar facility as at the date of the circular; specific classification expectations are set for new credit to Stage 3 borrowers under SLFRS 9. Finance Companies must also disclose restructuring terms and charge breakdowns before approval and obtain borrower consent, and provide written reasons for any rejection while noting the right to appeal to CBSL’s Financial Consumer Relations Department. Finance Companies are instructed not to decline new loan applications solely due to adverse Credit Information Bureau records and to develop a reporting modality with the Credit Information Bureau so concessions do not adversely affect borrowers’ credit scoring or rating. Monthly reporting to CBSL on reliefs granted and rejections is required within 15 calendar days of each month-end starting 28 February 2026, with the reporting format to be issued later; branches must be notified within three days and internal guidelines issued within seven days.
Central Bank of Sri Lanka 2026-01-09
Central Bank of Sri Lanka sets disaster relief expectations for finance companies including 3 to 6 month repayment suspensions and concessional new lending
The Central Bank of Sri Lanka issued Circular No. 01 of 2026, mandating Finance Companies to offer temporary debt relief, fee waivers, and concessional credit to those affected by recent cyclonic and flood disasters. Measures include suspending repayment of capital and/or interest for 3 to 6 months, with interest capped at the contract rate and no interest on deferred interest. Finance Companies must report monthly to the Central Bank on reliefs granted and ensure concessions do not impact borrowers' credit scores.