Banks to reduce interest rates on loans and overdrafts
Since it was reported that certain banks have been charging rates as
high as up to 39 percent p.a. as penal rates, banks have agreed that the
overall penal rates of interest/rates applicable to unauthorized
excesses are to be reduced from the current levels to a figure not
exceeding 29 percent p.a.
Sri Lanka Banks' Association's member banks will consider a further
reduction for priority sector facilities within their respective bank
portfolios on a case by case basis.
These decisions are supported by the following perspectives and will
be subject to review:
* The level of domestic inflation has progressively come down during
the past three months, whereby the point to point inflation is now at a
single digit level.
* A gradual reduction in the treasury bill/bond rates which has
occurred during the past few months, due to adequate funds moving into
Government securities.
* The release of liquidity to the money market following a reduction
in the Statutory Reserve Ratio applicable to Licensed Commercial Banks.
Banks will implement these changes this month but not later than May
1, 2009. |