A sudden decision by Sri Lankan public and private sector banks in the north to stop issuing loans has left the Tamil business community in a precarious situation. The banks subsequently increased the rate of interest on existing loans by 4 percent, reported TamilNet.
As a result of being unable to repay the new interest on their existing loans, several Tamil traders have had to close their businesses.
The president of the Jaffna Chamber of Commerce, Mr.R Jayasekaram, stressed that the sudden termination of issuing loans to businesses was the starting point for an economic crisis for the entire business community in that area.
"These bank branches were established after the war under the theme to provide livelihood assistance to people. However, these bank branches have not provided any social welfare facilities or livelihood assistance to the affected, instead they were functioning with the sole purpose of earning profit,
“Many traders with the loans obtained from these bank branches have already launched their business activities. But, the bank branches phased down the amount of loans issued to traders six months ago.
"Majority of business people have mortgaged their properties to these banks to obtain loans. Now they are left in the lurch to find money and run their businesses,” he said.
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