Update on National Development Bank PLC Internal Fraud and Forensic Audit
Summary
The Central Bank of Sri Lanka issued an update on National Development Bank PLC following disclosure of internal fraud. CBSL is monitoring the situation daily and has directed NDB to engage an international forensic audit firm to investigate the fraud and assess compliance failures. NDB has also been required to commission an independent third-party review of its internal controls and governance processes.
What changed
CBSL has disclosed ongoing supervisory engagement with NDB PLC following an internal fraud incident. The central bank has directed NDB to engage a leading international forensic audit firm to conduct a comprehensive investigation covering both the fraud itself and any regulatory compliance failures related to controls, oversight, and governance. NDB must also commission an independent third-party review of its policies, procedures, systems, and internal controls.\n\nAffected parties should note that NDB continues to meet all regulatory capital and liquidity requirements. CBSL has confirmed no evidence of loss at other regulated financial institutions and has warned the public against misinformation. Banks and financial institutions should monitor for any further directives from CBSL regarding enhanced supervisory expectations following this incident.
Archived snapshot
Apr 18, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Update on National Development Bank PLC
The Central Bank of Sri Lanka (CBSL) continues to closely monitor on a day-to-day basis developments relating to National Development Bank PLC (NDB) following the disclosure of an internal fraud. CBSL wishes to inform the public that NDB in consultation with CBSL is finalizing arrangements to engage a leading international firm with experts from overseas to conduct a comprehensive forensic audit into the incident. The scope of this audit will apart from matters directly related to the commission of this fraud, also fully address and assess any failures on compliance with regulatory requirements on control, oversight and governance during the period in which the fraudulent transactions took place. The forensic audit is expected to commence shortly, and its progress, including any interim findings as well as the final report, will be submitted directly to CBSL who will directly engage with the auditors to the extent considered necessary during the audit. In parallel, CBSL has directed NDB to take immediate and expeditious measures to strengthen its internal controls and governance processes, with particular focus on addressing identified lapses. NDB has also been required to commission an independent third-party review to assess the adequacy and effectiveness of its policies, procedures, systems, and internal controls. NDB continues to meet all regulatory requirements relating to capital and liquidity. CBSL remains in close and continuous engagement with the Board and management of NDB, as well as other relevant stakeholders, and stands ready to take any further measures necessary to safeguard the interests of depositors and ensure the stability of the financial system. There is no evidence of any other regulated financial institution suffering any loss arising from the incident at NDB and the public are requested not to be misled by any statements to the contrary made in various fora.
Bank Supervision Department 17.04.2026
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