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Sri Lanka Removes Five Percent Ceiling On Lending

Sri Lanka's Central Bank has issued a directive enabling banks to extend loans to margin trading from 5%. The move follows recent appeals by the Colombo Stock Brokers Association (CSBA), which said lifting the ceiling from 5% to 7.5% of

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Sri Lanka’s Central Bank has issued a directive enabling banks to extend loans to margin trading from 5%.

The move follows recent appeals by the Colombo Stock Brokers Association (CSBA), which said lifting the ceiling from 5% to 7.5% of a bank’s portfolio can inject billions of rupees by way of margin trading funds to the stock market.

The regulator consented to the extension, ordering banks to set their own risk limits.

(JDC)

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