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By: Isuru Parakrama
April 06, Colombo (LNW): National Development Bank PLC (NDB) has revealed that a significant internal fraud within the institution has now been assessed at approximately Rs. 13.2 billion, marking a substantial increase from earlier preliminary estimates.
In a formal disclosure to the Colombo Stock Exchange (CSE), the bank clarified that the irregularities were confined to a specific operational segment rather than being widespread across its entire network. Investigations are currently ongoing, with law enforcement authorities assisting in efforts to trace and recover the misappropriated funds.
Despite the scale of the incident, NDB reassured customers that their deposits and account balances remain fully secure. The bank also emphasised that day-to-day operations have not been disrupted and that it continues to maintain strong capital reserves and sufficient liquidity.
In response, the Central Bank of Sri Lanka (CBSL) has taken precautionary measures to preserve financial stability. These include instructing the bank to defer a planned cash dividend payout and to limit non-essential expenditure, such as expansion projects. However, shareholders will still be eligible for a scrip dividend under the revised arrangement.
The bank has already initiated internal corrective steps, including suspending staff believed to be connected to the fraud, securing sensitive documentation, and reinforcing access controls across affected systems. Management oversight of the implicated division has also been restructured.
Looking ahead, NDB has announced plans to appoint an independent forensic audit team to conduct a thorough review of the incident. The objective will be not only to establish accountability but also to identify weaknesses and introduce stronger safeguards to prevent similar occurrences in the future.
Financial analysts note that while the situation is serious, the swift response by both the bank and regulators may help restore confidence, provided transparency and accountability are maintained throughout the investigation.
