The Central Bank yesterday informed the public of maximum interest rates that could be offered for deposits by finance companies, with effect from April 1, 2014.
This was the first time Central Bank notified the public of the maximum interest rates on deposits as the earlier practice had been to inform the top management of the finance companies mostly on a quarterly basis.
The Central Bank said the maximum interest rate that could be offered for savings deposits accepted or maintained shall be 7.58 per annum.
The maximum interest rate that could be offered for fixed deposits accepted or renewed for a maturity period of one year or less should be 11.01 percent per annum.
If the maturity period is over one year and up to three years, the maximum interest rate should be 12.01 percent per annum and if the maturity period if over three years, the maximum interest rate should be 13.51 percent per annum.
Finance companies are allowed to pay an additional interest rate of one percent above the maximum rate, in the case of savings or fixed deposits by senior citizens over 55 years.
According to analysts, this is a step in the right direction by the Central Bank though it is long overdue to make the public aware of the official interest rates that could be paid by finance companies within the legal framework they are operating in.
Thousands of Sri Lankans have been duped by finance companies—some licensed by the Central Bank—offering interest rates way higher than the rates the Central Bank had fixed.
“I believe this is very good move by the Central Bank, if they continue go public with the rates every three months or so. Then the people could guess if somebody is offering interest rates higher than the official rates, there’s something fishy going on with that company,” a finance sector analyst said.