Central Bank requests reduction in interest rate of deposits

COLOMBO (News 1st) - The Central Bank of Sri Lanka has requested licensed banks and Non-Bank Financial Institutions to reduce interest rates on deposits made by the Small and Medium Enterprises in particular, with effect from April 29, 2019. Interest rates on savings and other deposits with tenures less than 3 months offered by licensed banks and NBFIs were based on the Standing Deposit Facility Rate whilst longer tenures were based on the 364 day treasury bill rate. Accordingly, the Central Bank expects lending rates of banks and NBFIs to reduce further in the immediate future, and borrowers, particularly SMEs, can expect to obtain credit facilities at reduced interest rates from banks and NBFIs. Issuing a release, the Central Bank will closely monitor the behavior of bank interest rates and take further measures as appropriate in the future to support economic growth given well contained inflationary pressures.