Friday, 03 July 2020 15:45

Local banks follow due diligence in accepting SDA deposits

Sri Lanka banks have not been directed to desist from following the required due diligence processes in accepting deposits for Special Deposit Accounts (SDAs) introduced recently to attract much needed foreign exchange into the country.

The Central Bank said that the required due diligence processes has to be followed by banks in Sri Lanka in opening and maintaining recently introduced Special Deposit Accounts (SDAs).

The Government in consultation with the Monetary Board of the CB has introduced the SDA with the view to seek assistance for the national effort to overcome the effects of COVID-19 outbreak.

This action has been taken by issuing Regulations dated 08.04.2020 under the provisions of the Foreign Exchange Act (FEA).

The exemptions from procedural requirements specified in the said Regulations allow an AD to directly credit funds to an SDA without routing such funds through an Inward Investment Account under normal circumstances.

Banks have not been directed to entertain foreign currency deposits‘following no questions asked’ policy, CB said adding that the said Regulations cannot exempt ADs from complying with provisions of FEA.

In this regard, section 7(6) of FEA requires ADs to request the person who engages in a capital transaction to provide information/documents or make any declaration when it is reasonably necessary to satisfy that the said transaction is in conformity with any other laws regulating such transactions

(LIN)

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