Infamous

Aug 27, 2010 (LBO) – Sri Lanka’s finance ministry chief lashed out at the country’s cautious banks which are reluctant to engage in risky lending and also slammed a credit information office, labeling it ‘infamous’.

“The associated risks and the mismatch in asset and liabilities of these institutions have imposed a severe burden to their respective Governments, which in turn have caused large fiscal deficits posing a threat to the global financial system.” Treasury Secretary P B Jayasundera said the Central Bank, which is the banking regulator may “need to consider the working of the Credit Information Bureau,” which shared information about defaulting borrowers among lenders.

“..[T]his infamous CRIB has created a situation where bankers use such information to discourage borrowers and reject their requests,” Jayasundera said, delivering a speech commemorating the 60 years of Sri Lanka’s Central Bank.

“In the post conflict context, our private sector deserves some relief from the banking system.

“Private sector has performed in a high interest rate regime where their cost of borrowing has been in excess of 30 percent.”

“Many defaulting customers have been subject to penal rates and their na