CoPF questions governance, regulatory lapses over Rs. 13.2 b NDB fraud

Friday, 10 April 2026 00:24 - - {{hitsCtrl.values.hits}}

CoPF Chairman MP Dr. Harsha de Silva

CBSL Governor Dr. Nandalal Weerasinghe

The Committee on Public Finance (CoPF) has raised concerns over what it described as, ‘significant lapses in corporate governance’, at National Development Bank PLC (NDB), alongside supervisory gaps within the Central Bank of Sri Lanka (CBSL) and delays in the disclosure of material information in relation to the alleged Rs. 13.2 billion fraud.

The Committee said such shortcomings were unacceptable and directed that immediate corrective measures be implemented, while signalling continued and closer parliamentary scrutiny to ensure accountability, transparency, and the protection of public confidence in the financial system.

The issue was taken up when the CoPF met earlier this week under the chairmanship of MP Dr. Harsha de Silva, with CBSL Governor Dr. Nandalal Weerasinghe, members of the Monetary Board and Monetary Policy Board, and senior CBSL officials in attendance as part of the CBSL’s statutory presentation to Parliament.

The CoPF prioritised the NDB matter during the session, initiating a focused discussion with the CBSL, underscoring the gravity of the incident and the need for urgent regulatory and supervisory response, the Parliament Secretariat said.

Responding to the Committee, Dr. Weerasinghe said a preliminary investigation is currently underway. He assured that the CBSL will report back to the CoPF at the earliest once further information is gathered.

The Committee stressed that both institutional governance within banks and regulatory oversight must function without delay or gaps, particularly in matters involving potential financial misconduct, given the broader implications for financial system stability.

NDB’s Rs. 13.2 billion fraud appears to have gone undetected for over 18 months, with a sharp and unexplained rise in CEFT-related receivables flagged as early warning signs that were not acted upon by management or oversight bodies.

The bank has fully provided for the loss, leading to an estimated Rs. 4 billion 1Q 2026 loss, with a net impact around Rs. 7 billion. While capital adequacy is expected to decline, it remains above regulatory minimums, supported by dividend suspension and CBSL oversight. The fraud involved internal collusion exploiting weekend CEFT windows, with recovery efforts, staff suspensions, tighter controls, and a forensic audit now underway (https://www.ft.lk/front-page/NDB-Board-gets-flack-for-ignoring-high-Rs-12-3-b-receivables-arising-from-CEFT-deals/44-790631).

According to State media reports, on Wednesday, a fourth suspect was remanded until 17 April by Colombo Additional Magistrate Oshada Migara Mahaarachchi over the fraud. The Criminal Investigation Department (CID) told Court the suspect obtained funds through crypto currency transactions routed via an entity named “Buy Today,” while the main suspect – an Assistant Manager of NDB Bank’s Department of Payments and Settlements –allegedly used other officers’ passwords to execute the fraud. Police opposed bail citing risk of witness interference, with three others already in remand, and the Court rejected the bail application pending further investigations.

The NDB’s Board of Directors comprises Sriyan Cooray (Chairman), Kelum Edirisinghe (CEO), Bernard Sinniah, Sujeewa Mudalige, Kushan D’Alwis, Kasturi Chellarajah, Shweta Pandey, Hasitha Premaratne, Sanjaya Mohottala, and Shanil Fernando.