Friday Sep 20, 2024
Friday Sep 20, 2024
Wednesday, 17 August 2022 00:20 - - {{hitsCtrl.values.hits}}
The Central Bank of Sri Lanka has withdrawn the mandatory requirement to convert service export receipts/proceeds that are received on or after 12 August.
The move is aimed at encouraging service exporters to repatriate their export proceeds into the country.
CBSL said the service exporters may use their export proceeds so repatriated to Sri Lanka for the permitted purposes. The mandatory requirement to receive proceeds of service exports to the country within 180 days from the date of provision of services remains unchanged.
According to the information reported by banks, during the first six months of the year 2022, a total of $ 1,533 million has been received as service export receipts, of which $ 406 million has been converted to rupees. The highest monthly service export proceeds of $ 324 million were received in March 2022.
CBSL said during discussions with representatives of service exporters, they have highlighted the potential to further enhance export receipts.
“All exporters are encouraged to bring in all export proceeds to the country at this time of need, while taking note of the mandatory requirement to receive such proceeds within 180 days. The Central Bank has intensified its monitoring on compliance with the relevant requirements with respect to exporters and Authorised Dealers,” CBSL said.
The national chamber for the IT/BPM industry in Sri Lanka SLASSCOM on Monday welcomed the CBSL decision.
“This measure will help instil confidence, especially amongst the foreign IT-BPM companies having their captive delivery centres in the country,” SLASSCOM said in a statement. “Despite the recent stability issues facing Sri Lanka in the recent past, the IT-BPM sector continues to attract interest from foreign buyers and investors for its talent and innovation capabilities. This relaxation will be another plus to attract newer foreign direct investments into the sector,” it added.
The Repatriation of Export Proceeds into Sri Lanka Rules No. 1 of 2022 issued by the Monetary Board of the Central Bank of Sri Lanka and published in the Gazette (Extraordinary) Notification No. 2270/66 dated 11 March, are hereby amended by the repeal of Rule 4 thereof and the substitution therefor, of the following new Rule effective 12 August.
Rule 4: Every exporter of goods, who receives export proceeds in Sri Lanka, in terms of Rule 3 above, shall mandatorily convert residual of the export proceeds received in Sri Lanka, into rupees upon utilising such proceeds only in respect of the below mentioned authorised payments, on or before the seventh day of the following month,
i. Outward remittances for current transactions related to the particular export of goods including one-month commitments therein
ii. Withdrawal in foreign currency notes or transfer of funds for travel purposes related to export of goods
iii. Debt servicing expenses and repayment of foreign currency loans and accommodations obtained by the exporter of goods, where such foreign currency loan and accommodation is a permitted borrowing in terms of the Regulations, Orders and Directions issued by the Central Bank of Sri Lanka under the provisions of the Foreign Exchange Act No. 12 of 2017 or the Banking Act No. 30 of 1988, as amended, including one-month loan commitments
iv. Payments of dividends declared to non-resident investors and/ or payments of salaries to expatriate employees who are foreign nationals or dual citizens as permitted under the provisions of the Foreign Exchange Act No. 12 of 2017
v. Payments in respect of making investments in Sri Lanka Development Bonds in foreign currency up to 10% of the export proceeds, so received
vi. Payments to local suppliers who are permitted to receive payments in foreign currency in terms of the Directions issued by the Central Bank of Sri Lanka under the provisions of the Foreign Exchange Act No. 12 of 2017 for the purchases related to the particular export of goods
