Colombo Chief Magistrate Asanga S. Bodaragama on Thursday ordered further arrests in the National Development Bank (NDB) fraud investigation, escalating one of the largest banking-fraud probes in recent Sri Lankan history beyond the four employees already remanded.
The alleged misappropriation involves transactions of around USD 42 million, equivalent to about Rs. 13.2 billion. The case surfaced in April and led to the arrest of four NDB staff members in early May. Investigators suspect they used internal suspense accounts to facilitate the unauthorised transfers.
The Chief Magistrate directed that additional NDB employees be taken into custody as the inquiry continues. The court also instructed that any individuals found to have breached Central Bank of Sri Lanka regulatory guidelines be arrested.
The Criminal Investigation Department is leading the probe with assistance from the Central Bank.
The Central Bank has reiterated that no customer deposits or individual account balances have been affected, and that NDB’s capital adequacy and liquidity positions remain stable. Earlier this month, Governor Nandalal Weerasinghe told a Committee on Public Finance sitting that every other licensed bank had been checked and no parallel fraud had been identified.
NDB has separately commissioned Deloitte Touche Tohmatsu for an international forensic review, while KPMG has replaced Ernst & Young as external auditor for FY2026 under a six-year-rotation rule. A derivative action filed by a minority shareholder against the bank and EY individuals also remains active in the Commercial High Court.
The earlier four remanded suspects include senior officers from the bank’s payments and reconciliation functions. The new arrest order signals investigators believe the scheme involved a broader internal network than initially identified.
