Central Bank Governor Dr. Nandalal Weerasinghe expressed concern over the prolonged delays in prosecuting illegal pyramid schemes identified under the Banking Act. Speaking at a recent meeting of the Committee on Public Finance held at the Parliament complex, the governor revealed that none of the lawsuits filed against approximately 20 illegal schemes identified since 2011 have been concluded.
Responding to a question raised by Deputy Minister Chaturanga Abeysinghe, Dr. Weerasinghe explained that the Central Bank’s investigations under Section 83 (C) of the Banking Act determine whether a financial institution is engaged in illegal activity. Once such a determination is made, cases are forwarded to the Criminal Investigation Department (CID) for further inquiry and subsequently sent to the Attorney General’s Department for prosecution.
“The first illegal pyramid scheme was identified in 2011. Despite this, the case is still ongoing. The legal process is far too lengthy, and a massive effort is required from law enforcement authorities, the prosecution authority, and the judicial system to expedite these cases,” the governor stated.
Dr. Weerasinghe emphasized the importance of addressing the inefficiencies in the legal framework and the judicial process to ensure swift action against such illegal activities. He acknowledged the challenges in prosecuting financial fraud and highlighted the need for enhanced collaboration among relevant authorities.
In the interim, the Central Bank has ramped up public awareness campaigns to prevent individuals from falling victim to pyramid schemes due to financial illiteracy. Dr. Weerasinghe noted that prevention remains the most effective measure, given the systemic delays in legal enforcement.
He urged lawmakers to address these shortcomings, emphasizing that protecting the public from fraudulent financial schemes requires both robust legal mechanisms and timely judicial intervention.
