June 11, 2012 (LBO) – Loans to private borrowers from commercial banks collapsed to just 18.7 billion rupees in April 2012, from 55 billion rupees a month earlier, the lowest since June 2010, amid heavy state borrowing, official data showed. Loans to private borrowers from banks rose 34 percent from a year earlier to 2,179.8 million rupees but the monthly volume collapsed to just 18.7 billion rupees, a level not seen since June 2010 when private borrowings were 19 billion rupees.
In April, while private sector credit fell to a near two year low, credit to the central government rose 32 billion rupees to 1,028 billion rupees, up 47.4 percent from a year earlier.
Loans to state enterprises rose another 10.1 billion rupees to 257.2 billion rupees, up 105.8 percent from a year earlier.
Sri Lanka has tried to curb private sector credit after a balance of payments crisis was triggered during the second half of 2011 by heavy state borrowings energy utilities to finance tariff manipulations.
Energy prices were raised in February, but credit to state enterprises have continued to grow. Energy price deceptions remain probably the biggest threat to Sr