“We recently granted Dialog, permission to be in the business of channeling foreign exchange remittances via mobile phone, upon request. But they are yet to receive the nod from the Payments and Settlements Department of the Central Bank”, the Exchange Controller P.H.O. Chandrawansa said.
The mobile-based inward remittance service which is expected to get off the ground within a month is expected to change the country’s foreign currency exchange landscape. Once fully operational, this will enable over 1.6 million Sri Lankan expatriate workers to send home their hard earned foreign currency with a press of a button in their mobile phones.
Dialog, building on its existing capacity in mobile-based money (known as eZ Cash introduced in June 2012) will collect the foreign currencies sent by expatriates into a custodian bank account before remitting the money to individual customer bank accounts.
Meanwhile the Senior Assistant Controller of Exchange at the Central Bank Pavithri Vithanage said they had received proposals from one other party apart from Dialog but was reluctant to disclose information due to its sensitive nature.
“At the moment we are evaluating the proposal but as the Exchange Control Department we are also concerned about possible foreign currency outflow which could happen as a result of this additional leeway provided to the mobile operators,” Vithanage noted.
“As long as the money is coming in we have no issue. But we have to be equally watchful of the possibility of foreign currency draining via this technology. Therefore we need to ensure the controls are also in place to avoid such a scenario,”she further pointed out.
At a time when the mobile phone has become an indispensable device, it will be interesting to see how the conventional money changers will receive the news and face competition from Dialog with its 7.8 million subscribers.
Sri Lanka emerging from a stringent foreign exchange regime prevailed from 1970 to1976, made notable progress in 1977, commencing significant relaxation followed by current account transaction liberalization in 1994 and (certain) capital account relaxations in 2010.
Relaxations took place in a rapid pace during 2009-2013 with simplification of accounts providing greater flexibility for non- residents investments in Sri Lanka and also for residents investing outside the borders.