New Foreign exchange Act to help build forex reserves | Sunday Observer

New Foreign exchange Act to help build forex reserves

Members at the panel discussion titled ‘The new forex Act and Regulations – What does it mean for business?’ organized by the Ceylon Chamber of Commerce.     PIC: SAMANTHA WIJESIRI
Members at the panel discussion titled ‘The new forex Act and Regulations – What does it mean for business?’ organized by the Ceylon Chamber of Commerce. PIC: SAMANTHA WIJESIRI

The newly enacted Foreign Exchange Act through the relaxation of foreign currency regulations will facilitate the country to build up its foreign exchange reserves as the end result, a senior Central Bank official said last week.

“If our department at the Central Bank did not facilitate this, there would have been severe repercussions in terms of outflows such as our businesses would have been turned away and looked to invest elsewhere, as this is the age of globalization,” Director, Department of Foreign Exchange of the Central Bank of Sri Lanka, Udeni Alawattage told a panel discussion last week.

He explained that there would have been foreign exchange outflows as businesses would have sought sophistication such as in marketing and technology acquisition elsewhere.

Meanwhile, Head of Compliance at Cargills Bank, Summaiya Maccan Marker said that from a bank’s compliance point of view, the Association of the Compliance Officers in banks are presently trying to work together as a common body in the interest of customers.

“This is to overcome any ambiguities because if we can come out with a set of documents where irrespective of a person going to bank A, B or C they will be asked for the similar set of documents, then it will be easy,” Marker said.

However, she said that banks would still need documentation from customers although there is some leeway for banks to act on bona-fides and integrity aspects as result of the direction.

“As this Act has been liberalised to encourage businesses, enhance FDIs and remittances, it is important for bankers also to look at this practically and within the framework of the law. So the regulations provide that banks should also satisfy the bona-fides and underlying transactions,” Marker emphasized. The panel discussion organized by the Ceylon Chamber of Commerce was also participated by Senior Assistant Director, Legal and Compliance of CBSL - Ms. Pavithri Vithanage, Precedent Partner, FJ & G De Saram - Ms. Ayomi Aluwihare Gunawardene, Director, KPMG - Suresh Perera and Chief Economist of the Ceylon Chamber of Commerce - Shiran Fernando. The session was moderated by Partner Ernst & Young, Duminda Hulangamuwa. 

 

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