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Tue, 24 October 2017 00:24:39
Sri Lanka CBSL says no circular for senior citizens interest rate scheme extention of new fixed deposits
11 Mar, 2015 09:50:50
By Gayan Chandrasekara
Mar 11, 2015 (LBO) – Sri Lanka’s state banks have extended the 15 percent senior citizens interest rate scheme for new fixed deposits of up to one million rupees amid quarries from dissatisfied elders.

Even though the scheme has been extended, general manager of bank of Ceylon D.M Gunasekara said that banks will consider only 'genuine' senior citizens to open up new fixed deposits.

“We are taking National Identity Card numbers and maintaining a record of interest payments in order to stop senior citizens trying to take low interest loans from one bank and depositing it in high interest fixed deposits in another bank.” Gunasekara said.

However the Central Bank has not yet published a press release extending the scheme for new fixed deposits coming to effect after 31 January 2015.

“I was not very clear about the new money, now I have got instructions, even they can bring new money and open up to one million...,” an official of the central bank said.

“We haven’t received the circular yet,” a deputy director of central bank told LBO.

Speaking at the press briefing, Tuesday finance minister Ravi Karunanayake asked central bank to defend their actions.

“The central bank does not have separate standards. We as government say, they follow. This is not like the previous Central Bank that did what they want,” Karunanayake stressed.

According to Karunanayake, senior citizens who have over one million rupees already in their fixed deposits will have to use a new account to qualify for the scheme although the instructions are not clear enough.

“The question was if there were three million; they can have 15 percent for one million”

“NO...they have to use a new account for that one million, we can’t have a differentiation, our intention is only to create for the people who really require it, not for the super rich who basically should be getting a super gain tax.” Karunanayake said.

According to the point five of the 100 day programme of President Maithripala Sirisena, senior citizens will get a 15 percent interest rate for the first one million of fixed deposits held in state banks.

The term ‘first one million’ includes deposits that are over one million.

As per the ‘interim budget’ of minister Karunanayake, senior citizens will be receiving a higher interest rate of 15 percent per annum for their savings up to a maximum level of 1 million rupees for funds deposited in commercial banks.

Currently, senior citizens (over 60 years of age by 31 January 2015 and reach 60 after that date) are entitled to the 15 percent scheme provided that the person holds a fixed deposit of up to one million rupees in aggregate in all banks.

Senior citizens who opened fixed deposits of up to 2.5 million rupees after 01 January 2015 and prior to 16 January 2015 under the previous scheme are also entitled to an interest of 12 percent per annum.

The guidelines seem to have no instructions about persons opened deposits of up to 2.5 million rupees between 16 January 2015 and 31 January 2015.

Even though licensed commercial banks and licensed specialized banks seem to be covered under the exiting regulations, the new decision of state banks to allow new deposits into the scheme have to be scrutinized.

“Well...we have given it to the state banks and others can compete.” Karunanayake said.

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