By Walter Jayawardhana

President Mahinda Rajapaksa ordered yesterday that the commercial lending rates of the countryƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s state banks be reduced by almost half with immediate effect.

The state owned banks, have been have been charging 15-22 percent before the reduction took place.

“President Mahinda Rajapaksa had ordered state banks to reduce lending rates in between 8-12 percent,” a statement issue by the PresidentƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s office said.

“This decision was aiming to encourage small and medium enterprises including agriculture, tourism, industries, fisheries, and construction,” the president’s office statement said.

The PresidentƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s office said he has issued the relevant instructions with the intention of passing on the benefits of the progress achieved in the economy with the end of the war.

The decision was taken today on the instructions of the President during a meeting at Temple Trees . The meeting was held between heads of Banks to secure the contribution of State Banks for the progress of the economic sector. The President said loan recipients should receive the benefits of the interest reduction when releasing credit on instalments by the Bank. Minister Ranjith Siyambalapitiya, PresidentƒÆ’‚¢ƒ¢-¡‚¬ƒ¢-¾‚¢s Secretary Lalith Weeratunga and Finance and Treasury Secretary Dr. P.B. Jayasundera attended this meeting.

Dr. P.B. Jayasundera said the war has ended and the global economy is also improving. Inflation in the country has decelerated. Infrastructure is in place for economic development. Situation of the small and medium scale industrialists has improved. They also need an opportunity to survive. Dr. Jayasundera said the three State Banks had more than 1500 branches and there is a network to access any village. He noted that only State Banks can usher in awakening.

According to government instructions loans given for sectors such as agriculture, fisheries and small industries will range from eight percent to 12 percent. It will also apply for the balance that is due to be paid for earlier loans. Fines imposed on interests will be suspended. The housing loans for the public servants will be released if all requirements are met, the government announced. With housing loans various sectors like building to hardware stores in the rural economy will be strengthened, it was opined