Arimac is innovating and redefining the Sri Lankan banking sector – The Island

By Hiran H. Senewiratne

Sri Lankans send about US$7.5 billion a year to Sri Lanka, but because some of them channel these funds through unauthorized monetary schemes, Sri Lanka loses US$2 billion of those funds. “This is the reason why the Central Bank introduced ‘SL Remit’,” said CBSL Governor Ajith Nivard Cabraal.

“SL Remit is a highly profitable app for Sri Lankan expats and boosts remittances to the $9 billion mark,” Governor Cabraal said at the launch of the new app.

The Payments and Settlements Department of the Central Bank of Sri Lanka hosted the launch of the Lanka Remit National Remittance mobile application yesterday at the Atrium, located at CBSL, Head Office, Colombo 01.

Cabraal added, “We don’t see our remittances as under threat; alternative methods are adopted to remedy the problem. The Central Bank as well as the banking sector had felt the magnitude of this situation. And the government is fully committed to stemming the situation.

“We were able to put in place a new device to solve this problem. I am confident that as we move forward, we will be able to take the necessary steps as an industry to respond to this situation.

“Transactions worth about $60 billion take place at the official exchange rate and imports worth nearly $20 billion take place at this rate; exports of around USD 20-30 billion also occur at this rate and remittances of around USD 5.5-6 billion are sent at the same rate.

“The export of services is happening at the same pace. Government and private sector transactions, which include borrowing and borrowing repayments, are occurring at this rate. This whole series of transactions of approximately 60 billion dollars for one year is carried out at this official exchange rate.

“However, a number of transactions also take place outside of this exchange rate. If these transactions had to be estimated, they would be in the order of 1 to 1.5 billion USD. Sometimes we are faced with this assertion that the exchange rate is the gray market exchange rate and therefore we should transfer all other transactions that take place at this exchange rate. This is a mistake which I believe should also be corrected.

Namal Rajapaksa, Minister of Youth and Sports, Development Coordination and Monitoring and Minister of State for Digital Technology and Business Development, said the government has laid the groundwork to digitalize the whole of Sri Lanka.

Rajapaksa said that although Sri Lanka has high usage of Facebook and other social media accounts and high usage of smartphones, adaptation to the use of money transfers through these channels was sadly low. As the world prepares to digitize payment methods, most Sri Lankans still prefer the traditional mode of cash payment, he added.

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