Sri Lanka’s National Development Bank (NDB) has officially announced the appointment of KPMG Chartered Accountants as its external auditor for the fiscal year ending December 31, 2026. This decision was communicated in a market filing, which stated, “In accordance with Resolution No. 05, KPMG, Chartered Accountants, has been designated as the Bank’s External Auditor for the financial year ending December 31, 2026. Concurrently, Ernst & Young, Chartered Accountants, will no longer serve in this capacity.”
On April 6, NDB acknowledged the occurrence of a significant fraud amounting to Rs. 13.2 billion within the institution. Despite Ernst & Young serving as the external auditor for the financial year 2025, they failed to detect the fraudulent activities.
In response to the situation, NDB revealed on April 23 that it has engaged Deloitte Touche Tohmatsu India to perform a forensic investigation into the fraud, with the findings to be reported to the Central Bank of Sri Lanka (CBSL).
The transition to a new external auditor was made to align with Direction No. 6.2 (d) (iv) of the Banking Act Directions No. 5 of 2024, which outlines the Central Bank of Sri Lanka’s corporate governance regulations. This directive specifies that the appointment of an external auditor should not exceed a six-year term.
