Lifeline for tea industry
**Banks to cut interest rates, grace period extended**
**Tea Price Stabilisation Fund mooted**
**Tea Board buying more tea from Auction**
colombo: The Government yesterday took several vital steps to address
the current problems faced by the tea industry.
These decisions were taken on the instructions of President Mahinda
Rajapaksa, at a discussion held at the Central Bank yesterday under the
patronage of Governor Ajith Nivard Cabraal.
The discussion focused on a number of key issues and several actions
to be implemented with immediate effect were decided upon.
Accordingly, commercial banks will cut interest rates on loans
offered for purchasing tea by six per cent, while the existing grace
period of one week for settlement of these loans is to be extended to
A ‘Tea Price Stabilisation Fund’ will also be set up.
The Government has allocated Rs. 1.5 billion as the initial capital
for setting up this ‘Tea Price Stabilisation Fund’.
Apart from these measures, the Sri Lanka Tea Board has already taken
steps to purchase tea from the Tea Auction.
The above moves will ensure the viability of the industry, which
includes about 400,000 small-scale tea estate owners and other
contributing parties such as suppliers, manufacturers, exporters and
The current problems in the tea industry are said to be a temporary
phenomenon and it is expected that things will return to normal as the
global financial situation improves. The Secretary to the Ministry of
Plantation Industries, the Chairman of the Sri Lanka Tea Board and
various representatives of commercial banks in Sri Lanka also
President Rajapaksa met top tea industry figures last week to seek
their views on solving the problems affecting the tea industry.