ComBank denies violating CBSL directives


Commercial Bank of Ceylon PLC (ComBank) vehemently denied allegations that it disregarded the Central Bank of Sri Lanka’s (CBSL’s) directives on repossessing assets.

Speaking to us, an official of ComBank said that the bank had not violated any of the regulations of the CBSL.


Responding to a set of questions put forward by The Sunday Morning Business, the CBSL did not confirm whether they had received a complaint regarding said bank, or whether the bank violated any directives of the CBSL.

The allegations, according to All-Island Vehicle Leasing and Loan Installment Payers Association Convener Sanjaya Mahawatta, were that ComBank had advertised an auction of repossessed assets on 29 October, at a time when the CBSL had suspended parate execution, through which banks could sell mortgaged properties without going through legal and formal court proceedings.

Mahawatta alleged that the bank had disregarded the directives of the CBSL Governor by advertising the auction of repossessed assets in a national newspaper.

“We have written to the Central Bank including all these details. The Central Bank should take responsibility for this and provide us an answer,” he said.

He said their association would not stop until the CBSL gave them an answer on the matter.

Speaking about a death by suicide of one a businessman whose asset was mentioned in said advertisement, Mahawatta opined that action should be taken against the bank in that regard.

According to him, the businessman from Mathugama, who owned a supermarket-style shop at the centre of the Mathugama town, had died by suicide after one of his assets were reposssed by the bank upon failure to repay his debt.

“The bank did not respond to our queries either, but by their silence, it feels like they are showing that they made a mistake,” he claimed. Attempts to contact the family of the victim were futile.

Sources from the bank did not want to comment on the matter.

Considering the difficulties faced by borrowers due to the Covid-19 outbreak, from time to time since April 2020, the CBSL issued circulars requesting licensed banks to suspend recovery actions against Covid-19-affected individuals and businesses.

Licensed banks were required to defer recovery actions, including parate execution and auctioning of foreclosed properties until 31 December 2021 for Covid-19-affected borrowers, and 30 June 2022 for Covid-19-affected borrowers in the tourism sector.

Furthermore, as per the CBSL’s recently announced six-month roadmap, licensed banks and non-bank financial institutions are directed to suspend parate execution and forced repossession of leased assets up to 31 March 2022 for pandemic-affected borrowers.

The CBSL said if a customer believed that a licensed bank treated them in contravention to its circulars, such customers could direct their complaints to the CBSL Financial Consumer Relations Department Director using the online complaint submission form.

“Furthermore, it is also important to note that borrowers of financial institutions should discuss and agree on repayment plans so that financial institutions are also in a position to recover their loans without causing financial distress to their customers at times of hardships,” the CBSL said.

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