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| Tuesday, 1 July 2003 |
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by Rashomi Silva The Regional Development Banking network owned by the Ministry of Rural Economy Development will introduce a single digit loan interest rate from today for the first time in Sri Lanka's banking history. Rural Economy Minister and Deputy Minister of Finance Bandula Gunawardena said this during an inspection tour to Sigiriya handicraft processing park which is scheduled to open at the end of this month. "Rajarata, Sabaragamuwa, Ruhuna, Kandurata and Uva regional development banks have dropped its annual loan interest rate to 9.5 percent with effect from July 1", however the reduced interest rate will be applied only to housing loans and to the other micro credit loans that are advanced for the business ventures, he explained. Addressing a gathering of handicraft men of Central Province Minister Gunawardena said this was in a move to bolster the rural economy and to support the small-scale entrepreneur, he added that when the UNF took over the government in 2001 the loan interest rate was 24 percent and now it is between 16-20 percent. He expressed optimism that the other banks both the state and private sector too would bring down the interest rate to compete with them. "In developed countries the interest rate is usually below five percent in Japan it is as low as one percent we hope the Sri Lankan banking sector too will be able to make this change with the other banks competing with us", he said. "The country is now on the threshold of enjoying the fruits of the laborious work. With the proposed November salary increase for government servants and drop in loan interest rate are rewards for the people's patience", Gunawardena said. |
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