The International Monetary Fund (IMF) has indicated that it is closely monitoring the fraud case involving the National Development Bank (NDB), which is estimated to result in losses of 13.2 billion rupees. Evan Papageorgiou, the IMF Mission Chief for Sri Lanka, commented on the issue during a press briefing regarding the conclusion of the fifth and sixth reviews of the Extended Fund Facility (EFF).
Papageorgiou explained that the fraudulent activities were limited to a particular operational segment of the bank. He noted that the Central Bank of Sri Lanka (CBSL) has evaluated the NDB’s financial standing and confirmed that it remains well-capitalized and liquid, with key capital ratios exceeding standard requirements.
According to his statements, the CBSL has determined that the situation is confined to the bank itself and is not likely to escalate into a systemic issue. He emphasized that the matter is being addressed internally within the NDB, and the IMF is in ongoing discussions with the central bank regarding the developments.
Furthermore, Papageorgiou remarked that both the NDB and the CBSL have characterized the incident as a failure in operational oversight within a specific department of the bank, suggesting that corrective measures and supervisory actions are currently being implemented.
The fraudulent activities have resulted in an unaudited net loss of approximately 4 billion rupees for the first quarter of 2026, with an overall impact estimated at around 7 billion rupees when considering gross exposure, as reported by Softlogic Stockbrokers. The bank’s total assets, valued at about 990 billion rupees as of March 31, are projected to experience a decline of 0.7 percent.
In light of these developments, shares of the NDB rose by 3.41 percent, closing at Rs.113.75.
