Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe has urged the banking sector to strengthen controls ahead of Sri Lanka’s third Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) evaluation in March 2026.
He warned that failing the assessment could severely impact the country’s economic progress.
Coordinated by the Asia/Pacific Group on Money Laundering (APG), the evaluation could lead to a ‘Grey Listing,’ resulting in higher borrowing costs, stricter global scrutiny, and reputational damage. Dr. Weerasinghe emphasized the need for strong technical compliance and effective measures to prevent these risks.
Speaking at the Compliance Symposium 2025 in Colombo, he noted that Sri Lanka was previously classified as a ‘jurisdiction with strategic deficiencies’ in 2006 and 2014, leading to financial setbacks. To prepare for the upcoming review, international AML/CFT expert Dr. Gordon Hook will conduct a mock evaluation in March 2025. A high-level APG delegation, led by the Japanese Co-Chair, will visit Sri Lanka next month to brief President Anura Kumara Dissanayake and senior officials.
Dr. Weerasinghe highlighted key initiatives by the Financial Intelligence Unit (FIU), including an updated National Risk Assessment (NRA) set for publication in June 2025, the implementation of a second National Policy on AML/CFT, and institution-specific action plans aligned with APG requirements. A five-member AML/CFT Task Force was also appointed in December 2023 to oversee these efforts.
Additionally, the Central Bank has proposed amendments to key legislation, including the Prevention of Money Laundering Act, the Financial Transactions Reporting Act, and the Convention on the Suppression of Terrorist Financing Act. The 2024 Banking Act now prohibits the use of shell banks and mandates greater transparency in ownership structures.
Dr. Weerasinghe cautioned that non-compliance with AML/CFT regulations could expose the banking sector to financial risks, reputational damage, and potential exploitation by money launderers, both locally and internationally.
