Incentive package for migrant workers to boost forex inflows

• CB and govt. to introduce incentive package for migrant workers who remit moneys via formal channels 
• Incentive package includes pension benefits, insurance benefits, low interest loans, enhanced duty free concessions, etc.
• As of Sept., SL had received US $ 4.5bn in cumulative remittances, down 10% YoY

The Central Bank yesterday said that plans are afoot to incentivise the Sri Lankan expatriates who ensure their remittances enter the country through formal channels, so that both the migrant workers and national economy can reap the benefits of a win-win situation.

In an effort to encourage the inflow of remittances, as Sri Lanka grapples with a foreign exchange shortage, the Central Bank said future benefits for Sri Lankan expatriates working abroad would be linked to a quantum of remittances.

“Considering the importance of this steady non-debt inflow, the government and Central Bank of Sri Lanka are in the process of taking steps to ensure that remittances reach their full potential in a manner that is beneficial to the worker as well as to the country,” the Central Bank said in a statement. For the last five years, Sri Lanka has received an annual average inflow of US $ 7 billion per annum from workers’ remittances. As of September this year, Sri Lanka had received US $ 4,577.5 million in cumulative remittances, down 10 percent from the corresponding period in 2020.

To take the effort forward, the Central Bank is currently working in collaboration with the Labour Ministry, Foreign Employment Promotion and Market Diversification State Ministry and Sri Lanka Bureau of Foreign Employment, banking sector and several other stakeholders to introduce an incentive package for migrant workers.

The package for migrant workers would include pension/superannuation benefits, accident/life insurance benefits, banking facilities, including low interest loans for housing and/or self-employment on return to Sri Lanka and enhanced duty-free concessions.

The package of benefits would be made available only to those who remit their earnings to Sri Lanka through the formal banking system or any other formal money transfer system routed through banking channel.

The incentives are expected to be linked to the amount of foreign exchange so remitted to Sri Lanka. Operational details of proposed incentive package will be informed to the public in due course, in consultation with the relevant government authorities and banking sector, the Central Bank said.

The Central Bank also urged the Sri Lankan community residing abroad to ensure their remittances to Sri Lanka are being made through formal banking channels to a designated bank account in Sri Lanka, so that the value of foreign exchange so remitted to Sri Lanka could be easily tracked for the above-mentioned purposes.

Recently, the Central Bank established the Foreign Remittances Facilitation Department (FRFD) to facilitate and streamline workers’ remittances inflows. Efforts are also underway to launch ‘SL-Remit’ – a national remittance mobile application that will aim at attracting more remittances to Sri Lanka via official channels.