Commercial banks increased the annualized interest rate on credit cards up to 32%. This subject was raised by Ada Derana during the monetary policy review press conference of CBSL which was held yesterday (11). Responding to the question, the Governor of the Central Bank Dr. Indrajit Coomaraswamy expressed the following;
“You have to separate unsecured products like credit cards from secured lending. Now unsecured products quite naturally when the economy is in a downturn the banks will price risk higher because that is an unsecured product so will be difficult to get those rates down, but for normal lending based on security on collateral we expect them to bring rates down. But unsecured loans in the current context where economic activity is muted naturally they will put a higher risk premium. They will Price risk higher,” Governor said.
To the latest figures released by the Central bank of Sri Lanka (CBSL) the total Credit Card Outstanding Balance issued by the Banking and Financial Institutions of Sri Lanka was reported at Rs.108.76 billion, at the end of May. This records a decrease of Rs.1.5 billion from the previous month of Credit Card Outstanding Balance Rs.110.27 billion.