Liberalising foreign deposits hailed

Hiran H. SENEWIRATNE

Most of the private commercial banks hailed the Central Bank’s decision on the liberalising the acceptance of foreign deposits by domestic banking units of all commercial banks, banking sources said.

The permission has been granted with effect from this week known as Foreign Investment Deposits Accounts (FIDA).

It is subjected to the conditions that a deposit account should maintain a minimum of at least US $ 10,000 or equivalent and total foreign deposits accepted 20 per cent of the total deposit based in any bank, Central Bank official told the Daily News Business.

Hatton National Bank Chief Executive Officer, R. Theagarajah said that this will enable to attract foreign investment deposits for local commercial banks to mobilise despite the current economic conditions in this banks.

He said it will enhance the foreign currency reserves flow into the country in the medium to long term perspectives.

Each bank could hold 20 per cent of the total deposit liability, which will open doors to foreigners, deposits in the country for investment purpose without any hinder enabling macro economy to grow under the current scenario, he said.

Sampath Bank Chief Operating Officer (BOO) Aravinda Perera said that with the removing of restriction on local commercial banks to accept foreign deposits will positively impact the country to increase the economic activities.

He said earlier the SIERA terms and conditions, foreigners and Sri Lankans who are working abroad were subjected to send deposits to commercial banks in the country. With the liberalisation of the restriction it could attract not only for foreigners but Sri Lankans could send money without any hassle in the future.

The Chief Manager -Branch Operations Anushan Fernando said that this move will bridge the Domestic Saving Investing gap while enhancing the macro economic performance in the country. On the other hand it will enable commercial banks to mobilise foreign savings in their banks, he said.

He said since the Sri Lankan banking interest rates are quite attractive and our track record of repayment of capital quite impressive, most of foreign investors would deposit in local commercial banks in the future he said.

The new deposit scheme will facilitate offering and promoting international financial services and improve further investors’ confidence in Sri Lankan.