Credit Regulation Authority bill soon to tackle loan sharks: CB

Sri Lanka’s Central Bank (CB) indicated that the monetary policy easing will be paused in the near term after lowering interest rates on Friday for the fourth time this year to make economic growth positive next year from around minus 3 per cent expected this year.

The Monetary Policy Board has taken this decision with the aim of achieving and maintaining inflation at the targeted level of 5 per cent over the medium term, CB Governor Nandalal Weerasinghe told reporters on Friday.

He said the government will enact a Credit Regulation Authority Act in parliament to regulate the money lending and the micro finance business and to provide for matters connected therewith, including protection of customers of said businesses.

He made this disclosure when responding to a question raised by a journalist on inconveniences faced by many people due to online lending companies operating in the country without obtaining the permission from the CB.

He noted that the people should be more cautious in borrowing money at high interest rates from such loan sharks.

Referring to 2024 budgetary allocation of Rs. 450 billion bank capitalisation, he noted that it was to support the capital improvement process in the banking system if a state bank is in need for it.

The proposed provision is to improve the capital of the state banking sector if it need capital infusion due to liquidity issues and will ensure the stability of the banking sector in the long run, he added.

Sri Lanka will have access to the US$330 million second instalment of the IMF’s EFF facility in financing once the review is approved by the IMF Executive Board in December, the CB governor said responding to a question raised by a journalist.