On the 58th anniversary of Sri Lanka’s Independence Day, Sri Lanka launched its maiden global campaign on “Sri Lanka Nation Building Bond” (SLNBB) among its foreign overseas workers.
Under the program, the government announced the issuance of foreign currency denominated bonds to a value of $25 million. The bonds were issued to Sri Lankan working community abroad who have their permanent residence overseas and to professionals earning in foreign exchange in Sri Lanka.
Sri Lankans working abroad remit some $1.8 billion annually to the island’s coffers whose contributions are considered to be their country’s second largest foreign exchange earner.
A two-member delegation comprising Rose Cooray, assistant governor Central Bank of Ceylon and Douglas Weerasinghe, deputy general manager — international and treasury of Bank of Ceylon, lead manager of the bonds visited the Kingdom to launch this project. During the first leg of its tour, the delegation met community members in Riyadh and Jeddah and subsequently visited Abu Dhabi, Dubai and Doha to continue their campaign among Sri Lankans in the Gulf. “We chose Saudi Arabia to kick off our campaign since it has the world’s largest concentration of Sri Lankan overseas workers and we want to tell them of the country’s expectations from its people toward nation building,” Rose Cooray told Arab News.
“The objective of SLNBB is to provide an opportunity for nonresident Sri Lankans to acquire solid investment and thereby help in building the nation,” Cooray said, pointing out that the entire proceeds of the bond issue will be utilized for infrastructure development in the country such as building of another international airport, six flyovers and highways. The SLNBBs are denominated in US dollars, sterling pounds or euros and the minimum investment for the three currencies is US dollars 500, sterling pounds 250 and euros 500. Sri Lankan Ambassador A.M.J. Sadiq also addressed the gathering at the launching ceremony in Riyadh where Sri Lankans from all walks of life were present. In Jeddah, Consul General Masihudeen Inamullah introduced the bankers to his countrymen at a similar function held subsequently.
Cooray pointed out that the bonds are for a period of five years and they are transferable through electronic means on the advice of investors. She added that the value of the bonds could be kept as collateral for any loans from either Bank of Ceylon or People’s Bank, state banks, which have readily agreed to release 90 percent and 100 percent of the total value of the bonds.
SLNBB holders will be eligible to import a vehicle at a concessionary rate of duty of 25% on the CIF value of the vehicle in lieu of prevailing Customs Duty, Value Added Tax and Excise (Special Provision) duty. Earnings from the bond, paid half yearly, will be exempted from income tax/withholding tax and stamp duty.
The Deutsche Bank AG, No. 86, Galle Road, Colombo 3, Sri Lanka, has been appointed as the custodian bank which will maintain the records of investors and investments in scripless form and will make the payments of earnings and repayment of principal to investors on due dates.
Meanwhile, in response to the government’s recent invitation to foreign investors to invest up to 5% of the outstanding Treasury Bonds, overseas clients of Citibank N.A. (Rs2,400 million) and Hong Kong and Shanghai Banking Corporation Ltd. (Rs30 million) have, by Jan. 30, 2007, invested Rs2,430 million in treasury bonds in foreign currency (equivalent to $23 million). Of this total, investment made through the primary market amounted to Rs1,950 million and the balance via the secondary market. This development is considered a very positive start and provides a substantial momentum to meet the target of Rs20 billion for the year 2007 set by the government. Details on currently available treasury bonds and prevailing market rates can be obtained from Licensed Commercial Banks (LCBs), Primary Dealers (PDs) and the CBSL website (www.cbsl.lk).
Operating instructions issued to authorized dealers by the Exchange Control Department of the CBSL, guidelines issued to participating agents and foreign investors, investors guide and a list of treasury bond series available for foreign investors are also available on the Central Bank website.
Details can also be obtained from the Public Debt Department (PDD) of the CBSL. Telephone:94-11-2477274, 94-11-2477212, 94-11-2477278, 94-11-2477281.
Fax: 94-11-2477718/19 or 94-11-2477759.
E-mail: [email protected], [email protected], [email protected].
