The Treasury of Sri Lanka owes Rs. 108 billion to the banking sector for the higher interest rates provided for the senior citizen deposits which are currently terminated due to the economic crisis, State Minister of Finance Dr. Ranjith Siyambalapitiya said.

Speaking at Parliament yesterday (25), the State Minister said that the Treasury needs to reimburse the banking sector Rs. 108 billion for the higher interest rates provided for the senior citizen deposits taken before the termination of the scheme in 2022.

Responding to a request by the Leader of the Opposition Sajith Premadasa to recommence the scheme, Dr. Siyambalapitiya said that under the current situation to provide a 15% interest rate for the deposits of senior citizens above the age of 60, the Treasury needs to pay at least Rs. 80 billion annually to the banks.

“It is good if we can do that (recommence the scheme) but we have to do that from the state revenue which is completely tax revenue and charges,” he said adding that the Government is ready to provide these benefits as soon as the Government can match its revenue and expenses.

He added that the Treasury operations is facing an absolutely challenging year in 2024, as the expenses have increased on every side in terms of Aswesuma, public sector salaries, debt and interest payments while the inflows are narrowed due to limitations in money printing and borrowing.

Further, he said that a solution that was implemented to recover the amount withheld from senior citizens who are receiving less than Rs.100,000 as interest payments annually through the withholding tax was found to be practically not feasible.

“So now we are actively looking for a solution on how to provide the amount withheld for people who are earning less than Rs 100,000 as interest annually,” he said.