The National Bank of Yugoslavia, the country's central bank, has sued Drexel Burnham Lambert Inc. to recoup $80 million the bank lost on securities it bought based on alleged misrepresentations made by the now shuttered investment firm.

The bank, which is responsible for investing Yugoslavia's monetary reserves, said Drexel had promised to invest its money with large commercial banks or in high-quality government debt securities.Instead the funds were allegedly given to Drexel's cash-strapped parent Drexel Burnham Lambert Group, which is now in bankruptcy, the suit said. National Bank said it had never before lost money in an investment transaction.

"We dispute the premise of the complaint," said Steven Anreder, a Drexel spokesman.

The complaint, filed last week in Manhattan federal court, said Drexel solicited the bank's business in 1989 and that it had never before invested through Drexel. Drexel sold the bank "time deposit" investments, in which Drexel was obligated to return the principal plus interest.

National Bank alleges that Drexel assured it the funds would be invested with commercial banks ranking in the top 100 worldwide in terms of assets or in high quality government debt securities.

"Instead Drexel intended all along to, and did in fact, use National Bank's money for its own internal purposes."

The bank said the investments were made through Drexel Burnham Lambert Trading Corp., a commodities trading unit.

When Drexel filed for bankruptcy in February it said it owed $600 million to DBL Trading. The head of that unit has told the bank its investments cannot be returned.