The Commercial Bank of Ceylon has announced a further lending rate cut, slashing rates by up to 2% on all categories of loans in a continuing effort to bolster businesses affected by the COVID-19 pandemic by providing affordable access to desperately-needed funds.
The Bank took steps to reduce lending rates in February 2020, before the full onset of the COVID-19 pandemic and also responded swiftly during the lockdown period by reducing lending rates on two more occasions. Accordingly its rates for Agri Business Loans, SME Loans and Gold Loans have been reduced in 2020 by 3.5%, 4% and 5% respectively.
Sri Lanka’s benchmark private sector bank, which has also launched two separate bank-funded support loan schemes since May 2020to support COVID-19 affected borrowers, said the rate cut, effective 24 June 2020, covers all new Home Loans, Leasing, Personal Loans, Pawning, Diribala Development Loans for SMEs, Green and Pensioners’ Loans as well as loans provided under the special Bank-funded Agri Business and COVID-19 relief loan schemes.
Additionally, loans provided under the Bank’s ‘Dirishakthi COVID-19 Support Loan’ scheme designed to meet the working capital requirements and revive operations of micro businesses whose annual turnover is below Rs 15 million, will be provided at an interest rate of 9% per annum, the Bank said.
“The depths to which some business sectors have been affected continues to be revealed as we step up our efforts to provide a lifeline and sustain companies and the economy until business volumes and cash flows improve,” Commercial Bank Managing Director S. Renganathan said. “As a systemically important bank, the Commercial Bank of Ceylon is doing everything within its capacity to support the post-COVID-19 revival, and we will continue to look for ways in which we can contribute even more in the challenging months ahead.”
Detailing the latest rate cuts, the Bank announced that the rates on Agri Business Loans which were cut by 2% in May to 12% and 13% for five and seven year loans respectively, have now been cut by a further 1.5% to 10.5% and 11.5%.
Meanwhile the rate on ‘Diribala’ loans designed for SMEs and micro enterprises in the industrial and services sectors, reduced by 2% in May, have been slashed by a further 2% for both five and seven year tenors to 9.5% and 10.5% respectively, the Bank said.
Besides the launch of its the ‘Dirishakthi COVID-19 Support Loan’ scheme for micro entrepreneurs, Commercial Bank recently made a separate commitment of approximately Rs 10 billion to provide loans to SMEs affected by COVID-19, after it obtained a loan of US$ 50 million from the IFC. These Bank-funded loans are also provided to those who missed out on the benefits of the CBSL supported ‘Saubhagya Covid-19 Renaissance Facility.’
The interest rates on Home Loans have been reduced by up to 1.5% to 9.75% for 10-year loans, 10.5% for loans of over 10 years, and 9% for ‘Privilege’ Home Loans.
Leasing, Biz Loan and Personal Loan customers benefit from reductions of up to 1.5% on their respective rates of interest. Pensioners’ Loans are benefitted by a rate cut of 1.5% on loans of up to 84 months.
Meanwhile, the rates applicable to Green Loans and Leases that support conversion to renewable energy and investment in other eco-friendly practices have also been slashed by a further 1% to 10% for three-year loans and 11.5% for seven year loans.
The Bank has also taken the initiative to further reduce the Pawning interest rate, reduced to 11% p.a. in May, by a further 1% to 10% effective 24 June 2020.
One of the largest lenders to the SME sector, Commercial Bank of Ceylon has been offering financial support services to businesses in order to soften the blow of the economic effects that COVID-19 has imposed.
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