In the hope of capturing more remittance inflows and tourism recovery, Sri Lanka announced that they wanted overseas workers to send funds back home only through CBSL-authorized banks and other certified remittances.
RemitBee, Canada's most trusted and well-loved online money transfer, is CBSL-certified!
Here’s everything you need to know:
Remittances, which amount to around US$ 7 billion per year, are one of Sri Lanka's biggest sources of foreign currency. In the past months, however, there's been a loss of US$300 million in remittances. But why is that?
People sometimes transfer money through different channels other than formal banks. For example, many migrant workers send money back home to their families in Sri Lanka through the "hawala" or "undiyal" transfer system.
It's like sending cash in the currency they earn abroad (for example, the Canadian dollar) to a "middleman." That "middleman" then assures that their family in Sri Lanka receives an equal amount in rupees. These transfers are completed just as fast as they are through formal channels.
With that being said, it is not a surprise that more and more people go to and remit money through the informal "hawala" system. On average, hawala offers 180 to 190 rupees for one Canadian dollar, which means 30 rupees more than remittances sent through formal banks! Due to the ongoing trade deficit and limited foreign exchange, the Sri Lankan rupee dropped in early September, and the central bank unofficially adjusted the exchange rate at 159 LKR for 1 CAD.
This year, Sri Lanka's tourism declined, and the trade deficit increased to $6 billion in the first nine months of 2021. Sri Lanka suffered from low public income, and major rating agencies have lowered Sri Lanka's sovereign ratings several times this year as well.
That is why in the hope of fixing its weak finances, the Sri Lankan government wants to crack down on informal remittance channels like "Hawala" and urges migrant workers to send money via authorized banks only.
In 2022, the country will also have to pay $4.5 billion in debt and interest. With a larger percentage of remittance flows, it can be used as collateral to borrow more money.
But no worries! If you want to send money back home to Sri Lanka and still worried about the low exchange rate, Sri Lanka government offers incentives to migrant workers who send money through official channels under the "Incentive Scheme on Inward Worker Remittances."
The additional incentive being provided, as mentioned above, is intended to help improve foreign currency liquidity in the foreign exchange market by attracting more workers' remittances to Sri Lanka through formal banking channels.
In addition to the previous offer of 2 rupees per dollar, the bank will provide an extra incentive of 7 rupees (0.062 CAD) per CAD for remittances sent through licensed banks and "other internationally certified remittance options." One of Sri Lanka's authorized remittances is RemitBee!
We all want hassle-free, fast, and most importantly, safe money transfers when sending money abroad. When sending money from Canada to Sri Lanka, save yourself from worry with RemitBee!
Trusted by thousands of Canadians and Sri Lankan migrant workers alike, RemitBee is a CBSL-authorized remittance option where you can bank-to-bank transfer anywhere, anytime.
Valid only until the end of January 2021, you can avail the newly issued incentive of 10 rupees per USD, which is about 6-7 rupees extra per CAD! Remember that the credit will be done by your local recipient bank where funds get deposited.
What's more? There are over 500 cash pick-up locations in Sri Lanka if you use RemitBee Instant. Anyone wanting to send money to the country can do so by getting your free account today. For sure, this is something you don't want to miss out on!
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