The uncertainty over an increased interest rate on bank deposits for senior Sri Lankan citizens, an issue that has been brewing since early 2015, continues. Despite the 2017 budget proposal to permit banks to offer 15 per cent interest on deposits up to Rs.1.5 million, which is a repeat of the 2016 proposal, senior citizens [...]

The Sunday Times Sri Lanka

15% interest: The merry-go-round continues

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The uncertainty over an increased interest rate on bank deposits for senior Sri Lankan citizens, an issue that has been brewing since early 2015, continues.

Despite the 2017 budget proposal to permit banks to offer 15 per cent interest on deposits up to Rs.1.5 million, which is a repeat of the 2016 proposal, senior citizens are yet to afford this facility.

The Business Times, which has been consistently raising this issue, received a letter from an aggrieved retired pensioner which is published in full to illustrate the depth of the problem:

“As you are aware it was proposed to grant a special rate of interest of 15 per cent on fixed deposits of senior citizens up to Rs. 1.5 million by the Budget for 2017.

In Section 322 of the Budget Speech – 2017 it is mentioned as follows: ‘To support our senior citizens further, we will also continue the senior citizens deposit scheme which guarantees an interest of 15 percent for deposits up to Rs.1.5 million, during 2017 as well’.

“Even though this special interest rate was included in the 2016 Budget it has not been implemented up to now. Banks implemented only the previous circular issued by the Central Bank under which 15 per cent was paid for FDs up to 1 million.

“When I checked with People’s Bank and Bank of Ceylon they said they haven’t still received instructions from the Central Bank to grant 15 per cent on FDs.

I was asked to called the Central Bank whose Director of Bank Supervision confirmed that they have not as yet instructed commercial banks to implement the scheme because the directive from the Treasury has not been received by them in this regard.
The directive should be issued, as mentioned by the officials of the Treasury, by the Treasury Director Development Finance. I was not unable to contact him as had gone outstation.”

The pensioner said that officials are sending senior citizens on a merry-go-round for the second year in succession in relation to a budget proposal which should have been implemented in January 2016.

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