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Friday, 5 February 2016 00:00 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
The Central Bank is in the process of drafting the new Foreign Exchange Management Act to facilitateoperation of third party online payment platforms in Sri Lanka.
“We are in the process of now re-writing our whole law on this exchange control called the Exchange Management Act, which only has to face the hurdle of being passed in the Parliament,” Central Bank Governor Arjuna Mahendran said at the Ease of Doing Business’ Forum held on Wednesday.
This was in response to a question raised by a private company Mythesis Ltd, which is creating an online platform for graduates targeting the international market to attract foreign income to the country. However it requires PayPal integration to perform transactions under this platform.
“It’s a total new law. What we have right now is outdated and we have to rewrite the whole Act. I’m hoping that we would be in a position to present it to Parliament by next month. It will need two months to be read and passed. I am hoping that it will go through in the next six months. Then, I think that will address this concern of PayPal,” the Central Bank Governor explained.
Mahendran said the idea of using a PayPal is that in an event of rejection of purchase, a person is allowed to immediately return and obtain refund. However, under Sri Lanka’s current exchange control system it is not allowed to refund without permission.
He said that PayPal was reluctant to function in countries like Sri Lanka due to the power of the bureaucracy to interfere in the free flow of money.
“They do not want any bureaucrats interfering in the transaction process under their system, they wanta clean system. PayPal is saying until we make it automatic and no restrictions on the flow of dollars they won’t let Sri Lanka to be part of the PayPal,” Mahendran noted.
Thereby, the Governor requested the firms to be patient as they are in the process of addressing this issue in a more sustainable manner.
