Regulatory Alerts2022-04-21 | Monetary Law Act Order No. 03 of 2022Interest Rates on Lending and Deposit Products of Licensed Banks
The Central Bank of Sri Lanka issued Monetary Law Act Order No. 03 of 2022 to lift interest rate caps on credit card advances, pre-arranged temporary overdrafts, and pawning advances for licensed banks. The directive mandates that these financial institutions adjust deposit rates in alignment with the central bank's tight monetary policy to effectively attract deposits into the banking system. These regulatory changes take effect immediately for new and renewed products, commencing with the next billing cycle for credit cards.
a,\ April2022 MONETARY BOARI) CENTRAL BANK OF SRI LANKA MONETARY LAW ACT ORDER No.03 of2022 INTEREST RATES ON LENDING AND DEPOSIT PRODUCTS OF LICENSED BANKS (1) The Central Bank of Sri Lanka (CBSL) having considered the tight monetary policy measures adopted thus far hereby revokes Order 2. 1 of the Monetary Law Act drder No. 02 of 2020dated 21 August 2020 as amended by the Order 2.1 of the Monetary Law Act Order No. 01 of 2022 dated 11 March 2022, effective as follows. (i) Credit card advances, cofllmencing from the next billing cycle. (ii) A11 new pre-alranged temporary overdrafts and existing pre-alranged temporary overdrafts that are renewed/extended. (iii) All new pawning advances and existing pawning advances that are renewed. (2) Licensed banks shall adjust the deposit rates adequately, in line with the tight monetary policy measures adopted by CBSL, to attract deposits into the banking system. Mrs.TMJYPFernando Senior Deputy Governor Central Bank of Sri Lanka