This study aims to analyze the dependence of reservoirs (locally called tanks or wewas) in the headwaters of the Aruvi Aru catchment on precipitation and thus to evaluate their efficiency. The Aruvi Aru is located in the Dry Zone of Sri Lanka, and numerous human made reservoirs characterize the study area. The methodology is based on the application and correlation of climatic and hydrological drought indices. The Standardized Precipitation Index (SPI) is applied to precipitation data at different time scales and the Standardized Water-Level Index (SWLI) is applied to water-level data of five major tanks in the catchment. The results show that near normal present-day average precipitation is appropriate to fill the investigated tanks. The precipitation of the previous 6–12 months has the highest impact on water-level changes. A moderate to strong positive correlation between SWLI and SPI point to other factors besides precipitation affecting the water level of the tanks. These are: (i) catchment size together with the buffering capacity of the upstream catchment and (ii) management practices. As the overall conclusion of our study shows, the tanks functioned efficiently within their system boundaries.