Not so fast

January 30 (LBO) – The central bank is planning to introduce new prudential regulations for credit cards, following their rapid use and growth in lending, an official said.

Last year the government slapped a 10 rupee stamp duty on every 1000 rupees of purchases through credit cards. Up to last November Sri Lankan banks have issued 798,000 credit cards and advanced 19.9 billion rupees to cardholders.

In terms of total credit in the system this is still just 1.5 percent.

“The issue is now is that this credit outstanding is about 30 percent of credit limits are approved,” says P. Samarasiri, the the Central Bank’s acting bank supervisor.

“That means there is a potential of 70 percent being used in the market. So total credit approved is about 67 billion rupees.”

But the regulator says it is not trying to discourage credit cards, as it has much growth potential.

Central Bank says credit cards usage is still low in Sri Lanka compared with other countries, and they would eventually like to see the sector grow.

“We see that the credit cards is a basic payment instrument that we should promote,” says Samarasiri.

In Sri Lanka credit card