The Hon. Ravi Karunanayake

¶ 01 Hon. Speaker, when a question is asked about the Ministry of Finance the Deputy Minister answers; I expect the same on the Central Bank.

¶ 02 I seek a statement from the Minister regarding a major national issue: a financial fraud of about Rs. 13.2 billion acknowledged as having occurred across FY 2024, FY 2025, and the first quarter of 2026—not Rs. 800 million but Rs. 13,200 million. This raises serious concerns about regulatory oversight, the integrity of the financial system, and the statutory duties under the Central Bank of Sri Lanka Act, No. 16 of 2023. That is when the Central Bank gained its independence. Before gaining independence the CBSL bankrupted the country; after independence they are bankrupting the banking system. That is the fear.

¶ 03 Especially, questions arise about supervision, system stability, and anti‑money‑laundering obligations, including the role of the FIU.

¶ 04 Please address the following:

¶ 05 1. Central Bank supervisory failure: How did the Bank Supervision Department fail, over more than two years, to detect or act on a fraud of this magnitude?

¶ 06 Hon. Speaker, when Rs. 100,000 comes in, the Central Bank asks 100 questions. Here there are likely over 3,000 transactions. How can an “independent” CBSL fail to answer on this?

¶ 07 2. Financial Intelligence Unit (FIU): We have information that at least two banks reported suspicious transactions to the FIU at least 16 months prior to detection. Why were these reports not acted upon? How does the CBSL justify this failure under AML/CFT obligations?

¶ 08 Our priority should be to protect the people and the banking system, not to protect the CBSL.

¶ 09 3. Involvement of other institutions: Have investigations revealed any involvement of other banks or non‑bank financial institutions? If so, what is the estimated systemic impact?

¶ 10 Hon. Speaker, two commercial banks have reported these transactions to the FIU as suspicious transactions. So, why has no action been taken on this?

¶ 11 4. Regulation of payment systems (LankaPay): With over 2,700 CEFT transactions, why did LankaPay (40% owned by the CBSL) and the national payment infrastructure fail to issue alerts? Was real‑time monitoring and control in place?

¶ 12 5. Impact on dividends and institutional investors: What is the value of dividends withheld during this period? What is the impact on EPF, ETF—the people’s money—and the state insurer SLIC and other institutional shareholders?

¶ 13 6. Fiscal loss: What is the total direct and indirect tax loss, including uncollectible penalties? Rs. 13.2 billion in losses implies at least 30%—about Rs. 3.6 billion—gone, then 18% VAT gone, amounting to roughly Rs. 6 billion lost to the Government.

¶ 14 7. Remittances and crypto: Were funds remitted abroad or converted via cryptocurrency without exchange control approvals? If so, how, and what recovery steps are being taken?

¶ 15 8. Market capitalization: From disclosure to date, what is the decline in the share price and overall market capitalization?

¶ 16 There was a debenture issue closing on 19 March. While this scandal was unfolding, the CBSL told the country there was no problem; ten days later it was revealed there was a major fraud, and even then the disclosure came from the Stock Exchange, not the CBSL.

¶ 17 9. Independent forensic audit: By appointing the forensic auditor themselves, has the CBSL created a conflict of interest? Will the Government, under the powers of the President as Minister of Finance, appoint an independent auditor?

¶ 18 Thank you, Hon. Speaker.