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New app to attract worker remittances

10 Oct 2021

 
  • Central Bank announces plans for ‘SL – Remit’
  • Liquidity crisis prompts Govt. to go for the app
  BY Shenal Fernando  The Central Bank of Sri Lanka (CBSL) has announced that it will be introducing a national remittance mobile application titled “SL – Remit” to attract more remittances to Sri Lanka. This “SL – Remit” mobile application was proposed by the Working Committee appointed by the CBSL to study and suggest new remittance channels for Sri Lanka and to make recommendations on reducing the cost of remitting money, having identified the need to introduce new and low-cost remittance channels with the objective of increasing inflows of foreign remittances while discouraging the use of informal channels.  Due to the CBSL maintaining the exchange rate artificially at Rs. 203, there has emerged a liquidity crisis within the formal foreign exchange (forex) market, which has prompted the Government to seek such measures to attract more remittances. Currently, most overseas workers are favouring the use of informal channels for remitting their earnings owing to such channels providing them better rates. The resulting significant loss of worker remittance inflows through formal channels has exacerbated the forex liquidity crisis. According to CBSL data, inflow of worker remittance decreased by 35.4% year-over-year (YoY) in July 2021 to $ 453 million from $ 702 million in July 2020. According to the CBSL, this “SL – Remit” mobile application will contain “features such as self-registration of users, the ability to link to global money transfer operators and global fintechs to facilitate remittances from any country, instant fund transfer to any bank account/mobile wallet in Sri Lanka”. Moreover, the application will provide value-added services such as direct bill payments, attractive foreign exchange rates, and low transaction fees. The Working Committee comprises experienced professionals from Bank of Ceylon, People’s Bank, Sampath Bank PLC, Commercial Bank of Ceylon PLC, Hatton National Bank PLC, The Hongkong and Shanghai Banking Corporation Ltd., Cargills Bank Ltd., Dialog Axiata PLC, Mobitel (Pvt.) Ltd., and the CBSL. The CBSL will be implementing this mobile application with the assistance of stakeholders, including the Ministry of Finance, Ministry of Foreign Affairs, Sri Lanka Banks’ Association, Sri Lanka Bureau of Foreign Employment (SLBFE), and LankaClear (Pvt.) Ltd.  

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