Changes to senior citizens’ FDs: Fortunes changing for the worse
12 Apr 2022
Changes to senior citizens’ FDs: Fortunes changing for the worse
12 Apr 2022
Elderly bemoan negative quality of life owing to impact of Govt.’s move
BY SUMUDU CHAMARA The economic crisis is not a new phenomenon for Sri Lanka, but it has now become the biggest issue the country is facing. It is a time when every citizen is scrambling to save as much money as possible, even though it is becoming an uphill battle owing to inflation, which has gotten out of the Government’s hands. In this context, saving money is a dream for many, and those who have saved money are trying to get the maximum benefit out of their savings. Last month, it was reported that the Central Bank of Sri Lanka (CBSL) had instructed licensed commercial banks to convert senior citizens’ fixed deposit accounts that come under the category of the “special high interest rate scheme” into regular fixed deposit accounts. They were allowed to do so in the event that account holders do not appear before the relevant banks and submit a request in writing to extend the scheme by another year. According to what was reported, this new regulation was applicable to senior citizens’ fixed deposits that had reached maturity before 21 March, and the account holders had been required to visit the relevant bank before 31 March, and submit the said request. The issue attracted attention mainly due to the considerable difference between the interest rates of the two types of fixed deposits. The interest rates offered for normal fixed deposits were around half of the interest rates offered for fixed deposits that fall under the special high interest rate scheme, which is 15%. Senior citizens who have completed 60 years of age are eligible to open a fixed deposit account under the special high interest rate scheme, and they are allowed to open only one such account with a maximum deposit of Rs. 1.5 million. To discuss how senior citizens view this move, The Morning spoke to several senior citizens who have fixed deposit accounts. In this regard, Jayasinghe (name changed on request), a 62-year-old retired public sector employee, said that this move is a completely insensitive one, especially given the health condition of most senior citizens, and that it can easily worsen the impacts of the present economic burden on them. “I have had a fixed deposit account for years, and this is the first time that such an additional and irrational requirement was imposed by the Government regarding such fixed deposits. This is unacceptable, due to the deteriorating health situation of most senior citizens. I cannot even leave the house without the help of someone else, and having to go to the bank to renew my own account to which I have deposited my own money, just to continue to enjoy the benefits I was promised when I opened that account, is ridiculous.” He expressed concerns that this is not just a matter of the senior citizens’ health condition, but is also a matter of the senior citizens’ economy at a time when the country is in a deep economic crisis. “Like me, many retired senior citizens depend largely on the interest they receive from their fixed deposits, because we can no longer work like we did before. Some depend completely on the interest. Some are living in rented houses or in elders’ homes, and it is with this interest that they pay their rent or fees, and cover their basic expenses. If they fail to appear before banks personally and renew their fixed deposit accounts, it directly affects the interest rate that they receive since the type of their fixed deposit changes. “It is not something that most senior citizens can afford, especially not in the current economic situation. The country is going through an economic crisis it cannot get out of, and we are living in an era where we cannot waste a single rupee. Every rupee is more important now than before, since the value of every rupee has decreased significantly.” He opined that this situation will affect the quality of life of a large number of senior citizens who have deposited all their savings in fixed deposits with the hope of living the latter part of their lives without being a burden to anyone. He opined that this situation will in turn increase the burden of rising inflation on others such as families and the guardians of senior citizens.Amarapala (name changed on request), a 64-year-old retired businessman who has a fixed deposit account, noted that in a context where Sri Lanka does not have a proper social security mechanism, what the Government should do is further strengthen the available systems through which senior citizens survive in their old age. He opined: “I understand that the Government as well as the country’s banking system are faced with severe economic and financial challenges. However, people, especially senior citizens who cover their expenses with the interest received for the little money that they have saved over a lifetime, are facing worse economic challenges. . Therefore, passing the burden of the deteriorating economy and the consequences of the rulers’ wrong decisions, to senior citizens, who have contributed to the country in a plethora of ways, is unacceptable.” He also raised concerns as to whether the said decision was clearly communicated to senior citizens who have fixed deposits that fall under the category of the special interest rate scheme. “At the same time, there has been no proper discourse or explanation about the reasons that led to the said decision or its objectives. Even if there were such, the relevant information or explanation has not reached us senior citizens who have fixed deposits. I do not even know how many fixed deposit holders got the message about this decision. “The Government or the banking system must have had a good reason to take this decision, but, educating senior citizens who have fixed deposits is crucial, because, at the end of the day, it is their money. In fact, decisions such as these can easily confuse senior citizens and put an additional burden on them, especially those who do not associate with the outside world much or watch news. Such sudden decisions, which are also unfavourable to the account holders, should be discussed and conveyed in a better manner.” He further noted that the said decision sets a bad precedent, as it implies that with short notice, the benefits given to senior citizens, or any citizens for that matter, by banks or by the Government, can be controlled or curtailed in unexpected ways. “Those who have fixed deposits are not people who are waiting for the Government to spend public funds to feed them. They have earned and have saved. They should be given the benefits that they were promised, and should not be subjected to confusing or unfair regulations,” he opined. Adding that Sri Lanka is going through a time where senior citizens should receive easy and more opportunities and benefits, he said: “When it comes to supporting the elderly population, Sri Lanka has a long way to go. How many banks issue a loan to a senior citizen, how many financial institutions support senior citizens planning to start their own business, and how many Governments have at least talked about introducing a social security system for senior citizens who have no income or someone to support them? “Senior citizens are often viewed as people who are waiting for free food or special benefits. But a large segment of senior citizens can still look after themselves, be financially independent, and contribute to the country’s economy in some way. However, it requires some support from financial institutions, civil society organisations, and the Government.” Senior citizens are an integral part of any population, and their contribution has helped build the society that exists today. Therefore, as those who spoke with The Morning pointed out, decisions that affect their savings of a lifetime should be clearer and should not affect their confidence in the banking system.
