COLOMBO : A Gazette notification (2202/7) was published recently dated 16 th November 2020, extending the validity period of Special Deposit Account for a period of 12 months from
8 th April 2020.The notification seeks to amend the time period specified originally foropening of SDA’s of 6 months from 8 th April 2020 in Regulations published in April 2020and July 2020 to 12 months.
As per Gazette Notification 2170/4 dated 8 th April 2020 issued under the Foreign Exchange Act , any Sri Lankan individual resident in or outside Sri Lanka including Dual Citizens, Citizens of other States with Sri Lankan origin and any person resident outside Sri Lanka including funds, corporate bodies, association and other well-wishers, were permitted to open and maintain an account titled “Special Deposit Account” in the form of Term Deposits either in any designated foreign currency or in Sri Lanka Rupees with an authorized dealer in Sri Lanka, out of inward remittances from abroad routed through the banking system.
Salient features of SDA include Interest payable of 1 percentage point and 2 percentage points per annum for SDAs with a tenure of 6 months and 12 months, respectively, payable at maturity of the deposit, above the deposit interest rates applicable for normal deposits of similar maturities by the respective bank. Repatriation is freely allowed outside Sri Lanka on the maturity of the term deposits.
The Gazette notification published on 1 st July 2020 (2182/32) also allowed any person who is eligible to open SDA and has arrived in Sri Lanka from overseas on or after 1 January 2020, to open SDAs with any Authorized Dealer in Sri Lanka. This has now been allowed up 7 th April 2021, out of foreign exchange legitimately acquired and brought into Sri Lanka by such person.
If any person in, or resident in, Sri Lanka who has foreign currency in his/her possession up to authorized limits, subject to a declaration on source of funds to the Authorized Dealer, is eligible to open SDAs with such foreign currency with any Authorized Dealer in Sri Lanka before 7 April, 2021.
