The Central Bank of Sri Lanka (CBSL) has asked Ernst & Young (E&Y) Sri Lanka not to assign two partners involved in the audit of National Development Bank PLC (NDB) to any licensed bank audit, the Central Bank said in a statement on Tuesday.

The two are the Engagement Partner and the Quality Assurance Partner who worked on NDB’s financial statements. The request followed the disclosure of an internal fraud at the bank.

The CBSL said the restriction does not affect E&Y’s recognition as a qualified auditor eligible to audit licensed banks under the Banking Act, No. 30 of 1988, as amended. It issued the statement as a clarification for the avoidance of doubt.

The statement did not name the two partners. It was published on the Central Bank’s website under the heading “Clarification on the Auditors to Audit the Accounts of Licensed Banks in Sri Lanka”.

Background

NDB disclosed the fraud in April 2026 and initially estimated the losses at Rs. 13.2 billion. An independent forensic investigation by Deloitte Touche Tohmatsu India LLP later put the total value of fraudulent transactions at about Rs. 13.64 billion.

The final figure is about Rs. 440 million higher than the initial estimate. According to findings disclosed in September, the transactions covered several financial periods, and Rs. 9.62 billion of the total, roughly 70 percent, was attributed to 2025 alone. The bank has said certain employees acted in collusion with external parties.

The forensic investigation also identified weaknesses in internal controls, transaction monitoring, account reconciliation and governance procedures. NDB has maintained that customer accounts and deposits were not affected. The Central Bank has continued to monitor the bank’s financial position and regulatory compliance.

What it means

Under the Central Bank’s position, E&Y can continue to audit other licensed banks, so the restriction applies to the two named roles rather than the whole firm.

NDB has said customer accounts and deposits were not affected by the fraud, so account holders have no action to take according to the bank’s statements. Licensed banks audited by E&Y will see no change at firm level.