3rd week running: Elder citizens wait for elusive 15%

More than three weeks after the Government promised a higher interest on deposits of Sri Lanka’s senior citizens after last month's interim budget, the offer remains an elusive promise.

It has caused a lot of anxiety among elder citizens, some calling the Business Times for news on any forward movement.

Treasury officials are still to take a decision on directing the Central Bank (CB) on this new scheme on senior citizens’ interest rate of 15 per cent per annum on Rs.1 million deposits which was proposed at the mini budget on January 29. This proposal followed the last regime’s proposal to grant 12 per cent annual interest rate for Rs 2.5 million deposits of citizens over 60 years of age, later changed to 12 per cent on Rs. 1 million deposits.

Independent checks by the Business Times seeking clarity on the scheme from the Treasury wasn’t answered as the officials were awaiting instructions from the Finance Minister Ravi Karunanayake, The Ministry has to issue operating instructions to the CB, which then sends a directive to the banks. This process is yet to happen - much to the chagrin and frustration of many bankers who don’t know how to answer questions by customers. They are still fielding numerous calls from seniors, some bankers said, adding that they are taking the brunt of all the frustration that seniors undergo. “They take their frustration out on us. Many seniors call us to find out if the new scheme on senior citizens’ interest rate of 15 per cent per annum on Rs.1 million deposits which was proposed at the mini budget is implemented,” a banker told the Business Times.

A CB official said that all commer- cial banks have to grant 12 per cent per annum on fixed deposits of Rs. million, which was the previous proposal. "Also if a person above 60 years want to withdraw prematurely and open a Rs. 1 million fixed deposit at 12 per cent from an existing fixed deposit there won’t be a penalty,” he said.

The Sri Lanka Banks' Association (SLBA) which was to meet the CB seeking clarity on this matter will meet CB Governor Arjun Ma- hendran on his return to the island at the weekend. Upali de Silva, Secretary SLBA told the Business Times that commercial banks are still awaiting a clear direction from CB. “We are meeting the Governor when he returns on this matter," he said. Mr. Mahendran is to clarify the CB’s stance on this matter.

According to SLBA data, some 750,000 senior citizens hold accounts in 33 banks worth Rs. 750 billion.