Leases banned-Pawning restricted





Sri Lanka’s banks will be banned from giving leases from June 01, 2016 and pawning will be limited to five percent of total lending, and large withdrawals will be taxed, Finance Minister Ravi Karunanayake said.

In another move that can hit banks and make people hoard cash at home, withdrawals over a million rupees will be taxed at 2.0 percent, he said.

Higher volumes will be taxed at a higher rate. But people will be allowed to transfer funds by drafts he said.

People who issued rubber cheques will also be prosecuted under a new law.


All banks will have to open 15 percent more branches in lagging regions, he said, in a another potentially controversial move that increase the operational costs of banks.

Such branches should have at least 6 employees, he said.

He claimed that some areas were ‘overbanked’ and others were underbanked.

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