Certain foreign owned banks are seen to be evading the recent Circular 5 (2020) stipulations of the Central Bank that are geared to offer relief for self-employed and others individuals that have been affected by the Covid-19 related lockdowns, and economic inactivity.
These banks are promising the customers who have applied for loan-repayment relief under terms of the Circular various relief packages, but do not bother to arrange and finalize any such facility within a reasonable time period. Instead they keep sending the regular account statements to the customers without any adjustments for the relief they promised.
When the customers complain that the pledged relief was not granted, they say that since there was a delay in offering the package that would have offered relief for six months under terms of the Central Bank (CBSL) circular, they can now only offer such a package for three months or some other such shortened time period.
Self employed persons such as Attorneys at Law are, in terms of the Circular, entitled to a six month moratorium on any debt instrument and this includes credit cards, term loans etc.
But foreign banks have adopted the ruse of not finalizing the new debt holiday for at least three months during which time they drag their feet, after which they tell the customer that three months have already lapsed and that they are now granting the relief for only three months that are left out of a six month period. Often, even the promised three months relief is not finalized.
The modus operandi seems to be to delay the finalization of the agreed payment holiday by saying the bank is ‘working on it’. However, while the bank ‘works on it’, regular loan payments or credit card payments are collected on the basis of regular statements, as if nothing has changed, and the question of debt relief never arose.
Customers reiterate that when complaints are made and it’s impossible for the banks to delay any longer, the banks say three months of the debt holiday have lapsed and that they are now only able to grant relief for only half of the period of the six month debt holiday. The fact that three months lapsed entirely due to the bank’s own fault because the bank never finalized the relief package for the customer, is conveniently left unsaid.
What’s quite offensive in this state of affairs is the fact that the banks make a big pretense of offering customers the relief packages. They don’t argue; they say the package will be made available.
But once that promise is given nothing materialises in writing, and while they delay any such relief package there are daily calls from the Recoveries Department of the bank, asking customers why they have not paid up their loans or credit card payments. Many individuals who have been affected say that this sort of conduct is highly irregular and totally unbecoming of banks that are supposed to be responsible financial institutions. The banks cannot act as if one of its departments do not know what the other department does.
Also, the banks keep going back on their word. Once they agree to a six month debt holiday, they renege on the deal halfway in other ways, and say for instance that they offer ‘personal banking customers’ a three month debt holiday, whereas the customer concerned has applied as per the Central Bank Circular 5 which entitles him to a six month repayment holiday as long as the application has been made within the deadline.
The three month personal customer relief is for a different category of bank client, but those self employed, such as Attorneys who have applied for relief under terms of the Circular, are also told that they will only be given three months relief as per the relief offered to ‘personal banking customers.’ This directly flies in the face of the Central Bank Circular.
Banks are obligated to offer relief under the ‘Rupees 50 billion, Six-Month Re-Financing Facility to Support COVID-19 hit businesses including self employment and individuals’, also known as Circular number 5 of the CBSL for 2020.
Attorneys and other affected individuals are contemplating relevant action against the banks concerned for shirking the obligation and responsibility to offer the relevant relief under terms of the CBSL Circular. The banking regulatory arm of the CBSL has meanwhile stated that the banks by and large are complying with their Circular, but unfortunately that does not seem to be the experience of most customers.
The CBSL Circular is accompanied by a relevant FAQ explainer which states that if the amounts have been recovered in the regular manner, the banks have to refund the amounts recovered for the six months repayment holiday granted to individuals who qualify for it. But the bank officials fudge this too, and claim that they cannot reverse any sums that have already been recovered
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