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Invest in Treasury Bills and Treasury Bonds issued by the Government of Sri Lanka

Millions of Sri Lankans work overseas and every year thousands add to that work force. In 2010 266,445 left the island for foreign employment, which were 247,126 in the previous year. Foreign employment continued to be an important and stable source of foreign currency inflows to the country. As a result of the developments in migrant worker population, total foreign remittances received in 2010 increased by 23.6 per cent to US dollars 4,116 million, compared to US dollars 3,330 million received during the previous year.

Many Sri Lankans used to keep their money in NRFC/RFC accounts without investing in any source due to lack of awareness and also due to lack of secure investment opportunities. Now that Government of Sri Lanka has opened an investment opportunity in Treasury Bills/Treasury Bonds to Sri Lankan Diaspora and migrant workforce, they can invest their hard earned foreign currency earnings in motherland with government guaranteed Treasury Bills and Bonds.

Who is Eligible?

The following categories of persons are eligible to invest in Treasury bills/Treasury bonds issued by the Government of Sri Lanka.

(a) Sri Lankans who have made their permanent residence overseas (Non-residents);

(b) Citizens of Sri Lanka who have taken up overseas employment / set up business in abroad;

(c) Citizens of Sri Lanka with dual citizenship in Sri Lanka and in another country;

(d) Sri Lankan professionals living in Sri Lanka or abroad who earn income in foreign currency;

(e) Banks acting in fiduciary capacity on behalf of the above categories.

Who to contact?

Investments needs to be done through Licensed Commercial Banks(LCB), Licensed Specialized Banks(LSB) (National Savings Bank) and Primary Dealers who named as Lead Managers(LM). Eligible investors are registered at the Central Depository System (CDS) of Lanka Secure maintained by the Public Debt Department (PDD) of the CBSL.

CDS will issue statements containing the following to the investors.

a) A monthly statement confirming the transactions that have taken place during the month.

b) A statement confirming the outstanding balance held by each investor semi annually.

c) A statement indicating the maturity proceeds and/or interest payment whenever such payments fall due.

These statements will be issued directly to the name and address of the investor, as registered in the CDS.

How to Invest?

 

Now, the investor must open an special Rupee account named Treasury Bill / Bond Investment External Rupee Account – Deshabhimani (TIERA-D )with a Lead Manager of his/her choice. This Bank is named as the custodian Bank. Functions relating to transfer of funds/money and make payment for purchase of Treasury bills/Treasury bonds in rupees will done through this special account. The custodian bank has to make necessary arrangements to transfer respective rupee amounts to the relevant account at the Central Bank through Real Time Gross Settlement System (RTGS).

How to receive Interest and Maturity Proceeds?

 

Maturity proceeds/Interest income payable on Treasury bills/Treasury bonds will be paid in rupees by the Public Debt Department of the CBSL on behalf of the Government of Sri Lanka through RTGS to respective custodian Banks on respective maturity dates. Custodian Banks will transfer the respective payments to the TIERA-D accounts or any other account specified by the investor on the same day.

What are the Benefits?

  • The repayment of capital and interest of investment is guaranteed by the Government of Sri Lanka.
  • The very special feature in this investment is the ability to re –convert your investment (including interest) into any major foreign currency without any exchange control restrictions.
  • Conversion can be done at the time of maturity or prior to maturity.
  • No tax and stamp duty payable on your investment in Sri Lanka.
  • On maturity you can reinvest or convert to foreign currency and remit either to your NRFC account or to any account outside Sri Lanka as well. You can use TIERA accounts to transfer funds to your relatives or others in Sri Lanka on periodical  basis.
  • Ability to book Forward Exchange Contracts to mitigate currency risk.
  • Highly liquid and tradable in the secondary market.
  • Treasury bills/Treasury bonds may be held jointly within the facilities available (at present up to three with the CDS). Payment of maturity proceeds and interest payments shall be based on the agreement between LM and joint holders.
  • On line viewing facility of Investment status through internet via www.cbsl.lk/lankasec.

Any Disadvantages?

Funds available at NRFC accounts in Sri Lanka are not permitted to transfer to TIERA-D account.

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Sandun W

Sandun joined Lanka Help Magazine as a contributor in June, 2011. He has been consistently writing articles to our magazine. Many useful articles of this site are under Sandun's name.

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