BB asks banks not to transact with Sri Lanka through ACU mechanism

Bangladesh Bank on Thursday asked banks not to conduct transactions with Sri Lanka through the ACU mechanism.

The central bank in a notice said that in response to the self-motivated decision by the Central Bank of Sri Lanka (CBSL) to remain temporarily suspended from the ACU mechanism with effect from October 14, 2022, all Authorized Dealers (Ads) are advised not to do any trade and trade-related transactions with Sri Lanka through ACU mechanism. 

The ACU is an arrangement for settling import payments for intra-regional transactions among the participating countries. The central banks make payments every two months. Bangladesh, Bhutan, India, Iran, the Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are members of the ACU. 

Bangladesh uses the mechanism to settle both import and export payments. Sri Lanka’s decision has excluded them from the mechanism. Now, if any Bangladeshi banks want to settle a transaction with any commercial bank in Sri Lanka, they will need to use some other mechanism.