Private foreign currency accounts

published by admin on Sat, 08/06/2011 - 09:23

1. Following accounts in foreign currency are permitted to be opened in domestic banking unit in commercial banks in Sri Lanka

(a) Non Resident Foreign Currency accounts (NRFC    )

May be opened and operated by;

(a) a citizen of Sri Lanka who is or has been employed outside Sri Lanka;

(b) a national of a foreign country who prior to the acquisition of such nationality was a citizen of Sri Lanka;

while such person [above (a) and (b)] is resident outside Sri Lanka or within ninety days after the return of such person to Sri Lanka.

(c) a foreign employment agency licensed by the Sri Lanka Bureau of Foreign Employment with the prior written approval of the Controller of Exchange,

A NRFC may be opened in the form of a current, savings or fixed deposit account and, in       the case of persons referred to in clauses (a) and (b) above may be held jointly provided all the joint holders are qualified to open such an account.

A NRFC account of a person referred to in clauses (a) and (b) above shall only be credited with –

                    (a) inward remittances in foreign exchange in favour of such person;

(b) foreign exchange brought to Sri Lanka by such person on arrival in Sri Lanka;

                    (c) interest payable in foreign currency on the funds held in the account;

(d) dividends and profits earned from and sale proceeds of investments of the funds of the account, in an enterprise approved by the Board of Investment of Sri Lanka under section 17 of the Board of Investment of Sri Lanka Law (hereafter referred to as a “BOI Enterprise”) and received in foreign currency.

(2) A NRFC of an agency referred to in clause  2 (c) above shall only be credited with –

  (a) commissions or service payment fees in foreign currency in the form of inward    remittances in respect of recruitments made by the agency;

  (b) interest payable in foreign currency on the funds held in the account.

Funds in a NRFC account may be utilized for –

(a) making any payment in foreign currency to or for the credit of a person    resident            outside Sri Lanka;

                        (b) transfer of funds from one NRFC to another NRFC;

(c) making any payment in Sri Lanka in Sri Lankan rupees converted at the                   prevailing rate of exchange;

(d) issue of travelers cheques [not exceeding 10000 United States Dollars ] and foreign currency notes[not exceeding 500 United States Dollars ] for travel outside Sri Lanka   subject to subparagraph 2. © above ,

                      (i) the account holder where such holder is a person referred to in clauses  (a) and   (b) above

                      (ii) a proprietor, partner or a director of the account holder where such  holder is a foreign employment agency,   on production of an unutilized travel ticket.

                        (e) an investment in a BOI Enterprise;

(f) subject to such restrictions as may be imposed under the Banking Act No.30 of 1988, as security for the grant of rupee loan facilities for third parties.

(b) Resident Foreign Currency accounts (RFC   )

May be opened with minimum initial deposit of 500 United States Dollars or equal ant in other foreign currency, and operated by;

(a) an individual resident in Sri Lanka, whether a citizen of Sri Lanka or not, who could       satisfy the authorised dealer that the individual owns or holds foreign exchange of an       amount not less than 500 United States Dollars or its equivalent in other foreign currency received on inward remittances in favour of the individual or brought to Sri Lanka on arrival therein by the individual;

(b) a citizen of Sri Lanka resident in Sri Lanka who owns or holds foreign exchange of an amount not less than five hundred United States Dollars or its equivalent in other     foreign currency.

A RFC shall be opened  and maintained in the form of a savings, current or fixed deposit account and could also be held jointly with other individuals qualified to open such an account.

A RFC account shall only be credited with –

(a) inward remittances received in favour of the account holder except as proceeds of export of goods and services by the account holder or as remittances  to the credit of a Non-Government Organization;

(b) foreign exchange brought to Sri Lanka on arrival therein by the account holder other than as any unutilized balances of foreign exchange granted for travel abroad;

(c) foreign exchange owned or held by the account holder in opening the  account;

(d) interest payable in foreign currency on funds held in the account.

Funds in a RFC account may be utilized for –

(a) making any payment in foreign currency to or for the credit of a person resident outside Sri Lanka;

(b) transfer of funds from one RFC to another RFC;

(c) making any payment in Sri Lanka in Sri Lankan rupees converted at the prevailing  rate of exchange,[and any documents for making any of the above payments shall be endorsed as being issued in Sri Lanka against the funds in the RFC].

(C) Resident Non Nationals’ Foreign Currency accounts (RNNFC)   

May be opened and operated by r a national of a foreign country resident in Sri Lanka either temporarily or permanently on a resident visa.

 A RNNFC may be opened as a current, savings or a deposit account but withdrawal of funds by cheque from such an account is not permitted.

Interest is paid in foreign currency in which the account is maintained on outstanding balance of a RNNFC

 

A RNNFC may only be credited with –

(a) inward remittances of foreign currency in favour of the account holder;

(b) interest paid on the funds in such account;

(c) foreign currency in which the account is maintained equivalent to the amount of Sri Lankan rupees authorized by the Controller of Exchange for remittance abroad by the account holder and converted into foreign currency at the rate of exchange prevalent on the date of credit to the account.

Funds in a RNNFC may be utilized for –

(a) outward remittances in the foreign currency in which the account is maintained

(b) travel abroad [ currency notes for travel abroad shall not, except with the approval of the Controller of Exchange, exceed 500 United States Dollars ]

(c) payment in Sri Lanka in Sri Lankan rupees converted at the prevailing rate of exchange.

(d) Exporters Foreign Currency accounts (EFCA)

 An EFCA may be opened for an exporter of goods in Sri Lanka.

Before opening an EFCA, the exporter shall furnish the authorized dealer the number assigned to the exporter by the Sri Lanka Export Development Board.

An EFCA may be opened as a current, savings or a deposit account.

*An EFCA shall be credited solely with proceeds of exports of the account holder and shall not qualify for any tax exemptions.

Proceeds of exports of the account holder is not permitted to  credited to any foreign currency account which qualifies for tax exemptions such as a NRFC or RFC of the account holder.

Funds in an EFCA may be utilized/ remitted by the account holder –

(a) to meet reasonable claims by foreign buyers of the exports of the account holder in respect of quality and quantity deficiencies of the goods exported and as commissions to agents abroad of a reasonable percentage of the FOB value of exports

(b) for settlement of import bills of the account holder including the import bills of another company belonging to the same group of companies of which the account holder is a member, and may also be utilized for the repayment of loans granted to the account holder in foreign currency and the interest thereon

EFCA account is not permitted to be overdrawn

Subject to the other provisions herein exporter may credit export proceeds to a rupee account or may retain such proceeds abroad in any commercial bank provided funds in such an account abroad are not used for acquisition of property or other capital assets outside Sri Lanka.

(e) ) Foreign Currency accounts for hoteliers (HFCA)

A HFCA may be opened for hoteliers in Sri Lanka.

A HFCA shall only be credited with –

(a) inward remittances in foreign currency from foreign travel agents and charter operators for services rendered by the hotelier; and

(b) foreign currency payments by foreign tourists to the hotelier for services rendered to the tourists;

(f) Resident Guest Foreign Currency accounts (RGFC)

A RGFC may, with the prior approval of the Controller of Exchange, be opened for foreign investors and professionals resident in Sri Lanka under the Resident Guest Scheme who could contribute to the economic and socio-cultural developments of Sri Lanka. RGFC scheme is processed by Board f Investment in Sri Lanka

A RGFC shall be opened with a minimum initial deposit of United States Dollars One Hundred and Fifty Thousand or its equivalent in other convertible foreign currency being the minimum amount required to be brought into Sri Lanka for the purposes under the Resident Guest Scheme and, where the account holder has any dependent resident in Sri Lanka, with a further initial deposit of United States Dollars Twenty Five Thousand or its equivalent in other convertible foreign currency, being the amount required for registration of each such dependent under that scheme.

Funds in a RGFC may be utilized for investment in –

(a) projects approved by the Board of Investment of Sri Lanka or by any other relevant authority;

(b) shares of companies listed at Colombo Stock Exchange, and shall not be utilised for any other purposes except with the prior approval of the Controller of Exchange granted with the concurrence of the implementing agency of the Resident Guest Scheme.

Authorised dealers may pay interest on the funds in a RGFC for an initial period of two years commencing from the date of opening of the account at such rate not exceeding the rate of interest payable on a NRFC and may, with the prior approval of the Controller of Exchange, pay interest on such funds thereafter. Any interest so paid as above shall not be credited to the RGFC of the account holder.

A RGFC account holder shall open a Resident Guest Rupee account for the deposit of funds remitted to Sri Lanka for the upkeep of the account holder and the dependents, if any, of such account holder and converted into Sri Lankan rupees.

Income from any investment made out of the funds in a RGFC and the interest paid on the funds in such an account may also be credited to the Resident Guest Rupee account of the holder of the RGFC.

Funds in a Resident Guest Rupee account may be utilised for the local disbursements of the account holder but shall not, without the prior written approval of the Controller of Exchange, be utilised for remittances abroad.

Foreign currencies

“foreign currency” means any of the following currencies;

(a) for the purposes of a NRFC –

(i) United States Dollar;

(ii) Pound Sterling;

(iii) Euro

(v) Swiss Franc;

(vi) Japanese Yen;

(vii) Australian Dollar;

(viii) Singapore Dollar;

(ix) Canadian Dollar;

(x) Danish Kroner;

(xi) Netherlands Guilder;

(xii) Swedish Kroner;

(xiii) Hongkong Dollar;

 (d) for the purposes of an EFCA, HFCA or RGFC any convertible foreign currency, and the expression “foreign exchange” shall be construed accordingly.