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The Import Section of the Ceylon Chamber of Commerce is lobbying with the fiscal authorities to ensure that commercial banks offer the business sector reductions that are commensurate with the reduced lending rates introduced by the Treasury and the Central Bank.

The Treasury and the Central Bank in its persistent efforts to reduce lending rates to the Business Sector, has on many occasions during the last year reduced the Reserve Requirement, REPO rates, Reverse REPO rates and Treasury Bill rates. Treasury Bill rates have now been brought down to single digit figures with an average of 8.9 % at last week's auction.

The Import Section, in its effort to ensure that its members obtain commensurate reductions from their commercial banks has addressed this issue with the Secretary of the Treasury and the Governor of the Central Bank. The Import Section has pointed out that although the Government has lowered interest rates, the Commercial banks still continue to charge an average of 18% on their lending rates, paying their depositors only 4%-6% on saving accounts.

It has drawn attention to the universal index of assessing the profitability of a bank, where a return of 1% was considered a good profitability index. However, Sri Lanka's banks were giving three times this at about 3%, thereby earning profits of around Rs 1,000 million per bank annually. The fiscal authorities have given an undertaking to the Import Section that this problem will be addressed.

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