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New year dawns with teachers protesting high interest rates

A leading teachers’ unions on the island has demanded an immediate halt for raising the interest on bank loans to principals and teachers.

Along with a group of teachers the general secretary of the Ceylon Teachers’ Union (CTU), Joseph Stalin handed over their demands to the general manager of the People’s bank on the 2nd of January.

The People’s bank provides the “Guru Setha” loan scheme for principals and teachers. According to CTU, since so many in the education sector have taken this loan, they are already paying the relevant loan instalments and interest.

“The “Guru Setha” loan scheme was earlier given under a 9.5% interest rate. While teachers who have taken this loan are paying the interest under 9.5% interest rate, they keep receiving letters from the People’s bank branches saying that the interest rate for the loans that they have taken will increase from 9.5% to 15.5%.”

CTU has pointed out to the bank general manager that this is unfair and stressful.

The union says that, especially, when giving loans the bank considers the loan margin limit of 40%, and increasing the interest rate to 15.5% for the loans given at 9.5% would subject that margin limit to exceed.

According to the 2021 People’s bank annual report, out of 14.5 million customers 1.9% of it, which is about 275 500 customers representing the education sector were given loans, said Joseph Stalin.

By increasing the interest rates for the loans given to the education sector under these circumstances, the union leader has indicated in his letter that all those who took the loans will suffer further in the current economic crisis.

The Ceylon Teachers union has requested the bank to pay attention to this situation and stop the decision to increase the interest rates for the loans given for the education sector.

Responding to that request, the bank officials have stated that they will give an answer in this regard by the 05th of January.

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