2026-02-20 / Ministerial Statement: Expansion of credit issued by licensed commercial banks and non-banking financial institutions 2026-02-20
## Summary
The Minister of Labour and Deputy Minister of Finance and Planning responded to a question raised by Hon. Ravi Karunanayake under Standing Order 27(2) on 18 December 2025, providing detailed data on private sector credit trends in Sri Lanka. Key figures show strong credit growth, with Licensed Commercial Bank lending to the private sector rising 25.2% year-on-year to Rs. 10,212.2 billion by end-2025, while non-bank financial institution credit grew 49.3% to Rs. 2,388.7 billion. Non-performing loan ratios showed general improvement across pawning, leasing, and credit card portfolios between 2023 and 2025, though credit card NPLs at finance companies rose sharply to 29.2% by mid-2025. The Minister noted that the Central Bank has tightened Loan-to-Value ratio caps for motor vehicle credit in response to significant growth in vehicle-backed lending, and that comprehensive credit data is publicly available through the Central Bank's official publications and website.
Hon. Speaker, the answer to the question raised by the Hon. Ravi Karunanayake under Standing Order 27(2) on 18 December 2025 is as follows:
1) Outstanding credit to the private sector by Licensed Commercial Banks (LCBs):
- End 2023: Rs. 7,366.4 bn | Y-o-Y change: -Rs. 45.0 bn (-0.6%)
- End 2024: Rs. 8,156.0 bn | Y-o-Y change: +Rs. 789.6 bn (+10.7%)
- End 2025: Rs. 10,212.2 bn | Y-o-Y change: +Rs. 2,056.1 bn (+25.2%)
2) Outstanding credit to the private sector by the non-bank financial sector (NBFIs):
- End 2023: Rs. 1,322.7 bn | Y-o-Y change: -Rs. 24.2 bn (-1.8%)
- End 2024: Rs. 1,599.8 bn | Y-o-Y change: +Rs. 277.1 bn (+21.0%)
- End 2025: Rs. 2,388.7 bn | Y-o-Y change: +Rs. 788.9 bn (+49.3%)
3) Pawning/Gold-backed credit outstanding (selected aggregates):
- All Banks: Rs. 696.4 bn (2023) | Rs. 847.3 bn (2024) | Rs. 1,019.6 bn (Jan–Sep 2025)
- Finance companies (FCs): Rs. 219.7 bn (2023) | Rs. 286.8 bn (2024) | Rs. 403.5 bn (Jan–Sep 2025)
4) Leasing facilities outstanding (banks only):
- All Banks: Rs. 244.4 bn (2023) | Rs. 305.0 bn (2024) | Rs. 436.2 bn (Jan–Sep 2025)
Leasing and hire purchase outstanding (finance companies):
- Finance leasing: Rs. 526.8 bn (2023) | Rs. 609.1 bn (2024) | Rs. 727.6 bn (Jan–Sep 2025)
- Hire purchase: Rs. 36.9 bn (2023) | Rs. 35.8 bn (2024) | Rs. 24.6 bn (Jan–Sep 2025)
5) Credit cards outstanding (all banks and FCs): figures are included in the detailed tables (tabled).
6) Summary of increases (Jan–Sep 2025 vs. earlier periods), in rupees and percentage terms, for pawning/gold loans, leasing, and credit cards is provided in the tables (tabled).
7) Non-Performing Loan (Stage 3) ratios for pawning, leasing, and credit cards:
- All Banks (as at end period):
- Pawning/Gold Loans: 0.7% (2023) | 0.3% (2024) | ~0.3% (Jan–Sep 2025)
- Leasing: 9.2% (2023) | 4.2% (2024) | 2.7% (Jan–Sep 2025)
- Credit Cards: 6.7% (2023) | 5.1% (2024) | 4.3% (Jan–Sep 2025)
- Finance Companies:
- Pawning/Gold Loans: 6.0% (2023) | 1.8% (2024) | 1.0% (Jan–Sep 2025)
- Leasing: 20.2% (2023) | 12.6% (2024) | 8.4% (Jan–Sep 2025)
- Credit Cards: 17.5% (2023) | 13.4% (2024) | 29.2% (Jan–Sep 2025)
8) From 2023 to 2025, the combined increase in pawning/gold loans, leasing and credit cards is estimated at Rs. 539.1 bn, against a total private sector credit increase (M4) of Rs. 1,944.3 bn, a combined contribution of 27.7%.
9) The Central Bank continues to monitor credit behaviour. In view of significant Y-o-Y growth in vehicle-backed loan portfolios of finance companies and lease portfolios of banks, the Central Bank tightened caps on Loan-to-Value (LTV) ratios for motor vehicle credit.
10) The Central Bank publishes detailed sectoral credit breakdowns quarterly (since June 2010) and, from April 2025, a Monthly Survey on Loans and Advances by LCBs. Monetary and Financial Surveys with monthly private sector credit data have been publicly available since December 1991 and December 1998, respectively. Data are accessible via the Central Bank’s official website.
Thank you.