Stern action against noncomplying persons – CBSL

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Stern action will be taken against those who do not comply with regulations on foreign exchange transactions, the Central Bank of Sri Lanka (CBSL) announced.

In a statement, the CBSL reiterated all efforts would be taken to strictly monitor and ensure compliance with all regulations on foreign exchange transactions, encouraging foreign inflows through the banking system, rather than those being channelled through the grey market.

The CBSL said this includes repatriation requirements of export proceeds, conversions, and mandatory sales to the CBSL etc. Any instances of non-compliance will be dealt with stern action within the provisions of all applicable laws, the CBSL said.

“To ensure adequate foreign exchange liquidity in the banking system, the CBSL had to impose surrender requirements on export earnings. Further, measures were taken by the Government and the CBSL to discourage foreign exchange outflows, such as imposing restrictions on certain imports and payment terms and introducing margin requirements, while encouraging foreign inflows through the banking system, rather than those being channelled through the grey market.

The success of these regulatory measures and the ability to achieve the intended outcomes depend on the support and cooperation from the trading community and the banking system. However, it has been brought to the notice of the CBSL that certain market players are not being fully compliant with these regulations. Such practice, if continued, would deprive the people of the support expected from the Government in difficult times, while undermining the moral obligation of ‘equal burden sharing’ that is expected of all stakeholders under difficult and extraordinary circumstances.”

Furthermore, the CBSL said it wishes to reiterate that overcoming present economic woes and distresses requires substantial and concerted efforts from all stakeholders of the economy.

“Foul play on the part of any group of stakeholders would inevitably result in the worsening of the crisis, thereby having widespread detrimental effects. It is the duty of everybody to act conscientiously and responsibly, and extend their unhindered support during this hour of need, for the Nation to recover rapidly and emerge stronger from this crisis,” the CBSL added.