Commercial banks can accept deposits from foreigners

After assessing the foreign exchange risk management capabilities of commercial banks, the Central Bank further liberalised acceptance of deposits by domestic banking units of commercial banks from foreigners introducing a new scheme, Foreign Investment Deposit Accounts (FIDA).

Citizens of foreign states, Sri Lankan citizens resident outside Sri Lanka, corporate bodies incorporated outside Sri Lanka and foreign institutional investors such as country funds, mutual funds and regional funds can now make investments in savings and time deposits in designated foreign currencies or in Rupees with commercial banks.

This permission has been granted from June 2 subject to the conditions that a deposit account should maintain a minimum balance of at least US$ 10,000 or its equivalent and total foreign deposits accepted under this scheme do not exceed 20% of total deposit liabilities of the domestic banking unit.

This is one of the series of policy initiatives implemented by the Central Bank to secure comparative advantages by moving to global financial markets for mobilisation of foreign savings to fill the country's domestic savings-investment gap in the interest of enhancing its macro-economic performances.

The new deposit scheme will facilitate offering and promoting international financial services and improve further investor confidence in Sri Lanka in line with its long term objective of becoming a financial hub in the region.