Margin Requirements Against Imports

MONETARY BOARD CENTRAL BANK OF SRI LANKA 19 May 2022 BANKING ACT DIRECTIONS No. 03 of 2022

MARGIN REQUIREMENTS AGAINST IMPORTS

Issued in terms of the powers conferred by Sections 46(1) and 76(J)(1) of the Banking Act No. 30 of 1988, as amended.

The Central Bank of Sri Lanka, with a view to preserving the stability of the exchange rate and foreign currency liquidity in the banking system, requires licensed commercial banks (LCBs) and National Savings Bank (NSB) to adopt the following measures on imports of certain non-essential and non-urgent goods, with immediate effect until further notice.

1. A 100 per cent non-interest bearing cash margin shall be kept on the invoiced value of imports specified in Annex I, made under Documents against Acceptance (DA) and Documents against Payment (DP) terms.
2. In the case of NSB, the margin requirements specified in Direction 1 above, shall be applicable for such imports made under Letter of Credit (LC) terms, in addition to DA and DP terms.
3. In the case of existing DAs and DPs covering the importation of goods covered by these Directions, no increase in the value of such DAs and DPs shall be permitted by LCBs and NSB unless such increase is covered by the cash margin deposits as required in Direction 1 above.
4. Such non-interest bearing cash margin shall be placed by the importer with the bank that releases documents, at the time of acceptance of documents by the importer or at the time of making the endorsement by the licensed bank, in terms of Operating Instructions No. 05/2022 dated 12.05.2022, issued by the Controller General of Imports & Exports.
5. Such non-interest bearing cash margin requirement shall be on the total value of the invoice, regardless that the same invoice includes goods that are not covered under these Directions.
6. LCBs and NSB shall endorse the invoice to the effect that the margin deposit has been obtained.
7. The margin deposit shall be released on providing documentary evidence on payments through the banking channels in Sri Lanka and customs documents relating to clearance of imports.
8. LCBs and NSB shall not grant any loan facilities to enable importers to place the margin deposits in respect of these imports.
9. The provisions of these Directions shall have effect in addition to any requirement in force for the time being and such other requirements that may be introduced in terms of any law in respect of importation of goods.

(Signed) Dr. P Nandalal Weerasinghe Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka

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Annex I: List of HS Codes Subject to Margin Requirement

No	HS code		No	HS code		No	HS code		No	HS code
1	030441		38	081350		75	200860		112	220850
2	030449		39	081400		76	200870		113	220860
3	030451		40	090121		77	200897		114	220870
4	030461		41	090122		78	20089910		115	22089010
5	030462		42	09022019		79	20089990		116	240210
6	030469		43	09022093		80	20091110		117	24022020
7	030474		44	09022099		81	20091190		118	24022050
8	04029990		45	100490		82	200912		119	24022060
9	040310		46	110412		83	200949		120	24031920
10	040390		47	110419		84	200969		121	24031990
11	040510		48	110422		85	200971		122	24039190
12	040620		49	110423		86	200979		123	24039990
13	040630		50	110429		87	200981		124	33030010
14	040690		51	110430		88	20098990		125	33030021
15	060311		52	110510		89	200990		126	33030022
16	060490		53	110520		90	220210		127	33030029
17	08011190		54	110710		91	220291		128	330410
18	08011990		55	110720		92	22029910		129	330420
19	08021190		56	110814		93	22029930		130	330430
20	08023190		57	110900		94	22029940		131	330491
21	08028090		58	180620		95	22029951		132	330499
22	08041010		59	180631		96	22029959		133	330510
23	08041020		60	180632		97	22029961		134	330520
24	08051010		61	180690		98	22029969		135	330530
25	08052110		62	190211		99	22029970		136	330590
26	080610		63	190219		100	22029991		137	330610
27	080620		64	190221		101	22029999		138	330690
28	080810		65	190230		102	22030010		139	330710
29	080830		66	190240		103	22030020		140	330720
30	080940		67	190410		104	22030090		141	330730
31	081050		68	190420		105	220410		142	330749
32	08109090		69	200799		106	220421		143	33079090
33	081120		70	200811		107	220510		144	34011920
34	081190		71	20081910		108	220710		145	34012010
35	081320		72	20081920		109	220820		146	34013020
36	081330		73	20081990		110	220830		147	34029010
37	08134090		74	20083090		111	22084010		148	340510

(Pages 3-6 contain the continuation of the table of HS codes, which are omitted here for brevity as per standard transcription practices for large repetitive tables.)