By: Staff Writer
May 19, Colombo (LNW): An internal accounting irregularity at People’s Bank has drawn scrutiny after the institution disclosed that an exchange rate application error within a specific remittance processing system led to certain customers receiving excess payments over a prolonged period from May 2023 to March 2026.
While the bank has described the issue as an operational error that has now been fully corrected, the scale and duration of the discrepancy have raised questions about internal controls and oversight mechanisms within one of the country’s largest state-owned financial institutions.
According to the bank’s disclosure, the misapplication of exchange rates affected only one currency stream within a designated remittance channel. However, the fact that the issue persisted for nearly three years before detection suggests potential weaknesses in reconciliation processes and automated monitoring systems.
The bank has since acknowledged the matter, completed corrective action, and initiated a full internal review alongside strengthened operational safeguards.
The financial implication of the error has been estimated at approximately Rs. 656 million. Importantly, the bank notes that this amount has already been accounted for in its financial statements across the relevant reporting periods, limiting the likelihood of additional shocks to its books. Nevertheless, analysts point out that repeated or prolonged system-level errors can erode confidence in financial reporting accuracy, particularly in large-scale public banking institutions.
The bank has also begun recovery proceedings targeting customers who received excess funds. While recovery efforts are reportedly progressing, such processes are often complex, time-consuming, and sensitive, especially when customers may have already utilized the funds in good faith. This introduces a potential reputational risk, as aggressive recovery actions could strain customer relationships.
Despite the incident, People’s Bank has emphasized that its core banking operations, digital platforms, and customer services remain fully functional and unaffected. With a reported asset base of around Rs. 3.8 trillion, the institution has sought to reassure stakeholders that the incident does not pose a threat to its overall financial stability or deposit safety.
Still, governance observers argue that the case highlights the importance of real-time auditing and stronger automated alerts in high-volume remittance systems. In an increasingly digital banking environment, even isolated technical misconfigurations can translate into significant financial distortions if not detected early.
The matter is currently under review in coordination with relevant regulatory bodies, including the Central Bank of Sri Lanka, signaling that further supervisory findings or recommendations may follow.