Sri Lanka's IMF Review Leads to Call for Tighter Banking Supervision

An International Monetary Fund delegation arrived in Sri Lanka to carry out the third review of the country's economic reform programme, assessing progress on fiscal consolidation, tax policy, state‑owned enterprise restructuring and social safety nets. A positive outcome would unlock the next tranche of IMF funding, bolstering Sri Lanka's debt‑restructuring efforts and overall recovery.

During the same period, the IMF urged Sri Lankan authorities to strengthen banking oversight after a major fraud case at the National Development Bank. Parliamentarians questioned the Central Bank on the investigation, which is examining roughly Rs 13 billion in alleged misappropriated funds. A forensic audit covering a decade of transactions is underway, with an interim report expected soon and a final report due by 18 July. The case has raised concerns about regulatory weaknesses and the need for tighter supervision of the financial sector.