February 27, Colombo (LNW): Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe, has called on the country’s banking sector to bolster its efforts in preparation for the upcoming third round of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) evaluation.
Dr. Weerasinghe warned that a negative outcome from this assessment could severely hamper the nation’s economic growth.
The evaluation, coordinated by the Asia/Pacific Group on Money Laundering (APG), is scheduled to begin in March 2026. Dr. Weerasinghe highlighted that, as an active participant in the APG, Sri Lanka must avoid being placed on the regional organisation’s ‘Grey List,’ which could lead to devastating financial consequences, including strained correspondent banking relationships, heightened scrutiny of Sri Lankan clients, higher borrowing costs, and significant reputational damage.
In his address at the Compliance Symposium 2025 in Colombo, Dr. Weerasinghe emphasised that the nation must demonstrate strong compliance with international AML/CFT standards to pass the forthcoming evaluation.
Sri Lanka had previously undergone similar assessments in 2006 and 2014, which resulted in the country being flagged for strategic deficiencies, a situation that, according to the CBSL Governor, led to far-reaching economic and financial repercussions.
To ensure the country’s preparedness, Dr. Weerasinghe announced that renowned international AML expert, Dr. Gordon Hook, will conduct a mock evaluation in March 2025.
This exercise will assess the readiness of relevant stakeholders, with senior officials, including President Anura Kumara Dissanayake, receiving briefings from an APG delegation led by Japan’s Co-Chair next month.
Dr. Weerasinghe also pointed to several initiatives already underway to strengthen Sri Lanka’s AML/CFT framework. These include the completion of an updated National Risk Assessment, due for release in June 2025, and the implementation of the second National Policy on AML/CFT.
Additionally, a dedicated five-member task force was established in December 2023 to oversee these initiatives, whilst the Central Bank has proposed key amendments to crucial legislation such as the Prevention of Money Laundering Act and the Financial Transactions Reporting Act.
The Governor reiterated that non-compliance with AML/CFT regulations would expose the banking sector to significant risks, including the potential for financial losses and increased vulnerability to money laundering activities.
He urged banks to prioritise robust risk management practices and ensure high standards of compliance to protect both the financial system and the nation’s international standing.
