CIBSL moves to reduce loan interest rates

Hiran H. Senewiratne

LOANS: The Credit Information Bureau of Sri Lanka (CIBSL), which is one of the listed entities under the Ministry of Finance, will modernise with online facilities at a cost of Rs. 150 million to record all loan transactions in the country.

The purpose of this move is to reduce bank interest rates in the country in the loans, CIBSL General Manager N.P.H. Amarasena told the Daily News.

Once online facility comes into play, any lending institute can obtain the total exposure of any credit borrowing instantly.

An Indian company Dun and Bradstreet Information Services have undertaken the contract to install software system of CIBSL, he said.

Under the present context lending organisation that provides loans to a tune of Rs. 500,000 will go into their records, leaving greater number of financial transactions unreported less than that amount, he said.

He said that when all loans given by lending institute reported it would reduce the bank default ratio to a grater extent.

This would ultimately benefit the general public with the going down of bank interest rates in the country.

Amarasena said that entire operations at CIBSL carry out manually which negatively impact especially the SME and Micro finance due to the non-availability their information in their records.

Once they set up the new system all the loans given by lending institute will be reported in the country, he said. Amarasena said the benefits of the modernisation of CIBSSL enables the lending organisations to collect information online on all financial transactions including credit card transaction for them. Currently general public takes loans from lending institutes for different purposes, Amarasena said.

At present more than 90 lending organisation including commercial banks, leasing companies, national development specialised banks, national development banks have registered with them, he said.

Further, the Government will pass the Credit Information Bureau of Sri Lanka (Amendment) Act, which will enable any business organisation to be enrolled with them.