The Central Bank of Sri Lanka has warned residents against unauthorized foreign exchange transactions for overseas property investments. Legal action looms as ads on social media promote offshore real estate deals that violate the Foreign Exchange Act.
CBSL Warns of Legal Action Over Unauthorized Overseas Property Investments
The Central Bank of Sri Lanka (CBSL) has issued a stern warning to the public over a growing trend of advertisements promoting investments in overseas real estate, stating that such transactions could lead to serious legal consequences under the Foreign Exchange Act No. 12 of 2017.
In a press release issued today, CBSL said it had observed an increase in ads—both in print and across social media—encouraging Sri Lankan residents to invest in offshore properties. Alarmingly, some of these promotions also offer guidance on how to secure foreign financial assistance to facilitate such purchases.
The bank clarified that Sri Lankan residents are only permitted to make overseas property payments through Personal Foreign Currency Accounts (PFCAs), and even then, such transactions are capped at US$ 20,000 or its equivalent in another designated foreign currency. Payments for offshore property via Business Foreign Currency Accounts are strictly prohibited.
Moreover, CBSL highlighted that individuals residing in Sri Lanka are not allowed to obtain foreign loans or financial support from other local residents to fund overseas property purchases.
In light of these developments, the CBSL has urged the public to be highly cautious of investment-related content that promotes foreign property purchases, especially those promising foreign financing routes.
The Central Bank emphasized that any individual or institution found engaging in or facilitating unauthorized foreign exchange transactions for such purposes will face legal action under the Foreign Exchange Act.
This latest warning underscores the CBSL’s continued efforts to curb capital flight and maintain the integrity of the local financial system during a period of economic stabilization.
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