The special deposit account (SDA), which was announced during the peak of a potential foreign exchange crisis amidst the Covid-19 outbreak last year, has significantly raised more than $ 400 million in deposits as of last week.
Speaking to The Sunday Morning Business, a senior official from the Central Bank of Sri Lanka (CBSL), who wished to remain anonymous, stated that the SDA is performing exceptionally well since its implementation last year.
“In April, the SDA was extended by another year following the expiry date in order to seek assistance for the national effort to overcome the effects of the Covid-19 outbreak in the country. As of today, the SDA has exceeded $ 400 million of deposits,” the official noted.
However, an exact current figure for deposits under the SDA facility could not be obtained, as attempts to reach the Treasury in this regard proved futile.
In this context, speaking to us in May, Sampath Bank Senior Deputy General Manager Tharaka Ranwala 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 SDAs,” Ranwala concluded.
Likewise, 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.
Further, The Sunday Morning Business spoke to an official from the Bank of Ceylon in May, who also spoke on condition of anonymity and noted 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 and April 2021.
With reference to CBSL official statistics, as of 7 October 2020, total deposits in SDAs amounted to approximately $ 272 million.
The CBSL added: “Considering the favourable 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.