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Special Deposit Accounts extended by another year

04 Apr 2021

  • First extension is ending this Wednesday (07)

  • Extension is to support national efforts to overcome pandemic disruptions

  The Special Deposit Account (SDA) which was announced during the peak of a potential foreign exchange crisis amidst the local outbreak of the pandemic last year is set to be extended by another year, The Sunday Morning Business learns.  As the validity of the SDA is set to expire on this Wednesday (7), we inquired with the Central Bank of Sri Lanka Governor Prof. W. D. Lakshman, where he stated that the Monetary Board of the Central Bank has decided to extend the validity in order to seek assistance for the national effort to overcome the effects of Covid-19 outbreak in the country. We also spoke to Finance Ministry Treasury Secretary S.R. Attygalle who confirmed that this account will be extended by another one year following the expiry date.  In early February this year, Attygalle confirmed that the total deposits under the SDA facility were between $ 400 and $ 500 million. However, an exact current figure for deposits under the SDA facility could not be obtained, as attempts to reach the Central Bank of Sri Lanka (CBSL) in this regard proved futile. In this context, speaking to us last month, Sampath Bank Senior Deputy General Manager Tharaka Ranawala said that people living abroad have been very keen on making deposits under this facility, as they are seeing good returns. “We have had a growth of at least about 15-20% in the past few months in comparison to the previous figures between April and October 2020; hence, by referring to these figures, we have done pretty well, as a lot of people are enthusiastic about the SDAs,” Ranawala concluded. The Sunday Morning Business also spoke to a senior official from Commercial Bank of Ceylon, who wished to remain anonymous said that people are now much more eager in terms of investing, and this has also driven continuous improvement in the growth of SDAs. An official from the Bank of Ceylon, who also spoke on the condition of anonymity, said that people are making deposits; however, after the resumption of the SDA facility in October 2020, the amount being deposited from people abroad has slightly reduced. “This time it’s a little bit lower than last year, but there is a positive impact, and there are remittances coming into the country,” the official noted. The SDA facility was introduced by the Government on 8 April 2020. Initially, it was only valid until 7 October 2020; however, due to a substantial increase in foreign exchange, and the benefits of it coming into the country, the CBSL extended the SDA facility in December 2020, stating that the “Government decided to extend the validity period of opening SDAs up to 7 April 2021, on the recommendation of the CBSL Monetary Board”. The CBSL added: “Considering the favorable effects of retaining such foreign exchange within the country, the Government of Sri Lanka has allowed SDA holders who wish to keep maturity proceeds of their SDAs in Sri Lanka beyond the designated date of maturity to renew and continue their SDAs as normal deposits with authorised dealers.” Accordingly, the funds held in SDAs may continue to be held in the form of normal deposits, through which people will be eligible only for the interest rates offered by authorised dealers for normal-term deposits of the respective banks.


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