Directives relating to Inward and Outward Remittances
Special Deposit Account (SDA)1 – inward remittances
A new bank account termed Special Deposit Account (SDA) has now been introduced for any Sri Lankan individual, resident or outside Sri Lanka including Dual Citizens, Citizens of other States with Sri Lankan origin and any person resident outside Sri Lanka including funds, corporate bodies, association and other well-wishers to remit their foreign currency earnings, savings and investments to any bank of their choice in Sri Lanka.
All these accounts are free from taxes and foreign exchange regulations. All such deposits shall be protected under banking secrecy provision and further benefits with the relevant supporting legislation will be introduced with the 2020 Budget.
Salient features of the SDA:
a) It is in the form of Term Deposits either in any designated foreign currency or in Sri Lanka Rupees.
b) There is no prescribed minimum amount to be deposited.
c) Minimum period of maturity is 6 months.
d) Interest rate: 1% and 2% points per annum for SDA with a tenure of 6 months and 12 months respectively, above normal foreign currency deposits.
e) Interest payment: at maturity.
f) Repatriation of funds: freely convertible and repatriable outside Sri Lanka on maturity.
g) Exemptions: exempted from any procedural requirements specified in the Foreign Exchange Regulation No. 1 of 2017 published in Gazette Extraordinary No. 2045/56 of 2017.
h) Operation of accounts: Debits and credits are permitted under Section 7 of the Foreign Exchange Act, No. 12 of 2017 so that Rupee accounts can be opened.
i) Acceptable currencies: United States Dollars (USD), Euro, Sterling Pounds, 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.
1 President’s Media Division, press release dated 12th April 2020; can be accessed at
http://www.pmdnews.lk/new-bank-account-introduced-to-remit-foreign-currency-earnings/
All the regulations related to the new account have been incorporated in the Extraordinary Gazette notification issued by the Ministry of Finance, Economic and Policy Development on April 8th.2
Restriction on outward remittances:
The Ministry of Finance, Economic and Policy Development has issued Extraordinary Gazette No. 2169/3 dated 2nd April 20203 imposing the following measures4 on outward remittances on Capital Transactions for a period of three (03) months:
1. Suspend the general permission granted to make outward remittances for investments overseas through the Outward Investment Accounts by persons resident in Sri Lanka excluding the following;
a. investments to be financed out of a foreign currency loan obtained by the investor from a person resident outside Sri Lanka under the provisions of the Foreign Exchange Act, or
b. investments to be made to fulfill the regulatory requirement in that country.
2. Suspend the outward remittances through Business Foreign Currency Accounts (BFCAs) or Personal Foreign Currency Accounts (PFCAs) held by persons in, or resident in, Sri Lanka, other than for the remittances on current transactions.
3. Suspend the repatriation of funds under the migration allowance through Capital Transactions Rupee Accounts (CTRAs) by the emigrants who have already claimed migration allowance.
4. Limit the eligible migration allowance for the emigrants who are claiming the migration allowance for the first time up to a maximum of USD 30,000.
5. Limit the authority of the Monetary Board of the Central Bank of Sri Lanka to grant special permission for investments on case by case basis, which exceeds the limits specified in the general permission, only to those satisfying the criteria mentioned in 1.a and 1.b above.
2 Extraordinary Gazette No. 2170/4 dated 8th April 2020; can be accessed at
4 Source: Central Bank of Sri Lanka; can be accessed at
The above restrictions are only applicable to the identified capital transactions and do not impose any restrictions on already permitted current transactions.
FOR COMMERCIAL BANKS AND AUTHORISED DEALERS ENGAGED IN OUTWARD REMITTANCES AND PERSONS WHO MAKE OUTWARD REMITTANCES
All Commercial Banks, Authorized Dealers engaged in outward remittances and the persons who remit the money are hereby informed the Circular Numbered Sec/2018/03 and Dated 29th March 2018 has been suspended until further notice, and adhere to the procedure contained in Notice PN/TC/2020-03 dated 8th April 2020 .5
All commercial banks and authorized dealers who have the authority to engage in outward remittances shall maintain a schedule in the following format in respect of all outward remittances except remittances for import of any tangible goods, and submit the same on monthly basis on or before 10th of the subsequent month in the format provided in the notice.6
The above notice is applicable to already permitted transactions.
5 Requirement of Tax Clearance Certificates for Outward Remittances – Notice PN/TC/2020-03 dated 8th April 2020 to Commercial Banks and Authorised Dealers Engaged in Outward Remittances and the Persons who make outward remittances; can be accessed at
http://www.ird.gov.lk/en/Lists/Latest%20News%20%20Notices/Attachments/231/CLR08042020_E.pdf
6 ibid.
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