Sri Lanka regulator cracks down on illegal plantation deposit schemes

ECONOMYNEXT – The Central Bank of Sri Lanka has initiated legal enforcement and frozen bank accounts of six institutions accepting unauthorized deposits under the guise of plantation and forestry cultivation projects, Governor Nandalal Weerasinghe said.

Under Sri Lankan law, it is illegal for institutions not registered with the central bank to accept monetary deposits. The regulatory action comes as depositors hold media briefings complaining that companies have stopped returning their funds, even as these entities step up social media publicity to lure new investors into pyramid schemes.

“To pay an annual return of around 40% and return the entire capital, such a business cannot function without continuously collecting money from someone else. That makes it a pyramid scheme,” Weerasinghe said.

Weerasinghe compared the operations to past collapsed financial schemes like Golden Key and Sakvithi, noting that the only difference is that funds were solicited under the pretext of farming. Once central bank warnings and public awareness caused new deposits to slow down, the companies could no longer maintain repayments, causing the crisis to escalate.

The Governor rejected claims that regulatory action prevented companies from paying returns, emphasizing that the central bank had placed no restrictions on legitimate farming and had only frozen a small fraction of the total illegal deposits.

“We have placed no ban on farming. If they claim they cannot pay because of Central Bank actions, that admission itself proves the returns were never generated through agriculture,” Weerasinghe said.

Weerasinghe revealed that depositors’ funds were not used solely for cultivation, but were diverted into launching supermarkets, newspapers, tourism ventures, and paying artists and social media commentators. Suppliers to these auxiliary businesses were also left unpaid, with sales proceeds diverted back into the scheme to service pyramid payouts.

The Governor explained that the central bank’s key goals are halting fraudulent operations and preserving assets to minimize losses for eventual court-supervised distribution. He urged depositors to assist authorities with evidence rather than defending the companies, warning that late entrants historically lose everything.

Weerasinghe confirmed that further investigations are underway beyond the initial six institutions as fresh complaints arrive. He appealed to media houses not to promote these schemes and urged operators to halt operations and submit to the courts before they collapse entirely. (Colombo/September 30/2026)