Banks in compliance with interest rate cut

By Sulochana Ramiah Mohan

The Central Bank’s latest request to all the licensed commercial banks to reduce interest rates levied on credit cards to a level between 24 -36 per cent with immediate effect has been implemented since last November, some private sector banks noted.
Credit card interest rates cuts are technically penal rate cuts sans first month interest, it was revealed.
According to some private sector banks, they have implemented the credit card rate cuts from last November, when the inflation had dropped to a single digit.
American Express, Manager Card Portfolio Team, Prasanga Kasturiarachchi said, their Gold card came down to 2.9% from 3.3% and the other cards were down by 3% from 3.5 per cent from November 1 last year and will not go down further, until there is a major change in the country’s economy.
It was similar with HSBC. Sarit G Wijeyekoon, Head of Personal Financial Services HSBC Sri Lanka, said, “We have constantly reviewed our rates in line with market rates. In accordance to Central Banks’ s directive, we have reduced our rates and they range from 2.8 - 3.0% monthly”, with effect from 1 Jan 2010.
It was noted that their Classic card credit rate was slashed to 3.15% from 3.25 last Novemer and on January 2010 they further reduced their Visa Classic and Gold card from 3.15% to 3%. Also Platinum and Premium were slashed from 3% to 2.8%.
Commercial Bank, Senior Manager - Card Centre, Ayomi Kelegama said that interest rates applicable on all Commercial Bank cards have always been below the maximum set out by the Central Bank recently. She said, “interest rate on our Gold and Classic card is 3%. On our electronic card it is 2.9%.
In the mean time, Central Bank Governor Ajith Nivard Cabraal, speaking to FEB said, if they are informed of any bank that does not comply with their request to slash rates, he would promptly take action against them.