Government mulls issuing bearer bonds to boost worker remittances

The government is considering more incentives including issuing bearer bonds, special loan schemes and direct fuel purchasing mechanisms to attract more foreign exchange inflows from migrant workers via formal channels.
During the weekly Cabinet media briefing, Cabinet Co-Spokesperson and Minister of Transport and Highways and Minister of Mass Media Bandula Gunawardena revealed that the Cabinet of Ministers agreed to hold discussions on issuing bearer bonds targeting migrant workers.

He noted that bearer bonds, which are a type of fixed-income security owned by the holder rather than by a registered owner, were first introduced to the country in 1980.  Registered Stock and Securities Ordnance allows the Finance Ministry to issue bearer bonds. Meanwhile, the Labour and Foreign Employment Ministry has begun formulating a special interest free loan scheme for families of migrant workers based on their foreign currency savings with commercial banks in Sri Lanka.

Accordingly, migrant workers will be required to make US$ 50 in savings per month for a period of one year with a commercial Bank in Sri Lanka to be eligible for this proposed scheme.  Consequently, their family members will be able to borrow up to US$ 3000 under the proposed scheme, which is payable in five years.

Gunawardena said he was confident these measures will route more worker remittances to the country through formal channels.

In addition, the Minister of Agriculture and Minister of Wildlife and Forest Resources Conservation, Mahinda Amaraweera revealed that the government is also considering a proposal to allow families of migrant workers to purchase fuel with their foreign exchange, though he failed to provide more details on it.

Worker remittances slightly increased to US$ 304.1 million in March from US$ 248.9 million recorded in April, but was still down from US$ 460.1 million recorded a year ago with a significant chunk of migrant workers still preferring to send their forex earnings through informal channels.