The Speaker of Parliament, Dr. Jagath Wickramaratne, has endorsed the certificate on the Rescue, Rehabilitation and Insolvency (Corporate and Personal) Bill, bringing the legislation into force as the Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act, No. 12 of 2026.
The Bill was first read in Parliament on March 17, 2026 and passed following a debate on May 6, 2026, the Department of Communication of Parliament said in a statement reported by Ada Derana and Newswire. The certificate of endorsement is the final parliamentary step required for a bill to come into operation.
The Act provides for amendments to the Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act, the Companies Act, No. 7 of 2007, the Inland Revenue Act, No. 24 of 2017, and the Mediation Boards Act, No. 72 of 1988, while repealing the Insolvency Ordinance (Chapter 97), which had governed personal insolvency in Sri Lanka for more than a century.
The legislation introduces specific procedures for personal insolvency, including provisions for debt protection, moratoria and debt restructuring, while preserving a debtor’s reasonable income and essential assets. It also addresses corporate governance, receivership and cross-border insolvency, with the stated aim of enhancing predictability and confidence in the credit market. The Act is intended to provide a fresh start for honest individual debtors and establish a structured mechanism for the rehabilitation of distressed but fundamentally viable companies.
The new law completes a structural reform commitment under Sri Lanka’s IMF Extended Fund Facility programme. The earlier debate cycle had drawn public-finance scrutiny on whether the framework adequately protected apartment buyers as creditors, with TW Holdings chair Thilan Wijesinghe arguing before the Committee on Public Finance that the existing law had left depositors at stalled projects such as the Krish development without standing equal to banks.
Sources: Speaker endorses Rescue, Rehabilitation and Insolvency Bill — Ada Derana, June 17; Sri Lanka’s new insolvency law comes into force after Speaker’s endorsement — Newswire, June 17.
