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
President discuses immediate steps for necessary relief measures to disaster-hit people
-- [15 minutes ago]
US to send emergency assistance to Sri Lanka for flood relief
-- [1 hour and 21 minutes ago]
Pakistan to send relief assistance for Sri Lanka
-- [1 hour and 38 minutes ago]
Indian Naval Ship Kirch arrives in Sri Lanka with relief assistance for people displaced by floods
-- [8 hours ago]
Death toll from floods and landslides in Sri Lanka rises to 100, another 99 missing
-- [8 hours ago]
Sri Lanka Air Force Airman fell off from helicopter during flood rescue operations dies
Indian PM condoles the loss of lives and property in Sri Lanka due to flooding and landslides
India dispatches three Navy ships to assist Sri Lanka disaster relief operations
Orientation program for Jaffna Sunday schoolteachers on national integration, reconciliation
Sri Lanka's John Keells profit before tax increases 19% to Rs.22.89 billion for 2016/17

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.