Regulatory Alerts2018-11-26 | Circular No: 35/01/005/0010/22Margin Requirements Against Letters of Credit for Importation of Motor Vehicles and Non-essential Consumer Goods
The Central Bank of Sri Lanka mandates that Licensed Commercial Banks require a 100 percent minimum cash margin for opening foreign currency Letters of Credit for importing motor vehicles and non-essential consumer goods. This directive, effective from 26 November 2018, requires that import bills be settled using the margin deposit and prohibits under-invoicing when such Letters of Credit are opened. Banks must adhere to these conditions until further notice, building upon previous regulations issued in September 2018.
7, Offirrypi) 2 (5161). 30, ff6lAIT$11$ 1.01F6466) .1:LIu 590, acorogal 01, Sex&opes dclod@cbslAk 7 bzo @toe, 2 025) 2Qe.94A elm 30, 252”33252S5 @3D25) ask.sa. 590, @2:5)3go 01, g coa5)30 ) +94 112 477036 +94 112 346287 Level 7, Tower 2 No. 30, Janadhipathi Mawata P.O. Box 590, Colombo 01, Sri Lanka 1 ww.cbsl.gov.lk @ (9=3 ®LO WLoge fi60rSDE6 U4011 ou‘dl CENTRAL BANK OF SRI LANKA 6V5rs @®@esiog 25)003 ces3F525-i@g2/325-do GlrofIg"urra/fisir Domestic Operations plimaristboth Department Circular No: 35/01/005/0010/22 26 November 2018 To: All Licensed Commercial Banks MARGIN REQUIREMENTS AGAINST LETTERS OF CREDIT FOR IMPORTATION OF MOTOR VEHICLES AND NON-ESSENTIAL CONSUMER GOODS This refers to the Circular No. 35/001/005/0010/21 dated 29 September 2018 on the above subject. Licensed Commercial Banks (LCBs) are hereby further informed that the minimum cash margin applicable for opening of Letters of Credit (LCs) through foreign currency for the importation of motor vehicles and non-essential goods will be 100 per cent. Following conditions are also applicable at the time of opening LCs through foreign currency; I. The import bill shall be settled in foreign currency utilising the margin deposit maintained with the bank There shall be no under-invoicing when LCs are opened Conditions specified in the Circular No. 35/001/005/0010/21 dated 29 September 2018 Banks are required to comply with this Circular with effect from 26 November 2018 until further notice. Director Domestic Operations rriT TT in FLIT rilira TT IPTTTTflTTTT IT NTT HI ii