Ravi K questions CBSL oversight over Rs. 13.2 Bn NDB fraud

Colombo, May 6 (Daily Mirror) - MP Ravi Karunanayake has raised serious concerns in Parliament over regulatory failures surrounding the reported Rs. 13.2 billion fraud at NDB Bank, questioning how authorities failed to detect the alleged irregularities over more than three years.

Raising the issue in Parliament, Karunanayake described the matter as one of grave national importance and pointed to concerns over financial system integrity and statutory accountability.

He questioned the role of the Central Bank of Sri Lanka (CBSL), particularly its Bank Supervision Department, in failing to identify or act on the alleged fraud despite its obligations under the law.

The MP further noted that at least two banks had reportedly flagged suspicious transactions to the Financial Intelligence Unit (FIU) around 16 months prior to the fraud being disclosed, and questioned why such reports were neither acknowledged nor acted upon in line with Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements.

He also sought clarification on whether investigations have revealed the involvement of other banks or non-bank financial institutions, and the total exposure across the financial system.

Karunanayake raised concerns over reports of more than 2,700 CEFT transactions, questioning why the national payment infrastructure, including LankaPay, failed to trigger alerts and whether real-time monitoring and reconciliation systems had been properly enforced.

In addition, he requested details on the total value of dividends withheld during the period and the impact on institutional shareholders, including the Employees’ Provident Fund (EPF), Employees’ Trust Fund (ETF) and Sri Lanka Insurance Corporation (SLIC).

The MP also called on the Government to disclose its estimate of total fiscal losses arising from the fraud, including direct and indirect tax losses, as well as any issues related to non-collectability.

He further questioned whether any funds had been transferred abroad or via cryptocurrency, and if so, how such transfers were carried out without exchange control approval and what recovery actions are currently underway.

Karunanayake also sought information on the decline in the bank’s share price and market capitalisation following the disclosure, and the total loss in market value.