BIZ

Sri Lanka-Iran ‘tea-for-oil’ barter agreement progresses with over $20 million settled

Published

1 year ago

February 1, 2024

nipuni

The ongoing Sri Lanka and Iran ‘tea-for-oil’ barter agreement is now making strong progress and Sri Lanka has already settled over USD 20 million to Iran.

“This agreement was to settle a total of USD 250 million for purchases made by Ceylon Petroleum Corporation (CPC) for oil imported from Iran in 2012”, said Chairman Sri Lanka Tea Board (SLTB) Niraj De Mel in a special interview with ‘Daily News Business’.

In a bid to save draining of foreign exchange from Sri Lanka to service the high petroleum imports the then Minister of Finance, Mangala Samaraweera and Dr. Romesh Pathirana talked to National Iranian Oil Company of Iran officials since 2019 to trade tea instead of paying in USD when purchasing fuel to protect local forex reserves.

The barter was agreed in 2021 for oil imported in 2012 however due to the economic crisis this deal was only signed last year.

“Since then we have made very strong progress and up to December 2023 we have settled around USD 20 million.”

Explaining the modalities of the agreement he said that the local tea exporters to Iran get paid in Sri Lanka rupees by the Ceylon Petroleum Corporation.

SLTB will be settling payments to Sri Lanka tea exporters upon confirmation of tea consignments are shipped to Iran by the tea exporters. This is scrutinized through a recognized Audit Firm.

“The agreement is to send USD 5 million worth of tea each month to Iran for 48 months.”

De Mel said that with Iran facing a cold climate in the next few months we expect the demand for local tea to increase.

“Hence we have requested the Minister of Power and Energy Kanchana Wijesekera to increase the monthly USD 5 allocation (equivalent to Sri Lankan rupees) made by them to local tea exporters. We have requested the Minister to increase this to USD 10 million and he has responded to this request positively.”

De Mel said that though there are some international restrictions imposed on Iran this ‘tea-for-oil’ barter agreement does not violate it.

“This scheme will not violate any UN or US sanctions since tea has been categorized as a food item under humanitarian grounds while none of the black listed Iranian banks will be involved in the equation.”

The total revenue realized for the period January – December 2023 from tea exports was USD 1.31 billion compared with USD 1.27 Billion recorded for the period January to December 2022.

The increase of tea exports was USD 1.31 billion compared to the same period in 2022.

BIZ

End of parate relief for large SMEs

Published

8 hours ago

July 1, 2025

editor

The grace period granted to small and medium-sized enterprises (SMEs) under Sri Lanka’s Parate Execution Law officially ended midnight yesterday (June 30) for businesses with loans exceeding Rs. 50 million.

The Parate Law grants banks the authority to seize properties pledged as collateral without court proceedings. Although its implementation had been suspended for three months by the current administration—and for six months earlier under former President Ranil Wickremesinghe—it has now been reinstated, triggering serious concern among entrepreneurs.

Deputy Minister of Economic Development – Dr. Anil Jayantha Fernando has stated that the government intends to hold discussions with all relevant parties in the coming days to address the issues linked to the law’s reimplementation.

Meanwhile, Opposition Leader – Sajith Premadasa has warned that the re-implementation of the Parate Execution Law could lead to the rapid auctioning of assets from small, medium, and micro businesses, putting them at risk.

In a statement yesterday (June 30), he emphasized that these businesses contribute over 50% to Sri Lanka’s Gross Domestic Production (GDP) and employ over 04 million people.

BIZ

Special FD scheme for senior citizens introduced

Published

8 hours ago

July 1, 2025

editor

The Ministry of Finance has officially launched the special fixed deposit scheme for senior citizens.

Proposed in the Budget 2025, the scheme which is open to resident Sri Lankan citizens aged 60 years and above, comes into effect from today (July 01).

Eligible fixed deposits can be opened between July 01, 2025, and December 31, 2025, and must have a 12-month tenure.

The scheme will be implemented through the 17 licensed commercial banks; five (05) government banks and twelve (12) private banks that have confirmed participation. As part of the process, customers are required to provide a declaration confirming that the funds deposited are their own, their monthly income is less than Rs. 150,000, consenting to the sharing of relevant information with the Ministry of Finance, Planning and Economic Development for verification purposes, agreeing that any false information provided will result in disqualification from receiving the interest subsidy.

The government has allocated Rs. 30 billion to cover interest subsidies under this initiative.

Key features of the scheme:
– Deposit Period: 12 months (1 year)

– Deposit Limit: Maximum of Rs. 1 million

– Interest Benefit: Depositors will receive either

An additional 3% over the Average Weighted Fixed Deposit Rate (AWFDR), or
An additional 3% over the declared fixed deposit rate—whichever yields a higher return.

Senior citizens interested in availing themselves of the benefits are encouraged to visit the nearest bank branch starting today. Applicants must provide valid documentation, including their National Identity Card (NIC) and Taxpayer Identification Number (TIN) issued by the Inland Revenue Department (IRD).

This scheme aims to support the financial security of senior citizens by offering them a safer and higher-yielding savings option.