The Central Bank of Sri Lanka (CBSL) has clarified that all transactions conducted between residents within Sri Lanka must be made in Sri Lankan Rupees, in accordance with the provisions of the CBSL Act, No. 16 of 2023. The clarification comes amid concerns that some residents are transacting domestically in foreign currencies rather than in the national currency.
According to the CBSL, such transactions are permissible only if specifically authorized by the Central Bank for purposes outlined under the Foreign Exchange Act, No. 12 of 2017.
In a statement issued on February 12, the Central Bank urged merchants and the general public to comply with existing regulations. It emphasized that no authorization has been granted to local merchants to receive payments from local customers into any Foreign Currency Account by converting Sri Lankan Rupees into foreign currency. This includes payments made through Electronic Fund Transfer Cards, such as credit or debit cards.
The statement further warned that any resident of Sri Lanka who makes a payment in foreign currency to a merchant within the country, or any merchant who accepts such payment without prior authorization from the Central Bank, commits an offence under the CBSL Act.
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Upon conviction following a summary trial before a Magistrate, offenders may be liable to a fine not exceeding twenty-five million rupees, imprisonment of either description for a term not exceeding three years, or both.
The Central Bank urged both the public and the business community to strictly adhere to the statutory requirements to avoid “severe legal consequences.”
