Bankruptcy Law Key to Saving Businesses and Jobs In Sri Lanka - Dr. Nandalal

COLOMBO (News 1st); Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka (CBSL), has called for the swift enactment of a long-discussed bankruptcy law, highlighting its potential to transform the country’s credit landscape and support economic resilience.

Speaking the launch of the National Credit Guarantee Institution Limited (NCGIL), Dr. Weerasinghe emphasized that a well-structured bankruptcy framework is essential for a healthy financial ecosystem. “We’ve been talking about the bankruptcy law for a long time. It’s time to move from discussion to implementation,” he said.

He explained that such a law would allow struggling entrepreneurs to exit failing ventures without collapsing the entire enterprise. “If an entrepreneur can no longer run a business, they should be able to transfer ownership to someone who can. This protects the enterprise, preserves jobs, and ensures business continuity,” he noted.

Dr. Weerasinghe added that this reform would not only safeguard economic activity but also encourage more inclusive financial services by reducing the perceived risk for lenders. “It’s a critical pillar in improving credit delivery and supporting entrepreneurship,” he said, acknowledging that the law is currently in draft form.

Sri Lanka launched the National Credit Guarantee Institution Limited (NCGIL) on Monday (2) in Colombo.

The initiative is aimed at enabling micro, small, and medium enterprises (MSMEs) to access finance without the need for collateral.

NCGIL was established through a Public-Private Partnership (PPP) between the Government of Sri Lanka and 13 stakeholder financial institutions, with the strategic and financial backing of the ADB, which provided an initial loan of USD 50 million to support its establishment.