Sri Lanka’s Central Bank asked every licensed bank to run an internal check for fraud similar to the Rs. 13.2 billion misappropriation disclosed at National Development Bank, Governor Nandalal Weerasinghe said, and no other incidents were reported.
“We asked all the banks to check whether a similar kind of incident took place,” Weerasinghe told EconomyNext on Wednesday. He said no fraud has been found at any other bank.
The disclosure is the first time the Governor has publicly confirmed that the Central Bank of Sri Lanka (CBSL) directed a system-wide review of internal controls in response to the NDB case, shifting the regulator’s stance from “no evidence” of contagion to active confirmation that licensed banks were instructed to self-audit.
The NDB fraud, disclosed earlier this year, involved unauthorised credit facilities and the manipulation of accounting records to channel large outflows under the guise of legitimate commercial transactions. The case has raised concerns about corporate governance and the effectiveness of bank-level oversight, with critics arguing that the sums involved should have triggered earlier regulatory alarms.
NDB has maintained throughout that depositors’ money remained safe and that the misappropriated funds came from one of the bank’s own accounts rather than customer deposits.
The CBSL’s forensic audit by Deloitte Touche Tohmatsu is now underway, with the regulator previously stating that no other regulated institution suffered losses tied to the NDB case. Opposition MP Ravi Karunanayake had alleged the fraud could extend to other banks and NBFIs, and the Committee on Public Finance reported audit failures at NDB earlier this month. The Governor’s confirmation that every bank was directed to self-check provides the most explicit assurance to date that the lapse appears isolated.
Sources: EconomyNext — Sri Lanka CB checked all banks for NDB type fraud: Governor.
