Bank officials arrested over an alleged US$1 billion transfer scheme face disciplinary decisions by their banks, while police pursue the criminal probe.
The bank officials arrested over the alleged US$1 billion overseas transfer scheme will face any internal disciplinary action from their respective employers, the Central Bank of Sri Lanka has said.
A senior CBSL official told The Island that the regulator cannot directly discipline employees of licensed institutions over alleged fraud. Instead, the individual banks must handle employment and disciplinary matters, while law enforcement agencies pursue any criminal investigation.
Four employees attached to four private banks, Shiran Mario Fernando, Umesh Indika, Dharmalingam Prashanth and Amila Udara Liyanamanna, were arrested by the Financial Crimes Investigation Division of the CID at their respective workplaces in Colombo. The Colombo Magistrate’s Court later remanded them until August 20 while investigations continue.
Investigators told court that the arrests followed information obtained during the wider investigation involving alleged scheme operator Jeffrey Mohamed, also reported as Jiffry Mohamed. Authorities allege that he transferred large amounts of foreign currency overseas under the pretext of importing goods that did not subsequently enter Sri Lanka.
The FCID alleges that bank officials assisted transactions connected to the operation and received payments. Defence lawyers have rejected the allegations and argued that some suspects held junior roles with limited responsibilities. The court rejected their bail applications and remanded them pending further investigation.
Asked whether police had formally notified the Central Bank about the arrests, the CBSL official said no such notification was required.
“They probably have informed relevant banks. Regulator has no authority to take actions against employees of regulated institutions for frauds. It is up to the banks to take disciplinary action against employees and law enforcement agencies to take actions against frauds,” the official said.
The official compared the situation with the Rs. 13.2 billion fraud uncovered at National Development Bank earlier this year. NDB said implicated employees were suspended and law enforcement authorities made arrests, while CBSL remained informed and provided regulatory oversight within its mandate.
The Central Bank itself said in April that it was monitoring the NDB case and could take measures if required to preserve prudential stability.
Accordingly, any employment action involving the bank officials arrested in the latest case rests with the individual banks. The criminal allegations, meanwhile, remain matters for investigators and the courts, and the suspects are entitled to the presumption of innocence unless and until guilt is established.
