Senior SL citizens to get 12 % on bank deposits from Jan 1, 2015
View(s):Senior Sri Lankan citizens over 60 years of age will receive 12 per cent interest on their fixed deposits up to a maximum of Rs. 2.5 million in any commercial bank from January 1, 2015, the Central Bank (CB) said on Tuesday. This is higher than the Rs.1 million per depositor.
The offer is part of a Budget 2015 proposal on higher interest rates to senior citizens. An Rs.2.5 million deposit would entitle an eligible depositor to Rs. 300,000 interest per annum.
The proposal ran into some heavy weather in the past few weeks with the CB saying it would only apply to a maximum of Rs. 1 million per depositor. Private banks’ had also requested that the Rs. 30 billion bond issue at 12 per cent interest to cover any deficit between lending and borrowing rates offered to state banks, be extended to all banks,
According to Sri Lanka Banks’ Association (SLBA) data, some 750,000 senior citizens hold accounts in 33 banks worth Rs. 750 billion.
In an eve-of-election incentive, the CB said the scheme would apply to all licensed banks, operating in Sri Lanka that maintain fixed deposit accounts shall implement this special interest scheme with effect from 1 January 2015.
It said all banks will receive a special bond to be issued by the Government at an interest of 12 per cent per annum, in order to cover the additional interest cost incurred by them, under this scheme.
The interest income on these deposits will be exempted from income tax.