BB will send team to look into Sonali Bank UK affairs

Dhaka,  Tue,  22 August 2017
Published : 14 Oct 2016, 00:06:22

BB will send team to look into Sonali Bank UK affairs

FE Report

A Bangladesh Bank (BB) team would visit United Kingdom (UK) next month to inspect the overall activities of Sonali Bank (UK) Limited that has been fined by the UK authorities.

The Financial Conduct Authority (FCA) has fined the bank £3.25 million and banned from accepting deposits from new customers for 168 days due to failure in putting anti-money laundering controls in place.

It also fined the bank's former money laundering reporting officer (MLRO), Steven Smith, £17,900 and prohibited him from performing the MLRO or compliance oversight functions at regulated firms.

"We've not been informed about the measure as of today (Thursday)," Shubhankar Saha, spokesperson of the central bank, told the FE.

A senior official, however, said a three-member team would visit UK to inspect the overall functions of the Sonali Bank (UK) Limited.

The visit would take place during November 28 to December 12, he added.

The team would meet officials of the FCA and the Prudential Regulation Authority (PRA).

Fifty one per cent of the bank's share capital is held by Bangladesh government and the rest 49 per cent by Sonali Bank Limited.

The Sonali Bank board was trying to know about the happenings in the UK and how things happened, said a senior executive of the bank in Dhaka.

The board would discuss the issue of Sonali Bank UK Limited in its next meeting, he added.

"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," Mark Steward, Director of Enforcement and Market Oversight at the FCA, said in a statement Wednesday.

The Sonali Bank currently has three UK branches-London, Birmingham and Bradford-set up to serve the expatriate Bangladeshi community.

Despite having previously received clear warnings about serious weaknesses in its AML controls, the bank "failed to maintain" adequate AML systems between 20 August 2010 and 21 July 2014, reports Banking Technology, a London-based global online platform for the industry.

The FCA found serious and systemic weaknesses affected almost all levels of its AML control and governance structure, including its senior management team, its money laundering reporting function, the oversight of its branches and its AML policies and procedures.

This meant that the firm failed to comply with its operational obligations in respect of customer due diligence, the identification and treatment of politically exposed persons, transaction and customer monitoring and making suspicious activity reports.

As a result, the bank breached Principle 3 (taking reasonable steps to organise its affairs responsibly and effectively, with adequate risk management systems) of the FCA's Principles for Businesses.

While under FCA investigation, Sonali Bank UK breached Principle 11 (dealing with regulators in an open and co-operative way) by failing to notify the FCA of an allegation of significant fraud.

Smith was Sonali Bank UK MLRO and compliance officer from February 2011, and failed on numerous levels "despite repeated warnings" from Sonali Bank UK internal auditors.

In taking this action, the FCA took into account the fact that Smith did not have "sufficient senior management support and was overworked".

Both Sonali Bank UK and Smith agreed to settle at an early stage and therefore qualified for a 30 per cent (stage 1) discount, according to the Banking Technology.

Sonali Bank (UK) Limited was established in the UK in December 2001 in order to provide faster and efficient services to members of Bangladeshi community.

"We are the only UK based Bangladeshi Bank and have been authorised by the PRA and regulated by the FCA and the PRA," the Sonali Bank (UK) said in its website.
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