Capital Controls

July 19, 2008 (LBO) – Sri Lankan Central Bank Governor Ajith Nivard Cabraal has said its exchange control department had streamlined approvals for overseas investments by local firms. The government wants to encourage big Sri Lankan companies to grow bigger and invest abroad, as a few have already done, he said.

“Now the exchange control department has liberalised those approvals (for overseas investment),” Cabraal told the annual general meeting of the Indo-Lanka Chamber of Commerce and Industry Friday.

“Within one month maximum those approvals will be granted provided the documentation is in order.”

Cabraal was responding to an appeal by the chamber’s president, Mano Selvanathan, whose firms have invested in India and south-east Asia, for faster approvals for overseas capital investments.

Selvanathan said Indian companies are allowed to export large amounts of money without Reserve Bank of India approvals while Sri Lankan investors need to take approval from the Central Bank.

He said if business was to take advantage of a new trade and investment treaty being negotiated between India and Sri Lanka, called the Comprehensive Economic Partnership Agreement (CEP