Snags in easing NRFC, RFC accounts restrictions
The relaxation of restrictions on foreign accounts announced on Monday by the Central Bank (CB) was welcomed by the industry, but there was no clarity on its implementation as of Friday.”We had meetings with the Exchange Controller for the past two days on implementing this,” a banker told the Business Times. The CB is to remove restrictions on foreign currency withdrawals from foreign currency bank accounts by the end of the week, Governor Arjuna Mahendran told reporters on Monday.
“By the end of the week we hope to remove restrictions on money withdrawals from foreign currency bank accounts such as Non-Resident Foreign Currency (NRFC) and Resident Foreign Currency (RFC) accounts,” he said. However bankers were still in discussion with CB officials seeking clarity on the directive on Friday.Many banks told the Business Times on Friday that they were still awaiting operating instructions from the CB.With this relaxation it’s expected that fund transfers would be allowed from RFC to an NRFC without prior approval.
Earlier such withdrawals were only allowed for education or medical purposes and Exchange Control approval had to be sought when remitting money out. “Banks will now remit foreign currency payments without questions being asked when this directive is implemented,” the banker said. Withdrawals from these accounts still have to be made in rupees (when in Sri Lanka