### 📉 MSMEs Call for Relief Amid Record Bank Profits & Tax Gains

The Ceylon Federation of MSMEs highlights a stark disparity where the banking sector and the Treasury thrived while small businesses collapsed due to high interest rates. • The Interest Shock: In April 2022, policy rates surged by 100%, pushing the Average Weighted Prime Lending Rate (AWPLR) from ~10% to nearly 30% by December 2022. This tripling of costs led to widespread defaults. • Windfall Gains (2023/2024): • Banking Sector Profit Before Tax (PBT): Rs. 762 Billion. • Government Tax Revenue from Banks: Rs. 295 Billion. • The Federation argues these gains were effectively "transferred" from struggling entrepreneurs. • The 'Moratorium Trap': Lack of clear CBSL guidelines on interest capitalization allowed banks to reschedule loans to their advantage, often compounding interest opaquely while using Parate Execution threats. • Proposed Relief Roadmap: • Refund excess interest collected (May 2022 – Nov 2024) for older loans. • Use the Rs. 295 Billion in tax revenue to provide tax credits to banks for these refunds. • Immediate suspension of CRIB and NPL listings for post-Easter attack victims. • Enact binding legislation to ensure mandatory borrower protection. The Federation maintains that the liquidity to save the MSME sector exists within these record-breaking figures.