Foreign Exchange Products

Manage your currency exposure whilst obtaining the best market prices

Foreign Exchange Products

Spot Foreign Exchange Contracts

An agreement to buy or sell foreign currency against another currency, at the prevailing market price and where settlement occurs in two business days common to both currencies.

Forward Foreign Exchange Contracts

A binding Foreign Exchange (FX) contract, that locks in the exchange rate of a currency at a future date.

Features to note:

  • Provides protection against currency volatility/risk
  • Helps fix the cost of your future FX commitments.
  • No up-front payment required.
Par Forward Foreign Exchange Contracts

Par forward is a hedging instrument that allows you to manage your FX exposures more effectively.

Features to note:

  • Applicable to businesses who have a guaranteed series of future FX commitments over a fixed period of time.
  • FX rates of the entire series of forwards would be blended into a single FX Rate.
  • Cash-flows being hedged could be at irregular intervals or of irregular notional value.
  • A defensive and conservative strategy for the hedger who wishes to ‘lock-in’ their cash flow requirements.

View Foreign Exchange rates

Foreign Currency Accounts

  • Personal Foreign Currency Accounts (PFCA)

Introduction

PFCA is an account that could be opened by Sri Lankans and foreign nationals (as per the eligibility) in designated foreign currencies for the purpose of saving / pooling foreign currency remittances/ deposits.

 

Who Can Open a PFCA

  • 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 estate of a deceased person, who maintained a personal foreign currency account with that authorized dealer until the completion of the administration of the deceased person’s estate.

 

Types of PFCAs that could be opened

  • Savings Accounts
  • Current Accounts without the cheque book facility
  • Fixed Deposits

 

Special Notes

  • All existing
    • Non-Resident Foreign Currency Accounts (NRFCAs),
    • Resident Foreign Currency Accounts (RFCAs),
    • Resident Non Nationals’ Foreign Currency Accounts (RNNFCAs)
    • Non-Resident Non-National Foreign Currency Accounts (NRNNFCAs) opened and maintained under the provisions of the repealed Exchange Control Act is now known as Personal Foreign Currency Accounts (PFCAs)
  • Debits and credits to the PFCAs are subject to the regulation and the direction issued by Central Bank of Sri Lanka
  • Each of the eligible category to open PFCAs should submit relevant documentation when opening the account as per the direction
  • Rupee and foreign currency loan facilities are available for the Sri Lankan working abroad community via PFCAs

 

Governing Foreign Exchange provisions

 

 

  • Business Foreign Currency Accounts (BFCA)

Introduction

BFCA is an account that could be opened in any designated foreign currency by resident Individuals and entities who earn foreign exchange in respect of the goods or services provided by such Individuals and entities to non residents.

 

Who Can Open a BFCA

  • 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 business as a shipping agent or a general sales agent in Sri Lanka on behalf of a foreign shipping line or airline (foreign principal) with a valid license or authorization letter issued by the Director General of
  • Merchant Shipping and Director General of Civil Aviation Authority of Sri Lanka, respectively.

    Additionally;

  • An administrator or executor of the estate of a deceased person, who maintained a Business Foreign Currency Account with that authorized dealer, until the completion of the administration of the deceased persons’ estate.
  • A receiver or liquidator, in the name of a company that maintained a Business Foreign Currency Account with that authorized dealer, until proceedings are concluded

 

Types of BFCAs that could be opened

  • Savings Accounts
  • Current Accounts without the cheque book facility.
  • Fixed Deposits.

 

Special Notes

  • All existing
    • Foreign Exchange Earners’ Accounts (FEEAs)
    • Inward Remittance Distribution Accounts (IRDAs),
    • Foreign Currency Accounts for Agents of Foreign Shipping Line or Air Lines (FCAAF SAs) opened and maintained under the provisions of the repealed Exchange Control Act is now known as Business Foreign Currency Accounts (BFCAs)
  • Debits and credits to the BFCAs are subject to the regulation and the direction issued by Central Bank of Sri Lanka
  • Foreign exchange earners who intend to open BFCAs should submit relevant documentary evidence of such foreign currency earnings.
  • Foreign Currency Loan facilities are available based on the foreign currency cash flows and credit evaluations

 

Governing Foreign Exchange provisions

 

 

  • Inward Investment Account (IIA)

Introduction

IIA is an account that could be opened by Non Residents, resident /non resident foreign nationals in designated foreign currencies or in Sri Lankan Rupees for the purpose of investing in permitted investments in Sri Lanka.

 

Who Can Open a IIA

  • A non- national resident in or outside Sri Lanka.
  • A non-national of Sri Lankan origin, who is a resident outside Sri Lanka
  • A Sri Lankan citizen, resident outside Sri Lanka.
  • A Company incorporated outside Sri Lanka.
  • Country and Regional Funds, Mutual Funds, Unit Trusts and other Institutional investors who are established outside Sri Lanka.
  • An administrator or executor of the estate of a deceased person, who maintained an Inward Investment Account with that authorized dealer until the completion of the administration of the deceased person’s estate.
  • A receiver or liquidator of a Company that maintained an Inward Investment Account with that authorized dealer until proceedings are concluded.

 

Types of IIAs that could be opened

  • Savings Accounts
  • Current Accounts without the cheque book facility
  • Fixed Deposits

 

Special Notes

  • All existing
    • Securities Investment Accounts (SIAs),
    • Special Foreign Investment Deposit Accounts (SFIDAs), opened and maintained under the provisions of the repealed Exchange Control Act is now known as Inward Investment Accounts (IIAs)
  • Debits and credits to the IIAs are subject to the regulation and the direction issued by Central Bank of Sri Lanka
  • Each of the eligible category to open IIAs should submit relevant documentation to prove the residence status
  • Accounts could be maintained in Sri Lankan Rupees of any designated foreign currency
  • Permitted Investment options in Sri Lanka via IIAs

 

Ex:

  • Invest, acquire or hold all classes of shares or an entitlement to shares issued by Companies incorporated in Sri Lanka under the Companies Act, No.7 of 2007
  • Invest, acquire or hold all classes of shares in a company not incorporated in Sri Lanka and listed in the Colombo Stock Exchange
  • Investment in debt securities or granting loans with a tenure of 3 or more years to companies incorporated in Sri Lanka (With certain conditions) in foreign exchange or in Sri Lanka Rupees
  • Units in Unit Trusts or Mutual Funds
  • Government Securities (treasury bills, treasury bonds and any other securities issued by the Government)
  • Securities issued by the Central Bank of Sri Lanka or any other statutory body;
  • Sri Lanka Development Bonds (SLDBs)
  • Deposits in licensed financial Institutions
  • Immovable properties
  • Any other investment categories approved by the Monetary Board in accordance with such directions as may be issued by the Minister.

 

Governing Foreign Exchange provisions

 

 

  • Outward Investment Account (OIA)

Introduction

OIA is an account that could be opened by Sri Lankan resident Individuals and entities in designated foreign currencies for the purpose of investing in overseas under permitted investments subject to an investment threshold imposed by the regulation.

 

Who Can Open a OIA

  • Companies registered under the Companies Act, No. 07 of 2007 other than a company limited by guarantee.
  • A partnership registered in Sri Lanka.
  • An individual resident in Sri Lanka.

* A Non-Governmental Organization shall not be permitted to open and maintain an Outward Investment Account.

* Any person against whom or any company or partnership against which legal proceedings or investigations are pending in respect of a prosecution under the provisions of the repealed Exchange Control Act or Foreign Exchange Act, No.12 of 2017, shall not be permitted to make any outward remittance in respect of a permissible capital transaction without obtaining clearance for such remittance from the Central Bank

 

Types of OIAs that could be opened

  • Savings Accounts
  • Current Accounts without the cheque book facility.
  • Fixed Deposits.(With Investment returns)

 

Special Notes

  • Debits and credits to the OIAs are subject to the regulation and the direction issued by Central Bank of Sri Lanka
  • Each of the eligible category to open OIAs should submit relevant documentation to prove the residence status in addition to the documents required as per the Direction No 14 of 2017 when investing funds from OIAs
  • Investment options in overseas via OIAs(Refer blow grid for investment thresholds)
Eligible Resident Investor Type of Investments / Instruments Permitted Limit
1. 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
2. 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
3. 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.
4. An individual  USD 200,000 or an equivalent amount in any foreign currency designated by the Central Bank, for life time.
5. 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.
  • Possibility for re –investment subject to the permitted investments, by utilizing funds up to fifty percent of the value of capital gains of previous outward investments credited to the OIA, without being subject to any threshold.

 

Governing Foreign Exchange provisions

 

Visit your nearest branch/ call the bank hotline Number 4711411 for more information.

 



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