Bank of Ceylon error leads to Rs.263M double payments to contractors, with over Rs.51M still unrecovered, raising concerns over banking controls.
Sri Lanka’s Bank of Ceylon error has triggered concern after a massive duplication mistake resulted in over Rs. 263 million being transferred to unintended recipients, exposing serious gaps in banking system controls.
It is reported that due to a system failure within the Central Operations Division of Bank of Ceylon, funds exceeding Rs. 26 crore were mistakenly transferred to multiple contractor accounts. The bank has officially informed the Director of the Eastern Province of the Road Development Authority regarding the incident.
How the Transfer Error Occurred
The issue stems from a duplication error in a file of slip based fund transfers that were originally processed on December 30, 2024.
As a result of this duplication, a total of Rs. 263,529,072.11 was transferred out of the bank’s internal account on January 23, 2026. The delay between the original transaction data and the actual transfer has raised questions about internal checks and system validation processes.
However, questions remain about how outdated transaction data was reprocessed without detection.
Efforts to Recover the Funds
Following the discovery of the error, Bank of Ceylon initiated steps to recall the transferred funds.
Despite these recovery efforts, an amount of Rs. 51,053,326.59 remains unrecovered, indicating challenges in retrieving funds once they have been distributed across multiple accounts.
This raises concerns about the effectiveness of existing recovery mechanisms in the banking system.
Accounts That Received the Funds
The bank confirmed that the mistakenly transferred funds were credited to accounts held by several construction related entities across multiple commercial banks.
At NDB Bank, funds were transferred to Sintha Construction.
At Sampath Bank, the recipients included Himma Construction, R.S. Lanka Engineering, and M.M.R. Construction.
At Commercial Bank, the accounts belonged to Rakshi Construction, Karshika Construction, and A.D. Herath Engineering.
At People’s Bank, funds were credited to accounts of A.I. Ramesh and Kamarasignham.
At Amana Bank, the recipient was Gama Construction.
Coordination With Authorities
The Assistant General Manager of Central Operations at Bank of Ceylon has requested the Road Development Authority to coordinate with the relevant institutions to recover the outstanding funds.
This indicates that the recovery process will involve multiple stakeholders, including banks and contractors, making it a complex operation.
Wider Concerns in the Financial Sector
The incident has sparked widespread discussion within Sri Lanka’s financial sector due to the scale of the error and the apparent lapse in system safeguards.
The fact that funds were released based on transaction data that was more than a year old has intensified scrutiny over internal controls and risk management practices.
This raises concerns about whether similar vulnerabilities exist in other financial institutions.
What happens next could be critical in determining whether stronger safeguards will be introduced to prevent such large scale errors in the future.
