UK Financial Conduct Authority Fines Sonali Bank £3.2 Million for Breaches of AML/KYC Procedures

London-based Sonali Bank (UK) Limited (SBUK) has been fined £3,250,600 by the Financial Conduct Authority (FCA) for failing to keep adequate KYC/AML checks on its customers. In addition to the monetary penalty, the financial watchdog forbade SBUK to accept new customer deposits for a period of 168 days.

The heavy-handed penalties for Sonali Bank came after several warnings by the FCA. The agency had conducted several inspections that revealed multiple violations of various anti-money laundering rules by SBUK employees.

FCA states:
“Despite having previously received clear warnings about serious weaknesses in its AML controls, SBUK failed to maintain adequate AML systems between 20 August 2010 and 21 July 2014.”
The FCA also went after the bank’s former money laundering compliance officer, Steven Smith, who was fined £17,900 and barred from acting in similar capacity at other regulated financial institutions in the UK.

Several serious incidents prompted the FCA to impose the monetary penalties. According to the FCA, SBUK failed to question a PEP (politically exposed person) about large cash deposits when the income of the PEP was at £20,000 per annum, “Until 2014, SBUK did not conduct routine screening of its customer list to identify PEPs,” the FCA said.

In another case, the bank took its time in notifying the FCA of fraud when a customer reported that a sizable sum of money was removed from his account, without his consent or knowledge.

Mark Steward, Director of Enforcement at the FCA, explained that UK banks have no excuse to slack off on AML/KYC procedures, “There is an abundance of guidance for firms on how to comply with AML and financial crime requirements and no excuse for failing to follow it,” he adds.