Staff Reporter :
Finance Minister AMA Muhith on Thursday said the fine imposed by the UK’s Financial Conduct Authority (FCA) on UK Sonali Bank will have to be paid.
The FCA imposed a fine of £3.3 million (Tk 31 crore) on the bank recently for maintaining transactions in favour of politically exposed persons without doing due diligence and allowed suspicious money transfers from branches. The minister, however, said he has not seen any document on the issue and only came to know about it from media reports.
“If there is any fine, it has to be paid,” Muhith told reporters at the secretariat, adding that it is solely a matter of Bangladesh whether it will take steps against the people responsible.
The government of Bangladesh owns 51 per cent of the company, while the remaining 49 per cent is held by Sonali Bank Ltd.
Admitting the matter, a senior finance ministry official, seeking anonymity, told The New Nation yesterday that the British financial watchdog has imposed the fine on UK’s Sonali bank for failing to check its British clients from possible money laundering.
He said the Banking Division Secretary is aware of the matter as he had to preside the board meeting of the bank held in every two months. The official, however, declined to make further comment on the issue.
The FCA has also taken the unusual step of banning Sonali from accepting new banking customers for almost six months, saying that it gave “clear warnings” to the firm about its lax money laundering controls in 2010 and repeatedly afterwards.
Since 2014, when the FCA told the bank to tighten up its controls after an external review, Sonali’s revenues have fallen by a third to £6.75m. The firm has said it will cut its branches down to two by the end of the year.
The FCA said it found “a working environment throughout [the bank] which failed to pay sufficient heed to the importance of complying with anti-money laundering requirements”.
One customer had declared an income of £28,000, but managed to send £25,000 in remittances to Bangladesh in the space of 18 months. Sonali did not investigate further.
The bank carried out its own review of its trade finance customers in 2013, finding problems with more than eight in 10 applications, but did not do enough to tighten up its checks, the FCA said.
An expert sent into the firm to review its practices found a “worrying lack of knowledge and expertise in identifying suspicious transactions”. “Fighting money laundering is an issue of extreme international importance and ensuring that AML controls are effective and viewed as important throughout the business are fundamental obligations of all regulated firms,” said Mark Steward, director of enforcement and market oversight at the FCA.
The bank’s former money laundering reporting officer (MLRO), Steven Smith, has also been fined £17,900 and has been prohibited from performing the MLRO or compliance oversight functions at FCA-regulated firms.
The FCA accepted that he was overstretched in his job, but has nevertheless penalised him for failing to alert his bosses about the bank’s shortcomings in customer checks.
