Central Bank warns banks of ‘prowling’ scammers
The Central Bank (CB) has told all banks to be careful with credit and payment card transactions because scammers can exploit weaknesses in their systems by committing fraudulent activities.
This has come in the wake of the ongoing situation at NDB Bank PLC. Over the past 12 months, NDB Bank has been susceptible to two major frauds – one a credit card, which was reported last year, and the latest Rs. 13.2 billion fraud.
Banks were told to make sure they check transactions before approving them and to follow guidelines from the card schemes by the regulator.
“Banks are to ensure all test cases provided by the card-scheme are validated in the card switch and in all relevant systems as recommended by the respective card-scheme. They are also directed to ensure that all credit transfer logs are maintained daily at the card switch operated by the card issuing bank, and reconcile or credit transfer received to debit cards frequently. If any of these have not been implemented yet, the banks are requested to inform the Director of Payments and Settlements of the CB about the proposal date of implementation,” the CB letter said.
They were also asked to keep detailed records and report to the CB if they found any issues.
Banking analysts said the ongoing situation at NDB Bank highlights significant governance failures, mainly the alleged failure of its Board of Directors in preventing massive internal fraud, raising concerns about the integrity of regulatory agencies, including the CB, which has been compromised, as was recently revealed at the Committee of Public Enterprises submission.
The broader implications of this scandal show a systemic issue in Sri Lanka’s governance, in which the private sector often flees accountability for corruption.
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