Sri Lanka foreign exchange fraud investigation

Sri Lankan authorities are investigating a large-scale foreign exchange fraud involving the illegal transfer of funds overseas under the guise of import payments. The investigation, led by the Financial Crimes Investigation Division (FCID), initially focused on an alleged US$80 million (Rs 23.7 billion) operation involving 26 companies and 54 bank accounts. This early stage of the probe resulted in the arrest of a 34-year-old businessman from Colombo.

The investigation has since expanded significantly. Authorities are now targeting 17 additional companies, bringing the total number of entities under scrutiny to 89. The total amount under investigation is now estimated at Rs. 190 billion, involving transfers made between January 2023 and September 2025.

Investigators found that funds were routed through six state and private banks to high-risk jurisdictions, including Brazil, Panama, Mauritius, and Madagascar, without corresponding imports being recorded. While Rs. 130 billion is linked to the initial group of companies, the FCID is working to identify the operators behind the newly identified firms. The crackdown has reportedly contributed to an estimated 90% decline in the use of the Telegraphic Transfer (TT) system for overseas remittances.