August 17, Colombo (LNW): Legal proceedings are reportedly set to be initiated against Energy Minister Kumara Jayakody in connection with alleged financial irregularities dating back to his time at the Fertiliser Corporation in 2015, a report by Sunday Times disclosed.
The Commission tasked with probing bribery and corruption is preparing to bring the matter before the High Court, sources familiar with the development have disclosed.
At the heart of the case is a sum amounting to Rs. 8 million, which is believed to have been misappropriated during Mr Jayakody’s tenure. He had then chaired the tender committee responsible for awarding a procurement contract that subsequently became the focus of official scrutiny.
Two other individuals are also expected to be named in the case, suggesting a broader web of accountability within the institution at the time.
Whilst the identities of the additional suspects have yet to be formally confirmed, investigators are said to be in possession of documentation and testimonies that point to coordinated wrongdoing.
Energy Minister first in NPP govt to face legal action over alleged financial misconduct linked to past role
US Envoy urges Sri Lanka to remove trade hurdles and embrace economic reform
August 17, Colombo (LNW): Sri Lanka has a valuable opportunity to strengthen its position in global trade by streamlining regulatory processes and removing unnecessary trade barriers, according to US Ambassador to Sri Lanka Julie Chung.
During a recent meeting with senior representatives of the Ceylon Chamber of Commerce, the Ambassador encouraged Sri Lanka to take decisive steps toward fostering a more business-friendly environment. She emphasised the importance of reducing non-tariff barriers, promoting greater openness, and enhancing overall competitiveness to attract higher levels of trade and investment.
Ambassador Chung described the present moment as a critical window for Sri Lanka to reposition itself in the evolving global economy. She pointed out that with many international firms reassessing their supply chains and regional strategies, Sri Lanka could emerge as a compelling destination for investment—provided that the right policy measures are put in place.
Her comments were made during discussions with Chamber Chairman Krishan Balendra, Vice Chairman Bingumal Thewarathanthri, Deputy Vice Chairman Vinod Hirdaramani, Secretary General and CEO Buwanekabahu Perera, and other private sector leaders. The talks focused on enhancing trade relations between the United States and Sri Lanka, expanding bilateral investment opportunities, and exploring areas for long-term economic collaboration.
Congratulating Mr. Balendra on his recent appointment as Chairman, Ambassador Chung reiterated the US Embassy’s commitment to working closely with the Ceylon Chamber of Commerce, which she acknowledged as the country’s most prominent private sector body. She also expressed appreciation for the Sri Lankan Government’s constructive approach to ongoing trade discussions, describing recent negotiations as fair, reciprocal, and grounded in mutual respect.
The meeting also touched on Sri Lanka’s strategic location within the Indian Ocean and its untapped potential as a regional trade hub. With global businesses increasingly turning their attention to South Asia, Ambassador Chung noted that Sri Lanka is well-positioned to benefit from shifting investment trends—particularly if the government continues to pursue meaningful economic reforms and regulatory modernisation.
Wave of disciplinary action sees ten judges interdicted amidst broader judicial scrutiny
August 17, Colombo (LNW): The Judicial Service Commission (JSC) has suspended yet another District Court judge over allegations of misconduct, raising the number of judicial officers interdicted within the current month to ten — an unusually high figure that signals a significant disciplinary sweep within the judiciary.
In a separate development, a Civil Appellate High Court judge stationed in Gampaha has been instructed to proceed with retirement, following an internal investigation into what has been described as sustained underperformance.
Sources familiar with the matter indicated that formal retirement documentation has already been issued by the JSC, effectively concluding the judge’s judicial tenure.
The JSC has also intensified its focus on judicial conduct in Minuwangoda, where both the sitting District Judge and the Additional District Judge have been called before the Judges’ Institute.
The summons relates to ongoing inquiries into alleged breaches of professional standards, though officials have yet to disclose the precise nature of the accusations.
These developments come amid growing calls for increased accountability and transparency within the judicial system.
Government to repay only refundable portion of Adani’s Mannar Wind Project deposits
August 17, Colombo (LNW): The Sri Lankan government has confirmed it will only return the refundable portion of the financial deposits submitted by the Adani Group for the proposed Mannar Wind Power project, according to Energy Minister Kumara Jayakody.
Speaking at a briefing held at the Government Information Department two days ago (15), Minister Jayakody clarified the state’s position following speculation around potential compensation claims by the Indian conglomerate.
He noted that whilst deposits had indeed been placed by Adani with the Sustainable Energy Authority in relation to the renewable energy initiative, only those deemed refundable under existing guidelines would be repaid.
In response to a query regarding whether the Adani Group had requested reimbursement for broader preliminary expenses or initial investments, the Minister firmly stated that the government’s obligation extended solely to refundable sums.
He further explained that major infrastructure projects typically involve both refundable and non-refundable financial commitments — a standard practice within the energy sector and public-private project frameworks.
The Sustainable Energy Authority, which has overseen administrative aspects of the project to date, has been instructed to carry out a detailed review to assess and confirm the specific amounts that qualify for reimbursement. The aim is to ensure transparency and adherence to legal and procedural norms in managing project finances.
The Mannar Wind Power project had previously drawn public and political attention, both due to its scale and the strategic involvement of a foreign entity.
Sri Lanka Customs hits record revenue milestone amid launch of new trade facilitation system
August 17, Colombo (LNW): Sri Lanka Customs has reported its most substantial monthly revenue collection on record, bringing in an impressive Rs. 235 billion last month — a landmark achievement for the institution and a notable reflection of the country’s evolving trade and fiscal landscape.
This historic revenue milestone was revealed by the Director General of Customs, Sunil Nonis, during the official unveiling of the Customs Document Notification System (CDNS) on the 15th of this month.
The new system has been developed to streamline communications with importers and exporters, offering automated alerts and improved tracking for documentation, with the aim of reducing bottlenecks and enhancing operational transparency.
Addressing the gathering, Nonis underscored the significance of the revenue achievement, noting the remarkable progress made in just over a year. “We once marked Rs. 100 billion in monthly collections as a major breakthrough. To now surpass Rs. 235 billion in a single month is an extraordinary leap forward,” he remarked.
Officials attribute this surge in revenue to a combination of factors, including strengthened enforcement measures, the adoption of technology to minimise leakages, and a rise in international trade activity following macroeconomic stabilisation.
The Customs Department has been focusing on modernising its processes and increasing efficiency, while also tightening its grip on illicit trade and under-invoicing — efforts that appear to be yielding tangible financial results.
Robust expansion in Sri Lanka’s services sector amid broad-based growth in July
August 17, Colombo (LNW): Sri Lanka’s services sector recorded a marked upswing in July, as key industries such as retail, finance, and freight transport drove a significant increase in overall business activity, according to the most recent data from the Central Bank of Sri Lanka (CBSL).
The Services Purchasing Managers’ Index (PMI), a key indicator of sector performance, climbed to 70.1 in July, rising sharply from 61.9 in the previous month. This notable improvement suggests growing momentum in the country’s economic recovery, particularly within consumer-facing and logistics-related services.
Strong performances were observed in wholesale and retail trade, where business activity surged, reflecting heightened consumer demand and improved market conditions. The financial services sector also demonstrated continued resilience, underpinned by a rise in lending and broader improvements in banking activity. Freight transport services saw further gains, likely supported by increased movement of goods and improved supply chain operations.
In addition to these core sectors, several other service areas reported upward trends. Personal care services, postal and courier activities, digital broadcasting, telecommunications, and hospitality — including food and beverage services — all contributed to the overall sectoral uplift. Health care services also saw steady improvement, indicating a wider rebound in public and private demand.
The expansion of new business was particularly encouraging, with the corresponding index rising to 64.9 in July from 62.9 in June. This growth was largely attributed to heightened activity in trade and financial services, pointing to sustained investor and consumer confidence.
Labour market conditions within the sector improved as well, with the employment index increasing to 59.8 from 51.6, suggesting that businesses are actively recruiting to cope with growing demand. At the same time, firms reported a rise in unfinished workloads, indicating pressure on capacity despite the hiring boost.
Looking ahead, the outlook for the next quarter appears optimistic. According to the CBSL, expectations for future business activity have strengthened, buoyed by improving macroeconomic stability and a more favourable business environment across the country.
Several districts to further witness showers (Aug 17)
August 17, Colombo (LNW): Showers will occur at times in the Western and Sabaragamuwa provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts, the Department of Meteorology said in its daily weather forecast today (17).
A few showers may occur in North-western province. Mainly fair weather will prevail over the other areas of the island.
Strong winds of about (40-50) kmph can be expected at times over Western slopes of the central hills and in Northern, North-central, North-western and Southern provinces and in Trincomalee district.
Marine Weather:
Condition of Rain:
Showers will occur at a few places in the sea areas off the coast extending from Colombo to Matara via Galle.
Winds:
Winds will be south-westerly to westerly and wind speed will be (30-40) kmph.
Wind speed can increase up to (50-60) kmph at times in the sea areas off the coast extending from Chilaw to Mannar via Puttalam and from Matara to Pottuvil via Hambantota.
Wind speed can increase up to 50 kmph at times in the sea areas off the coast extending from Chilaw to Matara via Colombo and Galle and from Mannar to Trincomalee via Kankasanthurai and Mullaittivu.
State of Sea:
The sea areas off the coast extending from Chilaw to Mannar via Puttalam and from Matara to Pottuvil via Hambantota will be rough at times.
The sea areas off the coast extending from Chilaw to Matara via Colombo and Galle and from Mannar to Trincomalee via Kankasanthurai and Mullaittivu will be fairly rough at times.
SL Customs Launches Anti-Corruption Drive with Tech and Oversight Reforms
Sri Lanka Customs is currently implementing anti-corruption measures including the setting up of an Internal Affairs Unit to probe public complaints and new technology to improve transparency and efficiency.
These reforms are being carried out in accordance with the National Anti-Corruption Action Plan (NACAP) 2025-2029 to foster a corruption-free environment, improve public trust, and facilitate trade and travel, finance ministry sources revealed.
With a views of curbing revenue leakages the government will enact necessary legislation by end-October 2025 to mandate the Customs Department with clear and unfettered responsibility for the clearance, movement, and control of goods to and from the special economic zones (SEZ) a high official of the ministry said.
The Customs compliance will be enhanced by (i) implementing more robust risk assessment so that percentage of shipments assigned to the green channel approaches 80 percent, and (ii) closing the long rooms and eliminating face-to-face document review of customs declarations prior to their formal submission.
According to memorandum of economic and financial Policies submitted to the International Monetary Fund (IMF) the finance ministry will begin quarterly publication (on the Ministry website) by each revenue department on the implementation progress of the anticorruption measures including the digitisation and automation beginning from second quarter of 2025.
The establishment of the Internal Affairs Unit was recommended in an IMF diagnostic report, highlighting the need for dedicated units to investigate staff misconduct in customs administrations.
Customs trade unions are now collaborating with the department’s management to combat corruption, indicating a positive shift in the overall approach to integrity.
Structural reforms of Customs Department included the implementation of stricter legislation and bringing in new technology..
It also targets human resource management, for example, streamlining recruitment processes and constructing infrastructure.
Public dissatisfaction with the current operations of Customs, including inefficiency, fraud, and corruption, has been one of the reasons for these reforms, a top finance ministry official said.
It is aim to increase transparency and accountability within the department, reducing opportunities for corruption and improving public perception.
Digitisation of Customs procedures is a priority method to reduce manual processes that are prone to corruption.Overall, Sri Lanka Customs is actively fighting corruption on the basis of a multi-pronged approach encompassing institutional reforms, technology, and collaboration with stakeholders, including trade unions and the general public.
SL Government’s Cannabis Export Plan Faces Fierce Protests despite Gains
Sri Lanka’s first legal cannabis cultivation project for medicinal export has now moved from policy to implementation, yet the government’s landmark decision is unfolding amid an escalating storm of religious protests, civil society objections, and public mistrust.
The Cabinet this week confirmed that seven foreign investors have been approved to commence cultivation on a 64-acre site in Mirigama, marking the first time such a venture has been sanctioned under Sri Lankan law.
The project, originally approved in April 2024 under then State Minister of Indigenous Medicine Sisira Jayakody, is being rolled out under a stringent regulatory framework designed to reassure both local communities and international buyers.
Health and Mass Media Minister Dr. Nalinda Jayatissa announced that investors must commit at least US $5 million in capital along with a US $2 million security deposit held by the Central Bank. Cultivation licenses, valid for six months at a time, will require clearance from the Ayurveda Department, Ministry of Environment, and Ministry of Public Security, while the Special Task Force and police will provide round-the-clock security.
All cannabis plants must be imported and strictly confined to export markets in North America and the European Union, with the government insisting that not a single gram will be diverted to local markets.
The government’s economic argument is anchored in the explosive growth of the global medicinal cannabis industry. Analysts project the worldwide cannabidiol market will rise from US $5.49 billion in 2019 to over US $26 billion by 2027, while the industrial hemp sector, which includes medicinal cannabis, is expected to grow from US $7.9 billion in 2023 to nearly US $32 billion by 2030.
Sri Lankan officials believe the country’s Ayurvedic heritage, coupled with its strategic location, will position it as a competitive and reputable supplier.
They also point to the potential for significant job creation, with Board of Investment data suggesting that large-scale export agriculture projects in zones like Mirigama could collectively generate over 75,000 direct and indirect jobs and bring in more than US $2.6 billion in foreign exchange annually.
Investor interest in the scheme has been strong. Out of 37 applicants, seven companies have been selected in the first round, all of them foreign-backed and well-capitalized.
The government says this ensures access to advanced cultivation technology, quality control, and compliance with the rigorous testing demanded by premium overseas markets. Officials stress that by limiting participation to highly funded investors and maintaining multi-agency oversight, Sri Lanka can protect its domestic market while capturing lucrative export revenues.
However, the project’s rollout has unleashed a wave of social and political backlash. Today, Buddhist clergy led by the Asgiri Chapter warned that cannabis cultivation, even under the guise of medicinal production, is morally and culturally inappropriate.
Senior monks described the move as a “national disaster” that risks normalizing drug use. Civil society groups such as the Alcohol and Drug Information Centre echoed these concerns, warning that no regulatory framework can guarantee zero leakage into the domestic market and that illicit diversion is inevitable when “good money” is involved.
Social media reactions have been equally scathing, with users warning that cannabis could serve as a gateway to more dangerous drugs and that the policy prioritizes foreign profit over public welfare.
Human rights observers have also linked the controversy to Sri Lanka’s shrinking civic space, noting that recent years have seen increased restrictions on protests and dissent. Activists argue that the government’s willingness to push through such a socially contentious policy without broad public consultation reflects a deeper democratic deficit.
For now, the cannabis fields in Mirigama remain under heavy guard, the government confident in its ability to deliver both economic returns and regulatory compliance.
Yet the protests on the streets and the moral outrage from the pulpit suggest that Sri Lanka’s entry into the global medicinal cannabis trade may prove as politically combustible as it is financially ambitious.
Whether the projected billions in export revenue will outweigh the cultural, social, and political costs is a question that will be tested in the seasons ahead.
Sri Lankan Banks Post Record 1H Profits as Recovery Gains Pace
Sri Lanka’s banking sector has delivered a landmark performance in the first half of 2025, with both state-owned and private lenders posting record profits amid a more favourable economic environment. A combination of easing interest rates, a stronger rupee and renewed credit demand has driven the sector’s earnings surge, signalling a decisive shift from crisis-era survival to growth-oriented lending.
Lower funding costs, stemming from recent Central Bank policy rate cuts and stable inflation, have improved operating margins. The Finance Ministry’s latest fiscal review highlighted increased system liquidity and a stronger external position, while the country’s current account surplus in the first half has bolstered market confidence and supported credit expansion.
Among state-owned banks, Bank of Ceylon (BOC) set the benchmark with a profit before tax (PBT) of Rs. 59.4 billion for the first six months of the year, representing a 165% jump from Rs. 22.4 billion a year earlier. Profit after tax (PAT) reached Rs. 35.9 billion, supported by a 79% surge in net interest income to Rs. 102.7 billion and greater operational efficiency.
This followed an exceptional first quarter, when BOC posted a PBT of Rs. 30 billion, up 222% year-on-year, and a PAT of Rs. 17.1 billion, reflecting a 95% rise in net interest income. National Savings Bank (NSB) also reported strong results, with a profit after tax of Rs. 7.59 billion for the first quarter, up 124% from last year, aided by higher operating income and tight cost management.
Private sector banks have also capitalised on the improved market conditions. Commercial Bank of Ceylon reported a net profit of Rs. 31.17 billion for the first half, up 64.9% year-on-year, while profit before tax rose 61.5% to Rs. 45.24 billion.
The bank saw operating income increase by nearly 40%, while impaired loans declined and customer deposits crossed Rs. 2.5 trillion. Sampath Bank, however, recorded mixed fortunes, with second-quarter profits slipping 17% year-on-year to Rs. 6.7 billion due to higher operating costs.
Nevertheless, its first-quarter performance had been notably strong, with PBT at Rs. 13.4 billion, up 115%, and PAT at Rs. 8.3 billion, a 149% increase, supported by robust non-interest income and capital strength.
Hatton National Bank (HNB) posted a 49% jump in group profit after tax to Rs. 11.1 billion in the first quarter, driven by improved asset quality and solid capital buffers. Nations Trust Bank was among the first to release full half-year results, reporting a profit after tax of Rs. 9 billion, up 10% year-on-year, alongside a 26% increase in its loan book. DFCC Bank also reported double-digit growth in net interest income during the first half, underpinned by a strong capital position.
Mid-tier lenders mirrored the trend, with Union Bank reporting a 247% surge in profit after tax to Rs. 251 million for the first half, while profit before tax rose to Rs. 834 million. SDB Bank posted a Rs. 156 million profit after tax for the same period, supported by improved margins and expanding lending activity.
Overall, the first half of 2025 has marked a clear turnaround for Sri Lanka’s banking sector. The combination of lower interest rates, currency stability, and renewed credit appetite has created a fertile environment for profitability.
Both state-owned and private banks are now better positioned to support the country’s post-crisis economic recovery. However, the Finance Ministry has cautioned that sustaining this momentum will require continued fiscal transparency and steady progress on debt restructuring to safeguard financial sector stability.