End of Parate Relief for Large SME Borrowers

COLOMBO (News 1st); The grace period granted to small and medium-sized enterprises (SMEs) under Sri Lanka’s Parate Execution Law officially ends today for businesses with loans exceeding Rs. 50 million.

This relief measure, introduced earlier this year, was designed to provide temporary protection to SMEs facing financial hardship, allowing them time to negotiate with banks and avoid immediate asset seizure under the Parate Law. 

According to the Central Bank of Sri Lanka, the grace period applied only to businesses that had initiated discussions with banks before March 31, 2025.

Meanwhile, SMEs with loans ranging between Rs. 25 million and Rs. 50 million will continue to benefit from the grace period until September 30, 2025.

The Parate Law, which allows banks to seize assets of defaulting borrowers without court proceedings, was temporarily suspended by the government until March 31, 2025, to support economic recovery efforts.