June 15, Colombo (LNW): The International Monetary Fund (IMF) has reportedly called for enhanced banking supervision and tighter regulatory oversight in Sri Lanka following the emergence of a major financial fraud involving the National Development Bank (NDB), according to discussions held at the Committee on Public Finance (CoPF).
The matter was examined during a recent CoPF meeting chaired by Opposition MP Dr Harsha de Silva, where senior officials from the Central Bank, including Governor Dr Nandalal Weerasinghe, were questioned about the ongoing investigation and measures being taken to prevent similar incidents in the future.
During the proceedings, Dr de Silva referred to observations contained in recent IMF review reports, which highlighted the importance of strengthening the Central Bank’s supervisory framework and improving regulatory safeguards within the financial sector. He sought clarification on the progress made in response to those recommendations and the steps being taken following the alleged fraud.
Central Bank representatives informed the committee that a comprehensive forensic audit is currently underway to determine how the transactions occurred, identify weaknesses in internal controls and uncover the methods used to carry out the alleged scheme.
The investigation is being conducted with the cooperation of the NDB. However, concerns were raised by committee members, including Dr de Silva and MP Ravi Karunanayake, regarding the extent of the bank’s involvement in shaping the scope of the inquiry, given that it is the institution at the centre of the allegations.
Responding to the concerns, officials stated that the bank’s role was limited to providing an initial draft framework for the audit, while the Central Bank ultimately finalised the terms of reference and investigative scope using its own assessments and recommendations.
The committee was informed that investigators are expected to submit an interim report within the coming days, while the final report is scheduled to be completed by 18 July. The forensic review is expected to examine financial transactions spanning a decade in an effort to establish whether the alleged activities were isolated incidents or part of a broader pattern.
The case has attracted significant public attention following reports that approximately Rs. 13 billion may have been misappropriated through fraudulent transactions. Adding to concerns, Public Security Minister Ananda Wijepala recently informed Parliament that some of the funds under investigation are believed to have been transferred overseas.
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