Central Bank of Sri Lanka has decided to withdraw the Monetary Law Act issued on 26 April 2019 on imposing maximum interest rates on Sri Lanka rupee deposits of licensed banks.

Considering the high real interest rate on deposits and lending products prevailing in the economy and the need to strengthen and expedite monetary law transmission through the financial system, and for licensed commercial banks and licensed specialized banks to reduce interest rates on lending and thereby enhance credit flows to the real economy, the Monetary Board issued an order on maximum interest rates to be paid in respect of deposit products of licensed bank. (26 April 2019)

However issuing a statement on Wednesday CBSL noted that ; “Consequent to the issuance of the Directions to the licensed banks by the Central Bank of Sri Lanka on Enhancing Efficiency of the Transmission of Recent Policy Decisions to Market Lending Rates, where licensed banks are required to reduce its rupee denominated market lending rates, the Monetary Board has decided to withdraw the Monetary Law Act Order No. 01 of 2019 issued on 26 April 2019 imposing Maximum Interest Rates on Sri Lanka Rupee Deposits, with effect from 24 September 2019,”