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The Central Bank has decided to relax NRFC, RFC withdrawal regulations

The Central Bank has decided to relax the regulations on NRFC, (Non-Resident Foreign Currency) and Resident Foreign Currency Accounts (RFC) withdrawals,Central Bank Governor Arjuna Mahendran said.

Gazzette approval is expected for this by January 31.

He said that the main reason for this is to encourage more investments to the country and elevate the nation towards being the financial hub in the region.

Currently there are many restrictions when withdrawing money from these forex accounts as many questions are being asked when customers withdraw money”.This will encourage both local and foreigners to invest in more forex,” Mahendran said.

Earlier withdrawals were limited for education and medical purposes and many questions were asked. “It was almost impossible for even a parent to transfer forex from his or her account to present an anniversary gift.

Earlier banks had to ensure that transactions were only for current account purposes, but banks will now remit payments without questions being asked, he said.

Domestic withdrawals still have to be made in rupees, Deputy Governor Nandalal Weerasinghe said. (SS)

The Central Bank has decided to take-over the management of Entrust Securities PLC from 6 p.m. yesterday.

The Central Bank (CBSL) will soon appoint a State bank to manage operations of the institution. Entrust was appointed as a licensed Primary Dealer by the Central Bank to deal exclusively in Government Treasury Bills and Treasury Bonds in April 2000.

Central Bank Governor Arjuna Mahendran said that on several occasions irregularities of the company including misappropriation of funds was brought to the notice of the Criminal Investigations Department as well as the CBSL.

“We contacted Entrust and last November gave them an ultimatum to present CBSL with a credible future restructuring business plan. We also gave them a deadline till 6 p.m. yesterday. However they have not responded and we will now take over the management.”

He said that though there were crashed of finance companies and banks this is something new to Sri Lanka. “We want to ensure stability and also confidence in the market and this was the reason we decided to offer the management of Entrust to a government bank. A similar scenario was witnessed when the Seylan Bank (then owned by Lalith Kotelawala) was given to be managed by a State Bank.

The CBSL would also relook at the ‘books’ of the company and if there is fraud involved action will be taken against the management and other officials in the company.

“We would also look at liquidation assets of the company.”

Entrust Securities created history in the local debt market by being the first regulated Non Banking entity under the Public Debt Department of CBSL that got listed in the Colombo bourse.

Commenting on the progress of the proposed setting up of an International Financial Centre in Colombo Mahendran said that approvals are now being sought for it by the Finance Ministry. He also said that Sri Lanka needs urgently needs a Bond clearing house.

He said that the reserves have recently increased from US$ 6.5 billion to 7 billion. “The Sri Lanka rupee too is now moving towards a comfortable level.”
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