The Central Bank, which released its Monetary Policy Review on Friday, said that it has been a matter of concern that two months after relaxing monetary policy interest rates pertaining to both deposit and lending interest rates still remain high. It however noted that following recent discussions that the Central Bank had with leading commercial banks, it is anticipated that both deposit rates and lending rates will be adjusted in the near term, in line with the direction of monetary policy.
When asked for a comment on the issue, Secretary General of the Sri Lanka Banks Association, Upali de Silva said the Association has not taken any decision in this regard and hence it will be up to the individual banks to decide whether or not to reduce rates.
However, he noted that the Central Bank had advised banks not to encroach into the finance companies structure of rates where they offered deposit rates of a maximum of up to about 16%.
“Most banks are presently considering the rate review. It’s not possible to adjust rates immediately so each bank will take their time and space. As far as lending rates are concerned it will depend on cost of funding of each bank”, De Silva highlighted.