By: Staff Writer

May 11, Colombo (LNW): The unfolding Rs. 13.2 billion fraud inside NDB Bank has become one of the most serious financial scandals to hit Sri Lanka’s banking sector in recent years, exposing deep weaknesses in governance, internal controls, and regulatory oversight.

The fraud, according to ongoing investigations, was allegedly orchestrated within the bank’s Department of Payments and Settlements, where insiders are suspected of bypassing monitoring systems and diverting funds through nearly 64 fraudulent accounts before converting portions into cryptocurrency through global platforms including Binance. Authorities believe the transactions were deliberately carried out during weekends to avoid immediate detection by automated monitoring systems.

Sri Lanka’s Criminal Investigation Department has already arrested and remanded several suspects, including Lahiru Harshana Kodikara, identified in court filings as an assistant manager attached to the bank’s head office payments division. His brother, Pathum Kothalawala, along with bank employee Kosala Tharanga and Mohammed Inhamul Hashan, are also among the principal suspects facing formal charges. Investigators have recorded statements from at least 16 individuals, while officials warn the number of implicated persons could eventually exceed 60.

The scandal has now escalated into an international investigation after Sri Lankan authorities sought assistance from Interpol experts to trace approximately Rs. 380 million allegedly converted into cryptocurrency and transferred through offshore channels. Court proceedings before the Colombo Chief Magistrate’s Court remain active, with additional hearings expected throughout May.

Amid mounting public pressure, the Central Bank of Sri Lanka appointed Deloitte Touche Tohmatsu India LLP to conduct an independent forensic audit into the fraud and investigate failures in governance and oversight. However, critics argue the move does not go far enough.

Opposition parliamentarian Ravi Karunanayake has questioned why the existing NDB board remains in office while the very audit examining the fraud is being conducted under their watch. He has called for the appointment of an independent competent authority under the Ministry of Finance and urged Sri Lanka to seek assistance from international financial regulators such as the Bank of England and the Monetary Authority of Singapore.

Economic analysts say the Central Bank is deliberately avoiding drastic intervention to prevent panic within the banking system. Officials maintain that NDB still satisfies all regulatory capital and liquidity requirements despite the massive financial loss. Suspending the board, they argue, could trigger depositor panic and potentially destabilize the wider banking sector.

Instead, the regulator has adopted a middle-ground strategy by suspending cash dividends, freezing branch expansions, and restricting discretionary spending while allowing the current board to remain operational under close supervision.

Meanwhile, critics continue to accuse the Central Bank of failing to act on early warning signs. Reports presented before the Committee on Public Finance claim suspicious transactions linked to the fraud had been flagged by other commercial banks nearly 16 months before the scandal surfaced publicly, raising difficult questions over regulatory accountability and systemic oversight failures within Sri Lanka’s financial sector.

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Sri Lanka plans to become Japan’s Next Strategic Investment Gateway

Sri Lanka is attempting to reposition itself as a strategic economic partner for Japan, but analysts warn that attracting major Japanese corporations will require far more than trade concessions and diplomatic goodwill.

At a recent business forum hosted by the Sri Lanka Japan Business Council, policymakers and industry leaders outlined both the promise and the obstacles facing Sri Lanka’s efforts to secure larger Japanese investments and expand exports into one of Asia’s most demanding markets.

At the centre of discussions was the proposed Sri Lanka-Japan-India economic corridor, a regional integration initiative that officials believe could transform Sri Lanka into a manufacturing and logistics hub connecting South Asia with East Asian supply chains.

Japanese Ambassador Akio Isomata argued that rising geopolitical uncertainty and long-term energy security concerns are forcing Asian economies to rethink trade routes, industrial partnerships, and production networks. He warned that global instability may continue for decades, making regional cooperation increasingly important for economic resilience.

Sri Lanka hopes to use this shifting environment to its advantage by presenting itself as a gateway linking Japanese investment with India’s massive consumer market. Officials believe the island’s strategic location in the Indian Ocean could allow Japanese firms to establish regional production and export operations while benefiting from Sri Lanka’s trade access and proximity to India.

However, business leaders admitted that Sri Lanka is still far from becoming a preferred destination for Japanese corporate giants.

Export Development Board Chairman Mangala Wijesinghe acknowledged that the country’s export profile remains limited largely to industrial goods and agricultural products with low value addition. He said Sri Lanka lacks sufficient numbers of export-ready small and medium-sized enterprises capable of complying with Japan’s strict technical and operational standards.

Industry experts noted that Japanese companies prioritise reliability, long-term consistency, and disciplined production systems when selecting investment destinations. Sri Lanka’s recurring economic instability, logistical inefficiencies, and uneven industrial standards continue to raise concerns among foreign investors.

Consultant Sunil Wijesinha stressed that Japanese buyers evaluate every aspect of operations, from factory cleanliness to workflow management. According to him, many Sri Lankan exporters underestimate how strongly Japanese corporations value operational precision and organisational culture.

Meanwhile, Rohan Pallewatte said Sri Lankan businesses frequently fail because they approach Japan expecting rapid transactions instead of long-term relationship building. He noted that securing contracts in Japan can take years of sustained engagement, patience, and repeated visits.

Despite these barriers, officials remain optimistic about sectors with strong growth potential. Value-added Ceylon cinnamon products, processed foods, fintech services, ICT exports, and mineral-based industries were identified as areas where Sri Lanka could establish a stronger foothold.

By: Staff Writer

May 11, Colombo (LNW): Sri Lanka’s apparel and textile sector entered 2026 under growing economic strain, with first-quarter export earnings recording a sharp decline as weak overseas demand, rising production expenses and increasing trade uncertainties eroded momentum in one of the country’s most vital industries.

Fresh industry data shows apparel export revenue fell by more than 8 percent during the first three months of 2026 compared with the same period last year, underscoring the mounting challenges facing a sector that contributes more than 40 percent of Sri Lanka’s merchandise exports.

Between January and March, apparel and textile earnings dropped to 1.27 billion dollars from 1.38 billion dollars in 2025. February and March recorded the steepest contractions, both exceeding 11 percent year-on-year declines.

January earnings stood at 425.44 million dollars, down 2.66 percent from a year earlier. February revenue dropped to 361.2 million dollars from nearly 408 million dollars, while March earnings fell to 440.32 million dollars compared with approximately 496 million dollars in 2025.

The downturn has spread across Sri Lanka’s key export destinations. The United States market, historically the industry’s largest buyer, registered monthly declines ranging from 6.37 percent to 12.78 percent amid cautious consumer spending and retailer inventory adjustments.

European Union demand also weakened considerably, with exports to the bloc declining 7.28 percent during the quarter. February alone witnessed a dramatic 19.48 percent slump in EU orders. Meanwhile, the United Kingdom market, which initially showed marginal resilience in January, ultimately recorded an overall quarterly decline of 7.93 percent.

Industry observers warn that geopolitical tensions in the Middle East are further disrupting supply chains and creating uncertainty in shipping and logistics operations.

Manufacturers are also battling escalating operational expenses. High electricity tariffs and fuel prices are estimated to be adding nearly 3 million dollars every month to factory operating costs, squeezing profit margins and weakening competitiveness against regional rivals.

Concerns are additionally mounting over renewed competition from South Asian manufacturing hubs and the ongoing United States “Section 301 Investigation” into global trade practices, developments exporters fear could reshape future sourcing patterns.

Amid these pressures, Sri Lanka is attempting to reposition its apparel industry through sustainability and technology-driven transformation strategies.

On Friday, a 7.56 million euro initiative funded by the European Union was launched under the Accelerating Industries’ Climate Response in Sri Lanka project to formulate a national Net-Zero Roadmap for the textile and apparel sector. The programme is being implemented by the United Nations Industrial Development Organization in partnership with the ministries overseeing industry, environment and energy.

The roadmap seeks to help manufacturers reduce emissions, improve energy efficiency and comply with stricter sustainability requirements increasingly demanded by global apparel brands and European buyers.

The initiative also coincides with the introduction of the United Kingdom’s Developing Countries Trading Scheme, which took effect on January 1, 2026, offering Sri Lanka liberalised rules of origin and duty-free market access expected to improve long-term competitiveness.

Despite the weak first quarter, the Export Development Board continues to project 5.5 billion dollars in annual apparel revenue for 2026, relying on what officials describe as a major transition toward higher-value and technology-integrated apparel production capable of sustaining Sri Lanka’s reputation as an ethical sourcing destination.

By: Staff Writer

May 11, Colombo (LNW): Sri Lanka’s economic recovery is entering a delicate phase as the Central Bank’s unexpected return to dollar selling fuels fears of renewed currency instability and mounting pressure on the country’s external finances.

For the first time in 22 months, the Central Bank became a net seller of U.S. dollars in April 2026, officially recording net sales of US$13 million. The move has sparked fresh debate among economists and financial analysts over whether authorities are struggling to contain the rupee’s slide toward Rs.320 against the U.S. dollar.

The development marks a sharp shift from the Central Bank’s recent strategy of aggressively purchasing foreign currency to rebuild reserves under the International Monetary Fund-supported reform programme. Since the financial crisis and sovereign default, reserve accumulation has been viewed as essential for restoring international confidence and stabilizing the country’s vulnerable economy.

Although the Bank still recorded net dollar purchases of US$697.2 million during the first four months of 2026, market participants say April’s intervention reflects growing anxiety over accelerating exchange rate pressure and tightening external liquidity conditions.

Sri Lanka’s gross foreign reserves dropped to US$6.58 billion in April from US$7.02 billion in March, representing a significant monthly decline. The reserve erosion has coincided with a rapid weakening of the rupee, which has depreciated by more than one percent during the period ending May 8.

Analysts believe the combination of reserve losses and currency weakness could threaten the country’s still-fragile economic stabilization process. A weaker rupee increases import costs and creates inflationary pressure across multiple sectors, particularly energy, transport, food, and healthcare.

Businesses dependent on imported raw materials are already facing rising operational expenses, while consumers remain vulnerable to another wave of price increases after enduring years of inflation and austerity measures linked to Sri Lanka’s debt restructuring programme.

The Central Bank’s latest intervention may have been intended to smooth excessive volatility in currency markets rather than artificially defend a fixed exchange rate. However, economists caution that continued dollar selling can become risky if reserves continue declining without sufficient foreign inflows from exports, remittances, tourism, or investments.

Sri Lanka is also navigating a complex debt repayment landscape. While repayments to bilateral and multilateral lenders have resumed, the country has not yet restarted payments to sovereign bondholders. Those obligations are expected to resume from April 2028, placing added importance on reserve preservation over the next two years.

Financial experts argue that premature reserve depletion could weaken Sri Lanka’s ability to meet future debt obligations and reduce confidence among international lenders and investors. Some analysts also fear that excessive currency intervention may recreate vulnerabilities that contributed to the country’s earlier balance-of-payments crisis.

Despite signs of economic improvement, including moderate growth and easing inflation compared with crisis years, recovery remains highly sensitive to external shocks and policy missteps. The latest reserve decline and renewed dollar sales underscore the continuing fragility of Sri Lanka’s financial position as policymakers attempt to balance exchange rate stability, debt repayment commitments, and economic recovery.

By: Staff Writer

May 10, Colombo (LNW): Sri Lanka’s decision to increase electricity tariffs by 18 percent for higher-end consumers has sparked widespread political criticism, with opposition parties accusing authorities of masking operational failures and inflating financial losses linked to controversial coal imports and thermal power inefficiencies.

The tariff adjustment approved by the Public Utilities Commission of Sri Lanka takes effect from May 11 and targets consumers using more than 180 kilowatt-hours monthly. The increase follows another major revision introduced only weeks earlier, intensifying concerns over the country’s escalating energy costs.

The latest revision comes amid a growing dispute surrounding imported coal used for thermal electricity generation. Critics allege that lower-quality coal shipments significantly reduced operational efficiency at power plants, increasing fuel consumption while lowering energy output.

Opposition politicians argue that the resulting financial losses have been incorporated into electricity pricing formulas despite assurances from regulators that consumers would not bear the burden of procurement failures.

The controversy has already produced major political fallout, including the resignation of the Energy Minister last month following mounting criticism over fuel procurement decisions and energy sector management.

Regulators insist, however, that the majority of Sri Lankan households will not experience higher electricity bills. According to the Commission, approximately 95 percent of consumers fall below the high-consumption threshold affected by the latest revision.

Authorities also announced a government subsidy package worth approximately Rs. 18 billion aimed at cushioning the impact on lower and middle-income households while protecting vulnerable consumers from rising energy prices.

The tariff revision includes reduced charges for low-consumption domestic users, particularly within the first 60-unit consumption blocks. Religious institutions and charitable organizations will also receive lower tariffs to support their social welfare activities.

The Commission stated that it had directed the National System Operator not to transfer additional costs caused by coal shortages directly onto consumers. Instead, those expenses must be absorbed and settled separately with the Electricity Generating Company under regulatory supervision.

At the same time, authorities unveiled a new tariff framework for electric vehicle charging stations, introducing separate rates for off-peak, daytime, and peak usage periods as part of efforts to improve national grid management and encourage cleaner energy adoption.

 Small and medium-sized enterprises and the tourism sector will also see revised demand charges designed to improve competitiveness and ease pressure on businesses already struggling with rising operational costs.

Despite these relief measures, critics continue questioning the transparency of the pricing process and the accuracy of operational cost calculations submitted to regulators.

Energy analysts warn that the recurring tariff hikes expose deeper structural weaknesses in Sri Lanka’s electricity sector, particularly the heavy dependence on imported fossil fuels and inconsistent procurement practices.

They caution that unless governance reforms and stronger accountability mechanisms are introduced, public confidence in the country’s energy management system may continue deteriorating while consumers remain vulnerable to future pricing shocks.

By: Staff Writer

May 10, Colombo (LNW): Sri Lanka’s tourism industry is entering a new phase of transformation as leading sector stakeholders increasingly focus on developing skilled professionals capable of delivering world-class visitor experiences rather than relying solely on the country’s natural attractions.

This renewed emphasis on human capital development was highlighted this week with the launch of the “Certificate Course in Inbound Travel and Tourism,” a collaborative initiative between Jetwing Travels and Colombo Academy of Hospitality Management (CAHM), operating under Australia’s William Angliss Institute.

The four-week programme, which commenced in Colombo on May 7, aims to equip tourism professionals with practical and modern industry knowledge at a time when global tourism trends are rapidly evolving and competition among destinations continues to intensify.

The course brings together selected associates from Jetwing Travels and CAHM students in a blended learning environment combining classroom-based theory with hands-on industry exposure.

Participants will receive training in a wide range of tourism disciplines including eco and wildlife tourism, experiential tourism, adventure tourism, MICE tourism, sustainability, and digital marketing   all areas increasingly viewed as critical for maintaining Sri Lanka’s competitiveness in the global tourism market.

Speaking at the opening ceremony, Hiran Cooray, Chairman of Jetwing Symphony PLC, stressed that Sri Lanka could no longer rely purely on its natural advantages to attract visitors.

“Tourism has always been one of the natural strengths of Sri Lanka,” Cooray said. “But advantage alone is never permanent. Industries remain competitive only when they continue to invest in knowledge, capability and standards. What we are building through this programme is not simply training, it is a stronger foundation for the industry itself.”

Industry analysts note that Sri Lanka’s tourism sector is increasingly being shaped by changing traveler expectations, particularly in areas such as sustainability, authentic experiences, and digital engagement.

Recognizing these trends, the programme places significant emphasis on digital marketing and destination storytelling, areas now considered essential for attracting international travelers in an increasingly online-driven marketplace.

Sustainability also forms a core component of the curriculum as the tourism industry worldwide adapts to growing environmental and social concerns among travelers.

Shiromal Cooray, Chairperson and Managing Director of Jetwing Travels, described the initiative as a long-term investment in the future of Sri Lanka’s tourism industry.

“The future of tourism industry is not only about destinations but more importantly about the people who represent,” she stated during the launch event.

Unlike conventional classroom-based programmes, the course will be delivered largely by active tourism industry professionals, allowing participants to gain firsthand exposure to the realities of destination management and evolving international tourism demands.

Organizers also announced plans to make the programme an annual initiative with participants selected through a merit-based process evaluating communication skills, professionalism, analytical thinking, and long-term career potential.

Tourism industry observers say the initiative reflects a broader shift within Sri Lanka’s tourism sector toward building a resilient and future-ready workforce capable of sustaining the country’s position in the highly competitive global travel industry.