The International Monetary Fund is “watching the situation carefully” at the National Development Bank and is in active discussions with the Central Bank of Sri Lanka over the Rs. 13.2 billion internal fraud, the Fund’s Mission Chief for Sri Lanka said on Thursday.
Speaking at a press briefing closing the fifth and sixth reviews of the Extended Fund Facility, Evan Papageorgiou said the fraud appeared “confined to a very specific operational area of the bank” and that “deeper internal investigations are underway.” His intervention is the first public comment from the IMF on a scandal that has triggered four arrests, a trading halt and a parliamentary probe.
“In terms of the public information that we have, and the discussion that we’re having, the CBSL has assessed that NDB remains well-capitalised and liquid, and the capital ratios are above the regulatory minimums,” Papageorgiou told reporters in response to an EconomyNext question. He said the Central Bank’s framing of the case was that “the issue is contained at the institutional level rather than becoming systemic,” and that corrective and supervisory actions were already underway at the bank.
The Fund’s comments validate the CBSL’s “contained, not contagion” messaging while confirming that external scrutiny extends beyond Sri Lanka’s parliamentary watchdogs. CBSL Governor Dr. Nandalal Weerasinghe briefed the Committee on Public Finance on April 7 and has suspended NDB’s cash dividend and frozen its branch expansion pending the investigation’s outcome.
A Softlogic Stockbrokers analysis cited by EconomyNext estimates an unaudited after-tax loss of roughly Rs. 4 billion for Q1 2026, with a net impact closer to Rs. 7 billion against the gross Rs. 13.2 billion exposure. Against NDB’s Rs. 990 billion asset base, that represents about a 0.7% hit. NDB’s own board statement put the worst-case at Rs. 4 billion, measuring P&L impact rather than gross fraud quantum.
NDB shares closed up 3.41% at Rs. 113.75 on the Colombo Stock Exchange on Thursday, clawing back part of the 15% drop suffered when trading resumed earlier in the week.
