Hong Kong Central Bank Fines SBI for Anti Money-Laundering Lapses

Hong Kong Central Bank has fined SBI’s Hong Kong branch HK$ 7.5 million for breaching anti money-laundering rules.

Published31 Jul 2015, 01:19 PM IST
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The Hong Kong central bank said that it has fined State Bank of India’s Hong Kong branch HK$7.5 million ($1 million) for breaching the city’s anti money-laundering and counter terrorism financing rules.

The fine marks the first time the Hong Kong Monetary Authority (HKMA) has taken disciplinary action under Hong Kong’s Anti Money-Laundering Ordinance brought into force in 2012.

Between April 2012 and November 2013 State Bank of India (SBI) Hong Kong failed to perform a series of key anti money-laundering checks, including doing due diligence on 28 corporate customers, monitoring existing business relationships, and verifying whether its customers were politically exposed persons.
— Hong Kong Monetary Authority (HKMA)

Besides paying the fine, the bank must also submit an independent report to the HKMA, which is Hong Kong’s banking regulator, outlining the remedial action it will take to tackle these internal control failings, it said.

It is important to note that neither the HKMA nor the external consultants found any instances of problem accounts or suspicious transactions during the period in question, or the years following. 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 re-mediation work to address their findings, which refer to procedures and policies in place during 2012 and 2013.

The HKMA has stepped up efforts to crack down on money laundering in recent years following fears raised by international regulators that the city’s controls were not strong enough.

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