NDB’s Shanil Fernando steps down from board

National Development Bank PLC (NDB) yesterday announced the resignation of Independent Non-Executive Director Shanil Fernando, in the first board-level exit following the bank’s Rs.13.2 billion fraud scandal.

The bank said Fernando stepped down with effect from 27 April, with shareholding details to be disclosed later.

The resignation follows rising pressure on the board and senior management to answer for oversight lapses, after the fraud, first estimated at Rs.380 million, expanded sharply as internal investigations progressed.

Governance advocates and market participants have increasingly called for accountability at the highest levels.

NDB has framed the incident as a failure of oversight, with CEO Kelum Edirisinghe acknowledging gaps in scrutiny. The fraud involved collusion among employees and the use of smaller transactions over time to bypass controls.

The bank expects a worst-case after-tax hit of around Rs.4 billion for the March quarter but maintains that customer deposits remain unaffected and capital levels are above regulatory thresholds.