CONTACT US

For any general inquiries, please fill in the following contact form:

Our websites never use cookies or other technologies such as pixel tags and web beacons. We only retain personal information when the contact section of our websites is filled. To proceed and get in touch with us through this format please read our Terms & Conditions, updated to be in line with the provisions of the GDPR, and tick this box to consent in us retaining the above information for contacting purposes only.

SUBMIT

India's Canara bank fined in UK for anti-money laundering breaches

India's Canara bank fined in UK for anti-money laundering breaches

LONDON (Reuters) - Britain’s markets regulator has fined the UK division of India’s Canara Bank (CNBK.NS) 896,100 pounds ($1.2 million) and blocked it from accepting new deposits for around five months for systemic anti-money laundering (AML) failures.

The Financial Conduct Authority (FCA) said on Wednesday that the control failures at the UK division of Canara Bank, India’s fifth largest state-run lender by assets, affected almost all levels of its business and governance structure, including senior management.

The division’s AML risk management and governance framework had been not fit for purpose, risking undermining the integrity of the UK financial system - despite regulatory warnings since 2012 that its systems needed fixing, the FCA said.

“Canara was warned its money laundering controls were inadequate and so its failure to remediate them properly is at the more serious end of the range of sanctions,” said Mark Steward, the FCA’s head of enforcement and market oversight.

The bank had seconded staff from its head office in India to fill senior management positions in the UK who did not properly understand British legal and regulatory AML requirements, leading to a “consistent failure” to implement adequate systems and controls, the regulator said.

Canara said it had now resolved the problems.

“The FCA has acknowledged the deficiencies have been rectified,” said Krishna Kant, the head of compliance in London.

The bank’s UK division was alerted to a number of problems after British regulators visited the bank in November 2012 and March 2013. But a third visit in April 2015 found remedial action insufficient - and the bank had also failed to embed “a culture of compliance” with regulatory requirements, the FCA said.

Regulators appointed a so-called “Skilled Person” in September 2015, a process that brings in independent experts to assess a business when watchdogs suspect a firm has governance or other weaknesses.

The Skilled Person’s report on January 2016 highlighted failures such as an AML risk management that was “not fit for purpose” and an inability by the bank to identify or flag unusual transactions or recognise PEPs - politically exposed people whose public status can make them vulnerable to corruption.

“These failings were endemic throughout Canara’s UK operations, affecting almost all aspects of its business and suggested that Canara may not be fit and proper,” the FCA said.

“Such weaknesses potentially undermine the integrity of the UK financial system by significantly increasing the risk that Canara could be used for the purposes of domestic and

international money laundering, terrorist financing and those seeking to evade taxation or the implementation of sanction requirements,” it said.

The regulator noted that Canara had made significant investments in improving systems and oversight, increased training and brought in external consultants.

It qualified for a 30 percent discount to the original fine for agreeing to settle at an early stage of the regulatory investigation.

Source: uk.reuters.com

MORE NEWS

Ed Sheeran paid more in tax last year than both Starbucks and Amazon

Ed Sheeran paid more in tax last year than both Starbucks and Amazon
He earned less than Starbucks and Amazon made in profits last year but Ed Sheeran paid more in tax than either company.Figures released this...

Europe’s biggest banks fined for money laundering

Europe’s biggest banks fined for money laundering
All five of the UK’s largest banks have been sanctioned for money laundering offences within the last decade.Almost all of Europe’s biggest ...

Ebay hit with £7m extra UK tax bill after a review by HMRC

Ebay hit with £7m extra UK tax bill after a review by HMRC
E-commerce auction site Ebay’s UK office paid out an additional £7m in owed corporate taxes last year, after the closure of a review by HM ...

Who's behind the blog

Who's behind the blog

SOCIAL MEDIA