The Indian state-controlled lender Canara Bank has been forced by the UK financial watchdog to stop accepting new client deposits in Britain for nearly five months and fined £896,100 for its sloppy anti-money-laundering controls.
The Financial Conduct Authority said on Wednesday it rated Canara’s breaches at the second-highest grade of seriousness, finding “failures [that] were systemic and affected almost all levels of its business and governance structure” between 2012 and 2016.
It is unusual for the FCA to impose a restriction on business as well as a fine.
The action comes after the FCA first warned Canara in 2013 that its anti-money laundering systems were not up to scratch following an industry-wide inspection of banks specialising in trade finance, according to the FCA’s final notice published on Wednesday.
The watchdog again scolded Canara in 2015 for not properly getting its house in order.
Part of the problem, the FCA said, was that Canara would second staff from its headquarters in India to the London office for three years at a time, and these staff were not fully up to speed with UK and European Union money-laundering regulations.
“Financial crime and money-laundering failures are areas of focused priority for us,” said Mark Steward, the FCA’s head of enforcement. “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.”
Canara co-operated with the FCA and qualified for a 30 per cent discount on a fine that otherwise would have been £1.28m.
Canara’s head of compliance in London, Krishna Kant, told the Financial Times: “As the FCA has acknowledged, we have rectified the problems. There was not an actual incident of money-laundering, and no individual conduct failings.”
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