CB boosts SDA to attract more forex

Tuesday, 14 July 2020 00:36 - - {{hitsCtrl.values.hits}}

Since their introduction in April the accounts have attracted $ 87 m
New regulations increase amount of forex that can be retained from $ 10,000 to $ 15,000
SDAs can now be used to collateral for loans

The Central Bank yesterday said fresh measures had been taken to expand Special Deposit Accounts, including enabling using them as collateral, but response has been lacklustre so far with the facility only attracting $ 87 million since their inception in April.

The Government introduced the Special Deposit Account (SDA) on 8 April to seek assistance for the national effort to overcome the effects of COVID-19 outbreak in the country. “It is encouraging to note that there is a favourable response on the same and so far, Sri Lanka has received $ 87 million (approx.) into SDAs,” the Central Bank said in a statement.

It said the Government in consultation with the Monetary Board of the Central Bank of Sri Lanka had taken further measures to encourage opening of SDAs as stated below:

1. Expansion of the sources of funding SDAs

a. Any person who has arrived in Sri Lanka from overseas on or after 01.01.2020 can open SDAs with any Authorised Dealer on or before 07.10.2020, out of foreign exchange legitimately acquired and brought into Sri Lanka by such person subject to:

i. a declaration made to the Sri Lanka Customs at the port of arrival where the amount of such foreign exchange exceeds $ 15,000 or an equivalent amount in any designated foreign currencies.

ii. a declaration to the relevant Authorized Dealer where the amount of such foreign exchange is equal or less than $ 15,000 or an equivalent amount in any designated foreign currencies.

b. Any person in, or resident in, Sri Lanka can open SDAs with any Authorised Dealer on or before 07.10.2020, out of foreign currency notes in his possession up to the limit of $ 15,000 and subject to such terms and conditions of the prevailing Regulations and Orders, subject to a declaration on the source of funds to the Authorised Dealer.

c. In this regard, the amount of foreign currency that can be retained by a person in, or resident in Sri Lanka in his possession has been increased from $ 10,000 to $ 15,000 with effect from 01.07.2020.

2. Obtaining loans against SDAs SDA holders can obtain loans from Authorised Dealers against SDAs as follows;

a. Residents in Sri Lanka Rupees

b. Non-resident SDA holders who are eligible to obtain loans as per the prevailing regulations

Further information on the above can be obtained as follows:

a. By accessing the following which are available under ‘Downloads’ in the official website of the Department of Foreign Exchange of CBSL (www.dfe.lk).

i. Regulations published in the Government (Extraordinary) Gazette Notification No. 2170/4 dated 08.04.2020.

ii. Regulations published in the Government (Extraordinary) Gazette Notification No. 2182/32 dated 01.07.2020.

iii. Order issued under Section 8 of the Foreign Exchange Act, No. 12 of 2017 published in the Government (Extraordinary) Gazette Notification No. 2182/33 dated 01.07.2020.

iv. Directions No. 06 of 2020 dated 06.07.2020 issued to Authorised Dealers.

b. From the Director, Department of Foreign Exchange, Central Bank of Sri Lanka, No.30, Janadhipathi Mawatha, Colombo 01.

Tel: +94 112 477 255, + 94 112 477 244, +94 112 477 433 and email: [email protected]

c. From any Authorised Dealer in Sri Lanka.