📈 MSMEs Accuse Banks of Usury, Call for CBSL Action

The Ceylon Federation of MSMEs has formally complained to the Central Bank of Sri Lanka (CBSL) about excessive lending rates charged by banks, despite significant policy rate cuts. • Key Concern: Banks are not proportionately passing on policy rate reductions to borrowers, leading to inflated lending spreads. • Economic Disconnect: While CBSL's Overnight Policy Rate (OPR) was 7.75% by Dec 5, the Average Weighted Prime Lending Rate (AWPLR) remained significantly higher at 8.74%. • Impact on MSMEs: This divergence disproportionately burdens MSMEs, hindering their recovery, investment, and job creation post-2022 economic crisis. • Bank Profits: The Federation highlighted a sharp rise in bank profits (Profit After Tax) during the 2022-2024 period, coinciding with high interest expenses for MSMEs. • Call to Action: The MSME body urges stronger regulatory intervention from CBSL to ensure fair monetary policy transmission, prevent unjustified widening of lending spreads, and demands that banks return excess interest charged to MSME borrowers.