Sep 01, 2011 (LBO) – Sri Lanka’s Commercial Bank has begun concessionary long term lending from an investment fund created with savings made from tax cuts under a proposal made in the government’s 2011 budget. The statement said state institutions can now borrow direct from local banks instead of being dependent on Treasury borrowings from foreign institutions, leading to benefits such as savings of foreign currency, faster disbursements and the active participation of the lending banks in monitoring progress of projects. The bank has signed an agreement to lend 1.5 billion rupees to the state-run Road Development Authority (RDA) from its Investment Fund Account (IFA), a statement said.
The funds are to be used in a two and a half year project to improve a 21.5 km stretch of the A6 highway between Dambulla and Habarana in the north-central region under the government’s infrastructure development programme, the bank said.
The project contractor, International Construction Consortium, is also a key client of the bank.
Under the government’s 2011 budget presented in November last year, all banking and financial institutions were required to create separate Investment Fund Accounts to transfer sa