The Central Bank of Sri Lanka’s Governing Board issued amendments to the maximum interest rates that finance companies may pay on deposits and offer on debt instruments, replacing Direction 4.2, Direction 5.1 and Direction 6.1 of the 2025 directions. The updated framework benchmarks ceilings to Treasury bill weighted average yield rates (WAYR), with fixed add-on margins by product and tenor. For LKR time deposits and other innovative deposit products where interest is paid at maturity, maximum annual nominal rates are capped at 91-day T-bills WAYR plus 1.10% for 1 month to less than 3 months, 182-day WAYR plus 1.25% for 3 months to less than 6 months, 364-day WAYR plus 1.50% for 6 months to less than 1 year, and 364-day WAYR plus 3.00% for 1 year to less than 2 years. For debt instruments with interest paid at maturity, the ceiling is 364-day T-bills WAYR plus 1.50% for tenors below 1 year and 364-day WAYR plus 3.75% for 1 year to less than 2 years. The ceilings for time and innovative deposits of one month and above up to less than two years, and for debt instruments, will be reviewed quarterly based on the simple average WAYR of the latest four primary Treasury bill auctions in the immediately preceding quarter.
Central Bank of Sri Lanka 2026-01-12
Central Bank of Sri Lanka amends finance company deposit and debt instrument interest rate ceilings to Treasury bill WAYR plus margins
The Central Bank of Sri Lanka amended interest rate ceilings for finance companies on deposits and debt instruments, linking them to Treasury bill weighted average yield rates (WAYR) with fixed add-on margins. LKR time deposits are capped at varying margins above the WAYR depending on the tenor, while debt instruments have a ceiling of 364-day WAYR plus 1.50% for under 1 year and plus 3.75% for 1 to less than 2 years. These ceilings will be reviewed quarterly based on the average WAYR from the latest four Treasury bill auctions.