COLOMBO: Just days after the Central Bank appealed to Sri Lankans overseas and Sri Lankans in Sri Lanka to deposit their foreign currency holdings in Sri Lankan banks to help boost the country’s foreign exchange reserves, and support the battle against COVID -19, the government has launched a special foreign currency deposits account (SDA), that will offer a range of benefits and incentives for Sri Lankan expatriates and investors.
The new initiative to attract much-needed foreign exchange features a range of extra benefits including a higher interest rate than the existing rates and zero tax. Accordingly, the new dollar or any other international currency account holder will get an extra 2% of interest in addition to the normal interest rate paid by commercial banks to foreign currency account holders like the Non Residence Foreign Currency (NRFC) accounts. To qualify for the additional interest rate, the deposits must remain for at least six months in the account.
Features of the Special Deposit Account
1. Eligible Persons
a. Sri Lankan individuals resident in or outside Sri Lanka
b. Dual Citizens
c. Citizens of other States with Sri Lankan origin
d. Non-nationals resident in or outside Sri Lanka
e. Funds, corporate bodies, associations incorporated/registered outside Sri Lanka
f. Any other well-wishers
2. Minimum Deposit: No prescribed limit
3. Type of Deposit: Fixed deposits only
4. Minimum Tenure: Six months
5. SDAs can be opened:
a. with an Authorized Dealer in Sri Lanka (any Licensed Commercial Bank and National Savings Bank).
b. only with inward remittances through banking system during the six months period from the date of the relevant Regulation, i.e., 08.04.2020.
c. by transferring funds received during the above mentioned period to an Inward Investment Account (IIA) or an account in the Offshore Banking Unit (OBU) with an Authorized Dealer.
d. either in foreign currency or Sri Lanka Rupees. The acceptable foreign currencies are United States Dollars (USD), Euro, Sterling Pound, Australian Dollars, Singapore Dollars, Swedish Kroner, Swiss Franc, Canadian Dollars, Hong Kong Dollars, Japanese Yen, Danish Kroner, Norwegian Kroner, Chinese Renminbi and New Zealand Dollars.
e. as a joint account
6. Interest Rate: Higher interest paid at maturity
a. 6 months deposits – 1 percentage point per annum above the normal rate
b. 12 months deposits – 2 percentage points per annum above the normal rate
7. Repatriation of Funds: freely convertible and remittable outside Sri Lanka upon maturity
8. Exemption: Will not be subject to any Foreign Exchange Regulations published in Gazette Notification No 2045/56 dated 17.11.2017.
9. How to obtain further information on the Special Deposit Account?
a. The Regulation published in the Government (Extraordinary) Gazette No. 2170/4 dated 08.04.2020 and the Directions No. 04 of 2020 dated 09.04.2020 issued to Authorized Dealers in relation to the above deposit scheme can be accessed under “Downloads” in the official website of the Department of Foreign Exchange of CBSL (www.dfe.lk).
b. Director, Department of Foreign Exchange, Central Bank of Sri Lanka, No.30, Janadipathi Mawatha, Colombo 01. Tel: +94 112 477255, + 94 112 477244, +94 112477433, +94 112477 375 Fax: +94 112 477716 Email: dfe@cbsl.lk
c. From any Authorized Dealer in Sri Lanka.
