ECONOMYNEXT – Sri Lanka is considering monetary incentives for migrant workers to discourage informal money transaction such as undiyal as many Sri Lankan expatriates are still not ready to use formal banking channels, Cabinet Spokesman Bandula Gunawardena said.
Sri Lanka’s foreign remittances have fallen 53.1 percent in the first five month of this year compared to the same period in 2021 to 1.34 billion US dollars as many expatriates are either keeping their foreign earnings with them in foreign currency or send via undiyal due to higher rate compared to official bank rate.
Some expatriates are not sending money because they have lost the confidence in President Gotabaya Rajapaksa’s government amid corruption allegations, government officials have said.
“Mostly expatriate Sri Lankans in the Middle East use the undiyal method to send money back to Sri Lanka,” Gunawardena told the weekly cabinet media briefing on Tuesday (05).
“Foreign Employment Minister Manusha Nanayakkara will submit cabinet proposal to provide some monetary incentives to those expatriates who sends money through banking channels.”
“This cannot be stopped at once. We urge expatriates to send your foreign remittances through banks as every cent of it will be used on importing crude oil, fertilizer, gas, essential items, essential commodities, medicines and that money cannot be stolen by anybody. It has to be recorded in international remittances.”
Sri Lanka central bank has taken strong steps to prevent undiyal citing that it was used for money laundering by drug smugglers and dealers.
However, undiyal dealers have some how have been able to continue the informal transaction as there is a strong demand because it offers 15-20 rupees higher than the official bank rate, market officials say.
The central bank’s steps to prevent undiyal transactions so far have failed to control the informal transactions. (Colombo/July 05/2022)