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NDB’s Rs.13 Billion Fraud Exposes Deep Governance Failures

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By: Staff Writer

June 14, Colombo (LNW): The discovery of a staggering Rs. 13.2 billion internal fraud at National Development Bank PLC has evolved into one of Sri Lanka’s most significant banking scandals, exposing alarming weaknesses in internal controls, supervisory oversight, and corporate governance practices.

Investigations indicate that the fraud was not the result of a single isolated incident but a carefully orchestrated scheme that allegedly operated undetected for nearly a decade. At the center of the scandal is a relatively junior employee working within the reconciliation process, who is accused of exploiting weaknesses in transaction monitoring systems and manipulating interbank settlement accounts to conceal unauthorized transfers.

The scale of the fraud has shocked financial markets and policymakers alike. The alleged perpetrator reportedly utilized technical loopholes linked to LankaPay CEFT suspense accounts, enabling the concealment of missing funds through overlapping settlement cycles. What makes the case particularly troubling is that billions of rupees were allegedly siphoned from the banking system without triggering effective internal alarms for years.

The fallout has already forced NDB to restate its financial statements and absorb substantial losses. The bank is estimated to have recorded a net loss of approximately Rs. 4 billion during the first quarter of 2026 after fully provisioning for the fraud. While management maintains that the institution remains financially stable and adequately capitalized, the reputational damage could take far longer to repair.

The ongoing forensic audit has widened concerns regarding institutional accountability. Deloitte Touche Tohmatsu India LLP has been tasked with conducting an extensive review covering a ten-year period, suggesting regulators suspect the problem may be deeply embedded within operational structures rather than being confined to a single employee’s actions.

Meanwhile, the Criminal Investigation Department has treated the matter as a potential insider conspiracy rather than a lone-wolf operation. Several senior and operational-level employees have been arrested, while courts have refused bail applications amid fears of witness interference and manipulation of transaction records. Investigators have reportedly traced significant portions of the missing funds to personal accounts linked to suspects and associated third parties.

Beyond the immediate financial losses, the scandal raises broader questions about risk management standards across Sri Lanka’s banking sector. If a low-level employee was capable of exploiting systemic weaknesses for nearly ten years, concerns naturally emerge regarding the effectiveness of audit functions, management oversight, compliance departments, and board-level governance.

As forensic investigators work toward their final report, the NDB scandal has become more than a case of fraud. It now represents a critical test of Sri Lanka’s banking governance framework. The findings could reshape regulatory expectations, strengthen operational controls, and determine whether financial institutions have truly learned the lessons from one of the country’s most consequential banking failures.

Seat Belt Enforcement on Expressways to Tighten After Compliance Deadline

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June 14, Colombo (LNW): Motorists and passengers travelling on Sri Lanka’s expressways will face stricter enforcement measures from later this month as authorities move to strengthen compliance with seat belt regulations.

The National Council for Road Safety has announced that legal action will be initiated against individuals found travelling without seat belts, regardless of whether they are seated in the front or rear of a vehicle. The move forms part of a broader campaign aimed at reducing injuries and fatalities resulting from road traffic accidents.

Council Chairman Manjula Kularatne said vehicle owners have been given a grace period to equip rear passenger seats with approved seat belts, but that concession is due to expire on 19 June. Following the deadline, enforcement officers will begin conducting more rigorous inspections on expressways and other key routes.

Officials emphasised that responsibility for compliance rests not only with drivers but also with passengers, noting that seat belts remain one of the most effective safety features in reducing the severity of injuries during collisions.

Road safety authorities have urged motorists to ensure that all occupants are properly restrained before beginning a journey, particularly when travelling at high speeds on expressways. Awareness campaigns and inspections are also expected to be intensified in the coming weeks to encourage greater public adherence to safety regulations.

Dengue Alert Intensifies as Mosquito Breeding Levels Rise Across Sri Lanka

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June 14, Colombo (LNW): Health officials have sounded the alarm over a significant increase in mosquito breeding activity across Sri Lanka, warning that the trend could accelerate the spread of dengue in the coming weeks if preventive measures are not taken urgently.

According to data gathered by the National Dengue Control Unit (NDCU), mosquito larvae indices have risen noticeably during recent months, reflecting a growing number of breeding sites in residential areas, schools and public institutions. Entomology experts attribute the increase to favourable weather conditions, poor waste management and the accumulation of stagnant water in many communities.

Officials reported that the national mosquito larvae density climbed to approximately 12 per cent in May, compared with around 8 per cent recorded a month earlier. The increase has been particularly evident in homes, where breeding site detections rose sharply during the same period.

Schools have emerged as a major area of concern, with inspections revealing a dramatic rise in mosquito breeding locations. Health authorities said the proportion of school premises found to contain larvae increased substantially within a single month, highlighting the need for stronger monitoring and clean-up campaigns in educational institutions.

Elevated mosquito breeding levels have also been detected in government offices, religious establishments and industrial zones. Factory surroundings recorded some of the highest infestation rates, while places of worship and public facilities also showed worrying trends.

The NDCU has called on residents, community organisations and institutions to conduct regular inspections of their premises and eliminate any containers or locations capable of collecting water. Officials stressed that even small amounts of stagnant water can become breeding grounds for dengue-carrying mosquitoes.

Meanwhile, health authorities have urged members of the public to seek immediate medical attention if they develop symptoms such as fever, severe headaches, body aches or persistent fatigue. Early diagnosis and treatment remain critical in preventing complications associated with the disease.

NDCU Director Dr Kapila Kannangara warned that dengue transmission is currently increasing in several parts of the country and emphasised the importance of following medical advice without delay when symptoms appear.

So far this year, more than 40,000 dengue infections have been reported nationwide, while 23 people, including four children, have lost their lives to the disease. Health officials have identified dozens of Medical Officer of Health divisions across multiple districts as high-risk areas, prompting intensified surveillance and vector-control operations.

Authorities are expected to expand awareness campaigns and inspection programmes in the coming weeks as part of a broader effort to curb the spread of dengue and reduce the risk of further outbreaks.

O/L Results Expected Within Days as Education Ministry Urges Schools to Stay on Schedule

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June 14, Colombo (LNW): Students awaiting the outcome of the 2025 General Certificate of Education (Ordinary Level) Examination are expected to receive their results within the coming days, according to education authorities.

Deputy Minister of Education Dr Madhura Seneviratne stated that the final administrative procedures related to candidate records and result processing are currently being completed, paving the way for the official release of examination results next week.

More than 450,000 candidates sat the examination, which was conducted over a ten-day period from 17 to 26 February 2026 at examination centres across the country. Education officials noted that the marking and verification processes have now been largely finalised, with only final data checks remaining before publication.

Meanwhile, the Ministry of Education has issued fresh instructions to schools regarding preparations for the 2026 Ordinary Level and Advanced Level examinations. In a circular addressed to school principals and senior education administrators, Ministry Secretary Nalaka Kaluwewa stressed the importance of ensuring that teaching activities remain aligned with the national academic timetable.

The Ministry has directed schools experiencing delays in syllabus coverage to implement corrective measures without delay. These may include revised teaching schedules, additional classroom sessions and other academic interventions aimed at ensuring students complete the required coursework before the examinations.

Officials also reiterated that both the 2026 O/L and A/L examinations will be conducted according to the dates set out in the national examination calendar, with no changes currently anticipated.

Indian Naval Vessel Completes Colombo Visit, Reinforcing Maritime Ties

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June 14, Colombo (LNW): An Indian Navy patrol vessel concluded a goodwill and logistics visit to Sri Lanka over the weekend, marking another step in the growing maritime cooperation between the two neighbouring countries.

The ship, INS Sharda, departed Colombo on Saturday (13) after spending several days in the island nation, during which a range of professional and cultural engagements were conducted. Prior to its departure, the vessel was accorded a ceremonial send-off by the Sri Lanka Navy at the Port of Colombo, reflecting the longstanding relationship between the two naval forces.

During the visit, senior officers from INS Sharda met with high-ranking Sri Lanka Navy officials to discuss areas of shared interest, including regional maritime security, operational cooperation and opportunities for future engagement. The meetings underscored the importance both countries place on maintaining close naval relations in the Indian Ocean region.

The visit also featured a number of activities designed to strengthen professional bonds and foster goodwill among personnel. Sailors from both navies participated in friendly sporting events and wellness programmes, providing opportunities for interaction beyond formal military engagements.

As part of the exchange, Sri Lankan naval personnel were invited aboard the visiting vessel to gain insight into its capabilities and operations. Meanwhile, members of the Indian crew explored several historic and cultural landmarks across Sri Lanka, giving them an opportunity to experience the island’s rich heritage and traditions.

Government Eyes Major Infrastructure Push with Increased Capital Spending

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June 14, Colombo (LNW): The Government is preparing to significantly expand its investment in public infrastructure next year, with plans to earmark nearly Rs. 2 trillion for capital development projects across the country.

Speaking at the launch of a road development initiative in Kalutara on Saturday, Health and Mass Media Minister Dr Nalinda Jayatissa said the proposed allocation reflects the administration’s commitment to accelerating economic growth through large-scale infrastructure improvements.

According to the Minister, capital expenditure for 2026 has already reached approximately Rs. 1.35 trillion, with further increases expected in the forthcoming budget as the Government seeks to strengthen transport networks, public services and regional development.

The remarks were made during the commencement of work on 14 newly carpeted roads in the Kalutara District under the Integrated Road Investment Programme (iRoad), one of Sri Lanka’s flagship rural connectivity projects. The scheme is being implemented with financial assistance from the Asian Development Bank alongside Government funding.

Dr Jayatissa noted that additional projects valued at around Rs. 550 million have been approved this year to improve rural road infrastructure throughout the district under both provincial and national development programmes. A further Rs. 100 million has been allocated for the construction and rehabilitation of bridges and culverts, while total spending on roads and related infrastructure in Kalutara is expected to approach Rs. 2 billion.

The Minister also highlighted what he described as encouraging economic indicators, pointing to a substantial rise in state revenue over the past two years. Government income reportedly reached Rs. 5.5 trillion last year, providing greater fiscal space for development spending and public investment.

He further stated that Sri Lanka achieved record export earnings during the previous year, while foreign worker remittances continued to grow steadily. The tourism industry has also maintained its recovery momentum, contributing to improved economic confidence and supporting the country’s broader development agenda.

Illegal Electric Fence Claims Lives of Elephant and Calf in Okkampitiya

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June 14, Colombo (LNW): A tragic wildlife incident in the Okkampitiya area has resulted in the deaths of two wild elephants, including a young calf, after they reportedly came into contact with an unauthorised electric fence erected to protect agricultural land.

The incident occurred in the Jothiamuna locality of Maligawila, where the animals are believed to have wandered into a cultivated property during their search for food. Wildlife officials said the elephants were fatally electrocuted after becoming entangled in a live electrical wire that had been illegally connected around the farmland.

The land had been used to cultivate a variety of crops, including sugarcane, bananas, papaya and paddy, with the fence allegedly installed to deter elephants and other wild animals from entering the fields. Investigators suspect the powerful current running through the fence caused the deaths instantly.

Among the animals killed was a fully grown elephant estimated to be around 20 years old, as well as a calf believed to be approximately one year of age. The deaths have sparked renewed concern among conservationists over the continued use of unlawful electric fencing in areas bordering wildlife habitats.

Authorities have taken into custody an individual responsible for overseeing the property, while efforts are under way to locate the owner of the land, who is reported to have left the area following the incident.

Officers from the Department of Wildlife Conservation, assisted by Okkampitiya Police, have launched a joint investigation. Officials say legal action will be pursued against those found responsible, while also highlighting the urgent need for safer and lawful measures to mitigate human-elephant conflict in farming communities.

Monthly Financial Assistance Scheme Launched for Differently-Abled University Students

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June 14, Colombo (LNW): Differently-abled students enrolled at state universities across Sri Lanka have begun receiving a new monthly financial allowance, marking a significant step towards improving access to higher education and reducing economic barriers.

The programme, introduced through the University Grants Commission (UGC), provides eligible students with a monthly payment of Rs. 5,000. Authorities have also commenced the release of backdated payments covering the period from January 2026, when the scheme officially came into effect.

According to UGC officials, the initiative was designed to offer additional support to undergraduates who often face higher educational and living expenses as a result of their physical difficulties. The allowance is expected to assist with costs related to transport, learning materials, assistive devices and other essential needs associated with university life.

Professor Wasantha Liyanage, Vice Chairman of the UGC, stated that the payment process is now under way and that qualifying students will receive both their regular monthly allowance and any outstanding arrears accumulated since the beginning of the year.

The UGC expects the scheme to strengthen student welfare and contribute to a more accessible and equitable learning environment across Sri Lanka’s universities.

Wanted Crime Suspects Returned to Sri Lanka Following UAE Deportation

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June 14, Colombo (LNW): Two Sri Lankan men allegedly linked to organised criminal networks and narcotics trafficking have been deported from the United Arab Emirates and are now in the custody of local authorities following their arrival in the country late on Friday (12).

The suspects, who had reportedly been living in Abu Dhabi for an extended period, were detained by UAE law enforcement agencies before arrangements were made for their removal to Sri Lanka. Investigators are said to have uncovered material stored on mobile devices belonging to the pair, including images and video clips allegedly connected to military hardware and conflict-related activities in the Middle East.

One of the individuals has been identified as 25-year-old Kapuru Bandarage Don Chathur Dilrukshan, widely known by several aliases, including “Modara Chathur”. The second suspect, known in criminal circles as “Blumenthal Sankha”, is also wanted by Sri Lankan authorities in connection with a number of ongoing investigations.

The two men landed at Bandaranaike International Airport in Katunayake on a flight arriving from Abu Dhabi shortly before 9.00 p.m. Security personnel and criminal investigators were present at the airport to take charge of the suspects immediately upon arrival.

Following preliminary questioning, Dilrukshan was transferred to a specialised crime investigation unit in Colombo for further interrogation regarding alleged organised crime and drug-related activities. Meanwhile, investigators continue to record statements from the second suspect as part of a broader inquiry into suspected criminal operations with both local and international links.

Prime Minister, UNICEF Review Education Recovery Measures After Cyclone Ditwah

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June 14, Colombo (LNW): Prime Minister Dr Harini Amarasuriya recently held discussions with a senior delegation from UNICEF on the ongoing recovery of Sri Lanka’s education sector in the aftermath of Cyclone Ditwah, with a particular focus on restoring learning opportunities for affected children.

The meeting, which took place at Temple Trees on 12 June, centred on evaluating the progress made under the Cyclone Ditwah Education Emergency Response Plan during its first phase, covering the period from January to April 2026. Officials reviewed key achievements, including efforts to rehabilitate damaged school infrastructure, improve access to educational resources, and provide support services for students whose schooling was disrupted by the disaster.

During the talks, both sides explored strategies to accelerate recovery initiatives and strengthen resilience within vulnerable school communities. Special attention was given to ensuring that children in the worst-affected areas can continue their education without prolonged interruptions.

The Prime Minister emphasised the importance of sustained cooperation between the Government and international partners in safeguarding the welfare and future prospects of young people impacted by natural disasters. UNICEF representatives reaffirmed their commitment to supporting Sri Lanka’s recovery efforts and enhancing long-term preparedness within the education system.

The UNICEF delegation was led by Representative Emma Brigham and Deputy Representative Begona Arellano, accompanied by other senior officials from the organisation.