CB denies claims of forcible remittance conversion

The Central Bank yesterday rejected claims by certain parties to the effect of forcible conversion of worker remittances into rupees under the proposed SFA, calling such claims, “completely unfounded”. 

Since the announcement of the proposal for SFA last Friday, there has been speculation by certain sections that all remittances were going to be converted into Sri Lankan rupees upon receipt by licensed banks under this arrangement. 

“The Central Bank of Sri Lanka categorically states that there is no truth whatsoever in this allegation”, a statement issued yesterday in response to the allegations said.

The linseed banks are required, since May 28 to sell 10 percent of the remittance they collect out of, “voluntary conversions” of worker remittances into Sri Lankan rupees on the strength of the additional Rs.2.00 incentive provided by the government on such conversions as per a proposal made in the budget last year to incentivise repatriations and conversions into rupees. 

“While a RFP has now been launched to explore the possibility of securitising this already existing flow to the Central Bank, the SFA will have no impact on any worker remittance, which can continue to be freely retained in foreign currency accounts in Sri Lanka or converted into Sri Lankan rupees as done in the past,” the statement said. 
“Accordingly, the general public is requested to remain vigilant and not to be misled by such false information,” it added.