Central Bank Goes Easy On Foreign Exchange Controls

The Central Bank of Sri Lanka today further relaxed foreign exchange controls with immediate effect in a bid to enhance the external competitiveness of Sri Lanka in the global market”.

The relaxed rules are as follows:

1.  Permission to foreign investors to invest in debentures of companies incorporated in Sri Lanka: Foreign investors will be allowed to invest in non-listed debentures, in addition to listed debentures, through the Securities Investment Account (SIA).

2.  Widening the eligibility to obtain an Electronic Fund Transfer Card (EFTC): Holders of Migrant Blocked Accounts, SIA, Diplomatic Accounts, etc will be allowed to obtain debit cards.

3. Issuance of Foreign Travel Cards: General permission will be granted to Licensed Commercial Banks (LCBs) to issue travel cards to their customers.

4. Increased facilities to resident foreign exchange earners: Foreign Exchange Earners’ Account (FEEA) holders will be allowed to make payments relating to foreign contracts out of the existing funds in the FEEA; LCBs will be allowed to provide loans in foreign currency to FEEA holders; and an addition, several amendments that have been made on a piece meal basis from 2012 onwards, will be consolidated.

5. Removal of the minimum balance requirement for Special Foreign Investment Deposit Account (SFIDA): The current requirement of maintaining a minimum balance in SFIDA accounts will be removed.

6. Remittance of living expenses in advance to obtain student visas: General permission will be granted for LCBs to facilitate transactions of students to open accounts with a foreign bank, if such students intend to proceed outside Sri Lanka for their studies; such payments also could be remitted through a Resident Foreign Currency Account, a Resident Non National Foreign Currency Account, or a Foreign Currency Account for International Services Providers and their Employees (FCAISPE).

7.   Credit facilities to importers resident in Sri Lanka by suppliers’ resident outside Sri Lanka: The time restriction that was prevalent on supplier’s credit for importers will be removed.

8.   Letters of Credit: The prevailing restriction on extending a Letter of Credit (LC) will be removed

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