Central Bank further relaxes foreign exchange controls
View(s):The Central Bank on Wednesday further relaxed foreign exchange controls with immediate effect aimed at “enhancing the external competitiveness of Sri Lanka in the global market”.
The relaxed rules are:
- 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).
- 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.
- Issuance of Foreign Travel Cards: General permission will be granted to Licensed Commercial Banks (LCBs) to issue travel cards to their customers.
- 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.
- 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.
- 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.
7. Letters of Credit: The prevailing restriction on extending a Letter of Credit (LC) will be removed.