Business

The Central Bank of Sri Lanka (CBSL) has observed that some residents in Sri Lanka are using foreign currency for transactions within the country instead of using Sri Lankan Rupees. The CBSL explained that, per the Central Bank of Sri Lanka Act, No. 16 of 2023, all transactions between residents in Sri Lanka must be conducted in Sri Lankan Rupees, unless the Central Bank permits otherwise under the Foreign Exchange Act, No. 12 of 2017. Additionally, the CBSL stated that it has not allowed local merchants to accept payments from customers in foreign currency by converting Sri Lanka Rupees, including transactions made through Electronic Fund Transfer Cards like credit or debit cards. As a result, the CBSL warned that any resident of Sri Lanka who pays a merchant in foreign currency or any merchant who accepts such payments without Central Bank authorization is committing an offense under the CBSL Act. If found guilty after a summary trial in front of a Magistrate, the penalties could include: - A fine of up to twenty-five million rupees (Rs. 25,000,000); - Imprisonment for up to three years; or - Both a fine and imprisonment. The CBSL urged the public and businesses in Sri Lanka to follow these rules closely to prevent serious legal issues.