Rates reduced due to CB strategy:

Catalyst for rapid growth

Lakshmi de SILVA

The decision to lower the rates of lending interests of public sector banks was made consequent to the inflation rate coming down from 28 percent in June 2008 to one percent now due to the strategies of the Central Bank and the Treasury, Finance and State Revenue Minister Ranjith Siyambalapitiya told a press conference yesterday.

“About 70 percent of the people patronize the public sector banks. Therefore the private sector banks too would follow suit reducing their interest rates,” he said.

The main Opposition party opposed everything for the sake of opposing but they had forgotten that the Regaining Sri Lanka policy document they brought out when they were in power last had proposed to make the People’s Bank a public company and sell its shares in the stock market to privatize it or to break up the People’s Bank into three entities,” he noted.

“When the global economic downturn occurred in 2007 a number of banks went bankrupt in countries like UK and USA. But in our country we did not experience such a crisis and in fact we were able to salvage a bank that was about to collapse due to internal reasons,” Siyambalapitiya said.

Today they were questioning the decision in and out of Parliament and they were moaning about the reduction of interest rates that was a measure to assist in rapid economic growth by encouraging entrepreneurs, industrialists and others who are engaged in contributing to the national economy.

The main opposition party was also alleging that the Government will increase interest rates after the election, a clear admission they will be defeated in the election and the Government will come back to power.

Bank of Ceylon General Manager B.A.C. Fernando said a meeting of all managers and regional managers was held yesterday to brief them on the new interest rates and how they operate. The public could access the Bank of Ceylon website to get all details about the new interest rates.

“More new customers will come to the public sector banks and they would make use of the lower interest rates and repayment would be easier,” he said.

The entire national economy would be revitalized. It happens so not only in our country but anywhere else. BoC will give loans to industries, agriculturists, fisheries sector and small and medium scale entrepreneurs. Chairman National Savings Bank S.R. Attygala said the reduction in interest rates was a catalyst for rapid economic growth.

“For example 20,000 housing loans to public servants will generate employment to an equal or bigger number of masons and workers,” he said.

Senior Deputy General Manager People’s Bank Kapila Ariyaratna said even before the Treasury decision to reduce interest rates, People’s Bank had given exporters loans at 11 percent interest and the present decision to reduce interest rates was salutary.