CBSL issues new directive on lending and deposit products interest rates

Monday, 25 April 2022 02:24 - - {{hitsCtrl.values.hits}}

The Central Bank has issued a new directive on interest rates on lending and deposit products following the increase of policy rates by 7% earlier this month. CBSL said having considered the tight monetary policy measures adopted thus far it was revoking previous orders which stipulated maximum rates that could be charged on (i) Credit card advances, commencing from the next billing cycle; (ii) All new pre-arranged temporary overdrafts and existing pre-arranged temporary overdrafts that are renewed/extended and (iii) All new pawning advances and existing pawning advances that are renewed.

Hitherto the maximum interest rate on Credit Cards was 20%; the maximum interest rate on Pre-arranged Temporary Overdrafts was 18% and the maximum interest rate on Pawning Facilities was 12%

Licensed banks can also adjust the deposit rates adequately, in line with the tight monetary policy measures adopted by CBSL, to attract deposits into the banking system.

Weekly Average Weighted Prime Lending Rate (AWPR) for the week ending 22 April 2022 increased by 314 basis points (bps) to 14.20% compared to the previous week, according to CBSL. A year ago it was 5.5%.

In contrast the Average Weighted Deposit Rate (AWDR) was almost static at 5.17% last week from 5.07% the previous week and 5.2% a year ago.