Banks oppose Finance Minister’s new motor leasing proposal

Wednesday, 9 November 2016 01:24 -     - {{hitsCtrl.values.hits}}

By Charumini de Silva

The banking community yesterday pledged that it would do whatever it took to stop the Finance Minister’s forthcoming budget proposal on raising the threshold on the leasing of motor vehicles, terming it an “idiotic proposal”.

The Daily FT learns that Finance Minister Ravi Karunanayake at a meeting yesterday informed all bank CEOs that he was going to raise the leasing threshold for the banks to Rs. 15 million, insisting that they avoid obstructing the proposal.

“If the proposal is presented to raise the leasing threshold to Rs. 15 million and limit our business we will take it up in court,” bankers who wished to remain anonymous told the Daily FT.

Responding to a query posed by the Leasing Association of Sri Lanka on the introduction of a Rs. 5 million threshold for bankers for motor vehicle leasing at the annual pre-Budget forum jointly organised by the Daily FT and the Colombo MBA Alumni Association, Minister Karunanayake said: “As for the leasing of motor vehicles, banks were the ones that were very touchy in this area. Bank licenses are given for banking activities and not for leasing activities. So we want them to get out of that. We have raised the threshold to Rs. 15 million. If you are lending to a group the banks can lend but anything less than Rs. 15 million has to stop, giving you all the opportunity.”