• Consumers question whether SL’s financial complaint system protects the public  or the institutions

For thousands of financially distressed Sri Lankans, the Financial Consumer Relations Department (FCRD) of the Central Bank of Sri Lanka (CBSL) is supposed to represent a place of relief, a final avenue before costly legal battles, repossessions, and financial collapse. For a growing number of complainants, the experience has led instead to frustration, distrust, and troubling questions about accountability inside the country’s financial regulatory system.

Across complaint letters, online discussions, and personal testimonies, people increasingly ask: Does the FCRD genuinely investigate complaints?

While there is no public evidence proving systemic corruption within the FCRD, public suspicion surrounding the Institution appears to be growing fueled by delays, weak investigations, inconsistent handling, and a perceived reluctance to challenge powerful financial institutions.

“I had to personally search for evidence to prove the original findings were wrong,” a complainant alleged. One complainant described an experience that has become emblematic of broader public frustration. According to the consumer, the FCRD initially issued findings based on information allegedly provided by a finance company that was later discovered to be false or misleading. The consumer claims that the regulator failed to independently verify key facts before reaching its conclusion. What followed, according to the account, was even more alarming. Rather than the regulator uncovering the inconsistencies itself, the complainant says the burden fell entirely on the customer to locate evidence and reopen the matter. “I had to personally search for evidence to prove the original findings were wrong,” the complainant alleged. The same individual further claims that despite promises of a formal meeting from the FCRD Director, the meeting was later abruptly canceled without satisfactory explanation. According to the complainant, repeated attempts to secure engagement from the Department were unsuccessful until the matter was escalated to the Human Rights Commission of Sri Lanka (HRCSL). Only after intervention by the HRCSL, the complainant says, was a meeting finally arranged between the parties. Yet, even during that meeting, the consumer alleges the finance company was never seriously questioned regarding the allegedly false information initially submitted to the regulator. “Instead, they looked the other way,” the complainant stated.

These allegations remain claims made by dissatisfied consumers and have not resulted in any public finding of wrongdoing against the FCRD. However, such accounts are increasingly contributing to public concern over transparency and accountability within financial dispute resolution mechanisms.

4 years, 4 officers, and growing debt

Another complaint raising concern involves allegations of severe procedural delays. One customer claims that a complaint remained unresolved for nearly four years while responsibility for the case shifted between four separate FCRD officers during that time. According to the complainant, each officer change disrupted continuity, forcing explanations, documents, and evidence to be repeatedly revisited. Meanwhile, the customer alleges, penal interest continued accumulating throughout the delay.

This reveals a deeper structural problem: while investigations move slowly, financial consequences for consumers continue uninterrupted.

For borrowers already in distress, prolonged administrative delays can dramatically increase debt exposure, intensify legal pressure, and weaken the consumer’s negotiating position.

Concerned individuals increasingly question whether financially distressed customers should bear the consequences of institutional inefficiency beyond their control.

Findings that carry weight beyond the FCRD

Defenders of the FCRD often emphasise that the Department is not a court of law.

Technically, that is true.

The FCRD primarily functions as a regulatory complaint and mediation mechanism rather than a judicial authority empowered to issue binding court judgments.

Yet, in practice, FCRD findings can still carry substantial influence.

Some consumers claim that findings favourable to banks or finance companies are later treated by Police officers, recovery agents, or even legal representatives as a form of institutional credibility because they originate from the respected CBSL.

As a result, this may:strengthen repossession efforts, influence Police cooperation during vehicle seizures or be presented in court proceedings as evidence that the dispute has already been reviewed by the country’s central financial regulator.

This creates concern among complainants who believe that even flawed or incomplete findings can have serious real-world consequences long after the complaint itself is closed.

If regulatory conclusions carry practical influence beyond the FCRD itself, then, the standards of investigation, impartiality, and accountability become critically important.

Structural Imbalance

At the centre of the controversy lies a broader imbalance of power.

Banks and finance companies possess legal teams that appear in court while the ordinary consumer often enters the system alone — emotionally exhausted, financially strained, and unfamiliar with complex regulatory procedures.

In that environment, administrative systems can appear intimidating and institutionally tilted toward larger financial actors, which may unintentionally favour institutions with superior bargaining power.

Corruption or incompetence?

Public anger has led some consumers to openly question whether individual officers within regulatory systems could become improperly aligned with financial institutions.

Can CBSL officers make allingments while discharging their duties to win board positions within private banks? 

Or, might the Governor of the CBSL work in favour of alien agendas with the hope of a favourable retirement? 

No public evidence has emerged demonstrating ‘systemic collusion’ within the FCRD, but, it is common practice for CBSL officers to transition into the private banking sector after retirement. However, public trust depends not on assuming that institutions are incapable of misconduct, but on ensuring that strong safeguards exist against it.

The deeper concern may not necessarily be corruption alone, but whether the system has sufficient:transparency, oversight and accountability mechanisms.

Others argue that the problem may stem less from corruption and more from structural weakness: under-staffing, a large caseload, procedural delays, limited enforcement powers, and administrative inefficiency.

Yet, for frustrated consumers facing mounting debt, the distinction between incompetence and unfairness can become difficult to separate.

The FCRD functions within the broader structure of the CBSL and consumers dissatisfied with outcomes are forced to pursue civil litigation.

But, directing financially distressed citizens toward lengthy court proceedings effectivly contributes to strengthening large institutions and severely inconveniencing the complainant. 

The growing crisis of trust

The controversy surrounding the FCRD reflects a larger national issue: declining public trust in institutions.

In such an environment, institutions are judged not only by whether they are fair — but by whether they appear fair.

The recent National Development Bank Rs. 13 billion scandal, the fraudulent State online bank payments and the recent issues with the banking system in the news do not add to the CBSL’s credibity of being a superior watchdog. 

Whether the harshest allegations against the FCRD are justified or not, one reality is becoming increasingly clear:

When large numbers of citizens begin to lose confidence in the neutrality of financial regulators, the credibility of the entire financial system begins to weaken alongside them.

And, once public trust disappears, restoring it becomes far more difficult than regulating finance itself.

The writer is a drama writer, director, producer, teacher and promoter. He is the Creative Director of the Sri Theatre Company

---------

The views and opinions expressed in this column are those of the author, and do not necessarily reflect those of this publication