Cabinet approves gold pawning relief and mortgage interest subsidy

The Cabinet of Ministers has approved a proposal to provide assistance to individuals who have pawned gold jewellery in banks.

This follows a proposal tabled by President Ranil Wickremesinghe, in his capacity as Minister of Economic Stabilization and National Policy.

The country’s recent severe economic crisis has had a direct and indirect impact on all sectors of the economy, and as a result, gold pawning has increased rapidly, according to the Cabinet Office.

By March 2024, the outstanding amount of mortgage advances which was approximately 210 billion rupees in 2019 had increased by 172 percent to approximately Rs. 571 billion.

The necessity to offer assistance to low-income people who have received mortgage advances from authorized banks has also been recognized in light of circumstances.

In view of this, a proper framework to offer an interest subsidy by the Treasury up to 10 percent annually for mortgage advances not to exceed Rs. 100,000 taken by customers on a personal basis from licensed banks by June 30, 2024, has been recommended.