Audit partners barred from bank work after NDB fraud, committee told

Sri Lanka's Central Bank has barred the Ernst & Young partners who audited National Development Bank from further bank audits following a reported Rs. 13.6 billion fraud, officials told the parliamentary Committee on Public Finance. The restriction concerns the partners involved, not a reported ban on the whole firm's operations.

At the November 5 committee meeting, banking supervisors said NDB's board audit committee had also been reconstituted. The bank was asked to submit a timetable for correcting weaknesses, with the Central Bank monitoring progress and carrying out unannounced inspections.

The fraud reportedly continued for three years and was discovered after the 2025 accounts had been certified. Findings from a forensic audit by Deloitte are being used to assess the suitability of those involved and whether further controls are needed.

The Sri Lanka Accounting and Auditing Standards Monitoring Board separately completed an inquiry into the auditors' work and referred it to the Attorney General on October 15 for advice on legal action, the committee was told. Detailed findings were not made public at the meeting.

Committee chair Harsha de Silva called for greater transparency about regulatory action. Central Bank Governor Nandalal Weerasinghe said lessons from the case had led to stronger supervision across the banking sector. Regulatory restrictions and investigative steps do not themselves establish any individual's criminal liability.