Host of benefits for Sri Lankan diaspora by PB

People’s Bank announced new initiative measures to Sri Lankans earning foreign currency, offering the best short term and long term investment opportunities through the Sri Lankan Rupee Treasury Bill and Bonds.

Under this scheme introduced by the Government of Sri Lanka and People’s Bank offers the Rupee denominated Treasury Bill and Bond, this initiative offers a safe and highly liquid investment opportunity to the Sri Lankan diaspora and migrant workers while providing an attractive return on their investments.

A Treasury Bill is a short term debt instrument issued by the Government of Sri Lanka with maturities of 91 days, 182 days and 364 days.

Treasury Bond

A Treasury Bond is a medium to long term debt instrument issued by the Government of Sri Lanka with maturities of 2 - 10 years. As an Agent of the Government of Sri Lanka, the Public Debt Department of the Central Bank of Sri Lanka (CBSL) issues Treasury Bills/ Bonds and pays interests and maturity proceeds on due dates.

Customer of People’s Bank who live abroad now have the opportunity to channel their investments through the Treasury Bill / Bond Investment External Rupee Account - Deshabhimani (TIERA-D) which can be opened by the investor. All transactions relevant to these investments will be routed through this TIERA-D.

The benefits offered by People’s Bank include, remittances into and out of the TIERA-D accounts would be free from exchange controls. The investor can also enter into a Forward Exchange Contract with the bank if they wish to mitigate the exchange risk involved with their transactions.

In addition to this, investor can look forward to risk free, gilt edged debt instrument, maturity proceeds at face value paid on maturity, half yearly coupon payments for treasury bonds, yield rates determined by the market, tradable instrument in the secondary market amongst a host of others.

Investment opportunity

Senior Deputy General Manager - Treasury and International Business, People’s Bank Vasantha Kumar said, “This is a great investment opportunity for Sri Lankans living abroad to earn high return in concurrence with further empowering the Government to go ahead with needed development projects in the country. Also, we are proud to note that People’s Bank has been appointed as one of the Joint Lead Managers to facilitate this endeavour.”

In addition, under the Central Bank’s new initiative measures, to promote inward remittances and to build the foreign exchange reserves to a high level, the Government of Sri Lanka has made necessary arrangements to pay a bonus interest in Sri Lanka rupees on the interest paid on Resident Foreign Currency and Non-Resident Foreign Currency accounts with effect from February 1, 2009. The bonus paid will be the rupee equivalent of 20% of the foreign currency interest that accrues on deposits.