Sri Lanka banks ordered to pay 15-pct interest to 60+ depositors

COLOMBO (EconomyNext) – Sri Lanka’s Central Bank has ordered banks to pay 15 percent interest for term deposits of up to a million rupees, held by those over 60 years of age, giving effect to an election promise.

Senior citizens who opened fixed deposits up to 2.5 million rupees before the 16.01.2015 under an earlier scheme would also get 12 percent interest.

A statement by the Central Bank said the rule applied to all banks.

The Rajapaksa administration gave a bond to for state banks to cover the extra interest, but no mention had been made of any such scheme at this time.

The full statement by the Central Bank is reproduced below:

Issue of Operating Instructions on the Special Interest Scheme for Senior Citizens

The Government of Sri Lanka has now finalised the procedure for implementation of the Special Interest Scheme for Senior Citizens announced in the Interim Budget 2015 with effect from 01.02.2015. Accordingly, the Central Bank of Sri Lanka issued the necessary Operating Instructions on behalf of the Government to all banks today. Key features of the Scheme are as follows:

Senior Citizens eligible for the Scheme:

(a) Senior citizens above 60 years of age who held rupee fixed deposits not exceeding Rupees one million in aggregate in all banks as at 31.01.2015.

(b) Senior citizens who reach 60 years of age after 31.01.2015 and hold rupee fixed deposits not exceeding Rupees one million in aggregate in all banks.

(c) Senior citizens who opened fixed deposits of up to Rupees 2.5 million, prior to 16.01.2015 under the previous scheme.

Interest rate payable in the Scheme:

(a) 15% per annum for (a) and (b) above

(b) 12% per annum for (c) above

Accordingly, Operating Instructions dated 30.12.2014 on the special interest scheme for senior citizens over 60 years of age have been revoked.