Banking

Sri Lanka starts its own payment card to cut costs

Tuesday June 25, 2019 5:45 pm

ECONOMYNEXT – Sri Lanka has started a national payment card which will settle domestic and international transaction partnering with JCB International, which will lower costs, the central bank said.

The card system is run by Lanka Clear (Pvt) Ltd, Sri Lanka’s domestic checque and interbank payment clearing house.
International transactions will be cleared by JCB International of Japan.

The card scheme which meets international standards will "benefits to Sri Lankan consumers due to its lower cost that enables financial inclusion," Central Bank Governor Indrajit Coomaraswamy said.

The debit card will be followed by a credit card and an e-commerce transaction support system.

The debit card will be accepted across over 4,800 ATMs connected to the LankaPay network to withdraw cash.

MCB Bank is the first to issue a LankaPay-JCB co-badged debit card.

The new card can be used at retailers who have Commercial Bank and Cargills Bank card swiping machines.

Seylan Bank has also joined on a ‘non-commercial basis’, the central bank said.

LankaClear Chairman Anil Amarasuriya said that switching all local transactions to be cleared locally gives a lower cost structure to the banks.

"The Payment card industry in Sri Lanka has been dominated by international card operators, thus far, and as a result the banking and financial sector is highly dependent on these operators to facilitate card operations, Amarasuriya said.

"From a macro point of view, the National Card Scheme is envisaged to save valuable foreign exchange to the country since transactions among local banks will be routed via LankaPay network."

Sri Lanka has been hit by ‘foreign exchange shortages’ after a soft-pegged central bank targets the exchange rate (collects forex reserves) and also that prints money to artificially lower interest rates was created in 1950.

The country was the hit by foreign exchange and trade controls, suffered high inflation and currency depreciation to become a lagging nation in Asia.

Many economic activities in the country from then on were directed towards ‘saving foreign exchange’, regardless of the cost and protectionists had a ready-made excuse to justify high prices in the name of ‘saving foreign exchange’.

However the Lanka Clear card also promises to lower costs. To end foreign exchange shortages analysts have called for reform of the peg, or taking away the money printing powers of the central bank (currency board) or a true float where no foreign reserves are collected. (Colombo/June25/2019)

Cancel reply

1 Sri Lanka to seek competitive bids for state asset sales

2 Sri Lanka in talks with India on oil pipeline to Trinco

3 Sri Lanka will not restructure T-bills outside Central Bank, bonds voluntary: Governor

4 Sri Lanka rupee opens at 322/327 to dollar, bonds up

5 Sri Lanka stocks weaken for the second session on profit taking

Bonds & Forex

Sri Lanka rupee closes at 328/329 against the US dollar, bond yields down

Friday March 31, 2023 7:34 pm

ECONOMYNEXT – Sri Lanka’s treasury bond yields were down and the rupee closed at 328/329 against the US dollar in the spot market on Friday, dealers said.

A 01.07.2025 bond closed at 29.80/30.20 percent on Friday, down from 31.25/30 percent on Thursday.

A 15.09.2027 bond closed at 27.45/55 percent, steady from 28.80/85 percent on Thursday.

Sri Lanka rupee closed at 328/329 rupees against the US dollar, from 327/330 rupees from a day earlier. (Colombo/ March31/2023)

Economy

Sri Lanka tax hike: no response from president, professionals to discuss next steps

GMOA Secretary Haritha Alutghe

Friday March 31, 2023 1:01 pm

ECONOMYNEXT – Sri Lanka’s trade unions and professional associations who have been agitating against an International Monetary Fund (IMF) backed progressive tax hike will meet to discuss further union action after a letter to the president went unanswered.

Government Medical Officers’ Association (GMOA) secretary Dr Haritha Aluthge told reporters on Friday March 31 that the unions will meet as the self-styled Professionals’ Trade Union Alliance (PTUA) collective which have so far been organising strikes and demonstrations demanding a revision of the taxes.

The PTUA has been awaiting a promised meeting with President Ranil Wickremesinghe for some days now. Aluthge previously said on Monday that if the meeting did not materialise, the unions would be compelled to go on strike.

The issue has become stagnant due to government inaction, said Aluthge at Friday’s press conference.

“The PTUA informed the president in writing yesterday for the last time to please understand the gravity of this situation and to immediately give us a meeting and present the government’s interim solution, through which the government can take measures to ease the sense of tension among professionals,” he said.

The purpose of the meeting is to discuss an “interim solution” to the professionals’ grievances over the progressive income tax hike until a reported revision that’s due in six months when the country’s recently approved 17th IMF programme comes up for review.

“Sadly, there has still been no response,” the GMOA official said.

All unions and professional associations will meet Friday evening together with a number of other unions to discuss further action, he added.

The privately-owned English-language weekly newspaper The Sunday Times reported on March 26 that the IMF had indicated the possibility of revising some of the taxes imposed as part of the IMF’s staff-level agreement with Sri Lanka when the programme comes up for review in six months.

According to the newspaper, IMF officials had conveyed this to representatives of trade unions during a virtual roundtable held last Friday March 24. The virtual meeting was held on the initiative of the IMF and was attended by trade unions and professional associations representing the PTUA including the GMOA. (Colombo/Mar31/2023)

Energy

Sri Lankan transport associations cut haulage and transportation fees after fuel price cut

Friday March 31, 2023 12:58 pm

ECONOMYNEXT – Sri Lanka Association of Container Transporters and fuel bowser owners has decided to reduce the haulage charges and transportation fee, after the government cut the auto diesel prices by 80 rupees, association officials said.

“Due to the recent reduction in Auto Diesel price from March30, 2023, the committee has decided to reduce haulage charges by 7 percent,” association said.

Sri Lanka Private Petroleum Tanker owners has also decided to reduce the transportation fee of fuel by 8 -10 percent from April onwards.

“We will be meeting with the association members and will be deciding on exactly how much we will be reducing,” the General Secretary of the association Nimal Amarasekera told EconomyNext.

“We hope to reduce it by 8-10 percent and will be applied.”

Meanwhile United Lanka Fuel Transport Bowser Owners Association said, the price reduction will be done, and the specific amount will be calculated using the cost per kilometer for a transporting bowser.

“We have different types of bowsers such as 13,200 litre and 19,800 litre likewise,” Association President K.W. Charles told EconomyNext.

“So the cost per kilometer per bowser is different and after we calculate only we can give a specific percentage.

“It will come to effect from this month and the payments for the next month will be based on the new prices.”

Charles said, this is only based on the price reduction of fuel, however several costs as maintenance and spare part costs should also be considered when deciding the transportation cost, which is also being discussed with the Ceylon Petroleum Corporation.

Sri Lanka slashed fuel prices with effect from Wednesday (29) midnight, Power and Energy Minister Kanchana Wijesekera said, after a protest by trade unions of state-run fuel retailer Ceylon Petroleum Corporation (CPC) resulting in queues at filling stations due to supply disruption.

The price of Petrol 92 Octane will be slashed by 15 percent or 60 rupees to 340, Petrol 95 Octane 95 will be reduced by 26.5 percent or 135 rupees to 375, Auto Diesel by 19.8 percent or 80 rupees to 325, and kerosene by 3.3 percent or 10 rupees to 295. (Colombo/ March31/2023)