Call for an International Forensic Investigation into NDB Fraud

Karunanayake Outlines Five Key Concerns to President in Letter

Parliamentarian Ravi Karunanayake has submitted a special five-point letter to President Anura Kumara Dissanayake regarding the serious fraud reported in connection with the National Development Bank (NDB). In his letter, he asserts that the Central Bank of Sri Lanka, as the primary regulator, has failed to ensure compliance with policy regulations and to maintain effective risk monitoring mechanisms.

The MP further points out that these fraudulent transactions have resulted in a loss of tax revenue owed to the government, emphasizing that the losses should be promptly calculated and recovered from those responsible.

Although the Central Bank has decided to appoint an institution to conduct an investigation, Karunanayake raises concerns over its independence. He therefore urges the President to initiate an internationally recognized, independent forensic investigation into the alleged fraud.

Through his letter, which outlines five key points, Karunanayake calls on President Dissanayake, in his capacity as Minister of Finance, to take the following actions:

1. The appointment of an internationally recognized, independent forensic audit team with no personal interests or bias.

2. Consideration of obtaining assistance from the following international institutions to support the investigation: Reserve Bank of India (RBI), Bank of Japan (BOJ), Bank of England (BoE), Monetary Authority of Singapore (MAS), and Bank Negara Malaysia.

3. Expanding the scope of the investigation to examine regulatory lapses by the Central Bank, weaknesses in technical systems, and failures in capital markets oversight.

4. A review of the accountability framework under the Central Bank of Sri Lanka Act No. 16 of 2023, particularly noting that the lack of fundamental banking sector experience among members of bank audit committees raises concerns about the effectiveness of the Central Bank’s “Fit and Proper” criterion.

5. Officially informing the International Monetary Fund (IMF) of the decisions taken in this regard, as a step by the government to strengthen governance in the financial sector.