Banking

Concerns raised over Sri Lanka foreign depositor scheme

Monday February 15, 2016 9:22 am

ECONOMYNEXT – Raising concerns over a scheme to draw foreign deposits to Sri Lanka’s banking system a civil society activists has sought assurances that that the funds legal and changes to the scheme if such an assurances cannot be given.

Chandra Jayaratne, a former top financial sector executive warned the Sri Lanka’s Finance Minister and Central Bank Governor in an open letter, that that they are accountable for a public call made to park foreign funds in Sri Lanka with ‘no questions asked’.

He called for a transparent set of guidelines.

Jayaratne questioned whether funds coming through the scheme would create monetary instability in the future.

He questioned whether Sri Lanka’s bank would violate any international conventions and commitments on countering money laundering and tax evasion.

He also sought an assurances that accepting such funds would not jeopardize "investigations or prosecutions which are currently being progressed against persons and their related parties and associates in Sri Lanka or overseas for having possessed or having deposited proceeds of serious crimes in banks in Sri Lanka or overseas."

Finance Minister Ravi Karunanayake had said earlier that the inflows would come subject to current banking laws.

The open letter is reproduced below:

12th February 2016

An Open Letter to the Minister of Finance and the Governor of the Central Bank; to be duly noted by the President, the Prime Minister, the Government, Commercial & Financial Services Sectors and Professional Practitioners

Dear Minister and Governor,

You are Accountable for Your Unwise and Unacceptable Actions and Inactions

Transparency International Sri Lanka and many professionals in Civil Society, (including much respected retired Senior Central Bankers), have sounded “Amber Light” signals, warning you of your unwise and unacceptable actions and inactions, in connection with the open public call made by the Minister of Finance with the apparent concurrence of the Governor of the Central Bank, requesting investors to “park” foreign currency deposits in Sri Lanka, as “special deposits”, on “no questions asked” basis, with “no locked in investment period”.

The Minister has in fact boasted, a few weeks ago, of the success of the scheme, with an unnamed Belgian investor, working in partnership with a Sri Lankan, having agreed and partly funded, the ‘parking of one billion US Dollars in Sri Lanka’. He has also proudly announced this achievement as a due endorsement of the Sirisena-Wickremesinghe Government.

At the time of this first announcement, connected bank officials had informed the media that the remittances have topped USD 1.5 billion; and as the remitting banks overseas would already have cleared the customer and due diligence performed, there was no real need for “Know Your Customer” (KYC) validations at the receiving end bank. However, the media had later quoted the Central Bank chief as having confirmed that, commercial banks will continue to accept foreign inflows under mandatory international monetary regulations to know the source of funds.

The media today headlines “Many more” ready to deposit says FinMin ; and “Why do you want aid when you can trade? Trade should substitute aid. Likewise why do you need loans, when you can have deposits? When deposits come, your reserves go up” quoting the Minister of Finance; who had asserted that “many more” are ready to help Sri Lanka defend its currency and bolster its reserves”; and says “these deposits will replace loans drawn at high interest rates.”

The Minister too has assured that the relevant KYC validations are carried out and that the critics need not worry whether these are hot money; and actions taken are without corrupt motives as a clean government is in power.

Civil Society, however wishes to hold the Minister of Finance and the Governor of the Central Bank accountable for the following;

1. Potential consequential risks, in the medium to long term, of the of scheme now in force and duly prompted by the Minister, as way forward to protect the value of our currency and secure low cost funds in the short term, leading to monetary instability and a potential balance of payment crisis in the future

2. Consequential potential negative national economic and social outcomes, if any in the short to long term, in the absence of a transparent and publicly announced scheme, detailing the applicable guidelines, procedures and processes governing investors “parking” foreign currency deposits in Sri Lanka, as “special deposits”, on “no questions asked” basis, with “no locked in investment period”.

3. Consequential impact, due to the aforesaid scheme and its operations and reporting standards in practice in Sri Lanka, Sri Lankan Banks and Financial Institutions, violating any international conventions and commitments of Sri Lanka and the local legal and regulatory framework, in terms of;
a. International Anti Money Laundering and Terrorism Financing Conventions and Commitments
b. Acts and Regulations associated with the Financial Intelligence Unit of Sri Lanka – refer – http://fiusrilanka.gov.lk/acts_regulations.html
c. Financial Action Task Force on Money Laundering (FATF 40 recommendations)
d. Foreign Account Tax Compliance Act (FATCA) obligations
e. The new global standard on Automatic Exchange of Information (AEOI) introduced to minimize the possibility for tax evasion.

4. Consequential impact due to the aforesaid scheme and its operations and reporting standards in practice in Sri Lanka and Sri Lankan Banks and Financial Institutions on;
a. Sri Lanka’s International Credit and Risk Ratings
b. Sri Lanka’s Foreign Direct Investment attractiveness
c. Sri Lanka’s International Trade and Services linked Value addition options
d. Sri Lanka’s Competitiveness and Investment Attractiveness as reflected by Internationally accepted Investment and Trading Indices

5. Assurance that none of the investors making deposits under this scheme, their actual beneficial interest holders, their proxies or associated or related parties, are presently or are likely to be, subject to prosecution in the future, for any international crimes or serious financial crimes, bribery or corruption, carried out by any of them, either in Sri Lanka or overseas; and further an assurance that none of the funds so deposited form a part of or tainted by being proceeds of any such crimes carried out in Sri Lanka or overseas.

6. Assurance that the acceptance of such deposits under the scheme, will not be deemed to tantamount to be a grant of a ‘general or special’ amnesty to such persons depositing proceeds, where such proceeds are later discovered to be out of any proceeds of serious crimes; and that such acceptance of deposits will thus not jeopardize any of the investigations or prosecutions which are currently being progressed against persons and their related parties and associates in Sri Lanka or overseas for having possessed or having deposited proceeds of serious crimes in banks in Sri Lanka or overseas.

Provided, the Minister and the Governor does hereby accept such accountability as outlined above, they are called upon to make a transparent public statement to that effect; and if not, the Minister and Governor are requested to make such changes to the scheme as essential to safeguard the longer term interests of Sri Lanka and its civil society and advice the public of such amended scheme in a transparent way.

Yours Sincerely,

Chandra Jayaratne

Markets

Sri Lanka stocks close down 0.60-pct, dragged by HNB and LOLC

Friday November 13, 2026 3:28 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.60 percent.

The ASPI was down 133.22 points at 22,024.18, while the more liquid S&P SL20 was down 1.06 percent, or 67.55 points, at 6,298.02.

The ASPI ended the week up 784.53 points from last Friday.

Positive contributors to the ASPI were Dialog Axiata (up 0.40 percent at 50.20 rupees), Distilleries Company of Sri Lanka (up 0.52 percent at 58.30 rupees), Aitken Spence (up 3.60 percent at 151.00 rupees), Ceylon Tobacco Company (up 1.05 percent at 1,828.50 rupees), and LOLC Finance (up 1.96 percent at 5.20 rupees).

Hatton National Bank (down 1.88 percent at 403.75 rupees), Richard Pieris and Company (down 6.21 percent at 27.20 rupees), LOLC Holdings (down 2.17 percent at 405.00 rupees), Sampath Bank (down 1.91 percent at 154.00 rupees), and Singer (Sri Lanka) (down 2.40 percent at 77.30 rupees) were top negative contributors.

Market turnover was 3.23 billion rupees. Capital goods led turnover with 869.21 million rupees. (Colombo/Nov13/2026)

Economy

Sri Lanka MP slams budget speech for omitting Tamil national question

Friday November 13, 2026 2:56 pm

ECONOMYNEXT – A Sri Lanka legislator has voiced strong disappointment that the President’s budget speech failed to make a single mention of the Tamil national question.

“It is very unfortunate that in His Excellency the President’s speech, there has not been a single word mentioned about the Tamil national question. Not a single word,” Shanakiyan Rasamanickam said.

“A budget speech generally, is a policy direction of the government for the next year. The budget speech is not only a statement of the country’s fiscal position or the economy’s position. It is the country’s, the government’s, plan, or what the government plans to do the following year. That’s a policy statement.”

Former presidents would at least mention the Tamil question even if it was not resolved, he said.

Former President Ranil Wickremesinghe in his speech, in his policy statement, he would mention: “The Tamil national question must be resolved,” Rasamanickam said.

Former Presidents Maithripala Sirisena and Gotabaya Rajapaksa also mentioned that the national ethnic question must be resolved, he added.

“Every President, every country’s Head of State, in their policy statements, have acknowledged the fact that there is an unresolved national issue, the Tamil national question, that it needs to be resolved. Various governments have proposed various mechanisms; none of them have succeeded, but at least it was mentioned.”

This year’s budget made allocations for the Office of Missing Persons, and the Office of Reparations.

“But the domestic mechanism is a mechanism that the victim community has rejected. So you all are allocating money to a mechanism where the victim community is not going to be part of.”

Last year’s budget 1 billion was allocated to be spent on the Trincomalee and Jaffna airports.

“Where was that 1 billion for the Trincomalee and Jaffna airports spent last year?”

“The trajectory of this government, Honourable Deputy Speaker, is worrying to me. It’s really worrying to me. Because if the objective is to say that there is no Tamil national question, if the objective is to say that you all have resolved any ethnic issue that this country faced, then Honourable Deputy Speaker, then I think the Tamil people will teach this government a very, very, very harsh lesson in the future.” (Colombo/Nov13/2026)

Bonds & Forex

Sri Lanka sells extra Rs6.5bn Treasury bills after auction

Friday November 13, 2026 12:32 pm

ECONOMYNEXT – Sri Lanka has sold 6,500 million rupees of treasury bills offered on tap at an average rate of 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 85.562 billion rupees.

The issue offered 90 billion.

Total market subscription was 6.5 billion rupees.

The debt office sold a 12-month bill at 9.95 percent.

On Wednesday (11) the debt office raised 79 billion rupees of 3, 6 and 12 month bills after offering 90 billion.

The settlement date is November 13. (Colombo/Nov13/2026)

Construction and Real Estate

Access Engineering Sept quarter group net profit surges 200-pct to Rs4.75bn

Friday November 13, 2026 12:15 pm

ECONOMYNEXT — Sri Lanka’s Access Engineering PLC recorded a group net profit attributable to equity holders of Rs. 4.75 billion for the quarter ended September 30, surging 200 percent from Rs. 1.58 billion a year earlier, interim accounts showed.

Basic earnings per share rose to Rs. 4.08 for the September quarter, up from Rs. 1.58 previously.

Quarterly group revenue expanded 36 percent to Rs. 20.39 billion from Rs. 14.94 billion, underpinned by condominium property handovers — reflected in inventories dropping Rs. 7.69 billion since March to Rs. 35.71 billion — alongside strong automobile sales and steady civil engineering execution.

Cost of sales rose at a slower 27 percent to Rs. 14.34 billion, lifting gross profit by 64 percent to Rs. 6.05 billion and expanding gross margins to 29.7 percent from 24.7 percent.

Other income jumped 144 percent to Rs. 259.9 million, while administrative expenses rose 75 percent to Rs. 1.14 billion, leaving operating profit up 64 percent at Rs. 5.16 billion.

However, finance costs more than doubled, rising 107 percent to Rs. 1.18 billion on elevated group borrowings of Rs. 43.74 billion, partly offset by finance income climbing 302 percent to Rs. 42.2 million.

Share of results from equity-accounted investees rose 122 percent to Rs. 26.7 million, pushing pre-tax profit up 56 percent to Rs. 4.05 billion.

Income tax swung to a net reversal of Rs. 186.6 million from an expense of Rs. 804.1 million, boosted by deferred tax assets on unrelieved losses from a 100 percent enhanced capital allowance claimed by 60 percent-owned radiopharmaceutical subsidiary Access Medical Tracers (Private) Limited.

Total period profit rose 136 percent to Rs. 4.24 billion, with non-controlling interest declining 24 percent to Rs. 164.9 million following last year’s buyout of minority shareholders in Harbour Village (Private) Limited.

No separate exchange gain or loss was itemized in quarterly earnings, though foreign currency translation via associates recorded a Rs. 17.4 million loss in other comprehensive income, alongside USD 16.6 million in corporate guarantees.

Notes also flagged an expected Rs. 1.45 billion recovery from the terminated South Asia Commercial and Logistics Hub project, a Rs. 225 million post-quarter legal settlement already provided for, and a Supreme Court appeal over a 2011/12 PAYE tax ruling.

Group assets stood at Rs. 132.4 billion as of September 30, with net asset value per share at Rs. 46.70, as the Employees’ Provident Fund raised its stake to 5.69 percent.

Access Engineering shares closed at 80.00 rupees at the end of September and are currently trading around 85.80 rupees. (Colombo/Nov13/2026)

Economy

Sri Lanka private sector says timely implementation of Budget 2027 key

Friday November 13, 2026 11:43 am

ECONOMYNEXT – Private sector body, The Ceylon Chamber of Commerce, said it was encouraged by the broad direction of Budget 2027, noting that it reinforces Sri Lanka’s commitment to economic transformation while maintaining policy continuity, macroeconomic stability, and fiscal discipline.

“This continuity is particularly important as the country seeks to transition from economic stabilisation to a more durable, investment-led growth trajectory.”

The chamber also noted several areas where the Budget could have placed greater emphasis to strengthen the country’s growth prospects.

“In particular, there is a need for a stronger focus on attracting Foreign Direct Investment (FDI), accelerating factor market reforms, particularly in land and labour, and fast-tracking public procurement reforms to improve the efficiency and speed of project implementation.

“More targeted and actionable proposals could have been introduced to unlock the potential of sectors with significant growth opportunities, including tourism, agriculture, IT/BPO and logistics.”

The chamber said the budget contains positive measures aimed at enhancing competitiveness, and external sector resilience, while presenting opportunities for focus on sectors that can accelerate growth.

“A number of the key structural reforms identified in last year’s Budget have been carried forward and strengthened, providing greater certainty and predictability to businesses and investors.

“These include the continued implementation of the Trade National Single Window (TNSW), the phased removal of para-tariffs, the rollout of the Digital ID framework, efforts to expand market access through new Free Trade Agreements (FTAs), the strengthening of one-stop-shop investment facilitation mechanisms, progress on Customs reforms, the expansion of Bandaranaike International Airport (BIA), enhanced financing support for SMEs, and reforms relating to the management of State-Owned Enterprises.”

The CCC said that more than 20 proposals submitted by it have been reflected in Budget 2027.

These include measures to strengthen investor facilitation through the establishment of a professionally managed investment promotion agency; continued efforts to improve trade facilitation and export competitiveness; the Government’s consideration of a successor programme with the International Monetary Fund (IMF); accelerated progress on key legislative reforms; the expansion of digital government services; and the promotion of cashless payments and broader digital adoption. The Budget has also captured several priorities relating to energy security, including the accelerated deployment of Battery Energy Storage Systems (BESS) and investments in fuel storage infrastructure, initiatives to optimize underutilized agricultural land, measures to support the expansion of the digital economy and the IT/BPO sector, and tax reforms to support exporters, including the acceptance of newly VAT-registered exporters as eligible exporters.

“The inclusion of these priorities reflects the value of sustained public-private dialogue and demonstrates increasing alignment between national policy objectives and the needs of a competitive, export-oriented economy.

“The priority now must be effective and timely implementation to translate policy commitments into investment, competitiveness, exports and sustainable growth.” (Colombo/Nov13/2026)