In the wake of President Gotabaya Rajapaksa’s outburst against monetary authority officials failure to introduce any tool to resurrect he Covid affected economy, the Central Bank now Implements New Credit Schemes to Support the Revival of the Economy of Sri Lanka
Economy Growth has fallen to dismal levels over the past few years, and the impact of the COVID-19 pandemic may result in severe stress on economic and financial system stability in the period ahead unless immediate remedial actions are taken.
In this context, in support of the government’s efforts to revive the economy, the Monetary Board of the Central Bank at its meeting held on 16 June 2020, decided to introduce new credit schemes under the Section 83 of the Monetary Law Act No. 58 of 1949.
Accordingly, in addition to the already disbursed Rs. 27.5 billion under the refinance scheme introduced on 27 March 2020, the Central Bank will provide funding to Licensed Commercial Banks (LCBs).
This will be provided at the concessionary rate of 1.00 per cent against the pledge of a broad spectrum of collateral, on the condition that LCBs in turn will on-lend to domestic businesses at 4.00 per cent, while ensuring the greatest possible distribution of this facility.
(LIN)