Dec 30, 2019 (LBO) – Sri Lanka’s Central Bank says that the weekly Average Weighted Prime Lending Rate (AWPR) has declined to single-digit levels by 27 December 2019, the first time since 29 April 2016.
According to the Central Bank, the overall weekly AWPR has declined by 230 basis points from 12.24 percent as at 26 April 2019 to 9.94 percent as at 27 December 2019.
The Monetary Law Act Order No. 02 of 2019 required every licensed commercial bank (LCB) to reduce their weekly AWPR by at least 250 basis points by 27 December 2019, compared to their AWPR published by the Central Bank as at 26 April 2019.
Several LCBs have complied with the above order but People’s Bank, Commercial Bank, Standard Chartered Bank, Amana Bank and several other small banks have failed to comply.
“Some LCBs have reduced their AWPR sharply during the week ending 27 December 2019 from the previous week ending 20 December 2019 to meet this regulatory requirement,” the Central Bank said.
“Nevertheless, it is also observed that People’s Bank, Commercial Bank of Ceylon PLC, Indian Overseas Bank, MCB Bank Ltd, Public Bank Berhad, Standard Chartered Bank, Amana Bank PLC and Axis Bank Ltd have failed to comply with the Monetary Law Act Order No. 02 of 2019.”
The Central Bank intends to take appropriate measures in relation to these banks, as well as those licensed banks that have not met with the other provisions of the Order, to ensure that the general public continues to benefit from an efficient transmission of recent policy decisions through the financial system.
As per the Order, any LCB shall not increase its AWPR, from the reduced level, and it is expected that market lending rates, particularly those linked to AWPR will continue to decline in the period ahead, with regular repricing.
The weekly AWPR is the weighted average rate of interest rates applicable on short term loans and advances granted by commercial banks to their prime customers during a particular week.
Press-release-on-AWPR-Final