Ravi K calls for independent forensic probe into NDB fraud

Colombo, May 4 (Daily Mirror) - Democratic National Alliance (DNA) MP Ravi Karunanayake has called on President and Finance Minister Anura Dissanayake to initiate an independent forensic investigation into the alleged fraud at National Development Bank PLC (NDB), citing serious concerns over regulatory lapses and systemic weaknesses in financial oversight.

In a letter addressed to the President, MP Ravi Karunanayake said that suspicious transactions linked to the bank had reportedly been flagged by at least two licensed commercial banks to the Financial Intelligence Unit (FIU) more than a year before the fraud was exposed. He noted that the apparent delay or inaction in responding to these warnings raises questions about the effectiveness and accountability of the supervisory framework.

The MP also alleged shortcomings on the part of the Central Bank of Sri Lanka, stating that the regulator may have failed to ensure compliance with prudential regulations, anti-money laundering obligations, and risk monitoring systems.

Highlighting systemic failures, Karunanayake pointed to weaknesses in internal bank controls, including lapses in middle-office functions responsible for transaction oversight. He further cited technological shortcomings, including the absence of real-time monitoring systems and issues with reconciliation between CEFT and RTGS payment platforms.

Concerns were also raised over capital market oversight, particularly NDB’s issuance of debentures worth approximately Rs. 16.2 billion in March 2026. The MP questioned whether due diligence had been exercised by institutions such as the Colombo Stock Exchange and the Securities and Exchange Commission of Sri Lanka, along with other regulatory and auditing bodies.

Karunanayake warned of a potential fiscal impact on the state, noting that tax revenue linked to the alleged fraudulent transactions may be unrecoverable unless urgent action is taken.

He also expressed concern over the independence of the current forensic audit process reportedly initiated by the Central Bank, suggesting that any investigation must be free from conflicts of interest and internationally credible.

The MP urged the President to appoint an independent investigative team and consider engaging global institutions such as the Bank of England, Bank of Japan, and the Monetary Authority of Singapore to support the process.

He further called for an expanded probe into regulatory failures, internal bank controls, technological systems, capital market oversight, and the overall fiscal impact. In addition, he stressed the need to review the “Fit and Proper” criteria used by the Central Bank in approving bank directors, raising concerns about the apparent lack of banking expertise among audit committee members.

Karunanayake also recommended that corrective actions be formally communicated to the International Monetary Fund as part of Sri Lanka’s ongoing Extended Fund Facility programme.

He said the Committee on Public Finance stands ready to assist in identifying independent professionals to conduct the investigation.

Describing the issue as one of urgent national importance, the MP stressed that restoring confidence in the banking sector and ensuring financial stability will depend on swift and transparent action.