Sliding interest rates
The interest rates on bank deposits have been reduced drastically and the explanation given by the Governor of the Central Bank is that to uplift the economy, interest rates must be maintained at a lower rate.
That is true, but then why is there is a saving called the Employees Provident Fund? This EPF is reimbursed by private sector workers during their retirement period and the interest on their fixed deposits are used as the income.
If the interest income is not sufficient, they are then forced to use the capital and end up with nothing. Does the government want those in the private sector to become beggars when they reach retirement age? If the EPF is not practical, then the authorities shouldn’t have converted it to a pension schemes.
It appears that the deposits to these pension funds by the customer is not refundable, and the interest or the pension payable monthly on maturity is only about 2 per cent more than the interest payable on a fixed deposit.
Who would be stupid enough to lose their life-long savings for an extra 2 per cent interest, unless that person has lost his senses due to old age? I hope the President will come up with a favourable solution to this matter during his budget speech.
R.N
Colombo