CBSL says E&Y remains eligible to audit licensed banks despite restrictions

Lanka Business Online and Newswire report that the Central Bank of Sri Lanka asked Ernst & Young Sri Lanka to keep the Engagement Partner and Quality Assurance Partner who worked on National Development Bank PLC’s financial statements off licensed-bank audit assignments. Newswire says the Central Bank issued its clarification on Tuesday, the 10th.

Lanka Business Online and Newswire say the Central Bank clarified that the measure is limited to those two partners and does not affect E&Y’s recognition as a qualified auditor of licensed banks under Sri Lanka’s Banking Act.

Newswire reports that NDB disclosed an internal fraud in April 2026 and initially estimated the loss at Rs. 13.2 billion. It says an independent forensic review by Deloitte Touche Tohmatsu India LLP later put the total fraudulent transactions at approximately Rs. 13.64 billion, with Rs. 9.62 billion linked to 2025.

Newswire reports that NDB said some employees acted together with external parties. It says the forensic review found shortcomings in internal controls, transaction monitoring, account reconciliation and governance procedures. Newswire also reports that NDB said customer accounts and deposits were unaffected, and that the Central Bank continued to monitor the bank’s financial position and regulatory compliance.