“Sharp decline in money remittance via informal channels”
Foreign remittances that came to Sri Lanka via informal channels like Hawala and Undiyal are fast reducing due to a series of productive steps that were taken by the Central Bank and the government recently, said Governor CBSL Dr. Nanadal Weerasinghe.
He was speaking at the introduction of the Remit App to the Sri Lankan migrant workers and Sri Lankans residing overseas.
One of the main causes of the acceleration of informal channels was the dollar being forcibly frozen by the CBSL and ex-pat workers received a better exchange rate from the black market. “after the floating of the dollar and the government offering a series of concessions and incentives for migrant workers to channel their remittances via the banking system we now see a sharp decline of money being remitted via informal channels.”
People also now have confidence that their remittances are put to prudent use like purchasing medicine, fuel, gas and other essentials and are now content that their remittances are not mismanaged. Dr. Weerasinghe said that they were forced to restrict the importation of around 350 items which was done to save foreign exchange which is a temporary measure.
“We know this will harm multiple sectors. People too can and should differ from buying on a mobile, refrigerator or TV for some time.
With the remittances flowing through banking channels and other economic fundamentals falling into place this ‘ban’ can be systematically relaxed sooner than expected.”
Labour and Foreign Employment Minister Manusha Nanayakkara too said that after introducing a series of incentives for migrant worker today inflow of remittances have increased and this ban could be lifted latest by the end of the year.
Target set for 2023 was to send 333,000 workers overseas and this would be overrun as to date 198,000 have left. He said migrant workers who send money through banking channels can even purchase a brand new electric car or a motorbike very soon and their duty-free allowances have been increased. In addition, low-cost housing loans, and gift vouchers too would be given to them.
“In addition, we will also be opening up a special Honor’ gate for them at the airport giving them VIP status.”
Chairman of LankaClear, Dr. Kenneth De Zilwa said that the LankaRemit app now provides Sri Lankan expatriates with access to a fast, secure and more convenient remittance channel to send money.
Remittance service providers connected to LankaRemit are increasing and more from the financial services industry including global money transfer operators and global FinTechs will join the App.
LankaRemit also offers several value-added services such as the ability to locate nearby money transfer operators and find relevant details of such locations.