The Central Bank of Sri Lanka has issued a warning to residents against conducting transactions in foreign currencies within the country, highlighting the risk of incurring fines up to 25 million rupees and/or facing imprisonment.
The bank has observed instances where residents engage in transactions using foreign currency instead of the Sri Lankan rupee. Under the Central Bank of Sri Lanka Act, No. 16 of 2023, all transactions between Sri Lankan residents must be conducted in rupees, except where the central bank has granted authorization under the Foreign Exchange Act, No. 12 of 2017.
In a statement, the Central Bank clarified, “Merchants and the general public are informed that the Central Bank has not granted any authorization for local merchants to receive payments from local customers to the credit of any Foreign Currency Account by converting Sri Lanka Rupees into foreign currency, including payments via Electronic Fund Transfer Cards (i.e., Credit or Debit cards).”
The statement further emphasized that any resident making payments in foreign currency to a merchant in Sri Lanka, or any merchant accepting such payments without central bank authorization, is committing an offense under the CBSL Act.
Upon conviction following a summary trial before a Magistrate, offenders may face:
- A fine not exceeding twenty-five million rupees (Rs. 25,000,000/-);
- Imprisonment of either description for a term not exceeding three years;
- Or both such fine and imprisonment.
The Central Bank strongly urges the general public and the business community to comply with these statutory requirements to avoid severe legal consequences.
(Colombo/Feb12/2026)
