Central Bank to immediately remove cash margin requirement on non-essential imports

Ban on vehicle imports continues

by Shyam Nuwan Ganewatte

Central Bank (CBSL) Governor Ajith Nivard Cabraal unveiling the ‘Six-Month Road Map for Ensuring Macroeconomic and Financial System Stability’ on Friday (1) discontinued the cash margin deposit requirements imposed on 623 non-essential/non-urgent imports with immediate effect.

The cash margin requirement was imposed by former CBSL Governor Prof W.D. Lakshman.

Speaking at the launch of six month road map at the Atrium of the CBSL, Governor Cabraal said that the ban on the vehicle importation will continue for some more time.

The Governor said that the CBSL would ensure the maintenance of mid-single digit inflation and ensure stability of interest rates and the exchange rates.

He said the CBSL will continue with steps to curb prohibited pyramid schemes and other financial scams and also introduce directions on IT Risk Resilience of Licensed Banks.

Cabraal said that the CBSL balance sheet would be strengthened with gradual rollback measures and the buildup of external reserves.

“It will also strengthen off-site surveillance and improve risk management framework including Governance in financial institutions,” he said.

The governor said that regional development initiatives would be strengthened and new regulations on financial consumer protection will be developed under the Monetary Law Act.

The central bank will introduce user-friendly online complaint submission portal through the CBSL website and social media and a ‘Credit Counseling Centres’ and ‘Investment Advisory Centres’ would be established at Regional Offices.

It would facilitate the setting up ‘Equity Funds’ to support stressed businesses and thereby avoid the increase of non-performing loans.

Cabraal also said the possibility of buying back the entire Issue of ISBs maturing in January 2022 and/or July 2022 would be considered, if high discounts are prevalent in the market.