SEC urges brokers, margin providers to lower interest rate on credit
Monday, 28 July 2014 00:01
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The Securities and Exchange Commission (SEC) has urged all stockbrokers and margin providers to lower interest rate when extending credit to their customers.
“It has been observed that the Average Weighted Prime Lending Rate (AWPR) of the Central Bank of Sri Lanka (CBSL) has declined considerably in the recent past and the lending rates on credit extension of certain stockbrokers have not been adjusted accordingly transferring the benefit of declined rates to clients. Hence, the Securities and Exchange Commission of Sri Lanka (SEC) is of the view that it is essential for the lending rates on credit extension be aligned with the policy rates prescribed by the CBSL,” all brokers and margin providers have been informed by SEC’s Officer in Charge and Deputy Director General Dhammika Perera.
Whilst thanking those who have already adjusted their lending rates, SEC has urged all to act accordingly so that the lending rates of credit extension would be brought to a justifiable level in line with the prevalent policy rates of the country.
Perera’s circular also acknowledged that the stock market has demonstrated a greater stability depicting a positive momentum with the benchmark All Share Price Index (ASPI) recently surpassing 6,700 mark, together with a larger participation of Investors in the market and increased level of turnover.
