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Hotels permitted to accept dollar payments from Sri Lankans
View(s):In a bid to draw foreign currencies in the possession of Sri Lankans into the banking system, the Government has issued a gazette allowing hotels registered with the Sri Lankan Tourism Development Authority to accept such money as payment for services.
The gazette was published under the Foreign Exchange Act by Mahinda Rajapaksa in his capacity as Finance Minister. It permits hotels to accept such payment from persons resident in Sri Lanka in respect of services rendered.
Money so accepted is required to be deposited into a business foreign currency account not more than seven days from the day of payment; or sold to an authorised dealer within the same time frame.
“By default, the US dollar is not a trading currency in Sri Lanka,” a travel industry source told the Sunday Times. “For example, if you have dollars, you cannot go to a shop and pay in dollars.
“Hotels, however, could accept foreign currency from a foreign passport holder, but not a Sri Lankan national,” he continued. “Thus, this gazette makes an exception so that a person having dollars in his or her possession will use them and they, in turn, will come into a bank.”
Sri Lanka last year allowed up to USD 15,000 or equivalent to be kept in possession of residents, up from the earlier US$ 10,000. And a Central Bank regulation said that a “special deposit account” — a fixed deposit with minimum tenure of six months offering higher interest rates than normal fixed deposits — could be opened out of foreign currency notes in the possession of any person in, or resident in, Sri Lanka up to the limit of USD 15,000. But it was subject to a declaration on the source of funds to the relevant authorised dealer.
The latest gazette does not set any limits on the amount of foreign currency to be used in payment of services. Neither does it require the payer to declare the source of funds.