The lending rates of the two loan schemes operated by the Central Bank for the development of the North and East, aimed at enhancing income generating activities, has been reduced to 9 percent per annum from 12 percent per annum with effect from January 1, the bank announced recently.

"The Central Bank of Sri Lanka has introduced two special loan schemes, "Awakening North" for the Northern Province and "Development of the East" for the Eastern Province with the purpose of providing credit facilities for capital investment for the resumption of economic activities in agriculture, livestock, fisheries and micro and small enterprises.

The maximum limit of each loan will be Rs. 200,000/- per borrower. The repayment period could be a maximum of 5 years with a grace period of 6 months," the Central Bank said in a statement.

The following financial institutions have been identified as Participating Financial Institutions under the two loan schemes: Bank of Ceylon, People’s Bank, Hatton National Bank, Commercial Bank, Seylan Bank, SANASA Development Bank, Sampath Bank and DFCC Bank.

In recent visit to the North, Central Bank Governor Ajith Nivard Cabraal asked banks to retain funds from deposits and remittances within the region for ending purposes.

He also proposed to speak to heads of commercial banks to allow regional branch managers to approve loans up to a certain limit without having to wait for approval from Colombo.

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