gossip lanka

Central Bank to take action against eight banks

The Monetary Law Act Order No. 02 of 2019 on “Enhancing Efficiency of the Transmission of Recent Policy Decisions to Rupee Denominated Market Lending Rates” required, inter alia, every licensed commercial bank (LCB) to reduce their weekly Average Weighted Prime Lending Rate (AWPR)  by at least 250 basis points by 27 December 2019, compared to their AWPR published by the Central Bank of Sri Lanka as at 26 April 2019 in the Weekly Economic Indicators publication.
This shall not apply to LCBs, whose AWPR reaches or falls below 9.50 per cent per annum as at the date of this Order or anytime thereafter.

The Central Bank observes that several LCBs have complied with the above Order, and in particular, some LCBs have reduced their AWPR sharply during the week ending 27 December 2019 from the previous week ending 20 December 2019 to meet this regulatory requirement. Accordingly, the overall weekly AWPR has declined by 230 basis points from 12.24 per cent as at 26 April 2019 to 9.94 per cent as at 27 December 2019. This is the first time since 29 April 2016 that AWPR has declined to single digit levels.