Bank Profits Must Never Come Before Compliance

The recent decision by the Central Bank of Sri Lanka (CBSL) to impose penalties on several leading banks and financial institutions for violating the Financial Transactions Reporting Act, No. 6 of 2006 (FTRA), raises serious concerns about the commitment of these institutions to anti-money laundering and countering the financing of terrorism (AML/CFT) obligations.

 Banks occupy a position of public trust.

 Their responsibility extends far beyond generating profits. Strict compliance with AML/CFT regulations is fundamental to preserving the integrity of Sri Lanka’s financial system and maintaining public confidence. Any lapse in compliance, whether deliberate or due to weak internal controls, can expose the country’s financial sector to significant reputational and economic risks.

 It is also important for bank management to lead by example. Ethical leadership and a strong culture of compliance should be embedded throughout the organisation. 

Employees take their cue from senior management, and any perception that commercial objectives take precedence over legal and ethical obligations sends the wrong message. Past incidents involving financial fraud within prominent banks serve as reminders of the importance of robust governance, effective oversight, and uncompromising ethical standards.

 Profits and compliance should go hand in hand. 

The banking sector must recognise that long-term success is built not merely on financial performance but on integrity, accountability, and unwavering adherence to the law.

 Mohamed Zahran