Private sector borrowings from Sri Lanka’s banking system accelerated sharply in March, with total outstanding credit rising Rs. 258.4 billion month-on-month to Rs. 10.7 trillion ahead of the Avurudu festive season.
The March jump was the second highest monthly increase in the past 12 months, after the Rs. 263 billion recorded in November 2025. The lowest in the period was the Rs. 83 billion expansion in January 2026 in the immediate aftermath of Cyclone Ditwah, with February recovering to Rs. 144 billion.
According to the latest Central Bank of Sri Lanka (CBSL) data, total outstanding banking-sector credit to the private sector reflected a 2.5% month-on-month increase. On a year-on-year basis, private sector credit expanded 27.1% in March, up from 26.4% in February.
Domestic banking units (DBUs) drove most of the rise, lending an additional Rs. 259.9 billion or 2.6% month-on-month to reach Rs. 10.14 trillion, a 29% year-on-year increase. Offshore banking units (OBUs) edged down by Rs. 1.5 billion to Rs. 556.2 billion, a 2.7% year-on-year decline.
Net credit to the Government fell Rs. 11.9 billion to Rs. 8.13 trillion, contracting 2.7% year-on-year. Credit to public corporations and state-owned enterprises also declined further, dropping Rs. 26 billion to Rs. 411.2 billion.
In its Annual Economic Review 2025, the CBSL said firming demand, reconstruction following Cyclone Ditwah, and improved economic activity would sustain private credit growth, but cautioned that geopolitical events including the Middle East conflict could moderate borrowing in the latter part of 2026. The credit data complements the budget primary surplus of Rs. 545 billion reported for January-February.
