Cabinet approves new orders for ‘Special Deposit Accounts’

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Oct 07, 2020 (LBO) – The approval of the Cabinet of Ministers was granted at their meeting held in April 2020 for the issuance of orders under the foreign exchange act No. 12 of 2017 for the opening and maintenance of contemporary deposit accounts named ‘Special Deposit Accounts’ in order to deposit money remitted into the country across the banking system for a period of 06 months, with the objective of encouraging the influx of foreign exchange into the country.

Accordingly, the valid time of the orders issued is scheduled to be ended on the 07th October 2020 and therefore, the following recommendations have been furnished by the financial board of the Central Bank of Sri Lanka to enable the foreign exchange remitted to Sri Lanka as per the above orders to be retained within the country for a further period.

 Payment of interest rates applicable to general term deposits to the ‘special deposit accounts’ too that are renewed and maintained after the maturity of the deposits.
 Permit to transfer the income generated at the maturity of the ‘special deposit accounts’ to respective accounts within Sri Lanka.
 The income of the special deposit account maturity of those ineligible (non -government organizations, guarantor companies etc,) for opening foreign currency accounts although resided within Sri Lanka, to be credited to a SriLankan Rupee account on the basis of non – remittance to account away from SriLanka in the future.

Accordingly, the Cabinet of Ministers approved the proposal submitted by the Prime Minister as the Minister of Finance for the declaration of new orders in terms of section 7 to be read with the section 29 of the Foreign Exchange Act in addition to the orders published in the gazettes extraordinary No. 2170/4 of 08.04.2020 and No. 2182/32 of 01.07.2020 in regard to special deposit accounts and the submission of the said orders to the Parliament for the approval.