The Central Bank of Sri Lanka (CBSL) has raised serious concern over incidents where residents in Sri Lanka are conducting domestic transactions in foreign currencies instead of Sri Lankan Rupees.
Clarifying the legal position, the CBSL stated that under the Central Bank of Sri Lanka Act, No. 16 of 2023, all transactions carried out between residents within Sri Lanka must be settled in Sri Lankan Rupees, unless specific authorization has been granted by the Central Bank in line with the Foreign Exchange Act, No. 12 of 2017.
The Bank further emphasized that no approval has been given to local merchants to accept payments from resident customers in foreign currency by converting Sri Lankan Rupees, including payments made through credit or debit cards credited to Foreign Currency Accounts.
Accordingly, the CBSL warned that both parties—
- residents making payments in foreign currency within Sri Lanka, and
- merchants accepting such payments without CBSL authorization—
are committing an offence under the law.
Upon conviction following a summary trial before a Magistrate, offenders are liable to:
- a fine of up to Rs. 25 million, or
- imprisonment for a period of up to three years, or
- both fine and imprisonment.
The Central Bank has strongly urged the general public and the business community to strictly comply with these legal requirements, warning that violations could result in severe legal consequences.
