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HK regulator fines Indian bank 1 mln USD for anti-money laundering violation

Xinhua, July 31, 2015 Adjust font size:

The Hong Kong Monetary Authority (HKMA) on Friday announced that it had fined the State Bank of India Hong Kong Branch (SBIHK) 7.5 million Hong Kong dollars (1 million U.S. dollars) for violating the region's anti-money laundering and counter terrorism financing law.

The fine was the first of its kind for the HKMA to take a disciplinary action against a financial institution under Hong Kong's Anti-Money Laundering and Counter-Terrorist Financing Ordinance which took effect in April 2012.

The HKMA's statement said it found that the SBIHK contravened four specified provisions in the anti-money laundering law between July 2012 and November 2013 when the bank failed to perform a series of key anti money-laundering measures.

Those measures include doing due diligence before establishing business relationships with 28 corporate customers, monitoring existing business relationships, and verifying whether its customers were politically exposed persons.

In addition to the fine, the HKMA also ordered the bank to submit an independent report assessing the bank's remedial measures for dealing with those internal control failings by a date and in a manner specified by the authority.

The authority also reprimands the SBIHK about the contraventions of specified provisions of the anti-money laundering law.

"We fully support the HKMA's efforts to ensure high standards of due diligence and monitoring among Hong Kong's financial institutions. As noted by the HKMA, we have undertaken very positive and intensive remediation work to address their findings, which refer to procedures and policies in place during 2012 and 2013." the Indian bank said in a statement.

Meena Datwani, director-general of the HKMA, said it was a case of internal control failures relating to anti-money laundering and counter-terrorist financing systems, and the HKMA wants to send a clear message that all authorized institutions should have effective systems and controls to detect and report suspicious transactions based on their knowledge of their customers. "These are fundamental to combating money laundering and terrorist financing and thereby maintaining the integrity of the banking system and the reputation of Hong Kong as an international

financial center," said Datwani. "The HKMA will take appropriate enforcement action to deter any lapses in this regard," she added. Endi