Despite keeping policy rates unchanged yesterday, the Central Bank slashed interest on credit cards to 18%, interest on overdrafts to 16%, and interest on pawning to 10%, to assist consumers recovering from the COVID-19 impact.
Releasing the latest monetary policy statement, the Central Bank said these decisions were taken considering bank lending rates of certain financial products which continue to remain high.
“The Monetary Board decided to revise downward the caps on interest rates on credit cards to 18% per annum, on pre-arranged temporary overdrafts to 16% per annum, and on pawning facilities to 10% per annum. Moreover, the Board was of the view that penal interest rates need to be capped at 2 percentage points over the regular interest rates charged on the relevant credit facility.”
Directions to effect these regulated interest rates will be issued shortly and will be effective from Monday, officials said.