Opposition legislator Ravi Karunanayake on Tuesday demanded answers from the Central Bank of Sri Lanka over its supervisory failure in the NDB Bank fraud case, telling parliament the regulator should have detected billions in suspicious outflows years before the scandal broke.
“Why couldn’t the central bank’s bank supervision department see this, and check it under section 80?” Karunanayake asked, referring to the Banking Act provision that empowers CBSL to intervene in regulated institutions. He cited internal NDB figures showing accounts that held Rs. 3.1 billion in 2023 ballooned to Rs. 12.1 billion in 2024 — eventually contributing to losses now placed at Rs. 13.2 billion.
The MP contrasted the regulatory blind spot with the controls ordinary depositors face: “When an average person tries to transfer 100 rupees out of the country, they have to answer a 4-5 page questionnaire,” he said. He also questioned the absence of internal audit checks and the bank’s apparent failure to apply the rotational principle to staff handling sensitive accounts. “Who was questioned? Where was the internal control, internal audit, the rotational principle?”
In response, CBSL said it was “satisfied that notwithstanding the reported loss, the prudential ratios relating to capital adequacy and liquidity continue to be at levels above the minimum regulatory requirements” — language identical to the statement the regulator issued when it suspended NDB dividends and froze branch expansion on April 7.
The exchange sharpens the political stakes of the fraud, which was first disclosed at Rs. 380 million in January and revised to Rs. 13.2 billion on April 6, sending NDB shares tumbling 15 percent when trading resumed. CBSL Governor Nandalal Weerasinghe has since used the case to advance a mandatory bank consolidation push, arguing weak governance at smaller institutions justifies forced mergers within two years.
Karunanayake’s intervention is the first formal parliamentary scrutiny of CBSL’s role in the fraud and signals the issue will not be confined to a board-level investigation.
