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::

* Moody's says Sri Lanka guarantee on pawning loans is credit positive for banks
Mon, May 26, 2014, 11:56 am SL Time, ColomboPage News Desk, Sri Lanka.

May 26, Colombo: Moody's Investors Service says that the guarantee on pawning loans proposed by the Central Bank of Sri Lanka will support the weak quality of pawning loans of banks.

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.

"Although the government's details on the mechanism are scant at this stage, we estimate that a partial guarantee is more likely because of the government's constrained fiscal capacity and the history of government guarantees," Nick Caes, a Moody's Associate Analyst has said.

Caes said even a partial guarantee would be credit positive for Sri Lanka's banks because it will support the currently weak quality of their pawning loans. Pawning loans constitute a substantial part of the recent increase in banks' nonperforming loans.

Although the new guarantee scheme will focus only on new pawning loans, Moody's expects that the scheme will allow existing borrowers to refinance their pawning loans, perhaps even at a lower rate, leading to improvements in the quality of the asset class for the banks.

** Related Story :: Sri Lanka Central Bank introduces a credit guarantee scheme on pawning advances

ColomboPage - Recent 10 Stories
Doubts raised on Pope's visit to Sri Lanka amid snap presidential polls
-- [4 hours ago]
Opposition MPs say election materials are being prepared in Sri Lanka Port Authority Defense Training School
-- [4 hours ago]
Sri Lanka to appeal to Europe Court of Justice on lower court ruling to lift sanctions on LTTE
-- [5 hours ago]
Browns Hotels and Resorts of Sri Lanka to develop four-star hotel in Maldives
-- [7 hours ago]
India to supply two naval offshore patrol vessels to Sri Lanka - report
-- [7 hours ago]
Sri Lanka police use water cannons and tear gas to disperse university students' march
-- [8 hours ago]
Sri Lanka's Sinhala Buddhist extremist group to contest for the upcoming elections
-- [8 hours ago]
Sri Lanka External Affairs Minister defends ministry secretary against 'unfounded allegations'
-- [8 hours ago]
Iran calls for expanding politico-economic relations with Sri Lanka
-- [9 hours ago]
Opposition lawmakers on fact finding mission attacked in Sri Lanka

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.