NDB fraud: IMF asks Central Bank to be vigilant

• An interim report will be submitted in a week and the final report on July 18

By Kelum Bandara

In the wake of the multi-billion rupee fraud at the National Development Bank (NDB), the International Monetary Fund (IMF) has asked the Central Bank to strengthen the bank supervisory and regulatory mechanisms, according to the Committee on Public Finance (CoPF).  

The CoPF which met under the chair of Samagi Jana Balawegaya (SJB ) MP Dr. Harsha de Silva took up the NDB fraud with the Central Bank officials including Governor Dr. Nandalal Weerasinghe recently.  

Dr. de Silva inquired about the progress into steps taken by the Central Bank. He brought to the notice that the IMF, in its fifth and sixth review staff report, had mentioned the need for the strengthening of the Central Bank’s supervisory and regulatory roles.  

The Central Bank officials said that a forensic audit had been initiated to identify the root cause of such transactions and modus operandi of them.  

It is done by the Central Bank in collaboration with the NDB. Both Dr. de Silva and CoPF member Ravi Karunanayake asked how the NDB, the accused, was involved in determining the scope of forensic investigation.   

The officials replied that the NDB was asked only to make a rough draft of the scope whereas the Central Bank formalised it with its inputs.  

They said that an interim report will be submitted in a week and the final report on July 18. Transactions covering a ten year period will be investigated.  

Earlier, reports said that Rs.13 billion had been siphoned off from the bank through fraudulent transactions.   

Public Security Minister Ananda Wijepala said in Parliament last week that money had been sent out of the country.