By: Staff Writer
Colombo (LNW): In a bid to promote trade and tourism in the SAARC region Sri Lanka has designated Indian rupees as a legal currency in the island.
According to foreign media, reports have emerged saying banks from India’s neighbouring island nation have opened special rupee trading accounts, called Vostro account.
This comes days after the Central Bank of Sri Lanka said that g the Reserve Bank of India’s approval had been received to designate Indian Rupee (INR) as a foreign currency in Sri Lanka.
It means that Sri Lankan citizens can now hold $10,000 (INR 8,26,823) in physical form.
This also means that Sri Lankans and Indians can use Indian rupees instead of US dollars for international transactions with each other.
Taking advantage of the inclusion of the INR as a designated foreign currency offers numerous benefits to both the bank and its customers. Nations Trust Bank now provides INR-denominated regulated accounts.
These include PFCA (Personal Foreign Currency Account) and BFCA (Business Foreign Currency Account).
These accounts cater to individuals and businesses seeking to engage in international trade transactions with India, streamlining currency exchange processes, reducing transaction costs, and increasing overall convenience.
The utilisation of INR for international trade settlement has the potential to stimulate economic growth, enhance trade relations, benefiting not just the bank and its customers but also the broader community and the country as a whole.
With this move, Nations Trust Bank solidifies its competitive position and will increase revenue through foreign exchange services, thereby contributing to the growth and sustainability of the country’s foreign reserves.
Holders of INR accounts can engage in a range of transactions, including currency note encashments, currency issuance, and international trade settlement activities such as imports, exports, Letter of Credits (LCs), and bank guarantees, excluding capital transactions or investments outside of Sri Lanka.
Within Sri Lanka, INR accounts can be used for INR note acceptance, issuance, and foreign currency exchange.
Hotels can deposit INR collected from non-resident guests into BFCA accounts, subject to specific conditions and regulations.
Individuals can open a Personal Foreign Currency Account (PFCA) within 90 days of returning from travel, while certain limitations may apply.
Nations Trust Bank PLC serves a diverse range of customers across Consumer, Commercial and Corporate segments through an island wide network of 96 branches.
The bank is focused on digital empowerment through cutting-edge digital banking technologies, and pioneered FriMi, Sri Lanka’s leading digital banking experience.
