The Central Bank has decided to introduce a guarantee scheme to compensate banks that grant cultivation loans accepting land as collateral to facilitate the farmers to practice their livelihood in the districts of Mullaitivu, Kilinochchi and Mannar.

The necessary operating instructions have been issued to the banks to implement the guarantee scheme. Accordingly, a bank granting cultivation loans to a person residing in the said districts will be eligible to receive a guarantee from the Central Bank under certain conditions.

This scheme will be in operation until 31 December 2012 and will be reviewed thereafter, the Bank said.