IMF watchful of NDB dealing with internal fraud

Colombo, April 10 (Daily Mirror) - In the wake of an internal fraud rattling the National Development (NDB), the International Monetary Fund (IMF) said yesterday that it is closely watching the situation and is in touch with the Central Bank.

IMF Mission Chief for Sri Lanka Evan Papageorgiou told a press conference that the Central Bank had indicated that the issue is contained at the institutional level rather than behind the system.

“The NDB disclosed an internal fraud involving employees acting in a coalition with some external parties. The way we understand, it was confined to a very specific operational area of the bank, and estimated losses, as it has been reported, is approximately Rs. 13.2 billion. I believe deeper internal investigations are underway. In terms of the public information that we have and the discussion that we're seeing, what we're having is that the Central Bank has assessed that NDB remains well capitalized, and it remains liquid, and the potential ratios, the capital ratios and everything else are above the regulatory minimums, “ he said in response to a question.

He said that, based on communications, both with the NDB and the Central Bank, this was an operational and oversight failure within the specific area of the bank.