The navy said there has been no damage to the watertight integrity of the ship or any injuries or loss of life.
It described the incident as a "minor accident" and added that a Board of Inquiry (BoI) is being constituted to investigate into the circumstances leading to the incident.
"INS Kora has reported minor damages to her ship's side," an official statement said.
Navy sources said the accident occurred at about 3.00 AM when merchant vessel Madelieine Rickmers, carrying a flag of Marshall Island, scraped INS Kora, a missile corvette.
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The merchant vessel, a 23,000-tonne cargo ship, was coming from Chittagong in Bangladesh to Colombo.
Following the incident, the ship was stopped and a verification done by naval personnel.
The sources said it will be allowed to continue its journey once they get the written commitment from the ship company that it will cooperate in the BoI.