CB directs single Foreign Exchange Earners Account for multiples

Thursday, 12 July 2012 03:55 - - {{hitsCtrl.values.hits}}

The Central Bank yesterday announced that those who have multiple foreign currency accounts will be required to unify all to a newly-directed single account named ‘Foreign Exchange Earners’ Account’ or FEEA.

With effect from yesterday all exporters, indirect exporters, suppliers of inputs, professional services providers, entrepot traders, gem and jewellery dealers, insurers, insurance brokers, travel agents, hoteliers, bunker suppliers and other residents who undertake foreign projects would be permitted to execute their current international transactions through this new FEEA.

The new account will replace Exporters’ Foreign Currency (EFC) Account; Indirect Exporters’ Foreign Currency Account (IEFCA); Foreign Currency Account for Suppliers of Inputs (FCASI); Foreign Currency Account for Professional Services Providers (FCAPS); Non Resident Foreign Currency Accounts for Foreign Employment Agencies; Foreign Currency Account for Gem and Jewellery dealers, and temporary/special foreign currency accounts authorised by the Controller of Exchange.

Central Bank also announced new operational measures for transfers between Non-Resident Foreign Currency (NRFC) and Resident Foreign Currency (RFC) Accounts.

It said the following transactions in relation to NRFC and RFC accounts held in the same bank or different banks irrespective of the holder of account or currency type in which accounts are maintained, will be permitted: Fund transfers between NRFC accounts; Fund transfers between RFC accounts and Fund transfers from NRFC accounts to RFC accounts.

However, funds/proceeds realised from the sale of properties in Sri Lanka should be credited to NRFC/RFC accounts, only in keeping with the existing regulations.

b) Opening of NRFC/RFC accounts by minors will be permitted through the credit of inward remittances received from their guardians/parents who are non-residents, or through the transfer of funds from existing NRFC accounts of such guardians/parents.

c) Any outward remittance out of NRFC accounts will be permitted irrespective of the underlying transaction, if the account holder is resident outside Sri Lanka.

The Central Bank said the new operational measures were in keeping with the announcement it made in its ‘Road Map for 2012 and Beyond’ early this year.

“The introduction of these measures would contribute to greater efficiency and convenience, improve investors’ confidence, strengthen foreign reserves in the long term, and stabilize the foreign exchange market,” the Central Bank added.