CBSL to reimpose ban on open accounts

After temporarily lifting it for two months in June, the Central Bank (CBSL) is to again reimpose the ban on open accounts system from the beginning of September. 

The temporary relaxation of the ban in June allowed traders to import selected essential food items over the past two months. 

An open account is an arrangement between a business and a customer, where the customer can buy goods and services on a deferred payment basis.

It was agreed to lift the ban on open accounts for two months when traders met then Prime Minister Ranil Wickremesinghe in June. 

Among the items which were allowed to be imported via the open account system were Kekulu, Nadu and Samba, wheat flour, sugar, red whole lentils, yellow whole lentils, yellow red peas, dried chilies, dried sprats, chickpeas, coriander seeds, cumin seeds, fennel seeds, methi Seeds and mustard seeds.

With that period due to lapse tomorrow (31), the CBSL has decided that there will be no further relaxation and that the ban will be reimposed from September 1. This is due to the country's continuing foreign exchange crisis.

Traders however, are warning that with the ban being reimposed, the price of essentials such as rice, sugar and dhal will go up again after about two weeks as they won't be able to find dollars to import them.  

In an attempt to stave off such a shortage, the Trade Ministry has requested the President to instruct the CBSL to release USD 150 million from the Indian credit line that has so far not been utilised. This is to ensure that essential food items can be imported for the next three months.

Trade Ministry sources said the President has agreed to this request.