CBSL’s interest manipulation affecting retirees

With reference to the first page report “CB Governor finally admits the obvious” in ‘The Island’ of December 5, I give below a letter I sent to the Central Bank in May 2020.

Quote – “CBSL has issued an order to banks and other financial institutions not to recover loan and lease installments until further notice (2-6 months).

“It would be greatly appreciated if CBSL issues another order to those institutions to pay the full monthly/annual interest without fail, to clients who maintain fixed deposits at their institutions. I believe these institutions use money in those deposits for their loan and leasing operations.

“Please do not consider this as a personal request of mine, because there are several millions of non-government sector retirees (senior citizens) who have deposited their EPF and retirement gratuity money at those institutions, for them to get a monthly stipend to cover their daily living expenses.

“It is with regret I mention here that the governments (CBSL) have completely ignored this category of people when the interest rates are drastically lowered in order to grant concessions to some business sectors. As far as I know, developed countries pay a small percentage as interest for savings/deposits, but they have other systems to look after the senior citizens and people who need assistance and, to maintain the cost of living at a practicable level.

“Very soon we will have to ask for Samurdhi benefits and any other similar benefits (Covid allowance – Rs 5000.00). For me, mind you, that is after serving the country for about 40 years and retiring as a senior manager at a semi-government Authority.

“According to some statistics Sri Lanka’s total deposits was reported at 48.994 USD bn in Jul 2019 and number of depositors about 2.8m. By the way has CBSK taken into account the number (%) of beneficiaries and the losers due to frequent reduction of interest rates or observed the gains the country has achieved?” -Quote ends

I am aware that many retirees sent letters to CBSL regarding the same matter, but authorities there, who retire with a massive package of (fixed) monthly pension and several other benefits acted like the “Deaf Elephant”. The President, Cabinet and MPs who get a (fixed) monthly pension just after five years of (non)serving and the CBSL had/have no solution other than the frequent reduction of interest rates, in order to come out of the economic mess they together had created.

These are the people who are responsible for sending many, who depended on monthly interest payment for their day to day living, to commit suicide after going behind ‘Sakvithis’ and other similar organizations who paid bigger interest rates.

J A