Forensic audit with foreign experts of NDB fraud soon, Central Bank says

A comprehensive forensic audit by a leading international firm with foreign experts will be undertaken into the Rs.13.2 billion fraud at the NDB, the Central Bank (CB) said on Friday.

This will be done by the NDB in consultation with the CB.

It said the scope of this audit will apart from matters directly related to the commission of this fraud, also fully address and assess any failures on compliance with regulatory requirements on control, oversight and governance during the period in which the fraudulent transactions took place.

“The forensic audit is expected to commence shortly, and its progress, including any interim findings as well as the final report, will be submitted directly to the CB who will directly engage with the auditors to the extent considered necessary during the audit,” the CB statement said.

In parallel, the CB has directed the NDB to take immediate and expeditious measures to strengthen its internal controls and governance processes, with particular focus on addressing identified lapses. NDB has also been required to commission an independent third-party review to assess the adequacy and effectiveness of its policies, procedures, systems, and internal controls.

It said  the NDB continues to meet all regulatory requirements relating to capital and liquidity. The CB remains in close and continuous engagement with the Board and management of NDB, as well as other relevant stakeholders, and stands ready to take any further measures necessary to safeguard the interests of depositors and ensure the stability of the financial system.

“There is no evidence of any other regulated financial institution suffering any loss arising from the incident at NDB and the public are requested not to be misled by any statements to the contrary made in various fora,” the CB said.