Reduction of lending rates hailed
by Shirajiv SIRIMANE
The request by the Central Bank to all banks to take measures to
reduce interest rates on lending by the end of October 2010 will have
far- reaching benefits on the economy.
The Central Bank said though it had eased its monetary policy stance
by reducing the policy rates since February 2009, the country's banks
are yet to show full downward adjustment in their rates.
Chief Executive and General Manager, People's Bank, P.V. Pathirana
said that this decision will spur economic development and create a new
breed of entrepreneurs. He said it would also help existing industries
to upgrade themselves, to add technology to their existing business and
meet the present and future demands.
With the ending of the war, people were more relaxed and are reaping
the benefits of peace.
This has also helped them to think of new opportunities and the low
interest rates would help them to convert their ideas to reality.
Pathirana said the People's Bank was created by the government, not
only to earn profits, but also to act as a facilitator to spur economic
development and they were happy to offer credit for lower interest
rates.
Head of Marketing, Deepal Abeysekera said that People's Bank paid
over Rs. 7.2 billion as taxes and levy to the Government last year. "The
balance profits were reinvested on the institution," he said.
He pointed out that when interest rates were lowered, more people
would have the ability to take credit, resulting in a chain of other
related activities which in turn would benefit the bank in a bigger way.
"When industries or housing projects are launched, they will provide
employment and would also help the cottage industry in a major way," he
said.
He said People's Bank has now disbursed Rs. 560 million worth of
credit facilities for the Uturu Wasanthaya as micro loans.
He said that Rs. 1.5 billion has been allocated to be given as micro
credit and 70 percent of this has already been given.
He said they have reopened their branches in Mullaitivu, Kilinochchi,
Paranthan and Mankulam. "We already have 14 branches in Jaffna," he
said.
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