Governor of the Central Bank – Ajith Nivard Cabraal has said that around 72 billion rupees worth of foreign currency suspected to be linked to drug trafficking had been circulated in the country during the last month.
Speaking at a media briefing held at the CBSL premises last Saturday (04), the CBSL Governor said that Sri Lankan migrant workers using informal channels to remit money, is the main reason for the drop in remittances.
“Last month, there was a drop of around US$ 300 million when compared with the same month in the previous year. US$ 300 million is Rs 72 billion, which is a huge amount. Such an amount would have come into Sri Lanka last month through informal channels. We suspect this money is being used to facilitate the illegal drug trade,” he had said.
The official exchange rate is Rs 203 per USD. “Informal channels may pay around Rs 230 to 240. We have started the process of seriously monitoring suspicious banking transactions. Some might be caught immediately, some may be caught in a year or two and prosecuted. Their accounts would be frozen. We have all the technology to track suspicious transactions. When using informal channels, an individual would be depositing money into the receiver’s bank account in Sri Lanka. If the individual depositing money is involved in any illegal activities, the person who received the remittance in Sri Lanka could also be in trouble. People should be aware that remittances through informal channels are illegal. Thus, I request everyone to use proper formal channels, the banking system for remittances.”
To encourage remittances through formal channels, the Governor said an extra Rs 10 per USD is being provided. Arrangements are being made to provide insurance schemes, pension, and increase the duty free allowance for Sri Lankan migrant workers who remit money through formal channels, Cabraal had added.