The largest bank of Australia has been hit by a fine of $531 million for delays in reporting tens of thousands of transactions. It is like a breach of the anti-money laundering and counterterrorism regulations of the country.
It was admitted by Commonwealth Bank of Australia that it had been late in reporting 53,000 transactions in excess of AU$10,000 over a three-year period from 2012 to 2015. The settlement, which amounts to AU$700 million, is the largest civil penalty in Australia’s corporate history.
In the month of August, the allegations against the bank were first surfaced. At the time, The Sydney Morning Herald wrote that government alleged that the suspicious transactions were allowed “to wash through [Commonwealth Bank’s] ATMs, including six instances when the bank believed the customers were possibly financing terrorism but did not report them to authorities in the required time.”
The newspaper also added, “Criminal gangs also laundered more than $70 million through the bank, as part of millions in cash deposits made through the bank’s ATMs.”
According to the Associated Press, CBA blamed a software error in its deposit-taking ATMs “and argued those violations should be treated as one rather than as a series of individual offences.”
Ultimately, the bank had agreed to the fine with the Australian Transaction Reports and Analysis Center or AUSTRAC. As part of the settlement, Commonwealth Bank also agreed to pay nearly $2 million in government legal costs
“I just want to say, once again, that we will not tolerate wrongdoing in the financial services sector. Where it has occurred, we will ensure those who are responsible are held to account,” Turnbull said.
The CBA scandal precipitated the departure of the bank’s former CEO, Ian Narev, shortly after the allegations became public.
The bank’s new CEO, Matt Comyn, said of the settlement, “While not deliberate, we fully appreciate the seriousness of the mistakes we made.”
“Our agreement today is a clear acknowledgement of our failures and is an important step toward moving the bank forward. On behalf of Commonwealth Bank, I apologize to the community for letting them down,” Comyn, who took over as chief executive in April, said in a statement.
The fine charged on CBA has dwarfed the previous record of $34.5 million in February 2017 on similar charges against Australia’s wagering giant Tabcorp.