Over 360 million dollars flow into Special Deposit Accounts
8 April 2021 07:23 am
Special Deposit Accounts (SDA) introduced by the Government last year have swelled $ 360.3 million, which has ptompted the Cabinet to approve extending their validity period further, Cabinet Spokesman Minister Keheliya Rambukwella said.
He told the weekly Cabinet briefing that a paper submitted by Prime Minister Mahinda Rajapaksa in his capacity as Finance Minister had been approved to support more inflows.
“The period for SDAs have been extended every six months since they were introduced in 2020 and the Foreign Exchange Act of 2017 will be amended accordingly,” Minister Rambukwella said.
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.
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