CB says banks had bloated worker remittance figures for years

• Says banks had classified all remittances inflow as worker remittances
• Identifies current worker remittances figures as actual funds remitted by Lankan migrant workers
• Implies that US$ 550mn average monthly worker remittances figure prior to 2021 was misleading 

The Central Bank (CB) yesterday claimed that banks had bloated inward worker remittance figures for years due to lapses in classifying such inflows from other remittance categories. 

“There had been errors in classifying inward worker remittances by the banking sector in the past. Banks in some instances classified all remittance inflows as worker remittances. Export proceeds also come into banks as remittances, and if they fail to identify them, then it leads to a bloating of actual worker remittance figures. This had been the case in the past years,” Central Bank Governor Dr. Nandalal Weerasinghe said.

He identified the current worker remittance figures as actual funds remitted by Sri Lanka’s migrant workers as opposed to the average US$ 550 million worker remittance inflows reported per month prior to 2021.

He said the CB came to learn that several reporting errors in classifying worker remittance inflows when it ordered banks to convert 50 percent of worker remittance inflows into rupees last year.

In July this year, worker remittances slightly improved to US$ 279.5 million from June. However, it was down from US$ 453.3 million a year ago.

The Governor said worker remittances and export proceeds have reached a stabilised level as of now, with a modest growth.

The CB is currently in the process of rectifying these reporting glitches of the banking sector under a new system.