Features

Banking Rules fail the elderly and informal sector

Published

1 week ago

2025/04/30

Yesterday, I received a phone call from a well-known private bank. A polite female voice on the line asked whether I was interested in obtaining a housing loan. Knowing how things typically work in the Sri Lankan banking system, I decided not to waste her time—or mine. So, I responded candidly: “I’m over 60. Are you still interested in offering your service to me?”

As expected, she politely replied, “No sir, we offer housing loans only to customers below the age of 60.”

Now, let’s think about this for a moment. If you’re 59 years old, does that mean the bank will give you a housing loan with just a one-year repayment period? Apparently, yes. What kind of absurd banking logic is this? Such rigid age cut-offs do not reflect risk management, but sheer bureaucratic laziness.

Banks and other financial institutions follow rules set by the Central Bank of Sri Lanka. One of the main reasons for these rules is to protect the money that people deposit. Figure 1 shows one of those orders to regulate home loans provided by banks.

Employees are to provide banks with confirmation from their respective employer regarding the retirement date/age, as applicable. This requirement introduces administrative friction for the borrower and places unnecessary dependence on employer documentation. Many private sector employers do not maintain strict retirement policies, and contract-based employment has become common. Mandating employer confirmation becomes especially problematic in such cases.

Eligibility Criteria for Housing Loans Under the Terms of This Order (Effective from 10 December 2020) specify the following individuals are eligible to obtain housing loans:

Salaried Employees

* Individuals must be employed in either the public sector (e.g., government departments, state-owned enterprises) or the private sector (e.g., registered companies, private institutions).

Confirmed in Service

* The employment must be confirmed, i.e., the borrower should have completed any probationary period and be in permanent or long-term service. Probationary employees or temporary/contract workers may not be eligible under this order.

This eligibility criterion is narrow and exclusionary, especially in an evolving labour market where:

* Many skilled workers are self-employed, on a contract basis or work in the gig economy would find hard to provide evidence to prove their repayment capacity.

* Job confirmation timelines are often extended due to changing employment practices.

* Real estate investment is increasingly seen as a retirement or family-planning strategy, including among older or self-funded individuals.

While the intent may be to minimise risk for banks by ensuring repayment capacity and employment stability, this overly conservative approach may discriminate against capable, creditworthy individuals, especially older citizens or those outside traditional salaried employment structures.

Tenure of a loan

Figure 2

is an excerpt from the directive issued by CBSL, highlighting the restrictions imposed on the tenure of home loans.

Interestingly, Deshamanya Lalith Kotelawela was one of the few who had the courage—and arguably the foresight—to challenge such irrational norms. While some of his business decisions were controversial, especially the appointment of non-professionals to key financial roles, his thinking on housing loans for older customers was progressive. He proposed that housing loans should be extended even to individuals aged between 60 and 70, with repayment periods of 20 to 30 years. However, he also recommended attaching insurance to these loans—an approach that could benefit his own insurance companies. Naturally, the premiums would be significantly higher for older or higher-risk borrowers.

His reasoning was rooted in both financial logic and social realism: in most Sri Lankan families, children would never allow their parents to lose the family home. In the worst-case scenario, the property—often the most secure asset one can offer—serves as reliable collateral. From a regulatory standpoint, too, this makes sense. According to the Basel framework for banking supervision, residential mortgage loans carry a risk weight of only 50% when calculating capital adequacy. That means such loans are already considered relatively low risk.

So, why are banks clinging to these outdated, “one-size-fits-all” rules that ignore real-world dynamics, demographic shifts, and even their own financial regulations?

These are not just outdated policies—they are stupid banking rules.

Age Discrimination and Financial Exclusion

This condition is fundamentally age-based and introduces structural discrimination against older borrowers. By linking repayment tenure strictly to the borrower’s retirement date, it disproportionately excludes capable individuals nearing retirement—even if they are financially stable, have substantial savings or collateral, or have alternative income sources such as pensions, business income, or rental properties. It presumes that retirement equals financial incapacity, which is not always true in the modern economy. Today, some retired government employees receive monthly pensions exceeding Rs. 100,000.

Ignores Multigenerational and Alternative Repayment Scenarios

This policy does not account for cases where a housing loan is taken for the benefit of the family, and repayment responsibility can logically transfer to a younger family member (such as an adult child or co-borrower). In South Asian cultures especially, joint-family structures and intergenerational financial support are common. Denying long-tenure loans, based on an individual’s remaining years of employment, ignores these sociocultural realities.

Penalises Those Who Start Later

Not everyone begins salaried employment early in life. Some people shift careers, pursue entrepreneurship, or even migrate and return to salaried employment later. Under this rule, a 45-year-old starting a government job would be eligible only for a 15-year loan, regardless of income or asset base. This rigid approach fails to reflect the dynamic nature of modern work and life paths.

Common sense

Banking is often celebrated as a sector driven by logic, data, and risk mitigation. Yet, it is riddled with regulations and practices that are outdated, unempathetic, and at times, downright illogical. A prime example of this is the age discrimination embedded in housing loan policies in many Sri Lankan banks—and indeed in banks across much of the world. The author’s anecdote of receiving a call from a reputed private bank offering a housing loan, only to be told that customers over 60 are ineligible, highlights a major flaw in modern banking systems.

At the heart of this issue lies a fundamental contradiction: while banks are supposed to be institutions that assess individual risk, they often make blanket decisions based on crude demographics such as age. If a person is 59 years old, they are technically eligible for a loan, but only for a tenure of one year, assuming the cut-off age is 60. That assumption, of course, is absurd. Imagine a healthy, wealthy 59-year-old customer being allowed to borrow only on terms designed for a dying man. This “stupid banking rule” lacks nuance and punishes individuals who might otherwise be low-risk borrowers with good collateral.

The Need for Reform

Age should not be the sole determinant of loan eligibility. In an era where people live longer, work well into their seventies, and often own significant assets, banking institutions must adopt more flexible, holistic credit assessment methods. Factors like health, income stability, family support, insurance coverage, and asset base must be considered alongside age.

Additionally, banks should be encouraged—or even regulated—to adopt inclusive lending practices. Policies that facilitate family-based guarantees, property-backed loans with transfer clauses, or reverse mortgage models can ensure that elderly individuals are not financially excluded.

(The writer, a senior Chartered Accountant and professional banker, is Professor at SLIIT, Malabe. He is also the author of the “Doing Social Research and Publishing Results”, a Springer publication (Singapore), and “Samaja Gaveshakaya (in Sinhala). The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of the institution he works for. He can be contacted at saliya.a@sliit.lk and www.researcher.com)

All News Advertisement

Features

‘Silent Majority’ abandoned to Long-suffering in regional conflicts

Published

8 hours ago

2025/05/8

Sahan Weerasooriya

People of the Gaza strip gather to collect food. (Haitham Imad/EPA, via Shutterstock)

With reports emerging that India has attacked some ‘sites’ in Pakistan and Pakistan-administered Kashmir, the question could be posed whether the stage has just been set for yet another costly India-Pakistan military conflict. Sensible opinion in South Asia could only hope that wise counsel would sooner rather than later come to prevail on both sides of the divide and that they would draw back from the brink of full-scale war.

The states concerned ought to know fully well the possible wide-ranging weighty consequences of another regional conflict. It should be plain to see that it would benefit none in the two theatres of confrontation, most particularly the relevant publics or the ‘Silent Majority’.

In fact, in connection with the mentioned initial military attacks, the Pakistani side has gone on record that some civilian lives have been lost. Such losses could burgeon in the event of full scale hostilities. These costs could of course be staggering and unimaginable in the event the nuclear option is resorted to by the sides, going forward.

Accordingly, the hope of the peace-loving world-wide is likely to be that India and Pakistan would give negotiations a chance and resolve their differences peacefully. It would be in the best interests of the world for the champions of peace to join their voices to that of UN chief Antonio Guterres and call on the sides to negotiate an end to their differences.

The utter helplessness and misery of the people of the Gaza ought to drive home afresh the horrors of war. Currently the news is that the Gazans are literally starving to death. Food and other essentials provided by UN agencies are reportedly being prevented by Israel from getting to the hapless people of Gaza. So dire is their situation that concerned quarters are calling on the compassionate worldwide to provide the Gazans with food, water and other essentials voluntarily. This SOS would need to be heeded forthwith.

Accordingly, it could be inferred that most formal arrangements, including those that are generally under the purview of the UN, geared to providing emergency humanitarian assistance to the needy, have, for all intents and purposes, been rendered ineffective in the Gaza. The UN cannot be faulted for this state of things; rather, Israel should be held accountable in the main for it.

The matter of accountability is central to the dramatic slide into lawlessness the world has been experiencing over the past few decades. As could be seen, International Law is no longer fully applicable in the conflict and war zones of the world because it is not being adhered to by many state and non-state aggressors. That the UN is hapless in the face of such lawlessness is plain to see.

We have of course the Middle East wherein International Law has fallen silent for quite a while. How could it be otherwise, when Israeli aggressions are being winked at by the US, for which the policy of backing Israel is almost sacrosanct?

Moreover, under President Donald Trump, it is difficult to see the US changing policy course on the Middle East. Trump made vague promises of bringing peace to the region in the run-up to his reelection but has done nothing concrete by way of peace-making. Consequently, complete lawlessness prevails in the Middle East. US policy towards Israel counts as another example of how the self- interest of US central administrations blinds them to their international obligations, in this case Middle East peace.

However, the commentator could be criticized as being biased if he holds only Israel responsible for what has befallen the Middle East. It has been the position of this columnist that Israel’s security needs should be taken cognizance of by its state and non-state adversaries in the Middle East and acted upon if the basis is to be laid for a durable Middle East peace. Inasmuch as Palestinian statehood must be guaranteed, the same should be seen as applicable to Israel. The latter too enjoys the right to live in a secure state of its own, unopposed by its neighbours.

The Ukraine of today is also sad testimony to the ill consequences of powerful, aggressor states wantonly disregarding International Law and its obligations. Nothing could justify Russia in invading Ukraine and subjecting it to a condition of Longsuffering. Clearly, Ukraine’s sovereignty has been violated and such excesses go to the heart of the current state of ‘International Disorder’. Of course the same stricture applies to the US in relation to its military misadventures in Afghanistan and Iraq, to name just two such modern examples.

There is no ducking the fact, then, that civilian publics in the mentioned theatres of war and outside, are being subjected to the worst suffering as a consequence of the big powers’ self-aggrandizement schemes and military misadventures. Longsuffering becomes the tragic lot of the people who have nothing to do with such unbridled power ambitions.

One would not be exaggerating the case if he states that civilian publics count for almost nothing in the present ‘International Disorder’. Increasingly it is becoming evident that from the viewpoint of the big powers and authoritarian governments the people are of little or no importance. Considering that self-aggrandizement is of the paramount interest for the former the public interest is coming to be seen as inconsequential.

Consequently, not much of a case could be made currently for the once almost reverentially spoken of ‘Social Contract’. For, the public interest does not count for much in the scrambles for power among the major powers who are seen at the popular level as the principal history-makers.

It is in view of the above that much is expected of India. Today the latter is a ‘Swing State’ of the first importance. Besides being a major democracy, it is one of the world’s principal economic and military powers. It possesses abundant potential to help to put things right in international politics. If there is one state in Asia that could help in restoring respect for International Law, it is India.

Considering the above, India, one believes, is obliged to bear the responsibility of keeping South Asia free of any more long-running, wasting wars that could aggravate the material hardships and socio-economic blights of the region. Thus, India would need to consider it imperative to negotiating peace with Pakistan.

Features

Memorable happening … Down Under

Published

8 hours ago

2025/05/8

Sahan Weerasooriya

Lyceum swimmers at Melbourne Sports and Aquatic Centre

Under the Global-Ise Australia Advanced Sports Development Programme, a delegation of 15 swimmers from Lyceum International School, Wattala, had the remarkable opportunity to train and experience high-performance sports development in Melbourne, Australia.

The 10-day programme was carefully curated to offer intensive training, educational exposure, and cultural experiences for the young athletes.

The swimmers underwent specialised training through Swimming Victoria’s elite programme, held at some of Melbourne’s premier aquatic facilities.

Visit to Victorian Parliament

Each day began as early as 5:00 a.m. and continued until 7:00 p.m., ensuring a rigorous and enriching schedule that mirrored the standards of international competitive swimming.

Beyond training, the programme offered a wide array of experiences to broaden the students’ horizons.

Morning training

The tour group explored iconic landmarks such as the Victorian Parliament and the Melbourne Cricket Ground (MCG), and enjoyed shopping at Chadstone – The Fashion Capital. They also experienced the natural beauty of Victoria with visits to Yarra Valley Chocolaterie & Ice Creamery, and Cardinia Reservoir Park, where they observed kangaroos in their natural habitat.

An academic highlight of the tour was the group’s exclusive visits to three of Australia’s leading universities: the University of Melbourne, Monash University, and Deakin University. These visits aimed to inspire students and showcase the vast educational opportunities available in Australia.

Checking out the scene at Yarra Valley Chocolaterie & Ice Creamery

As part of the cultural immersion, Global-Ise hosted a traditional Australian BBQ at the Tim Neville Arboretum in Ferntree Gully. The students also enjoyed a variety of diverse culinary experiences each evening, further enriching their understanding of local and international food cultures.

The tour concluded with a celebratory dinner at the Spicy Wicket Restaurant, where each participant received a presentation in recognition of their involvement.

Enjoying an Aussie BBQ for lunch

The evening was made especially memorable by the presence of Pradeepa Saram, Consul General of Sri Lanka in Victoria.

Global-Ise Management—Ken Jacobs, Johann Jayasinha, and Dr Luckmika Perera (Consultant from the University of Melbourne)—did a magnificent job in planning and the execution of the advanced sports programme.

Coaches from Sri Lanka presenting a plaque to Global-Ise Management team
Ken Jacobs (centre), Johann Jayasinha, and Dr Luckmika Perera (on the right

Features

Bright, Smooth Skin

Published

9 hours ago

2025/05/8

Sahan Weerasooriya

Hi! How’s the beauty scene keeping with you?

Phew, this heat is awful but there is nothing that we can do about it.

However, there are ways and means to take care of your skin and I will do my best to help you in every way I can.

Well, this week, let’s go for a Bright, Smooth Skin.

Gram flour (also known as besan) is a traditional skincare ingredient known for its:

* Natural exfoliating properties.

* Ability to absorb excess oil.

* Gentle brightening and tan-removal effects.

* Suitability for all skin types, especially oily and acne-prone skin.

You will need 01–02 tablespoons gram flour (besan) and rose water, or raw milk, to make a paste.

You could add the following two as optional add-ins: A pinch of turmeric (for extra glow), and a few drops of lemon juice (for oily skin and pigmentation)

Add the gram flour to a small bowl and mix in the rose water (for oily/sensitive skin) or raw milk (for dry skin) slowly.

Stir well to make a smooth, spreadable paste—not too thick, not too runny.

Now apply this mixture, evenly, to your damp face and neck, and let it sit for 5–10 minutes (don’t let it dry completely if you have dry skin).

Gently massage in circular motions using wet fingers—this helps exfoliate.

Rinse off with lukewarm water, and then pat your skin dry.

Use it 02–03 times a week for best results.

Skin Benefits:

* Removes dirt, sweat, and oil without stripping natural moisture.

* Gently exfoliates dead skin cells, revealing smoother skin.

* Brightens the complexion and fades mild tanning.

* Helps clear clogged pores and reduce pimples.

* Leaves skin fresh and glowing—perfect for humid climates.