Recovery of Loans by Banks (Special Provisions) (Amendment) Act 2011

This Act may be cited as the Recovery of Loans by

Banks (Special Provisions) (Amendment) Act, No. 1 of 2011.

The following new section is hereby inserted immediately after section 5 of the Recovery of Loans by

Banks (Special Provisions) Act, No. 4 of 1990 (hereinafter referred to as the “principal enactment”) and shall have effect as section 5A of that enactment :—

5A. (1) No action shall be initiated in terms of section 3 of the principal enactment for the recovery of any loan in respect of which default is made, nor shall any steps be taken in terms of section 4 or section 5 of the aforesaid Act, where the amount of such loan is less than rupees five million :

Provided however, at the time of default when calculating the amount due and owing to the Bank on the loan granted to such defaulter, the interest accrued on such loan and any penalty imposed thereon, shall not be taken into consideration.

The provisions of section 5A of this Act, shall also apply in relation to any bank established by an Incorporation Order made under the provisions of any written law for the time being in force, notwithstanding any provisions relating to the recovery of loans by any such bank.”.

Section 22 of the principal enactment is hereby repealed and the following section substituted therefor :—

22 “bank” means a licensed commercial bank or a licensed specialised bank within the meaning of the Banking Act, No. 30 of 1988

which is empowered to take possession of movable or immovable property which has been mortgaged to the bank as security for any loan, overdraft, advance or other accomodation and in respect of which default has been made.”.

In the event of any inconsistency between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevail.

“Interpretation.