Paying Locally in Foreign Currency Is Illegal | Up to Rs. 25M Fine or 3 Years Jail

COLOMBO (News 1st); The Central Bank of Sri Lanka (CBSL) has warned that all transactions between or among residents in Sri Lanka must be conducted in Sri Lanka Rupees (LKR) unless specifically authorized by the Central Bank under the Foreign Exchange Act, No. 12 of 2017.

In a statement, CBSL said it has observed instances of residents transacting domestically in foreign currency and moved to clarify the legal position.

CBSL further has not granted any authorization for local merchants to receive payments from local customers to the credit of any Foreign Currency Account by converting LKR into foreign currency, including payments made via electronic fund transfer cards such as credit or debit cards.

The Bank cautioned that any resident paying a local merchant in foreign currency, and any merchant accepting such payments from a resident without CBSL authorization, commits an offence under the Central Bank of Sri Lanka Act, No. 16 of 2023.

Upon conviction after summary trial before a Magistrate, offenders are liable to a fine not exceeding Rs. 25,000,000, imprisonment for up to three years, or both.

CBSL urged the public and business community to strictly adhere to these statutory requirements to avoid severe legal consequences.