Ravi Karunanayake Questions How Rs. 13.2 Billion Grew Inside NDB Systems Without Stronger Regulatory Intervention
Sri Lanka’s banking supervision architecture itself came under unusually sharp scrutiny at Parliament’s Committee on Public Finance (COPF) as former Finance Minister Ravi Karunanayake openly questioned the adequacy of the Central Bank’s supervisory response to the now infamous Rs. 13.2 billion fraud exposure disclosed by NDB Bank.
The exchanges before the Committee chaired by the economist, Dr.Harsha de Silva reflected growing unease among members over how extraordinarily large balances allegedly remained sitting inside what was described as a “suspense account” linked to pending CEFT transactions while the exposure itself continued expanding quarter after quarter.
According to discussions before the Committee, the Banking Supervision Unit of the Central Bank had reportedly raised queries regarding the unusually large balances. However, members appeared disturbed by indications that supervisory authorities largely accepted explanations provided by the bank itself without significantly deeper escalation despite the continued growth of the figure over time.
That figure, according to disclosures and parliamentary discussion, reportedly expanded from approximately Rs. 1.4 billion before ultimately reaching approximately Rs. 13.2 billion – nearly 35 times larger than the initial Rs. 380 million disclosure first communicated to the Colombo Stock Exchange on April 2nd 2026 before the dramatically revised disclosure issued days later on April 6th.
And that was the point that appeared to trouble COPF members most profoundly.
Not merely that a fraud allegedly occurred.
But that such unusually large balances and anomalies appear to have remained within the banking system for several months without supervisory escalation suff iciently strong to detect, isolate or aggressively interrogate the exposure before it reached catastrophic proportions.
Karunanayake reportedly questioned how banks paying approximately Rs. 50 million annually toward regulatory supervision could still find themselves operating within a framework where such anomalies allegedly continued growing without stronger intervention from regulators.
He also raised concerns regarding governance continuity inside banks themselves, specifically questioning how directors could remain in identical positions for periods extending up to six years without stronger rotation mechanisms functioning as institutional safety devices.
The issue of reporting frequency also emerged prominently during the proceedings. Members noted concerns that reporting obligations reportedly operated largely on monthly cycles rather than real-time or daily escalation mechanisms capable of identifying fast-moving anomalies inside payment systems.
That observation became particularly significant when MP Chathuranga Abeysinghe reportedly emphasized that even if regulators could not immediately identify underlying fraud, supervisory systems should still have been capable of identifying abnormal patterns, inconsistencies or unusually escalating exposures requiring intervention.
In essence, the criticism now emerging from COPF appears broader than the conduct of a single bank.
It increasingly targets the architecture of banking supervision itself.
Because the uncomfortable question now circulating both inside Parliament and beyond is no longer simply how the alleged fraud occurred.
It is how the surrounding systems – internal audit, governance controls, Banking Supervision, reporting structures and regulatory escalation frameworks – all appear to have struggled simultaneously to identify what eventually became a Rs. 13.2 billion exposure sitting visibly within the financial system itself.
And perhaps that is why the atmosphere surrounding the COPF discussions appeared unusually tense.
For if the issue was merely one rogue insider or one manipulated process, the story might end with criminal investigation.
But if Parliament increasingly concludes that the larger failure involved the inability of multiple layers of oversight to recognize escalating anomalies in real time, then the issue evolves into something much larger:
a question about the robustness of Sri Lanka’s financial supervision framework itself.
