Sri Lanka imposed a 100% cash margin when
opening letters of credit for 623 items. These items range from mobile
phones, chocolates, cereal, and a variety of clothing. CBSL had taken
the decision to discourage imports as the country faced foreign exchange
shortages as large volumes of money were printed. Banks have also been
barred from giving credit for importers to meet the margins. Licensed
Commercial Banks “shall not grant any advances to their customers for the
purpose of enabling such customers to meet the minimum cash margin deposit,”
said the Central Bank. A direction issued to licensed commercial banks
by the Central Bank said the margin requirement was effective from September
08th.