CB extends additional Rs.10 incentive scheme to Jan.31

• Also undertakes to bear transaction cost associated with remitting money through formal channels up to a limit 

The Central Bank last week decided to extend the worker remittance incentive scheme, which offered an additional Rs.10.00 for each dollar converted, through January 2021 from an earlier end date set at December 31, 2021. 

The announcement came amid some growing confusion as the operating instructions were issued at the beginning of December, which led some banks to interpret differently. 

While some banks did offer the additional Rs.10.00 incentive for all worker remittance regardless of its mode of sending - electronically or otherwise - there were some banks which denied the incentive for the electronic fund transfers while some had declined it altogether citing no proper instructions had been received by them.

Among several measures taken during the last few months to encourage migrants to use official banking channels when repatriate their earnings to Sri Lanka, the Central Bank in the first week of December announced to offer a further Rs.8.00 on top of an already paid Rs.2.00 for such moneys sent via banking channels and/or exchange houses, making the total incentive Rs.10.00. 

Worker remittances to Sri Lanka, the top foreign income earner to the country ,were on a descent every month since June this year on a year-over-year basis, as the rupee lost credibility causing parallel exchange rates which offer very high rates for changing foreign currency at unofficial channels.

“The Central Bank of Sri Lanka, having considered the requests made by Sri Lankans working abroad, has decided to continue the payment of additional Rs.8.00 per US dollar for worker remittances, paid in addition to the incentive of Rs.2.00 per US dollar under ‘Incentive Scheme on Inward Workers’ Remittances’, for such workers’ remittances channelled through licenced banks and other formal channels and converted into Sri Lankan rupees, until 31.01.2022,” a Central Bank statement said. 

The Central Bank also said this was in response to the favourable developments seen so far during December after the incentive scheme first came into effect from the beginning of the month. 

In November, the worker remittance incomes plunged 55.6 percent to US$ 271.4 million from the same month last year bringing the cumulative 11-month income to US$ 5,166.3 million, down 17.9 percent over the similar period in 2020. 

In addition to the Rs.10.00 incentive, the Central Bank has also decided to bear the transaction cost incurred by the Sri Lankans working abroad up to a defined limit when remitting their money through exchange houses and/or banks. 

By doing this, the Central Bank said, “a large segment of Sri Lankans working abroad would now be able to remit their money to Sri Lanka without any charges”.