Sri Lankans Pawn Over Rs. 1,200 Billion Worth of Jewellery at Commercial Banks, Reveals MP Sujeeva

Sri Lankans have pledged jewellery worth more than Rs. 1,200 billion as collateral at commercial banks across the country, a staggering figure that highlights the growing financial pressure faced by ordinary households, according to a statement made by parliamentarian Sujeeva.

A Nation Turning to Gold in Times of Need

The disclosure sheds light on the extent to which Sri Lankan families have been compelled to leverage their most treasured personal assets — gold jewellery — in order to access credit and meet day-to-day financial obligations. The scale of pawning activity at formal banking institutions points to deepening economic hardship that continues to affect a broad cross-section of the population.

Pawning, a practice deeply embedded in Sri Lankan culture, has long served as a quick and accessible means of obtaining short-term loans, particularly among middle and lower-income households. However, the crossing of the Rs. 1,200 billion threshold signals that this is no longer merely a cultural habit but a financial necessity for millions.

Concerns Over Household Financial Vulnerability

Economic observers note that a surge in jewellery pawning typically reflects declining disposable incomes, rising living costs, and limited access to alternative credit facilities. Sri Lanka's prolonged economic crisis, which saw record inflation, fuel shortages, and a severe foreign exchange crunch in recent years, has left many families with few options beyond pledging their gold assets.

The figure revealed by MP Sujeeva raises urgent questions about the financial resilience of Sri Lankan households and the broader stability of consumer finances in the post-crisis recovery period.

Implications for the Banking Sector

From a banking perspective, the massive volume of pawned jewellery represents a significant portion of secured lending portfolios. While commercial banks benefit from gold-backed loans — which are considered relatively low-risk due to the tangible collateral — there are concerns about what happens to borrowers who are unable to repay and risk losing irreplaceable family heirlooms.

• Jewellery pawned at commercial banks exceeds Rs. 1,200 billion in total value.
• Gold-backed lending is considered low-risk for banks but high-stakes for borrowers.
• Rising pawning rates are widely seen as an indicator of household financial stress.
• Middle and lower-income families are disproportionately affected.

Calls are now growing for policymakers to address the root causes driving Sri Lankan families to pawn their assets, including strengthening social safety nets, improving access to affordable credit, and accelerating broader economic recovery efforts.

The Rs. 1,200 billion pawning figure is not just a banking statistic — it is a mirror reflecting the financial struggles of countless Sri Lankan families striving to make ends meet.

As the country continues its path toward economic stabilisation, the welfare of vulnerable households and their ability to reclaim pledged assets without financial ruin remains a pressing concern for both lawmakers and civil society.