The Central Bank of Sri Lanka’s responsibility in debt repayment settlements is limited to the processing of transactions, upon the verification of account details and payment mechanisms.
This is due to further back office functions regarding payments and settlements now being in the hands of the Public Debt Management Office (PDMO), Central Bank (CBSL) Governor Dr. Nandalal Weerasinghe said, speaking at the public lecture on the State of the Economy held yesterday (13).
“What we had been doing before the PDMO was set up, we had the Public Debt Department which was the debt management office. The Central Bank did function on behalf of the Government, for public debt management,” Weerasinghe said, in response to a question directed at him on the cyber fraud of $ 2.5 million at the beginning of the year, which is currently under investigation.
Referring to the information on the alleged cyber fraud that has been made public, wherein a third party had requested for the payment settlement to be diverted to a new account, he said: “In that process, there was one step beyond that. When an instruction was given by the client, still the instruction should come from the account holder, the client, the Government, which is the Ministry of Finance.” He clarified that it is not within the CBSL’s mandate to alter or verify payment instructions issued by account holders.
“It was coming earlier through the Public Debt Department. The Public Debt Department had its back office here. The back office function is the payments and settlements part. So we performed that back office function,” he said.
He added: “Now, from last year onwards, it has moved to the PDMO. They had been operating from our premises, after that, they are now fully operational from there. This was the period where some discrepancy happened, but that was the process.”
The Government of Sri Lanka transferred its debt management functions from the Central Bank’s Public Debt Department (PDD) to the Public Debt Management Office (PDMO), which operates under the Ministry of Finance, in December 2025 – as mandated by the Public Debt Management Act, No. 33 of 2024, which was passed on 18 June 2024, and became effective on 25 November 2024.
The PDMO now handles debt management, including issuance of treasury securities and servicing of debt, while the CBSL continues to operate the settlement and depository systems (LankaSecure) under its Payments and Settlements Department.
“The Central Bank’s role is that it is the banker to the Government. In the debt service payments to the Government, the Central Bank is the banker to the Government. The Central Bank does not deal with any customers. This is the basic process of the Central Bank’s responsibility as a banker to the Government and the Ministry of Finance as a client, whose debt is serviced using Central Bank reserves, or their reserves in our accounts, maintained by us,” the CBSL Governor said.
He further added that the confirmation of receipt after a transfer is typically only observable by the recipient.