The Central Bank (CB) has issued a special circular ordering that the average lending interest rates of licensed commercial banks and financial institutions should be lowered immediately.
The Central Bank has issued this circular under the Monetary Law Act No. 58 of 1949.
The Central Bank states that the licensed state banks and financial institutions should maintain the lending interest rate at 13.5 percent or less.
The Central Bank has issued this circular in consideration of the fact that certain financial institutions continue to maintain high lending interest rates despite the significant easing of monetary conditions.
The Central Bank of Sri Lanka has informed that licensed commercial banks should maintain mortgage interest rates at 18 percent and credit card interest rates at 28 percent.
The Central Bank had issued this circular on Friday (25) and has informed the licensed commercial banks to pay close attention to it.
Central Bank Governor Dr. Nandalal Weerasinghe stated that this circular was issued with the aim of giving the full advantage of the reduction of the interest rates taken by the Monetary Board of the Central Bank on two occasions to the public.
The Central Bank Governor expressed confidence that the commercial banks will reduce the interest rates to the maximum for lending as per the circular issued by the Central Bank.
He said that the Central Bank will constantly monitor whether licensed commercial banks and financial institutions adhere to the circular. Dr. Weerasinghe pointed out that the commercial banks have already reduced the interest rates and further adjustments will be implemented starting this week.