The decision to stop the 20 percent bonus on interest paid to senior citizens who placed their savings in commercial banks was taken due to the financial burden it placed on the government, Cabinet spokesman and Minister Keheliya Rambukwella said.
However, he said the Treasury would be looking into the possibility of reactivating the special bonus scheme after several appeals were made to President Rajapaksa, but other sources said this was unlikely.
At a recent cabinet meeting, the President said that Rs. 71 billion had been paid to senior citizens as special bonus on their deposits.
Minister Rambukwella said the bonus given from January to June this year was meant to encourage senior citizens to save.
His remarks came in the wake of the Sunday Times front page lead story last week. The report said that Central Bank had encouraged senior citizens to place their money in commercial banks with the promise of a 20 percent bonus on interest, but six months later commercial banks were told by the Central Bank that the bonus scheme was being suspended.
However the Central Bank which subsidized the bonus payment could not bear the financial burden any further, Minister Rambukwella said.
It was the Central Bank that promised a 20 percent bonus on interest. The Central Bank made no comment all week on the sudden withdrawal of the bonus scheme. Officials also refused to comment.
Many of the senior citizens had withdrawn their savings from finance companies and deposited them in state and private banks as interest on deposits had fallen from 14-18% to 8-9% in the past three years. |
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