July 19, 2019 (LBO) – Sri Lanka’s 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.
The Central Bank of Sri Lanka requested licensed banks and Non-Bank Financial Institutions (NBFIs) to reduce interest rates on deposits with effect from 29 April 2019.
Commencing 01 July 2019, the Central Bank said it further revised the reference rates applicable on deposits of banks and NBFIs for the 03rd quarter of 2019.
Accordingly, the maximum interest rates that can be offered on savings and fixed deposits have reduced further by 50 basis points and 171 basis points, respectively, thereby reducing the cost of funds of banks and NBFIs.
Average Weighted Prime Lending Rate of licensed commercial banks has also reduced by 127 basis points from 12.24 percent as at 26 April 2019 to 10.97 percent as at 12 July 2019.
The Central Bank announced that it will closely monitor the behaviour of bank interest rates and take further measures as appropriate in the future to support economic growth given well contained inflationary pressures.