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Import payments only through banking system 

30 Apr 2022

  • Finance Ministry to issue new gazette to curtail USD outflow through imports
  • Imports through hawala to be banned soon
By The Sunday Morning Business Desk  With a view to curtail the outflow of US Dollars paid through unofficial channels when importing goods, the Finance Ministry is expected to issue a new gazette notification under the Imports and Exports Control Act, making it compulsory for all payments on imports to Sri Lanka to be made through a banking system, says the Central Bank of Sri Lanka (CBSL) Governor. Addressing the media on Friday (29), CBSL Governor Dr. Nandalal Weerasinghe stated that the new gazette which will be published will enable importation payments to be done only through Licensed Commercial Banks (LCBs). Explaining the current procedure, he said that there are three official channels through which importers can obtain cash from the LCBs.  “There are three methods through which goods may be imported: Open accounts, DP/DAP terms of payment, and Letters of Credit (LCs). In the case of LCs, a person is required to open an account at the bank, and therefore money has to be sent through the banking system. In other methods, goods will come through customs but the transactions will be carried outside the banking system through various methods. Right now, using the hawala system, importers are making payments from abroad when the import order is made and the transaction will be settled in Sri Lanka in rupees. Subsequently, the goods are cleared through customs. Thus, the money doesn’t move through the banking system and as a result a black market is created outside the banking system,” Weerasinghe explained.   He added that as a temporary measure, imports being brought down through such transactional methods will be banned after a short grace period. In the long run, all imports to the country will require a certificate that payment will be made through the official banking system. “If goods are imported by making payments outside the banking system, such imports will not be cleared by customs,” he asserted.  Weerasinghe further called on expats and exporters to not to remit money though the external market and highlighted that going forward, there will be no such market for it since the gap between the official exchange rate and unofficial exchange rate will decrease, leading to an increase in liquidity within the local banking system.  “The banking system at present has a flexible exchange rate and thus people are getting a fair amount for US Dollars. This exchange rate is a market oriented exchange rate, which is beneficial for everyone, unlike the previous situation where the forex that is being remitted was not being used for essential purposes,” Weerasinghe continued.  However, he confirmed that an exception will be made by the CBSL for exporters importing their requirements through the open accounts and DA/DP methods. 


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