Sri Lanka, June 17 -- It appears that our banking system is facing a serious challenge in the area of cash management, with critical internal controls seemingly having broken down. A series of major financial irregularities has raised concerns about the robustness of governance.

The reported losses include approximately US$2.5 billion involving the Treasury/Central Bank, along with substantial amounts at several banks: Rs. 13.1 billion at one institution, Rs. 626 million at another, Rs. 680 million at a third, millions at a bank branch in Kandy and day light robbery of cash being transported said to be an internal job at another bank.

These incidents stand in stark contrast to the numerous awards and accolades prominently advertised by...