Financial Institutions offering deposits and savings products generally publish a standard rate. However, in many instances deposit rates can be negotiated depending on the amount to be deposited and also the client’s relationship with the organization.
A deposit of funds placed at a financial institution, where the depositor earns a fixed rate of interest for a fixed period of time. Fixed Deposits can be for short, medium or long term. Funds can only be withdrawn before the maturity date with prior notice and could attract a penalty. A depositor has the facility to borrow funds from the institution using the deposit as collateral.
A deposit of money where the depositor earns a fixed rate of interest, for a fixed period of time. However, in the case of a certificate of deposit the investor deposits the discounted value of the certificate of deposit and receives the full value of the certificate on maturity.
i.e: The amount required to purchase a certificate of deposit of 100,000/- giving a yield of 8%p.a for 12 months would be 92,600/-
i.e: The amount required to purchase a certificate of deposit of 100,000/- giving a yield of 8%p.a for 12 months would be 92,600/-
There are four types of foreign currency accounts that are generally operated in Sri Lanka.
- Personal Foreign Currency Account (PFCA)
- Business Foreign Currency Account (BFCA)
- Inward Investment Account (IIA)
- Outward Investment Account (OIA)
Personal Foreign Currency Account (PFCA) is a special account which can be opened in designated foreign currencies and could be invested in many attractive investment products.
Eligibility
- An individual, including a minor, who is a Sri Lankan national
- An individual of Sri Lankan origin, including a minor who is a resident outside Sri Lanka
- A non-national resident in Sri Lanka
- A non-national either on temporary visit to Sri Lanka or intending to visit Sri Lanka
- An administrator or executor of the estates of a deceased person, who maintained a personal foreign currency account with that authorized dealer or restricted dealer until the completion of the administration of the deceased person’s estate
Permitted Credits
- Inward remittances
- Foreign currency brought into Sri Lanka
- Transfer from PFCA Accounts/Business Foreign Currency Accounts (BFCA) and accounts in Offshore Banking Unit
- Transfers from own Inward Investment Account (IIA), if the account holder is a resident outside Sri Lanka or a non-national resident in Sri Lanka
- The monthly salary, employment benefits and other related benefits, if the account holder is a non-national employee resident in Sri Lanka
Permitted Debits
- Any outward remittance
- Local disbursements
- Transfer to PFCA Accounts/Business Foreign Currency Accounts (BFCA) and accounts in Offshore Banking Unit
- Transfers to own Inward Investment Account (IIA), if the account holder is a resident outside Sri Lanka or a non-national resident in Sri Lanka
- Withdrawal in foreign currency notes up to USD 10,000 (or equivalent in any other foreign currency) for the purpose of travel
- Foreign currency withdrawals for non-national resident outside Sri Lanka who is on a temporary visit to Sri Lanka
Eligibility
- An individual resident in Sri Lanka
- A sole proprietorship or partnership registered in Sri Lanka where the proprietor or a majority of partners are resident in Sri Lanka (in case of a partnership with two partners, at least one partner shall be a resident in Sri Lanka)
- A company incorporated in Sri Lanka
- A company incorporated outside Sri Lanka which is registered as an overseas company under the Companies Act No 7 of 2007
- A State Institution with the recommendation of the secretary to the relevant line ministry or appropriate authority
- A person authorized to carry on a business as a shipping agent or a general sales agent in Sri Lanka on behalf of a foreign shipping line or airline (foreign principal) who possesses a valid license, or an authorized letter issued by the Director General of Merchant Shipping or Director General of Civil Aviation Authority of Sri Lanka as relevant
- An administrator or executor of the estate of a deceased person, who maintains a Business Foreign Currency Account with that authorized dealer or restricted dealer, until the completion of the administration of the deceased person’s estate
- A receiver or liquidator in the name of a company that maintained a Business Foreign Currency Account with that authorized dealer or restricted dealer, until proceedings are concluded
Permitted Credits
- Business, investment and salaries related inward remittances
- Foreign currency in the form of travelers’ cheques, bank drafts or currency notes
- Foreign currency brought into Sri Lanka by the account holder upon declaration
- Transfers from BFCA & Offshore Banking accounts
- Proceeds of foreign currency loans and advances with the prior approval of the Central Bank
- Sale proceeds of foreign assets acquired by debiting BFCA
- Capital gains in respect from investments made in Sri Lanka in foreign currency if the original transfer has been made by debiting the BFCA of the account holder
Permitted Debits
- Any outward remittance
- Disbursements in LKR
- Funds Transfers to BFCA, PFCA and Offshore Banking accounts
- Transfers to an Outward Investment Account of the same account holder
- Debt servicing expenses and repayment of foreign currency loans obtained by the account holder from authorized dealers or restricted dealers
- Transfers in respect of any investment permitted to be made in Sri Lanka
- Transfers to an Inward Investment Account (IIA) of a resident outside Sri Lanka for repayment of a foreign currency loan obtained from foreign lender
- Withdrawal in foreign currency notes up to USD 10,000 or equivalent for the purpose of travel
Inward Investment Account is a special account designated for eligible investors, resident in or outside Sri Lanka to route funds to invest in permitted investments.Licensed Commercial Banks and Licensed Specialized Banks (as permitted) are permitted to open and maintain IIA in the Domestic Banking Unit of a Licensed Commercial Bank and Licensed Specialized Banks (as permitted) in the name of the eligible investor. IIA may be maintained in Sri Lanka Rupees or in any designated foreign currency and may be held jointly by eligible investors.
Eligibility
- An individual of Sri Lankan origin who is a resident outside Sri Lanka
- A non-national resident in or outside Sri Lanka
- A non-national either on temporary visit to Sri Lanka or intending to visit Sri Lanka
- A Company incorporated outside Sri Lanka
Permitted Credits
- Inward remittances infavor of account holder
- Foreign currency brought into Sri Lanka by the account holder upon declaration
- Sales proceeds of immovable property including capital gains, leasehold rights, sub-lease hold rights, received in Sri Lanka Rupees where such investment made through IIA
- Transfers from Personal Foreign Currency Accounts (PFCA), Inward Investment Accounts (IIA) or Offshore Banking accounts of the same account holder
- Transfers from Business Foreign Currency Account (BFCA) of a person resident in Sri Lanka as repayment of foreign currency loans
- Transfer from Diplomatic Foreign Currency Accounts (DRA) and Diplomatic Rupee Account (DRA) of the same account holder
- Transfers from IIA of another person in respect of investments where such investment has been made by the account holder through the same IIA
- Dividend, sale or maturity proceeds, disposal of liquidation, capital redemption, share buyback, profits, surplus funds, rental income, recovery of principal, interest or any other related income received from capital transactions undertaken in Sri Lanka by persons resident outside Sri Lanka as permitted under Foreign Exchange Act
Permitted Debits
- Disbursements in Sri Lanka
- Outward remittance favoring account holder
- Own account fund transfers to IIA, PFCA or Offshore Banking accounts
- Payments relating to capital transactions undertaken in Sri Lanka by persons resident outside Sri Lanka
- Transfers to an IIA of another person in respect of the purchase of any permitted investment
- Disbursement relating to foreign currency loans to persons resident in Sri Lanka
- Transfer of proceeds of foreign currency loans to an Outward Investment Account (OIA) of the borrower where such loans have been obtained for financing an overseas capital transaction
- Transfers to Diplomatic Foreign Currency Accounts (DFA) and Diplomatic Rupee Accounts (DRA) of the same account holder
OIA is a special account designated for persons resident in Sri Lanka to channel funds abroad for eligible overseas investments such as investments in Shares, Units, Debt Securities, Sovereign Bonds and establishing of an overseas company of a company incorporated in Sri Lanka. Licensed Commercial Banks are permitted to open and maintain OIA in the name of resident investors in the domestic banking unit of a Licensed Commercial Bank in any designated foreign currency.
As at September 2018
Eligibility
- An individual, including a minor, who is a Sri Lankan national
- An individual of Sri Lankan origin, including a minor who is a resident outside Sri Lanka
- A non-national resident in Sri Lanka
- A non-national either on temporary visit to Sri Lanka or intending to visit Sri Lanka
- An administrator or executor of the estates of a deceased person, who maintained a personal foreign currency account with that authorized dealer or restricted dealer until the completion of the administration of the deceased person’s estate
Permitted Credits
- Inward remittances
- Foreign currency brought into Sri Lanka
- Transfers from PFCA Accounts/Business Foreign Currency Accounts (BFCA) and accounts in Offshore Banking Unit
- Transfers from own Inward Investment Account (IIA), if the account holder is a resident outside Sri Lanka or a non-national resident in Sri Lanka
- The monthly salary, employment benefits and other related benefits, if the account holder is a non-national employee resident in Sri Lanka
Permitted Debits
- Any outward remittance
- Local disbursements
- Transfers to PFCA Accounts/Business Foreign Currency Accounts (BFCA) and accounts in Offshore Banking Unit
- Transfers to own Inward Investment Account (IIA), if the account holder is a resident outside Sri Lanka or a non-national resident in Sri Lanka
- Withdrawal in foreign currency notes up to USD 10,000 (or equivalent in any other foreign currency) for the purpose of travel
- Foreign currency withdrawals for non-national resident outside Sri Lanka who is on temporary visit to Sri Lanka
Limits for Outward Investments
Eligible Resident Investor | Type of Investment | Permitted Limit |
---|---|---|
(i) A company listed in the Colombo Stock Exchange | Shares, Units, Debt Securities and Sovereign Bonds | USD 2,000,000 or an equivalent amount in any foreign currency designated by the Central Bank, per calendar year |
(ii) A company not listed in the Colombo Stock Exchange | USD 500,000 or an equivalent amount in any foreign currency designated by the Central Bank, per calendar year | |
(iii) A partnership registered in Sri Lanka | USD 300,000 or an equivalent amount in any foreign currency designated by the Central Bank, for life time | |
(iv) An individual | USD 200,000 or an equivalent amount in any foreign currency designated by the Central Bank, for life time | |
(v) A company or a partnership | Setting up of Overseas offices | USD 300,000 or an equivalent amount in any foreign currency designated by the Central Bank, per calendar year |
The following institutions are authorized by the Central Bank of Sri Lanka to accept deposits of money from the public.
Further inquiries can be made with the Central Bank of Sri Lanka
Bank Supervision Department : banksup@cbsl.lk
Dept. of Supervision of Non Bank Financial institutions : snbfi@cbsl.lk
Legal Department : legal@cbsl.lk
- Licensed Commercial Banks (LCB)
- Registered Finance Companies
- Licensed Specialized Banks (LSB)
Further inquiries can be made with the Central Bank of Sri Lanka
Bank Supervision Department : banksup@cbsl.lk
Dept. of Supervision of Non Bank Financial institutions : snbfi@cbsl.lk
Legal Department : legal@cbsl.lk