CBSL slaps Rs. 9.5 m fine on seven firms for AML/CFT non-compliance

The Central Bank of Sri Lanka (CBSL) yesterday said it has slapped a Rs. 9.5 million combined fine on two non-bank financial institutions (NBFIs), two banks, one casino, and a jewellery company for non-compliance of the provisions of the Financial Transactions Reporting Act (FTRA).

Regulator for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), the Financial Intelligence Unit (FIU) collected penalties of Rs. 2 million from LOLC Finance PLC, Rs. 1 million from Fintrex Finance PLC, Rs. 1 million from Pan Asia Bank Corporation PLC, Rs. 1 million from National Development Bank PLC, Rs. 500,000 from Rank Entertainment Ltd., (Casino Marina), Rs. 2 million from Bullion Exchange Jewellers, and Rs. 2 million from Mobitel Ltd.

The money collected as penalties was credited to the Consolidated Fund. 

By virtue of the powers vested under Section 19 (1) read together with section 19 (2) of the Financial Transactions Reporting Act, No. 6 of 2006 (FTRA), financial penalties are imposed on institutions for non-compliance with the provisions of the FTRA. The penalty may be prescribed by taking into consideration the nature and gravity of relevant non-compliances of the institutions.

The CBSL in a statement listed the following actions: 

LOLC Finance PLC

Date of imposition: 01.07.2025

Amount: Rs. 2,000,000.00 (Two Million Rupees)

Date of payment: 16.07.2025

Reasons for the imposition of the penalty: The administrative penalty was imposed as the Company had failed to:

i. report thirteen (13) Electronic Fund Transfer (EFT) transactions of the sample obtained during the examination, where the amount of such transfers exceeded Rs. 1 million (Rs. 1,000,000) or its equivalent in any foreign currency, to the FIU, within the specified period, and

ii. comply with the suspension orders issued by the FIU and subsequently extended by the High Court of the Western Province, holden in Colombo, by conducting debit transactions through a suspended account.

Fintrex Finance PLC

Date of imposition: 07.07.2025

Amount: Rs. 1,000,000.00 (One Million Rupees)

Date of payment:  23.07.2025

Reasons for the imposition of the penalty: The administrative penalty was imposed as the Company had failed to report five (5) EFT transactions of the sample obtained during the examination, where the amount of such transfers exceeded Rs. One Million (Rs. 1,000,000) or its equivalent in any foreign currency, to the FIU, within the specified period.

Rank Entertainment Ltd. (Casino Marina)

Date of imposition: 04.08.2025

Amount: Rs. 500,000.00 (Five Hundred Thousand Rupees)

Date of payment: 27.08.2025

Reasons for the imposition of the penalty: The administrative penalty was imposed as the Company had failed to,

i. maintain list of designated persons, groups and entities issued under the United Nations Regulations No. 1 of 2012 pursuant to the United Nations Security Council Resolution (UNSCR) 1373, and

ii. implement a mechanism to verify existing customers when a list of designated persons, groups and entities issued under UNSCRs is updated.

Although the above lapses in systems and procedures were observed, instances of business relationships with designated individuals or entities maintained by the company were not revealed during the on-site examination.

Pan Asia Banking Corporation PLC

Date of imposition: 22.08.2025

Amount: Rs. 1,000,000.00 (One Million Rupees)

Date of payment: 08.09.2025

Reasons for the imposition of the penalty: The administrative penalty was imposed as the bank had failed to,

i. verify the customers against the lists of designated persons, groups and entities issued under the United Nations Regulations, No. 1 of 2012 using the National Identity Card number or Passport number through the bank’s Targeted Financial Sanction (TFS) verification system, and

ii. verify the customers against the lists of designated persons, groups and entities issued under the United Nations Regulations, No. 1 of 2012, the United Nations Regulations, No. 2 of 2012, and the United Nations (Sanctions in relation to Democratic People’s Republic of Korea) Regulations of 2017 using only a part of the name.

Although the above lapses in systems and procedures were observed, instances of business relationships with designated individuals or entities maintained by the Bank were not revealed during the on-site examination.

Bullion Exchange

Date of imposition: 02.09.2025

Amount: Rs. 2,000,000.00 (Two Million Rupees)

Date of payment: 25.09.2025

Reasons for the imposition of the penalty: The administrative penalty was imposed as the Institution had failed to,

i. formulate an internal AML/CFT Policy; 

ii. establish and implement detailed controls and procedures to,

*identify and report suspicious transactions,

*conduct independent audits to test procedures and systems of the Institutions, for the compliance with provisions of FTRA and rules, regulations and directives issued thereunder,

*make its officers and employees aware of the laws relating to Money Laundering (ML) and Terrorist Financing (TF), and

*screen all persons before hiring them as employees;

iii. verify the prospective customers and beneficiaries and existing customers against lists of designated persons, groups and entities issued under UNSCRs.

Although the above lapses in systems and procedures were observed, instances of business relationships with designated individuals or entities maintained by the bank were not revealed during the on-site examination.

National Development Bank PLC

Date of imposition: 04.09.2025

Amount: Rs. 1,000,000.00 (One Million Rupees)

Date of payment: 12.09.2025

Reasons for the imposition of the penalty: The administrative penalty was imposed as the bank had failed to,

i. resubmit a significant number of cash transactions and EFT transactions where the amount of such transfers exceeded Rs. One Million (Rs. 1,000,000) or its equivalent in any foreign currency, which were rejected due to issues or errors in the submitted transaction data, to the FIU, within the specified period, and

ii. report transactions relating to leasing repayments exceeding Rs. One Million (Rs. 1,000,000) or its equivalent in any foreign currency, to the FIU, within the specified period.

Mobitel Ltd.

Date of imposition: 12.09.2025

Amount: Rs. 2,000,000.00 (Two Million Rupees)

Date of payment: 29.09.2025

Reasons for the imposition of the penalty: The administrative penalty was imposed as the Company had failed to,

i. conduct ML/TF risk assessment for mCash operations of the company, and

ii. maintain updated lists of designated persons, groups and entities issued under UNSCRs, in the company’s TFS verification system.

Although the above lapses in systems and procedures were observed, instances of business relationships with designated individuals or entities maintained by the company were not revealed during the on-site examination.