Senior citizens confused over new FDs
By Lalin Fernandopulle
Senior citizens have fallen from the frying pan to the fire with
confusion being confounded and the delay in implementing the 15 percent
interest rate scheme for senior citizens pledged by the Government
through its interim Budget.
The Government pledged a 15 percent interest rate on Fixed Deposits (FDs)
below Rs. 1 million deposited before January 31, 2015 for senior
citizens over 60. The confusion has arisen regarding the eligibility for
the interest rate scheme as there is no clarity and uniformity in
implementing the program. Opinion varies from bank to bank, adding to
the confusion. Account holders said that banks give various views as
there is no clear direction from the regulator on passing the
long-awaited relief to senior citizens who are left with a pittance
after paying their medical bills.
Central Bank Deputy Governor D B W A Silva said that the Central Bank
had issued clear directions to all banks on the interest rate. Senior
citizens said that banks are either reluctant to pass on the benefit or
have not received clear directions from the authorities.
Commercial Bank Managing Director Jegan Durairatnam said that the
bank had received directions from the Central Bank on implementing the
new interest rate for senior citizens.
“According to the directive senior citizens above 60 with an FD
account below Rs. 1 million deposited before January 31, 2015 are
eligible to receive the higher interest rate.
FD account holders who enjoyed the 12 percent interest rate for
amounts below Rs. 1 million, deposited before January 31, 2015 could
convert the account to the 15 percent interest scheme," he said.
Those with an FD above Rs. 1 million are not eligible for the new
scheme. A Bank of Ceylon branch manager in Colombo said that according
to the circular of the Central Bank, FD account holders with less than
Rs. 1 million deposited before January 31, 2015 are eligible for the 15
percent interest.
He said that a senior citizen could have only one FD account to
receive the 15 percent interest rate.
There cannot be multiple FD accounts. Pensioners said that the paltry
pension they get is hardly enough to make ends meet. Added to this
burden is the soaring cost of living which has left them with a Hobsons
choice, to either go for medicine or have food on their table.
Many of the pensioners and senior citizens who do not receive a
pension are at the mercy of their children. Neville Fernando, a
pensioner in Hendala said that those with an FD above Rs. 1 million are
not entitled to the higher interest rate. Citing an advertisement of the
Sri Lanka Banks’ Association (Guarantee) Limited in the newspapers of
March 2, he said the new interest rate is also not applicable for
balances in accounts other than in FD accounts. The advertisement stated
that balances in savings accounts or any other accounts other than FD
accounts will not be eligible for the higher interest rate. It also
stated that those opting for monthly interest will get 14.06 percent.
“There should be flexibility and options for senior citizens who have
made an immense contribution to the country.
Senior citizens are ignored once they reach retirement age forgetting
the contribution they made to the country,” Fernando said.
There is also confusion on whether the State and private banks apply
the same conditions. Account holders said that certain bank officials
are not clear about the conditions and are vague in their opinions. A
State bank official said that according to the Central Bank directive
those who are eligible for the 15 percent interest rate are those who
had maintained a FD with the 12 percent interest rate between January 1
and 31, 2015. He said that FD account holders within the stipulated
period would be eligible for the new interest rate by meeting the
necessary balance even after January 31. The former government granted a
12 percent interest rate per annum for deposits up to Rs 2.5 million for
citizens over 60.
Ananda Perera, a senior citizen with no proper income said that the
authorities have been dilly dallying on implementing the scheme which
would ease the burden of senior citizens most of whom lead a hand to
mouth existence due to the staggering cost of living. |