Sri Lanka’s Central Bank warns residents and businesses that using foreign currency for local payments could trigger massive fines and prison terms under strict financial regulations.
The Central Bank of Sri Lanka has issued a firm warning against conducting domestic transactions in foreign currency instead of Sri Lankan Rupees. Raising concern over recent practices, the CBSL clarified that under the Central Bank of Sri Lanka Act, No. 16 of 2023, all transactions between residents must be settled in Sri Lankan Rupees unless specific authorization is granted in line with the Foreign Exchange Act, No. 12 of 2017.
The Bank stressed that no approval has been given for local merchants to accept foreign currency payments from resident customers, including card payments credited to Foreign Currency Accounts.
Both residents making such payments and merchants accepting them without authorization are committing an offence. Upon conviction before a Magistrate, offenders face fines up to Rs. 25 million, imprisonment up to three years, or both.
CBSL urged strict compliance, warning of serious legal consequences.
