The Central Bank, as the apex institution, cannot stand apart from this. It sits at the centre. Its tools, its supervision, and its leadership are all part of the same equation. Continuity, in such circumstances, is not automatic. It must be justified, and the responsibility lies with the Governor.
Sri Lanka does not lack systems. It has, on paper, some of the most structured layers of financial oversight in the region. At the centre of that architecture sits the Central Bank’s Financial Intelligence Unit, armed with a platform that was meant to change the game. The GoAML system, developed at considerable cost and described as sophisticated, was designed to detect patterns, flag anomalies, and identify suspicious financial behaviour across banks and customers.
That is the theory.
The reality now demands a harder question. If such a system exists, and if it is indeed as robust as advertised, how does a pattern of transactions accumulate over time, sit within accounts, and grow to a reported Rs 13.2 billion, without triggering a meaningful intervention?
This is not a marginal oversight. Even in its earlier stages, when the numbers were significantly smaller, the signals were not insignificant. A figure in the region of Rs 1.4 billion within a suspense structure should, by any reasonable standard, have warranted attention. Suspense accounts are not meant to hold unresolved positions indefinitely. They are, by definition, temporary. When they begin to accumulate, they demand explanation.
The question then shifts from the bank to the system around it.
There are indications that other institutions may have been part of the transaction chain. The role of Sampath Bank has been mentioned in connection with large and unusual transfers. Whether these were formally reported as Suspicious Transactions is not yet clear. What does appear, however, is that even where such flows may have existed, they did not translate into decisive regulatory action. One of the earliest transactions is said to date back to 2023, at a level of around Rs 5 million. On its own, that may not alarm. In sequence, over time, it becomes a pattern.Due to the nature of the disclosure such as it has been, NewsLine has been unable to independently verify this claim as much as it is unable at the moment, to investigate if other banks and financial instituitions have also been implicated. That said, we are doing our own questioning and unlike some of these instituitions, we will share that with the public.
And patterns are precisely what GoAML is designed to detect.
The Central Bank’s supervisory framework is not passive. It is, in many respects, exacting. Board appointments to banks can take months of scrutiny. Fit and proper criteria are enforced.
Optically, the system is vigilant. Which makes the present failure all the more difficult to reconcile. Transactions, it is now suggested, unfolded over a period of at least two years. The aggregation is not trivial. It is, by any measure, record-setting.
So the question presents itself plainly. Did the system fail, or did the response to the system fail?
Was the Monetary Board sighted on these movements at any stage? Were alerts generated and set aside? Or did the technology itself fall short of its promise?
These are not technical questions alone. They are questions of accountability.
Parliament, too, must look inward. Oversight is not confined to regulators. Committees exist precisely to interrogate matters of public consequence. The intervention by Ravi Karunanayake MP suggests that the line of questioning was not entirely absent. But the broader examination appears to have stopped short of where it needed to go. Sensitivity cannot be the shield when public funds, investor confidence, and institutional credibility are at stake.
In jurisdictions such as the United Kingdom, where financial oversight is both political and regulatory, a failure of this magnitude would not pass quietly. The Bank of England and the boards of affected institutions would face immediate and sustained scrutiny. Directors would not be insulated by process. They would be tested by it.
Which brings the matter back to Sri Lanka.
This is not simply about one bank, or one sequence of transactions. It is about the integrity of the system that surrounds it. When losses of this scale occur, and when they do so over time, the expectation is not explanation alone. It is consequence.
There is also a second layer to this. Investors now face the prospect of not receiving dividends from the previous year.
Loss and withholding do not sit comfortably together. It raises a question that goes beyond accounting and enters the territory of trust.
Trust, once lost, is not easily restored.
The Central Bank, as the apex institution, cannot stand adjacent to this. It sits at the centre. Its tools, its supervision, and its leadership are all part of the same equation. Continuity, in such circumstances, is not automatic. It must be justified.
Be that as it may, the core question is no longer whether systems were in place. It is whether those systems were allowed to function as intended. The truth is that oversight without intervention is oversight in name only. And the sting, perhaps, is this. When Rs 13.2 billion can move, sit, and grow without decisive action, the issue is not the absence of tools.
It is the absence of accountability, and it is at that point that the Governor of the Central Bank must confront the question of his own continuity in office.
Integrity is integrity is integrity. In banking when trust is lost it’s as good as a Non performing loan. If people have not performed, they must go. At once.
