Regulatory Alerts2026-01-12 | Finance Business Act Directions No.01 of 2026Amendments to Maximum Interest Rates on Deposits and Debt Instruments
The Governing Board of the Central Bank of Sri Lanka issued these amendments on 12 January 2026 to update maximum interest rates payable by finance companies. The directive replaces prior directions by mandating quarterly reviews of deposit and debt instrument rates based on the simple average Weighted Average Yield to Redemption from recent Treasury bill auctions. It establishes specific maximum annual nominal interest rates calculated by adding fixed spreads to 91, 182, and 364-day T-bill yields across tenures ranging from one month to under two years.
GOVERNING BOARD CENTRAL BANK OF SRI LANKA
12 January 2026 | FINANCE BUSINESS ACT DIRECTIONS | No.01 of 2026
AMENDMENTS TO MAXIMUM INTEREST RATES ON DEPOSITS AND DEBT INSTRUMENTS
Issued under Section 12(1) of the Finance Business Act, No.42 of 2011 read with Section 133(1) of the Central Bank of Sri Lanka Act, No.16 of 2023
The Governing Board hereby issues the following amendments to the Directions on maximum interest rates to be paid in respect of deposits and debt instruments of Finance Companies (FCs).
Accordingly, the following will replace Direction 4.2, Direction 5.1 and Direction 6.1 of the Finance Business Act (Maximum Interest Rates on Deposits and Debt Instruments) Directions No.01 of 2025.
4. Reference rates | 4.2 | The maximum interest rates in respect of time deposits and other types of innovative deposits (such as recurring deposits) of tenure of one month and above, and up to “less than two years”, and in respect of debt instruments will be reviewed quarterly, based on the simple average WAYR of the latest four primary auctions for T-bills in the immediately preceding quarter.
5. Maximum interest rates on deposits | 5.1 | The maximum annual nominal interest rates that may be offered or paid by an FC on LKR time deposits and other types of innovative products for which interest is paid at maturity shall not exceed the interest rates derived in accordance with Table 1 below:
Table 1: Maximum interest rates for deposits
| Tenure of the Deposit | Maximum Interest Rate Per Annum |
|---|---|
| 1 month and less than 3 months | 91 days T-bills WAYR + 1.10% |
| 3 months and less than 6 months | 182 days T-bills WAYR + 1.25% |
| 6 months and less than 1 year | 364 days T-bills WAYR + 1.50% |
| 1 year and less than 2 years | 364 days T-bills WAYR + 3.00% |
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GOVERNING BOARD CENTRAL BANK OF SRI LANKA
12 January 2026 | FINANCE BUSINESS ACT DIRECTIONS | No.01 of 2026
6. Maximum interest rates on debt instruments | 6.1 | The maximum annual nominal interest rates that may be offered or paid by an FC on debt instruments for which interest is paid at maturity shall not exceed the interest rates derived in accordance with Table 2 below:
Table 2: Maximum interest rates for debt instruments
| Tenure of the Debt Instrument | Maximum Interest Rate Per Annum |
|---|---|
| Less than 1 year | 364 days T-bills WAYR + 1.50% |
| 1 year and less than 2 years | 364 days T-bills WAYR + 3.75% |
(Signature) Dr. P Nandalal Weerasinghe Chairperson of the Governing Board and Governor of the Central Bank of Sri Lanka
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