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Forex scam: CB checks on money changers
View(s):Authorised money changers have come under Central Bank scrutiny following allegations that they are siphoning off vast amounts of foreign currency.
Authorised dealers are required to hand over the foreign currency they buy to the Central Bank and obtain proceeds in Sri Lankan rupees.
As part of the investigations, Central Bank officials are visiting authorised money changers incognito to check whether they are involved in illegal transactions.
Exchange Controller P.H.O. Chandrawansa said the investigations followed complaints that authorised money changers who were only allowed to buy foreign currency and deposit it with the Central Bank were involved in major rackets.
Under existing laws authorised money changers should deposit a minimum of US dollars 1.5 million a year with the Central Bank.Mr. Chandrawansa said it had been revealed that the foreign exchange brought into the country was not being fully contributed to the national reserve as part of the money was smuggled out of the country.
However, Authorised Money Changers Association Secretary Sugath Subasinghe said they were finding it difficult to continue with the business as there were several unauthorised money changers and no action was being taken against them. He said there were only 65 authorised money changers, but there were a large number who were operating without a licence.
He denied allegations that the authorised money changers were involved in large scale foreign currency rackets.In 2012, the Central Bank made an attempt to instal closed-circuit television cameras in business places of authorised money changers, but the proposal was dropped after the money changers claimed that by installing cameras, the privacy of customers would be violated.
The Central Bank annually receives more than Rs. 7 billion from money changers.