Sri Lanka offers blanket amnesty for cash repatriated from Swiss bank accounts
ECONOMYNEXT – Sri Lanka is asking those who have undeclared funds stashed in Swiss bank accounts bring them back with no questions asked Finance Minister Ravi Karunanayake said.
"We want to make Sri Lanka a financial hub," he said. "The money will come through the banking system in accordance with internationally accepted rules."
In addition to Sri Lankan and the diaspora, money from neighbouring countries like India was also welcome, he said.
Some Swiss banks had recently asked Sri Lankan customers to take their money away.
"We are inviting them to bring the money here instead," he said. "Why keep them in accounts paying zero interest?
About 2-4 billion US dollars is expected to flow in from move over the next six months, he said.
Karunanayake said the move was expected to bolster foreign reserves and the rupee.
Sri Lankan’s are not allowed to have accounts in foreign banks without specific permission.
But no questions will be asked, Karunayake said. Special measures will be introduced to make the investors feel secure, he said.
Responding to reporters he said there was no bar for ex-President Mahinda Rajapaksa to use the amnesty.
Members of the ruling party had earlier charged that the Rajapaksa family had stashed money abroad, which had been denied.
Sri Lanka’s rupee has come under pressure from a rate cut and tens of billions of rupees printed to pay salaries and subsidies which then triggered a sell-off by foreign investors holding government bonds.
Analysts have called for a rate hike to boost savings, reduce credit so that an expanding budget deficit could be financed without printing money (central bank credit), which was promoting unsustainable credit. (Colombo/Oct02/2015)