Sri Lankan AI News Summary

SRI LANKA DAILY NEWS DIGEST - Tuesday, August 25, 2026 BANKING SCANDAL DOMINATES FINANCIAL SECTOR Confidence in Sri Lanka's banking sector has been shaken by an alleged $1 billion money-laundering operation run through "phantom imports." Thirteen banks are under investigation over thousands of fraudulent transactions, exposing failures in Know Your Customer protocols and the absence of real-time Customs integration. The network of shell companies uncovered so far points to systemic compliance breakdowns rather than isolated lapses. Against that backdrop, People's Bank reported record first-half results: pre-tax profit of LKR 32.6 billion, post-tax profit of LKR 20.5 billion, and operating income up 17.7 percent to LKR 95.2 billion. CONSTITUTIONAL CHALLENGE The President and Secretary of the Bar Association of Sri Lanka filed a Special Determination petition in the Supreme Court seeking a ruling that the proposed 22nd Amendment requires approval at a referendum. They argue the Bill threatens judicial independence and the sovereignty of the people. ENERGY POLICY PUCSL Chairman K. P. L. Chandralal said electricity tariff volatility could be reduced by cutting reliance on thermal generation in favour of renewables. Separately, the Commission introduced higher feed-in tariffs for renewable projects with battery storage, targeting at least 450MW of new solar PV and storage capacity by March next year. ECONOMY AND TRADE The government has issued a revised regulatory and tax framework for Colombo Port City, aiming to attract $6 billion in investment - $2.1 billion confirmed, with a further $4.1 billion targeted over five years. More than Rs. 75 billion of the Rs. 95 billion allocated for 2026 concessional loan schemes for MSMEs and agriculture has been disbursed. The Export Development Board met European Commission consultants Paul Baker and Talal Rafi to assess the impact of the EU-India free trade agreement on Sri Lanka. Markets were weaker: the Colombo Stock Exchange saw broad selling on Monday, with the ASPI closing below 21,350 as heavy crossings lifted turnover to LKR 16.85 billion. DIPLOMACY AND EXTERNAL Eric Meyer arrived in Colombo as the 29th US Ambassador to Sri Lanka. The World Food Programme met Prime Minister Dr. Harini Amarasuriya at Temple Trees to confirm continued partnership. Diplomats in New Delhi will experience the Esala Perahera this week. Abroad, the Trump administration published a proposed rule codifying a fee of more than $100,000 on new H-1B visas, a measure previously blocked by US courts. POLITICS, JUSTICE AND EDUCATION SLPP National Organiser Namal Rajapaksa said the party will expand grassroots outreach nationwide ahead of future elections. The Sectoral Oversight Committee on Governance, Justice and Civil Protection will seek Police Department proposals on easing prison overcrowding. The Examinations Department has released dates for the major school examinations of 2027. LAW AND ORDER CCTV footage enabled the swift arrest of a suspect who allegedly stole a passenger's bag at the Pettah bus stand. In Anuradhapura, a supermarket was fined Rs. 200,000 for selling electrical cord reels without SLS certification. SPORT India declared on 503 for 9 on a rain-hit second day, built around Dhruv Jurel's unbeaten 115. Asitha Fernando and Yashasvi Jaiswal were each fined 25 percent of their match fee for Level 1 ICC Code breaches; bowling coach Ryan van Niekerk praised Asitha's accuracy and stamina in long spells. Sri Lanka's women's team left for the UAE to defend the T20 Asia Cup, with captain Chamari Athapaththu confident of retaining the title across a 15-match, eight-team tournament.