Lankapage Logo Recent Top Stories
CP 14 YEARS
Go Home Home Serving the Sri Lankan community globally since 2000
go to LankaPage.com

Leading News from Sri Lanka::

* Sri Lanka Central Bank introduces a credit guarantee scheme on pawning advances
Wed, May 21, 2014, 09:52 pm SL Time, ColomboPage News Desk, Sri Lanka.

May 21, Colombo: The Monetary Board of Sri Lanka's Central Bank has approved the implementation of a Credit Guarantee Scheme on behalf of the Government for pawning advances granted by licensed banks, in order to support lending against gold articles.

The Monetary Board has also approved an allocation of Rs. 500 million from the Central Bank as the seed fund to support the Credit Guarantee scheme.

This scheme is expected to address the significant reduction in pawning advances that had arisen as a result of the decline in gold prices in the international market since early 2013.

As these advances have been predominantly used to fund Agriculture and the SME sectors of the economy, the authorities were of the view that pawning advances need to continue so as to provide the required funds to support such economic activities.

The attention of the Central Bank was also drawn to the present loan to value (LTV) ratio of around 65% and high rates of interest charged on pawning advances, which had further dampened the pawning credit activities.

The new Guarantee Scheme contemplates the licensed banks contributing a premium of 1% p.a. which would enable them to increase the LTV ratio up to a maximum of 80%, whilst the interest rate would be capped at 16% p.a. on the advances.

As a result of this Scheme, the borrowers and the lending banks will be able to increase the credit flows to the productive sectors of the economy through pawning advances.

This Scheme will be operated by the Regional Development Department of the Central Bank of Sri Lanka, on behalf of the Government.

ColomboPage - Recent 10 Stories
Indian Origin Tamils in Sri Lanka aim to double their representation in a reformed parliament
-- [3 hours ago]
Sri Lanka University Teachers' Association condemns attack on past president
-- [4 hours ago]
Mannar Bishop hospitalized after suffering stroke
-- [5 hours ago]
Meeting between Sri Lankan President and former President scheduled for Wednesday
-- [5 hours ago]
Sri Lankan business delegation to participate in World of Food India
Sri Lanka to release 1,400 prisoners to mark Vesak Day
Iranian national falls to death in Sri Lanka
Private hospitals in Sri Lanka directed to issue comprehensive bills to patients
Sri Lankan President pleased with the conditions at Ampara Hospital
International Arbitration Centre to be opened in Sri Lanka this week

Copyright © 2000, 2014 by LankaPage.com (LLC) :
The news and other contents on ColomboPage are copyrighted property of LankaPage.com, LLC. Any unauthorized use of any information on ColomboPage may constitute a violation of copyright laws. You need written permission to reproduce, republish, post, transmit, broadcast or distribute, material from this site from LankaPage.com, LLC. However, news organizations or broadcasters in Sri Lanka may republish the news items in ColomboPage with proper acknowledgment to ColomboPage.