National Development Bank (NDB) has disclosed a major fraud estimated at Rs. 380 million, committed by employees acting “in connivance with a third party or parties,” according to a filing with the Colombo Stock Exchange.
The bank warned that final losses could be “substantially greater” than the current estimate as investigations are still ongoing.
Investigations underway
NDB has referred the matter to law enforcement authorities and notified the Central Bank of Sri Lanka. Both criminal and internal investigations are running in parallel, with the bank stating it does not wish to speculate on final outcomes until it receives fuller reports.
The bank has not disclosed the identities of the employees involved or the nature of the third-party connections. Details on how the fraud was carried out or how long it went undetected have not been made public.
Customer deposits safe
In its stock exchange filing, NDB moved to reassure customers and investors, stating that “all deposits and account balances remain safe and fully secure with no impact on the Bank’s operations on an on-going basis.”
The disclosure is one of the largest reported internal frauds at a licensed commercial bank in Sri Lanka in recent years. NDB committed to providing more detailed disclosures as investigations progress.
Banking sector analysts will be watching closely for any regulatory response from the Central Bank, which has been tightening governance requirements for licensed banks following several high-profile lapses in the sector.