Sri Lanka lets foreigners open deposit accounts

COLOMBO, June 2 (Reuters) - Foreigners are to be allowed to deposit money with Sri Lankan banks in a move to promote investment in an economy which is short of domestic savings, the central bank said on Monday.

It said Sri Lankan citizens living abroad, corporate bodies incorporated outside Sri Lanka and foreign institutional investors will be allowed to invest in savings and time deposits in designated foreign currencies or in rupees with commercial banks.

A deposit account will have to maintain a minimum balance of at least $10,000 or its equivalent and total foreign deposits.

Previously foreigners could only invest in the treasury bond and treasury bill markets.

"The Central Bank further liberalised acceptance of deposits by domestic banking units of commercial banks from foreigners introducing a new scheme, Foreign Investment Deposit Accounts (FIDA)," the bank said in an emailed statement.

"We want to promote further foreign investor confidence and capital account liberalisation gradually," P. Samarasiri, an assistant governor at the central bank told Reuters.

"What we think is, there should be a capital moblisation in the country, so that we can get into the global market.