CBSL warns against foreign currency transactions between residents in Sri Lanka

The Central Bank of Sri Lanka (CBSL) says it has noticed certain instances where residents in Sri Lanka transact within the country in foreign currency, rather than in Sri Lanka Rupees.

In this connection, the Central Bank clarified that according to the provisions of the Central Bank of Sri Lanka Act, No. 16 of 2023 (CBSL Act), all transactions executed between or among residents in Sri Lanka shall be made in Sri Lankan Rupees, unless otherwise authorized by the Central Bank for the purposes of the Foreign Exchange Act, No. 12 of 2017. 

Further, merchants and the general public are informed that the Central Bank has not granted any authorization for local merchants to receive any payments from its local customers to the credit of any Foreign Currency Account by converting Sri Lanka Rupees into foreign currency, including payments via Electronic Fund Transfer Cards (i.e. Credit or Debit cards).  

Accordingly, it warned that any person resident in Sri Lanka making payments to a merchant in Sri Lanka in foreign currency, and/or any merchant accepting payments in foreign currency from a person resident in Sri Lanka for the supply of goods/services without authorization of the Central Bank, commits an offence under the CBSL Act and shall, upon conviction after summary trial before a Magistrate, be liable to;  

• a fine not exceeding twenty-five million rupees (Rs. 25,000,000/-); or  

• imprisonment of either description for a term not exceeding three (03) years; or   

• both such fine and imprisonment 

The CBSL urged the general public and the business community to strictly adhere to these statutory requirements to avoid severe legal consequences.