Confusion over 15% interest for senior citizens’ deposits

The Sri Lanka Banks’ Association (SLBA) is to meet the Central Bank (CB) tomorrow to get clarity on the proposed Senior Citizens’ interest rate of 15 per cent per annum on Rs.1 million deposits, SLBA officials said.

Upali de Silva, Secretary SLBA told the Business Times that commercial banks are still awaiting a clear direction from the CB. “We are meeting Deputy Governor, Ananda Silva on Monday on this matter," he said.

He said SLBA wants clarity on implementing this scheme which was proposed at the mini budget following 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. Mr. De Silva added that SLBA also want to clarify whether the 12 per cent interest holders are entitled to this new scheme. Those with such deposits won’t be requested to change the new scheme.

Officials said till clarity on the scheme is sought, new deposits will not be entertained by banks much to the chagrin of senior citizens – some of whom also called the Business Times asking for clarity on this scheme.

Mr. De Silva said that they are also planning to discuss about the bridging bond and the 6 per cent subsidy by CB to the banks in order for them to grant this scheme.

Analysts say that the low interest environment has notably reduced the standards of livings of many senior citizens and the increased interest rates would help alleviate their suffering.

He said SLBA wants clarity on implementing this scheme which was proposed at the mini budget following 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. Mr. De Silva added that SLBA also want to clarify whether the 12 per cent interest holders are entitled to this new scheme. Those with such deposits won’t be requested to change into the new scheme.