Banks make a killing at depositors’ expense

The motive of the government decision to lower the interest rates of deposits was predominantly to engross the banks to lend at lower interest rates for entrepreneurs to boost the economy of the country which is in dire straits. However, would this proposal prove productive?

Owing to this absurd stunt senior citizens and pensioners have been left high and dry high and dry, resulting in unprecedented agony and anguish. Many victims have highlighted their grievances on behalf of the distraught senior citizens and pensioners. This much spoken of government’s harsh decision to lower interest rates has made the lives of senior citizen’s and pensioners miserable with the escalating high cost of living, skyrocketing cost of medical expenses, etc. It is pertinent to mention that monthly interest rates on fixed deposits, which they mostly rely upon, have been reduced to alarmingly low 4% and 5 % which has added to the woes already the senior citizens face.

All senior citizens who are not receiving or entitled for a pension, depend solely on monthly fixed deposit interest as the regular source of income for their living. As a result of lowering interest rates of deposits, their plans have all been shattered causing them to be wondering how to make ends meet.At this dire juncture, the intervention of the President is needed to revoke this unreasonable decision of lowering the interest rates of deposits.

The only redress the senior folk benefits is by the Central Bank’s special scheme of 15% interest for senior citizens. However, in this too the senior citizens have been slapped and battered with a Rs 1.5 million ceiling.

In comparison to the reduction of interest rates of deposits, if one takes into account the number of loans granted to entrepreneurs at lower interest rates the answer would be very negligible, particularly as the bank’s do not take risks to lend to entrepreneurs whom they believe to have projects not viable. The banks of course, would show enhanced profits at the end of the year as they have paid the depositors lower interest rates which reflects as plus mark for their balance sheets. This is a blessing in disguise for the management of banks at the receiving end of impoverished pensioners and senior citizens.

In the above contest the intervention of the President Gotabaya Rajapakse is most needed to bring about redress to ‘distressed” senior citizens and pensioners

Sunil Thenabadu

Brisbane, Australia