Lankapage Logo Recent Top Stories
Go Home Home Serving the Sri Lankan community globally since 2000
go to

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
Malaysia-based Malindo Air begins flights to Colombo on Dec 18
-- [4 hours ago]
Custom officers arrested for soliciting a Rs. 125 million bribe granted bail
-- [5 hours ago]
Sri Lanka Navy arrests 10 local fishermen engaged in illegal fishing
-- [5 hours ago]
Nation Building Tax will not be added to the electricity bill, Minister assures
-- [5 hours ago]
Climate Change Agreement should not hinder sustainable development agenda of developing countries - President
-- [6 hours ago]
India offers military assistance to modernize Sri Lanka Army
Visiting Indian Army Chief meets Sri Lanka's Prime Minister
Sri Lanka’s CIC sells Chemifix trademark for Rs 345 million
IOM commends Sri Lanka's leadership of the Colombo Process
Sri Lanka and France renew commitment to deepen engagement in sports development

Copyright © 2000, 2014 by (LLC) :
The news and other contents on ColomboPage are copyrighted property of, 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, LLC. However, news organizations or broadcasters in Sri Lanka may republish the news items in ColomboPage with proper acknowledgment to ColomboPage.