Pan Asia reduces credit card interest rate

The present outstanding of credit card utilization of all banks exceeds approximately Rs. 35 billion. The average interest charged by banks from the clients varies from 40 to 50 percent. p.a.

The Government and on many occasions the Central Bank has called upon banks to reduce interest rates on lending to stimulate the economy, and indicated interest rates will be coming down further with the easing inflation fears.

Going by the Central Bank's actions and after taking a view on interest rates Pan Asia bank has decided to take the lead in reducing very high interest charged on credit cards from 42 percent to 30 percent. "We have taken this initiative to take off some burden and eased off repayment difficulties from the card holders and much needed support to drive the economic activities of the country, said an official of Pan Asia Bank.

The Central Bank has taken some radical and innovative steps during the past two three months to boost the economy by providing adequate liquidity to the market.

The Statutory Reserve requirement has reduced from 10 to 7 percent, flooding more than Rs. 25 billion to the market.

Policy rates were pushed down where repurchase rate reduced from 10.5 percent to 9 percent, Reverse repurchase rate down to 11.50 percent from 12 percent. The penal rate also was reduced from 19 percent to 13 percent and subsequently removed giving banks the opportunity to borrow from Rev Repurchase window at 11.50 percent.