• New prog. to provide relief maximum of an annual 10% for pawn advance that does not exceed Rs. 100,000

Sri Lanka to provide interest relief for pawning advances less than Rs. 100,000 obtained from licensed commercial banks as low-income families struggle to settle them following high interest rates, Cabinet Spokesperson Minister Bandula Gunawardena said.

Accordingly, the Cabinet has approved to implement an appropriate programme to grant an interest relief by the General Treasury subject to a maximum of an annual 10% for pawn advance that does not exceed Rs. 100,000 that has been obtained from the licensed banks on or before 30 June 2024 on individual basis.

The immense economic crisis experienced within the country during the past affected negatively every sector in the economy both directly and indirectly and as a result of the crisis, pawning gold jewellery took place accelerated. 

According to Central Bank statistics, the arrears of pawn advances which stood at Rs. 210 billion in the year 2019 increased up to Rs. 571 billion by March 2024 making it a growth of 172%. 

Pawning advances which stood at Rs. 411 billion by the end of the crisis year 2022 rose to Rs. 546.7 billion by end of 2023 with a year-on-year increase of 33% 

“Considering the said circumstances, the licensed banks have recognised the necessity of granting relief to low income generating communities who have obtained pawn advances from them,” the Cabinet Spokesperson said. 

However, he said that there is no ability for the Ggovernment to intervene in providing relief for pawning interest for pawning advances obtained from non-bank institutions.