Thousands of Sri Lankans in the diaspora regularly send money to their families and friends in Sri Lanka. The estimated population of Sri Lankans living outside their country currently stands at 3 million. As the diaspora numbers increase so are the remittances back home. For instance, in 2017, the Pew Research Centre records that a total of $7,190 million was sent to Sri Lanka.
The top 5 countries that dominate the remittance corridors to Sri Lanka are Saudi Arabia, the United Arab Emirates, United Kingdom, India, and Qatar. Low-income households in Sri Lanka are the greatest beneficiaries of remittances. This impact is seen in improved poverty rates in the districts that have sent the largest number of emigrants.
As of December 2016, the number of Sri Lankans working in Qatar was 145,256. The amount they sent home is slightly over $500 million. Despite the incentives offered to encourage remittances along formal channels, funds transfer through informal channels is still rampant. Workers with expired visas, undocumented workers, and first-time emigrants are among the most affected.
This guide will help you gain an in-depth understanding of the various formal ways you can use to send money to Sri Lanka, the information required, the regulatory framework, and factors that you need to consider when sending.
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There are multiple ways to easily send and receive money in Sri Lanka but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money.
Whether you are sending money to your family in Colombo, Kalutara, Gampaha, districts in the northern and eastern regions or other areas in Sri Lanka, your target should be to find the cheapest provider that will help you save on fees and exchange rates. Safety of transfers, sending limits and receiving limits are major concerns that you need to look at.
There are various ways you can send money to Sri Lanka. You can use international wire transfers, online money transfer services, and in-store sending options.
The banking system in Sri Lanka is well-diversified. The Central Bank of Sri Lanka is the regulatory authority of the banking sector. This sector comprises state-owned commercial banks, private domestic banks, foreign banks, development banks, housing banks, and national savings banks.
When sending to a bank in Sri Lanka, your transfer may be deposited directly or it may pass through intermediary banks before it is credited to the recipient’s account. The latter is normally costly and may take additional days for the money to get to your family.
Thanks to recent development, thousands of Sri Lankan workers in Saudi Arabia can now send money to Sri Lanka through the Commercial Bank of Ceylon, one of the leading banks in the country. This was made possible after the bank entered into partnerships with representatives in Saudi Arabia such as National Commercial Bank, Arab National Bank, Al Bilad Bank, and Al Rajhi Bank.
International wire transfers typically take between 3 and 5 days to be completed. However, without having a bank account in the sending country, you cannot use this service.
The largest banks per share of remittances in Sri Lanka are Bank of Ceylon (BOC), Peoples Bank (PB), Seylan Bank (SyB), Commercial Bank (CB), Hatton National Bank (HNB) and Sampath Bank (SaB).
In the North and East regions of the country where inter-ethnic clashes have been rampant, residents have to contend with limited access to formal banking. When sending to these border villages, bank transfers may not be the appropriate way of moving funds.
Most of the remittances to Sri Lanka especially from Asia and the Middle East, are made through online money transfer providers. These sending options give you a better rate, low transaction fees, and faster delivery times.
The providers differ depending on the transfer corridor. For instance, if you are sending from the United Arab Emirates to Sri Lanka, you will find providers such as GCC Exchange, Al Fardan Exchange, Ezremit among others.
If you are sending from the United Kingdom, providers such as Azimo, WorldRemit, Small World, Xpress Money, Ria, Fast Cash, and Lyca Remit can be your go-to options.
Most of the providers will require you to open an account with them, pay for your transfer, and then choose a payout option which could be cash pickup or direct bank deposit. A number of money transfer providers have mobile applications on both Android and iOS platforms to enable you to send on the go.
Other big names in this category include TransferWise, OFX, WorldFirst, TorFX, Xoom, Currencies Direct, and Transfast.
Western Union and MoneyGram are two of the most frequently used money transfer operators in this category. In addition to the online transfer option they give you, you can also send money to your family in Sri Lanka through their agency network.
Depending on the country you are sending from, you will find most of these agents in grocery stores, supermarkets, mailbox centres, travel agencies, drug stores, and so forth. For instance, Western Union allows you to send money directly to your recipient’s bank account or to an agent location near them. With as little as $4 transfer fee, you can send to your loved ones conveniently and fast.
Once you sign up for an online account, you choose the payout method, provide the recipient information and how you wish to pay for your transfer. There are several ways you can pay for your transfer. Some providers such as Xoom will allow you to pay through a direct bank debit, credit card, or debit card. Others such as OFX restrict their payment methods to bank transfers.
Credit cards and debit cards cost a little more, but they ensure funds are available for transfer faster than the other methods.
When sending money to Sri Lanka, you will be asked for specific information by the providers so that they can identify you and the recipient. Most of this information will be captured when signing up for the account. Regulatory bodies such as FCA and FINTRAC may require certain information to be captured by money transfer service providers. Some of the information you will need to provide include:
Depending on the country you are sending from, you may be asked to disclose the source and purpose of the money.
Looking at the transfer narrations given to the various money transfer providers, the following reasons stand out as the most common for people remitting money to Sri Lanka.
Instances of floods, earthquakes, and other disasters receive an overwhelming response in terms of financial assistance from the diaspora. Even at a family level, emergencies do arise such as sicknesses and deaths which require diaspora Sri Lankans to send in their support.
To support family income, Sri Lankans abroad send money on a regular basis mostly on month ends. This takes care of the day-to-day living expenses.
Some Sri Lankans send money home for tuition fees for their siblings or direct family members.
Investing back home remains one of the greatest pull factors for Sri Lankans in the diaspora. Most of the investments are in real estate, stock market and entrepreneurial ventures.
During festivals such as Vesak Poya, Poson Poya Festival, and Sinhala and Tamil New Year, the size and frequency of remittances to Sri Lanka usually increase.
Money transfer services have proved to be convenient, fast, and simple for people sending to Sri Lanka and other countries. Below are some of the reasons why you should try out a money transfer service provider for your next transfer.
There are several factors that you need to bear in mind when sending money to your family and friends in Sri Lanka.
Therefore, if you want to send money to Sri Lanka, you need to understand the remittance market, the players involved, what’s needed for you to send and receive money and the factors to bear in mind when sending.
Ria Money Transfer’s fast option is the fastest way to get your funds. The best part about their fast service is that it is cheaper than much of the slower competition. With Ria Money Transfer’s fast option, your money will arrive in Sri Lanka within a matter of minutes.
The downsides to Ria Money Transfer are that the service is not the easiest option to use, and the faster option is not the cheapest. That being said, Ria Money Transfer’s fast option is a great balance between cost and speed. Again, many of the slower money transfer services cast far more than Ria Money Transfer.
The cheapest way to send money online is through TransferWise. TransferWise only charges a stated fee. In fact, TransferWise is one of the very few services that forgoes on hidden currency conversion costs altogether. When you use TransferWise, you only have to pay them for the ability to complete the transaction.
The easiest way to send money is also TransferWise. TransferWise uses a three-step process that can be learned and repeated easily. All you need to do is tap in how much money you need to send and the destination. After that, you just complete the payment to TransferWise and the rest is up to them. It should only take a day or two for your money to reach its Sri Lankan destination.
The current exchange rate for the Sri Lankan Rupee (LKR) is 180.2318 LKR per American Dollar (USD), as of the time this was written. During the last 90 days, the LKR reached a high of 182.4199 LKR per USD, and a low of 177.0750 LKR per USD. The average exchange rate over the last 90 days was 180.6140 LKR per USD.
The average volatility rate of the LKR against the USD was 0.26% over the last 90 days. This is a normal volatility rate, and the LKR has been stabilizing in recent months. Going forward, you can reasonably expect moderate fluctuations to continue, barring any unforeseen circumstances.
TransferWise is the overall best way to send funds online to Sri Lanka. With TransferWise, you get an ideal balance between cost, ease of use, and time all in one. While TransferWise does take a day or two to work, it’s a great value given the price and simplicity of the service. For these reasons, TransferWise is the overall best way to transfer cash online.