Abstract：Sri Lanka's Parliament Committee on Public Finance (COPF) has reviewed a final audit that puts the financial impact of fraudulent transactions at National Development Bank (NDB) at Rs. 13,639,664,684, a figure that is about Rs. 400 million higher than the bank's initial disclosure. The committee, chaired by MP Dr. Harsha de Silva, summoned Central Bank of Sri Lanka officials to examine the irregularities and the audit report, according to Newswire.
Sri Lanka's Parliament Committee on Public Finance (COPF) has reviewed a final audit that puts the financial impact of fraudulent transactions at National Development Bank (NDB) at Rs. 13,639,664,684, a figure that is about Rs. 400 million higher than the bank's initial disclosure. The committee, chaired by MP Dr. Harsha de Silva, summoned Central Bank of Sri Lanka officials to examine the irregularities and the audit report, according to Newswire.
The audit covered the period from 1 April 2016 to 31 March 2026. The final figure is also Rs. 60 million above the amount NDB disclosed on 26 June, which was based on an interim audit report dated 22 June. The committee's review was reported on 8 October 2026.
ContentsHow the Losses Were Disclosed Over Time
NDB first put the figure at Rs. 13.2 billion in a disclosure on 6 April 2026. The final audit total of Rs. 13,639,664,684 is roughly Rs. 400 million above that. A later disclosure dated 29 September 2026 broke the impact into three periods: about Rs. 1.5 billion before 1 January 2025, Rs. 9.6 billion during 2025, and Rs. 2.5 billion in the first quarter of 2026.
The final audit confirmed that no customer accounts were affected by the fraud. That point had also been stated in earlier disclosures, and the committee repeated it in its account of the review.
Governance and Control Weaknesses Identified
The audit identified governance failures in several areas. These included the processing of Common Electronic Fund Transfer (CEFT) transactions, which are interbank electronic transfers routed through a shared national switch; user activities within the bank's core banking system, the software that records deposits, loans and transactions; and the management of user credentials and access information.
The report also flagged weaknesses in transaction monitoring, daily account reconciliation, financial compliance, internal auditing, branch network management and operational risk management. The committee examined findings from investigations by the Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAAMB) and Deloitte Touche Tohmatsu India LLP. Particular attention was given to the failure of external auditors to detect irregularities in the bank's financial statements, and to the accountability of senior management for corporate governance and risk management.
Public Funds and Fraud Monitoring
Lawmakers raised concerns about the potential impact on public funds, noting that a significant proportion of NDB Bank shares is held by institutions representing public and state funds. The committee's inquiry considered both the financial impact of the fraud and the institutional failures identified in the audit.
The committee also reviewed progress by LankaPay, the national payment network operator, in developing a centralized fraud monitoring system. It emphasized the importance of strengthening fraud detection mechanisms within individual banks so that transactions conducted through their own systems can be scrutinized more effectively.
The final audit report recommended comprehensive improvements to NDB Bank's internal controls, governance structures and operational procedures to prevent similar incidents. The meeting was attended by Deputy Ministers Chathuranga Abeysinghe, Dr. Kaushalya Ariyaratne and Nishantha Jayaweera, along with several members of Parliament.
What the Sources Do Not Say
The supplied materials do not say whether any individuals have been charged, arrested or prosecuted, nor do they give a breakdown of the Rs. 13.6 billion by transaction type, branch or counterparty. There is no statement from NDB Bank itself in the materials, only the parliamentary committee's account, and no detail on how the fraud was originally discovered or when the bank first detected it. The materials also do not explain how the loss is reflected in the bank's financial statements, whether provisions have been made, or what regulatory follow-up, if any, is planned for the bank or its auditors. No timeline has been given for implementing the recommended control improvements.
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