Central Bank...

“…in respect of leasing facilities, penal rates charged by banks, finance companies and leasing companies are in the range of 36 per cent to 48 per cent per annum on overdue rentals over and above the original rates,” the Central Bank said.

According to the Central Bank such excessive interest rates are not consistent with the present low interest rate regime prevailing in the country, and the low interest rates prevailing in other peer emerging economies where the lending rates range from 4 per cent to 12 per cent per annum only, and the penal interest rates charged are also comparatively much lower.

“In addition to strengthening financial system stability, the above measures are expected to expand the economic activities of the country in line with the macroeconomic projections for the medium to long term, through the enhancement of lending operations of banks, finance companies and leasing companies in a prudent and productive manner,” the Central Bank noted.