State banks create environment

Finance and leasing companies to reduce interest rates:

Suraj Bandara

The recent reduction of interest rates by State banks has created an environment for other finance and leasing companies to reduce their interest rates and bring it on par with this innovative investor-friendly step taken by the Government, the Leasing Association of Sri Lanka (LASL) Chairman Sanjeewa Bandranayake told Daily News Business.

All finance and leasing companies will have to reduce their lending rates gradually to compete with State banks, if they are to survive in the financial sector.

A new money market would emerge under this situation and would keep in touch with all investors who kept away from the banks due to the high interest rates, he said. If the monetary policies are compatible with the requirements of investors it would boost the industrial and overall economy of the country since innovative, dynamic and conducive situation would ease the prevailing inflation providing an extra stimulus to economic activities, said Bandaranayake.

The reduction of the lending rates of finance and leasing companies would be inevitable due to this drastic change in every sphere of the financial sector, he said.

Accordingly, the Central Bank in view of the rapid development in the country would take further steps to provide more benefits for the people in the agricultural sector, small and medium scale businesses in the country.