The government is making arrangements to pay a bonus interest in Sri Lanka rupees on the interest paid by the licensed commercial banks, National Savings Bank and Lankaputhra Development Bank on Resident Foreign Currency (RFC) and Non-Resident Foreign Currency (NRFC) accounts, with effect from February 1, the Central Bank (CB) said.
“This aims to promote inflows of foreign remittances into Sri Lanka through the banking channels as well as to promote the general public to deposit any foreign currencies held by themselves with aforesaid banks. Such inflows of foreign exchange into the banking system will make available more resources for the aforesaid banks for their lending operations, thereby effectively utilising such resources to promote investments,” it said in a statement.
The bonus so paid will be the rupee equivalent of 20 % of the foreign currency interest that accrues on deposits from February onwards. Citing one example, the CB said if an account holder receives an interest income of (for example) US$100 on his RFC or NRFC account deposit, the relevant bank will pay a rupee equivalent of US$20 in rupees as a bonus.
The bonus interest will be credited to a rupee account opened in the name of the account holder or to any other account nominated by the account holder. The bonus interest will not be credited to the RFC nor NRFC accounts. The bonus interest calculated using the monthly average exchange rate of the previous month published in the Central Bank of Sri Lanka website, will be paid to the account holder on the same day on which the foreign currency interest is paid. Further, the interest bonus will be exempt from any income tax deductions. The interest paid on RFC and NRFC accounts are already exempt from taxation, the CB said.