SDAs extended by another 6 months

• Cabinet approval given for PM proposal to attract more forex in SL 

Cabinet has given approval to extend the validity period of Special Deposit Accounts (SDAs) by another six months to attract more foreign exchange into the country, Cabinet Co-Spokesman Udaya Gammanpila said yesterday. 

The Government introduced SDAs last April to encourage remittances from Sri Lankans, dual citizens, and others to shore up reserves. 

The SDAs will be given higher-than-market interest rates to attract deposits.

“Cabinet approved a proposal presented by Prime Minister Mahinda Rajapaksa in his capacity as the Finance Minister to extend SDAs for another six months from 8 October,” Gammanpila said at the weekly Cabinet briefing yesterday.   

The Government introduced the SDAs on 8 April 2020 to seek assistance for the national effort to overcome the effects of COVID-19 outbreak in the country. In October, the Central Bank of Sri Lanka (CBSL) said total deposits in SDAs amounted to approximately $ 272 million. 

In addition, considering the favourable effects of retaining such foreign exchange within the country, the Government has allowed SDA holders, who wish to keep maturity proceeds of SDAs in Sri Lanka beyond the designated date of maturity, to renew and continue SDAs as normal deposits with authorised dealers. 

The funds held in SDAs so continued as normal deposits will be eligible only for the interest rates offered by the authorised dealers for normal term deposits of the respective banks. Upon maturity, such funds are freely convertible and repatriable outside Sri Lanka on any future date and permitted to be transferred into an Inward Investment Account or a Personal Foreign Currency Account, if the account holder is eligible to open or currently maintain such an account. 

CBSL has also issued necessary directions to authorised dealers (Licensed Commercial Banks and National Savings Bank) to implement the above decisions of GOSL. It said further information on SDAs can be obtained by accessing the website of the Department of Foreign Exchange of the CBSL (www.dfe.lk).