The gove ment has decided to extend the suspension of the Parate Law, which allows for the seizure and auction of properties for loan defaults, until March 31, 2025.

Cabinet Spokesperson, Minister of Health and Mass Media Dr. Nalinda Jayatissa, announced the decision at a media briefing today (10), noting that the suspension was initially set to end on December 15 this year.

The extension aims to support small and medium-sized enterprises (SMEs) severely affected by Sri Lanka’s ongoing economic crisis. Many SMEs have struggled to repay loans due to the financial challenges of the past four years.

Requests from the Small and Medium Enterprises Association prompted the gove ment to extend the suspension and explore alte ative solutions. The Cabinet has approved a proposal by the President, acting as Minister of Finance, to develop a comprehensive mechanism involving the Central Bank, public and private banks, and other institutions to address this issue and create a balanced resolution for all stakeholders.