The Central Bank of Sri Lanka has observed instances where residents are conducting transactions within the country using foreign currency instead of the Sri Lankan Rupee. The Central Bank wishes to clarify that under the Central Bank of Sri Lanka Act, No. 16 of 2023, all transactions executed among residents in Sri Lanka must be conducted in Sri Lankan Rupees. Exceptions to this rule require authorization from the Central Bank in accordance with the Foreign Exchange Act, No. 12 of 2017.
The Central Bank further informs merchants and the general public that no authorization has been granted for local merchants to receive payments in foreign currency from local customers. This includes payments converted from Sri Lanka Rupees into foreign currency via Electronic Fund Transfer Cards such as credit or debit cards.
Consequently, any resident of Sri Lanka making payments to a merchant in foreign currency, or any merchant accepting foreign currency payments from a resident without the Central Bank’s authorization, is committing an offense under the CBSL Act. Upon conviction after a summary trial before a Magistrate, offenders may face a fine not exceeding twenty-five million rupees (Rs. 25,000,000/-), imprisonment for a term not exceeding three years, or both.
The Central Bank strongly urges the general public and the business community to comply with these statutory requirements to avoid severe legal repercussions.
