SOS Save Our SMEs

— SAVE OUR SMEs
Institutional Rebellion Against Sovereign State Policy— And the Path to Revival...

Banker’s Heartmust belong toS R I L A N K A

In 2019, the Government of Sri Lanka made a solemn promise to 400,000 Sri Lankans in Tourism

It was mandatory CBSL Circulars — with the word SHALL— a legal obligation without exception.

Today — 80% of those who operate enterprises have not received that relief.

Not because they did not qualify. Not because they did not ask.

Because the Banking System — aided by regulatory silence — chose not to apply the law that

Parliament mandated.

The consequence: wrong CRIB classifications, blocked State Bank Capital, Going Concern Audit qualifications,
Parate execution threats — against businesses that survived four national crises — facing artificial liquidation.

This is not a commercial “Borrower” default.

This is documented Institutional Rebellion against Sovereign State Policy.

A Case Study - The Ground Situation -The Factual Details & Evidence

NDB (Loan Rs.175M approx.)

Applied the Circulars correctly
Same borrower. Same period. Same law.
Balance today: Below Rs. 30 million
Repayments-Rs.144M

HNB(Loan Rs182M approx.)

Did not apply — admitted in writing
Same borrower. Same period. Same law.
Balance claimed: Rs. 247 million
Repayments Rs.134M

One bank carried the Baton

One bank used it as a Weapon.

The solution is not complicated. NDB showed what Good Banking Practice looks like.

Parliament's role is to make that standard mandatory for every licensed bank
and to ensure that no enterprise is executed through Parate proceedings before
the correct balance is independently ascertained.

THE TORCH BEARER AT THE CENTRE OF THIS CASE STUDY

Stone-N-String / Mohksha Research Limited — A 40-Year National Enterprise

* Presidential Export Award Winner • 5S Award • Lifetime Industry Award

* Duty-Free Best Seller on Emirates • Products on 7 International Airlines

* Partner — IIFA Luxury Gifts (Bollywood Oscars) • Bocuse d'Or (Culinary Olympics)

* Products in the Vatican & Colombo Museum • South Asian Games • Epic Film Sri Siddartha

* A Window to the World.. Talent Pool & Micro Export Visibility through Self Employment

* Pioneering Ceylon Cinnamon — Secret Candy for Delightful Habits — Branding it Globally

“At the Pinnacle of Good Living-A Delightful & Healthy Lifestyle- A RED CARPET CATWALK

— SAVE OUR SMEs

Banker’s Heart must belong to S R I L A N K A

THE FACTS — RETOLD WITH EVIDENCE

1. THE NDB BLUEPRINT vs. THE HNB PREDATION — PROOF OF MALAFIDES (Annex. 6, 4, A)

NDB — what correct compliance looks like:

Applied all mandatory moratorium interest waivers completely and without reservation
Reclassified facility correctly to MGCP/RESCH — Moratorium Granted & Correctly Rescheduled
Offered from the 10-year repayment at concessionary rate plan — consistent with Circular 01/2025
Recognised ongoing strain from HNB's conduct — reduced monthly repayment to help the enterprise survive
Certified balance today: below Rs. 30 million — the correct result of applying the law

HNB — the documented path of non-compliance:

HNB's own Letter of Offer for the Rs. 150 million facility explicitly contained the moratorium relief clause as a contractual term — which HNB subsequently failed to honour
'One-Line Accounting' — bank statements showing only 'Loan Instalment' with no capital, interest or penalty breakdown — making reconciliation impossible
Capitalised compound interest and charged unauthorised penal charges during protected crisis periods — artificially inflating a legitimate debt to Rs. 233–247 million
HNB's own letter of 6th April 2026, paragraph (f): mandatory interest waivers were NOT granted during the moratorium period — the bank documented its own non-compliance
HNB simultaneously claims it did not apply the Moratorium — AND insists on payment per Moratorium Rules — a direct contradiction that misrepresents facts to regulators (Annex. 5, 7–10, 2, A)

2. THE STATE BANK BETRAYAL — BOC'S 11-MONTH STRANGULATION (Annex. 3, 12)

At our request BOC approved a Rs. 40 million emergency survival facility — against billion-rupee collateral —with the Prime mortgage with HNB for a similar Loan , the collateral covered more than 3 times the Loans
Over 100 documented calls to BOC officials. The 9th May letter remains silent on the request for increase in secondary mortgage ecurity - thus blocking a Working Capital release.In total, almost 18 months elapsed for a formal reply.
BOC denied the committed facility - citing HNB's incorrect CRIB classification and co-banker concerns created entirely by HNB's own regulatory non-compliance - without mentioning HNB's silence on the critical request for enhancement of collateral security
People’s Bank Int. Women’s Day Order A Rs. 5 million advance — needed to complete the order — was simultaneously blocked. Salvaged only by emergency funds from overseas. The Company had been a successful supplier for four consecutive years, always exceeding customer expectations — but HNB's CRIB classification stopped future orders entirely.
A subsequent Rs. 60 million working capital request against billion-rupee collateral was also denied — same manufactured reason
Both Treasury and Presidential Secretariat intervened formally.
It is difficult to understand why both parties were not asked to meet with regulators to find a solution - (however the norm appears to be that the regulator accepts the accused party's statements even when certified proof is presented by the other side. Here too, the Presidential Secretariat and Treasury, while expressing dismay, have been reluctant to act in a manner that would create a sustainable solution.(Annex. B)

3. THE AUTOMATED CRIB TRAP — THE 'E3' CATASTROPHE (Annex. 6, 2)

CRIB Score 250 / Grade E3 — the lowest credit classification — financial distress and imminent Parate execution
This classification was manufactured by HNB's non-compliance — not by genuine financial failure
NDB's correct classification for the same borrower: MGCP/RESCH - the contrast is recorded in the CRIB system
16th October 2025: while the Auditor General held certified proof of HNB's incorrect classifications,HNB unilaterally cleared the CRIB dispute flag
Two Government Ministries wrote formally to CRIB contesting HNB's actions. Ignored completely. CRIB acted instantly on HNB's informal communication alone
Certified cash crunch -Rs. 896 million over eight seasons — Auditor General and the IMF in Washington-informed

4. ABDICATION OF DUTY- THE CENTRAL BANK’S SILENCE

Bank Supervision was handed irrefutable certified mathematical proof and CRIB documentation proving HNB's violations - and failed to conduct a single independent audit, despite all tracking data residing within their own systems
CBSL accepted HNB's unverified counter-claims and informed the Company: 'the file is closed' — giving HNB a green light to execute Parate
The Financial Ombudsman's recommendation of 3rd March 2026 must be understood precisely: the so-called '71% interest waiver' was not applied across all facilities - it was calculated on terms proposed by HNB itself. Accepting it would have legitimised HNB's inflated balance as the correct starting point and permanently closed all regulatory avenues. The Company declined .The fundamental question arises: can Commercial Relief ever match Moratorium Relief?

5. FALSIFICATION OF CRIB — THE DISPUTE FLAG REMOVED (Annex. 2, D)

Despite certified proof and Ministerial intervention, the CRIB office accepted HNB's written assurance - removing the flagged dispute and placing the Company under wrong classification without any independent review
The automated grading algorithm executed a commercial death sentence — ignoring sovereign moratorium protections and freezing a state-protected, crisis-struck exporter out of the entire banking system
HNB forced monthly payments of Rs. 3.3 million as a condition for CRIB upgrade to normalcy — so that the Distress Flag could be removed. The Ministry of Tourism's Moratorium entitlement letter (Certificate No. 2) clearly demonstrates the Company's proactiveness in seeking relief and moving to active operation at the earliest opportunity
2019 transactions confirm the Company was unable to sustain even a Rs. 2 million monthly loan repayment to HNB at that time. HNB's three restructuring initiatives — without first granting the mandatory Moratorium Relief — were a commercial exercise designed to make a viable enterprise cease operations. Their subsequent monthly repayment requirements of Rs. 2.5 million made Parate Execution a foreseeable and manufactured outcome
MGCP status was never in HNB's mind -as mandated by CBSL Circular 10/2021.The pattern was deliberate.
CBSL Circular 10/2021 required: licensed banks in consultation with CRIB, shall develop an appropriate reporting modality for restructured credit facilities — HNB did nothing

6. MISLEADING REGULATORS — COMMERCIAL vs. MORATORIUM RELIEF

HNB convinced Bank Supervision and the Financial Ombudsman that their Commercial Relief was equivalent to - or better than - the mandatory Government Moratorium Relief directed by CBSL Circulars. These are fundamentally different instruments.
HNB misled Bank Supervision to close files — stating the Company's submissions were 'generally inaccurate' — clearing the path to Parate execution on a balance never independently verified
HNB offers relief on adhoc loans but not on the main loan — while simultaneously invoking Moratorium Rules for payment — a direct misrepresentation of the interest dues position
HNB presented to the Financial Ombudsman a selective partial calculation - covering only a fraction of the facilities - as though it represented full relief. The '71% waiver' figure sounds generous. Applied to a manufactured inflated balance, on cherry-picked facilities, it amounts to a fraction of what the CBSL Circulars actually mandate. The Company's refusal to accept this was not obstruction - it was the correct exercise of the right to a lawful and independently verified calculation. (Annex. 1, 2, 5, 6, 7, 10, 11, 12)

7. THE BANKING LEGAL SYSTEM — WHY PARATE MUST WAIT (Annex. 5, 7–11)

Courts will not grant a stay order unless the distressed enterprise deposits a substantial sum — which a Going Concern enterprise in artificial distress cannot provide
the core issue is identical: the amount due was not correctly ascertained because the Moratorium was not applied
HNB's own Letter of Offer accepts the Moratorium framework - yet HNB says it did not follow it - and insists on payment per Commercial Rules - while offering relief only on adhoc loans. This internal contradiction cannot support a liquidated Parate claim.
Correct calculations must precede any Parate execution. The law requires it. The Letter of Offer requires it. Common justice requires it.

8. NAC BANK..THE BANK THAT NEEDS A CONSCIENCE.. The Minister had said Banks Act on self interest

Passion and Purpose are CRITICAL for Success..
accordingly Our Firm Belief is A Country not only needs Currency for Growth but also Conscience.

The Fact is

Rs 5 million Request was declined to meet a 3A Customer Order
Rs 40 M Emergency Facility sabotaged. A State bank’s request to use collateral was declined after 18 months( after 100 Calls and 11 Months of written request)
Moratorium was not granted although the letter of offer indicated the relief
Regulators are misled in many ways..
CRIB Dispute is unilaterally corrected
One Line Accounting is Practiced..No Documents.. No Explanation
All replies to simple direct requests are always replied in Systems Loop.
A Cash Crunch Rs896 Million- 8 Seasons Lost ..not a single Checue dishonoured -CRIB Report

THE TWO BANKS — IN THEIR OWN WORDS AND DEEDS

Bank of Ceylon
The premier state bank of Sri Lanka
It is a MUS Bank - Must Uplift Society

A state bank whose constitutional mandate is national development. Prevented from fulfilling that mandate — not by the borrower's conduct, but by the systemic consequences of another bank's regulatory non-compliance.

Hatton National Bank
137 years of trust • Sri Lanka's 'Strongest Bank'
Public statement: "SMEs need more than Relief"
It is a NAC Bank - Needs A Conscience

137 years of national trust - the belief that Sri Lanka's strongest institutions serve the people. The evidence in this document asks one question: does Sri Lanka's strongest bank have Sri Lanka's strongest conscience?

The arithmetic is the evidence. The maths explains the motive.

A	Make the NDB Blueprint the National Standard Direct all licensed commercial banks to follow CBSL Circulars correctly. Where the Circulars alone are insufficient, follow the Good Banking Practice demonstrated by NDB: full moratorium interest waiver, MGCP reclassification, 10-year repayment structure, concessionary rate. One bank proved it is possible. Make it mandatory for all.
B	Prevent Parate Execution Until Dues Are Independently Ascertained No bank should be permitted to execute Parate proceedings until the outstanding dues have been ascertained by the Financial Ombudsman, an independent third party, or CBSL. The amount in dispute must be determined before the property is taken. This is not a request for debt forgiveness. It is a request that the arithmetic be correct before the axe falls.
C	Long-Term Relief for Those Forced Into Commercial Loans During the Crisis Those enterprises currently in distress because moratorium relief was wrongly denied and they were forced to take commercial loans to survive — should be assisted through a long-term concessionary facility based on those commercial loans. They did not choose commercial terms. They were denied the relief the law promised them.

9. The Basics of Moratorium Relief...

1.Understanding Moratorium Relief - THE SHIP, THE HARBOR AND THE HARBOR MASTER
2.Share the Relief with The Tourist Sector

10. Enjoy.. What the Torch Bearer Has to Offer

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