Private sector borrowing down sharply to Rs. 101 b in April

Monday, 8 June 2026 05:35 - - {{hitsCtrl.values.hits}}

Private sector borrowing from the banking system moderated in April, with total outstanding credit increasing by Rs. 100.6 billion month-on-month (M-o-M) to Rs. 10.8 trillion following the sharp expansion recorded in March.

This is the third-lowest monthly expansion in private sector credit during the past 12 months, after Rs. 83 billion in January 2026 and Rs. 87 billion in April 2025. The highest was Rs. 263 billion in November 2025, followed by Rs. 258 billion in March 2026.

According to the latest Central Bank of Sri Lanka (CBSL) data, total outstanding banking sector credit to the private sector rose to Rs. 10.8 trillion in April from Rs. 10.7 trillion in March, reflecting a 0.9% M-o-M increase. On a year-on-year (YoY) basis, private sector credit expanded by 27%, marginally lower than the 27.1% growth recorded in March.

Lending by domestic banking units (DBUs) continued to account for the bulk of private sector credit, increasing by Rs. 97 billion or 1% M-o-M to Rs. 10.24 trillion in April from Rs. 10.14 trillion in March. However, annual growth in DBU lending eased slightly to 29.1% from 29.3% in March.

Credit extended through offshore banking units (OBUs) rose by Rs. 3.4 billion or 0.6% M-o-M to Rs. 559.6 billion in April from Rs. 556.2 billion in March. Despite the increase, outstanding OBU credit remained lower than a year earlier, contracting by 2.2% YoY in April compared with the 2.7% decline recorded in March.

Net credit to the Government from the banking system increased by Rs. 20.5 billion in April to Rs. 8.15 trillion from Rs. 8.13 trillion in March. However, on an annual basis, Government credit remained in contraction, declining by 2.7% YoY.

Outstanding credit to public corporations and State-owned enterprises edged up by Rs. 2.2 billion to Rs. 413.5 billion in April from Rs. 411.2 billion in March. Nevertheless, lending to public corporations continued to contract sharply on a YoY basis, declining by 31.6% compared with a 31.2% contraction in March.

The CBSL’s Weekly Economic Indicators report showed broad money (M2b) expanded by 11.6% YoY in April, while private sector credit growth remained elevated despite the moderation in monthly borrowing.