Treasury fraud scandal raises questions over CBSL, Finance Ministry and who is accountable for US$2.5 million sent to a wrong account.
Treasury fraud allegations over US$ 2.5 million paid to a wrong account have raised serious questions over whether the Central Bank can avoid responsibility.
In recent months, several controversial financial transactions have surfaced in Sri Lanka, including the payment of US$ 2.5 million owed by the Treasury to an Australian creditor into a different account.
Other incidents have also been reported, including the disappearance of US$ 600,000 meant for the US Postal Service, the loss of French treasury bonds, and an alleged double payment of Aswasuma benefits.
In addition, questionable payments reportedly made by institutions such as the Road Development Authority and SriLankan Airlines have been revealed by activists on social media.
These disclosures have emerged against a backdrop where information is also coming out regarding cyber-related financial frauds at several commercial banks, including NDB Bank.
The controversy surrounding the Treasury payment of US$ 2.5 million to a wrong account deepened further after the sudden death of an officer named Ranga Rajapaksa.
He was one of four officers suspended in connection with the incident.
The Ministry of Finance has now launched an internal investigation into the questionable financial transaction, while the Criminal Investigation Department is also conducting a wider probe.
Who Should Be Held Accountable?
The central question is who should bear responsibility and accountability for this alleged financial fraud.
While government ministers have attempted to describe the incident as an oversight or dereliction of duty by officials, the Central Bank of Sri Lanka appears to be shifting full responsibility to the Department of External Resources under the Ministry of Finance and the State Debt Management Office.
Until December 31, 2025, the State Debt Department of the Central Bank of Sri Lanka was responsible for managing state debt.
However, from January 2026, the State Debt Management Office, which operates under the Ministry of Finance, took over the responsibility of managing state debt.
At a press conference on May 13, Central Bank Governor Dr. Nandalal Weerasinghe explained that the incident under discussion involved the ERD, meaning the External Resources Department under the Ministry of Finance.
He clarified that it did not involve the ERD known as the Economic Research Department under the Central Bank of Sri Lanka.
The main legal framework for state debt management is established under the State Financial Management Act No. 44 of 2024 and the State Debt Management Act No. 33 of 2024, which deal with the management of domestic and foreign debt.
The responsibility for implementing these laws lies with the Central Bank of Sri Lanka and the State Debt Management Office.
The official banker of the government, similar to the role commercial banks play for their customers, is the Central Bank of Sri Lanka.
That is a responsibility vested in the Central Bank.
Nevertheless, the two institutions currently investigating or involved in activities related to this transaction are the Department of External Resources under the Ministry of Finance and the State Debt Management Office under the same Ministry.
However, Deputy Minister of Finance Dr. Anil Jayantha has stated that the Secretary to the Ministry of Finance remaining in office is not an obstacle to conducting a fair investigation into the matter.
Addressing Parliament on May 5, the Deputy Minister of Finance said appropriate action would be taken based on information obtained from investigations into the alleged dereliction of duty by officials.
The Finance Ministry’s Responsibility
It is clear that the primary responsibility for this matter lies with the Department of External Resources under the Ministry of Finance and the State Debt Management Office.
The Ministry of Finance has already taken steps to suspend four officers directly connected to the transaction.
Whether the incident of Treasury funds being credited to another account was caused by hackers or happened unintentionally, the question remains whether senior officials of the Ministry of Finance can avoid responsibility and accountability.
“There is clearly negligence. From the Minister’s level downwards, they must take responsibility,” Dr. Amali Wedagedara, a senior researcher at the Bandaranaike Centre for International Studies, told BBC Sinhala.
“From the political leadership down to the administrative officials, including the most senior official, the Secretary to the Ministry of Finance, are bound by responsibility. The negligence cannot be attributed only to the official level,” she said.
Professor Aminda Mithsila Perera of the Faculty of Management and Finance at Wayamba University told BBC Sinhala that it may not be entirely fair to say a minister must take responsibility for this.
“The Financial Management Act exists, from 2024. Everyone’s responsibilities are clearly delineated. Ultimately, Parliament is the final custodian of and holds responsibility for the government’s assets and money. Everyone from Parliament downwards is more or less accountable. What we need to consider here is whether this was intentional or unintentional.”
He warned that Sri Lanka is moving towards a major crisis with technology.
“We have undergone a massive technological shift. It is very easy for the new generation to manipulate those above them. That is one of our problems. We need to find a remedy for that. If we do not find a remedy, this will continue.”
He said these incidents are different from the traditional money thefts that occurred in the past.
“Politically, ministers lack experience. The officials remain the same old ones. It is the officials who handle this; a minister does not sign off on such things.”
“The Secretary to the Ministry must be directly accountable. But it may not be entirely fair to say a minister must take responsibility. If this continues, we must expect even worse things in the future,” the Professor said.
The Central Bank’s Responsibility
Regarding the responsibility for the fraudulent transfer of US$ 2.5 million, Central Bank Governor Dr. Nandalal Weerasinghe clarified the role of the Central Bank of Sri Lanka as the government’s banker.
He stated that the Central Bank made the relevant payment based on instructions received from the Ministry of Finance.
The creditor that was supposed to receive the funds in this transaction was an institution called the Australian Export Finance Institute.
The Central Bank Governor stated that as the government’s official banker, once relevant instructions are received, the Central Bank makes payments from government reserves or from the Central Bank’s dollar holdings.
He stated that even before these functions were transferred to the State Debt Management Office under the Ministry of Finance, payments made under the Department of External Resources, which was then under the Central Bank, were also carried out according to instructions issued by the Ministry of Finance.
The Central Bank Governor also explained that during the interim period when these functions were being transferred to the State Debt Management Office, the Central Bank used its systems for the relevant activities.
He further stated that after verifying accounts and completing other processes, the Central Bank makes the relevant payments according to instructions received from the Ministry of Finance.
The Governor also stated that after receiving relevant instructions, the Central Bank does not re-check the relevant account numbers.
Locking The Stable Door After The Horse Has Bolted
Central Bank Governor Dr. Nandalal Weerasinghe said on May 14 that after this incident, the Central Bank is now working closely with the Ministry of Finance on relevant payments.
“Using our experience and knowledge to strengthen this system, we are working together cooperatively to ensure that something like this does not happen in the future,” he said.
However, US$ 2.5 million of public money has already been lost.
Recovering funds that have been credited to international bank accounts or possibly reached cyber criminals will not be an easy task.
“Ultimately, all of this involves the national economy and public money. That is our primary responsibility. This shouldn’t be approached with an attitude that a separate independent law absolves us of responsibility,” said Dr. Amali Wedagedara of the Bandaranaike Centre for International Studies.
She said the Central Bank should play a supervisory role until the Department of External Resources or the Treasury receives the required training.
“I think there is a history of the Central Bank working recklessly and irresponsibly. Not performing their regulatory function.”
“The Central Bank says it is the government’s banker,” she said, arguing that if that is the case, the Central Bank should contribute to tasks such as account verification.
How Did The Questionable Transaction Happen?
The Ministry of Finance says the transactions occurred in ten instances as follows:
November 14, 2025 – 3 vouchers: US$ 713,757.
November 28, 2025 – US$ 377,660.
January 5, 2026 – 5 invoices: US$ 420,210.
January 20, 2026 – US$ 997,799.
According to the standard debt repayment procedure, the Central Bank of Sri Lanka held the relevant responsibilities until December 31, 2025.
From January 1, 2026, the process has been implemented by the Department of External Resources under the Ministry of Finance and the State Debt Management Office.
The Ministry of Finance stated that invoices from creditors are received by email by the Department of External Resources of the Ministry of Finance.
Verification of payments linked to those invoices is carried out using the CDRMS, or Commonwealth Debt Records Management System, data system of the Department of External Resources.
Debt service forecasting is conducted by the State Debt Management Office.
Deputy Minister of Finance Anil Jayantha Fernando said the State Debt Management Office coordinates with the Treasury Operations Department to obtain relevant account details and with the Central Bank of Sri Lanka for foreign currency allocation.
After all information is verified, the State Debt Management Office enters the relevant data into the reserve management system.
Funds are then released by the Central Bank of Sri Lanka according to the relevant instructions.
Investigations are now underway to correctly identify who bears responsibility for these payments.
That means the investigation being conducted by the Criminal Investigation Department will reveal whether this was an intentional act or one caused by negligence or oversight by officials.
The Ministry of Finance first reported the matter to the Sri Lanka Computer Emergency Readiness Team, known as Sri Lanka CERT, and also sent a copy to the CID.
The date of discovery of the questionable transaction is recorded as March 23, 2026.
That was after the creditor institution, the Australian Export Finance Institute, reported on March 23, 2026, that the relevant payment had not been made.
Accordingly, the Director General of the Department of External Resources of the Ministry of Finance made a written complaint to the CID on March 24, 2026, under complaint number C51/26/CR.
The Ministry of Finance reported the matter to the Financial Intelligence Unit of the Central Bank on April 1, 2026.
The CID has reported information uncovered through its investigation to court through a B report.
The investigations are not yet complete, and Deputy Minister of Finance Anil Jayantha has explained to Parliament that the process remains complex.
