By: Staff Writer

April 28, Colombo (LNW): Sri Lanka’s JVP-led NPP administration has launched a fresh attempt to revive the underperforming Mattala Rajapaksa International Airport by inviting both local and international investors to take on its development and operational management. The initiative reflects a broader policy shift toward public-private partnerships aimed at reducing the fiscal burden of state-owned enterprises.

The airport’s current condition underscores the urgency of this move. Despite its modern infrastructure and capacity to handle wide-body aircraft, Mattala remains drastically underutilised. Passenger throughput is minimal, cargo operations are sporadic, and several facilities lie idle. The airport has occasionally been repurposed for unconventional uses including aircraft parking and storage—highlighting the absence of sustained aviation demand.

From a financial standpoint, the picture remains bleak. As of April 2026, the airport continues to operate at a loss, contributing to AASL’s overall financial strain. Revenue streams—largely limited to landing fees, occasional charter services, and minor commercial activities are insufficient to offset fixed costs such as maintenance, security, and staffing. The opportunity cost of capital tied up in the airport further amplifies concerns about its long-term viability.

The government’s EOI framework seeks partners capable of leveraging both operational and commercial opportunities. Airside responsibilities would include managing flight operations and aviation services, while landside development could open avenues in logistics, warehousing, hospitality, and retail. Authorities hope that integrating these elements could create a more diversified and resilient business model.

Yet attracting credible investors will not be straightforward. The core challenge lies in demand generation. Without a strong passenger base or strategic airline partnerships, even the most efficient operator may struggle to achieve profitability. Competing with the well-established Bandaranaike International Airport adds another layer of difficulty, as airlines and passengers naturally gravitate toward the primary gateway.

Investors must also weigh financial risks, including high initial capital requirements and uncertain return timelines. Infrastructure upgrades, marketing efforts, and potential incentives to attract airlines could require substantial upfront investment. In a volatile economic environment, these risks are magnified.

On the other hand, proponents argue that Mattala’s location near emerging industrial zones and the Hambantota Port presents untapped potential, particularly in air cargo and multimodal logistics. If effectively integrated into regional trade networks, the airport could evolve into a niche hub.

Ultimately, the success of this initiative will hinge on whether the government can structure a deal that balances risk and reward while providing investors with sufficient confidence to commit to a long-term turnaround.

By: Staff Writer

April 28, Colombo (LNW): The relaunch of Bake House Kandy has sparked both excitement and scrutiny, as one of Sri Lanka’s most recognizable dining establishments’ attempts to redefine itself for a new generation. Known for decades as a nostalgic gathering place, the bakery’s shift toward a modern, sustainability-driven concept highlights the pressures facing legacy brands in an increasingly competitive and values-driven market.

Central to the relaunch is a strong emphasis on responsible dining. The adoption of a clean-label approach, which excludes artificial additives, reflects growing consumer demand for healthier food options. At the same time, the integration of eco-friendly practices such as solar energy, water filtration systems, and reduced plastic use positions the brand as a socially responsible business. These initiatives align with global sustainability trends but also require careful implementation to ensure they are more than just marketing tools.

The redesign of the physical space marks a significant departure from the traditional look and feel that defined Bake House for generations. Contemporary interiors, curated dining elements, and the addition of smart tables aim to create a lifestyle-oriented environment. While this modernization may appeal to younger audiences, it raises concerns about whether the brand risks losing its original charm and identity.

Another notable aspect of the relaunch is the diversification of dining experiences within a single location. The introduction of multiple concepts including a family restaurant, tea-focused space, café, takeaway outlet, pub, and private event venue reflects an ambitious attempt to cater to varied customer preferences. However, such expansion can stretch resources and challenge consistency, particularly in maintaining service standards across different formats.

From an industry perspective, the move highlights a broader trend in Sri Lanka’s hospitality sector, where businesses are increasingly blending tradition with innovation to remain competitive. Yet, this approach is not without risks. Investments in technology, sustainability, and design can significantly increase operational costs, potentially leading to higher prices that may deter long-time customers.

There is also the question of inclusivity. As the brand shifts toward a more premium, experience-driven model, it may inadvertently exclude segments of its traditional customer base. Balancing affordability with modernization will be crucial in ensuring that the relaunch does not alienate loyal patrons.

In essence, Bake House Kandy’s transformation reflects the evolving expectations of today’s consumers, who seek not just food but meaningful, ethical, and engaging experiences. The success of this ambitious overhaul will depend on whether the brand can maintain its legacy while embracing change without compromise.

By: Staff Writer

April 28, Colombo (LNW): The unfolding fraud scandal at Sri Lanka’s National Development Bank is no longer just a financial crime it is a complex story of systemic breakdown, digital exploitation, and regulatory hesitation. As investigators peel back layers of the Rs. 13.2 billion fraud, new details suggest a highly coordinated operation that exploited both technological vulnerabilities and institutional blind spots.

Regulators, led by the Central Bank of Sri Lanka, have so far resisted installing a Competent Authority to take control of the bank. This cautious approach appears tied to the pending forensic audit and fears that aggressive intervention could trigger depositor anxiety. Nevertheless, pressure is mounting for decisive action as confidence in NDB’s governance erodes.

The mechanics of the fraud reveal a disturbing level of sophistication. Transactions were deliberately structured to evade automated detection systems, with amounts kept just under internal alert thresholds. These transactions were frequently processed over weekends—periods typically associated with reduced oversight—allowing fraudulent flows to accumulate undetected over time.

Central to the breach was unauthorized system access. Investigators believe primary suspects used stolen credentials from high-ranking bank officials, raising serious concerns about internal controls, password management, and multi-factor authentication practices. The breach highlights how even established financial institutions remain vulnerable to insider-assisted cyber exploitation.

To independently assess the damage, NDB enlisted Deloitte Touche Tohmatsu India LLP, bypassing internal reporting lines entirely. This move reflects not only the scale of the fraud but also a lack of confidence in internal audit mechanisms, which failed to detect glaring anomalies—including a dramatic surge in receivables that should have triggered immediate scrutiny.

The criminal dimension continues to expand. The Criminal Investigation Department is now pursuing a network of approximately 60 individuals, indicating the fraud may extend well beyond a handful of insiders. One notable arrest involves a suspect tied to a cryptocurrency laundering operation worth Rs. 390 million, suggesting that digital assets played a key role in obscuring financial trails.

The broader financial implications are significant. Although the Central Bank insists NDB remains stable, citing adequate capitalization, the projected Rs. 4 billion quarterly loss signals real strain. The downgrade by Fitch Ratings further reflects diminishing external confidence, with analysts pointing to “serious deficiencies” in risk governance frameworks.

Regulatory countermeasures have been swift but restrictive. Dividend payouts have been frozen, expansion plans halted, and operational spending curtailed. These steps aim to stabilize the bank but also underscore the severity of the crisis.

Ultimately, the NDB fraud exposes deeper structural issues within Sri Lanka’s banking sector particularly around digital security, internal audit effectiveness, and executive accountability. As forensic findings near completion, the focus will shift from discovery to consequences: who failed, who benefited, and whether meaningful reform will follow.

The answers may define not just NDB’s future, but the credibility of the country’s entire financial system.

By: Staff Writer

April 28, Colombo (LNW): Sri Lanka’s plan to establish the Industrial Transformation and Innovation Authority marks a major shift in managing the country’s industrial sector. By consolidating key institutions into a single body, the government aims to address long-standing inefficiencies. However, the move comes against a backdrop of mixed industrial performance and ongoing structural challenges.

The country’s industrial sector in 2026 reflects both potential and strain. Large-scale industries, numbering around 1,200, continue to dominate exports in sectors such as apparel, food processing, and construction materials. Meanwhile, approximately 75,000 SMEs form the backbone of domestic production, contributing significantly to employment and regional economic activity. Despite their importance, SMEs account for less than half of industrial output, highlighting productivity gaps.

The proposed authority is expected to enhance policy coherence and reduce overlapping mandates that have historically slowed decision-making. By bringing multiple agencies under one umbrella, the government hopes to create a unified strategy for industrial transformation and innovation. Support from international partners such as the Asian Development Bank adds further credibility to the initiative.

However, structural weaknesses within the sector may limit the effectiveness of such reforms. Industrial growth has been constrained by high borrowing costs, inconsistent policy implementation, and limited access to global markets. Additionally, technological adoption remains low, particularly among SMEs, reducing competitiveness in an increasingly digital global economy.

Under the NPP government’s policy framework, there is a strong emphasis on inclusive growth and state-driven development. While this approach aims to ensure equitable distribution of resources, it also raises concerns about excessive central control and reduced private sector flexibility. Businesses may face delays if decision-making becomes overly centralized without adequate decentralization mechanisms.

Another concern is whether the merger of institutions will lead to job redundancies or transitional disruptions. Employees within the existing agencies may face uncertainty, potentially affecting morale and productivity during the transition phase. Moreover, aligning the operational cultures of three different institutions could prove complex.

Despite these challenges, the creation of the ITIA offers an opportunity to address long-standing issues such as fragmented support systems and weak innovation ecosystems. If implemented effectively, it could improve access to funding, enhance research and development, and strengthen export-oriented industries.

Ultimately, the success of this industrial overhaul will depend on balancing central coordination with operational flexibility. Sri Lanka’s industrial sector stands at a critical juncture, and while the proposed authority could provide a pathway to modernization, its impact will hinge on execution, stakeholder engagement, and the ability to adapt to rapidly changing economic conditions.

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By: Staff Writer

April 28, Colombo (LNW): A series of cyber incidents targeting Sri Lanka’s financial system has exposed serious weaknesses in banking security and institutional oversight. The recent rise in phishing attacks, combined with internal fraud cases and the reported hacking of treasury loan installment systems, points to a wider crisis that goes beyond isolated breaches and reflects systemic vulnerability.

Cybercriminals are becoming increasingly sophisticated, exploiting both technical gaps and human behavior. By creating fake websites that closely resemble legitimate banking platforms, attackers trick customers into revealing sensitive information. Once access is gained, funds can be transferred quickly, often before any action can be taken. This efficiency highlights major shortcomings in current detection and response systems.

However, external cyber threats are only part of the problem. Internal fraud cases, such as those linked to NDB Bank, have raised serious concerns about governance, internal controls, and accountability within financial institutions. These incidents suggest weaknesses in employee monitoring, auditing processes, and risk management frameworks. When combined with cyberattacks, they create a dangerous environment for both banks and customers.

The reported breach involving treasury loan installment systems further deepens the crisis. If confirmed, it would indicate that vulnerabilities extend beyond commercial banks to government-related financial operations. This underscores the urgent need for a coordinated national cybersecurity strategy that covers both public and private sectors.

Increased scrutiny of bank management is now inevitable. Regulators may need to enforce stricter oversight, including real-time monitoring systems and mandatory cybersecurity audits. Bank leadership must also recognize that cybersecurity is no longer optional but a critical component of daily operations.

The economic consequences could be severe. Public trust in digital banking essential for modern financial systems may decline rapidly if security concerns persist. This could lead to reduced use of online banking services, greater reliance on cash transactions, and setbacks in financial modernization.

Addressing these challenges requires a comprehensive approach. Technological upgrades must be supported by staff training, public awareness initiatives, and stronger legal action against cybercrime. International cooperation may also be necessary, as many cyber threats originate beyond national borders.

In conclusion, the combination of phishing attacks, internal fraud, and system breaches signals a critical turning point for Sri Lanka’s financial sector. Without immediate and decisive reforms, the stability and credibility of the entire system could be at risk.

By: Staff Writer

April 27, Colombo (LNW): The Rs. 13.2 billion internal fraud at National Development Bank PLC (NDB) continues to expose critical governance and oversight failures, even as new developments in the bank’s audit framework raise further questions about transparency and accountability. While the forensic audit led by Deloitte Touche Tohmatsu India LLP is underway, recent decisions regarding external and internal audit functions alongside the continued tenure of the same board of directors are intensifying scrutiny.

In its latest disclosure, NDB confirmed that KPMG has been appointed as External Auditor for the financial year ending 31 December 2026, following shareholder approval at the Annual General Meeting held on 27 March 2026. Consequently, Ernst & Young has ceased to hold office. The bank stated that this transition was made to comply with regulatory requirements under the Banking Act and corporate governance rules issued by the Central Bank of Sri Lanka, which mandate auditor rotation after a maximum engagement period of six years.

While auditor rotation is a standard governance practice intended to preserve independence, its timing amid an ongoing forensic investigation into a massive fraud raises concerns about continuity and institutional memory. External auditors play a key role in assessing financial statements and internal controls; a transition at this juncture may complicate the broader effort to understand how systemic failures went undetected for nearly 18 months.

Simultaneously, the forensic audit continues to report directly to the CBSL, bypassing the NDB board to ensure independence. This unusual structure reflects regulatory caution, implicitly acknowledging that existing governance mechanisms may not be fully reliable. The audit’s mandate includes reconstructing fraudulent transactions, identifying responsible parties, and uncovering weaknesses in internal controls and oversight.

However, the continuation of the same board of directors whose leadership was accountable for all functions during the fraud period and remains so today casts a long shadow over these corrective measures. In most comparable cases, leadership changes are seen as essential to restoring trust and enabling unbiased reform. At NDB, the absence of such changes risks undermining both the perception and the effectiveness of ongoing investigations.

Adding another layer of complexity is the appointment of a new internal audit function despite the active forensic audit. While strengthening internal audit capabilities is generally a positive step, introducing a new team during a forensic probe raises questions about role clarity, independence, and potential overlap. Internal audit typically operates within the governance framework set by the board raising concerns about whether it can function objectively when that very framework is under scrutiny.

The coexistence of three audit layers external (KPMG), forensic (Deloitte), and internal (newly appointed) creates a dense and potentially fragmented oversight environment. Without clear coordination, this could lead to duplication of efforts, inconsistent findings, or gaps in accountability.

For stakeholders, these developments present a mixed picture. On one hand, regulatory compliance and enhanced audit structures suggest an effort to strengthen governance. On the other, the lack of visible accountability at the board level and the timing of these changes raise doubts about whether reforms are sufficiently deep or merely procedural.

Ultimately, the effectiveness of these measures will depend on execution. The forensic audit must remain the central pillar of truth-finding, while new audit appointments must demonstrably enhance not dilute oversight. Without decisive governance reforms, NDB risks prolonging its crisis and eroding confidence in both its leadership and Sri Lanka’s broader banking system.