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Harry Cassin
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FCA punishes Canara Bank for AML failures

The UK Financial Conduct Authority fined India’s Canara Bank about $1.2 million Wednesday for a series of AML failures and barred it from accepting deposits from new customers for nearly five months.

The FCA said it scored Canara’s misconduct “as a level four out of five on our scale of seriousness.”

The bank seconded staff from India to the UK for three years to fill senior management positions. That contributed to the compliance failures.

“This is because, as a result of this practice, some of the individuals in question have lacked the necessary understanding of applicable UK legal and regulatory AML requirements,” the FCA said.

The FCA alerted the bank’s UK unit to AML problems after visits in November 2012 and March 2013.

A third visit in April 2015 showed the bank had failed to embed “a culture of compliance” or take adequate remedial measures.

The FCA said the fine against Canara Bank and 147-day ban on deposits from new customers “highlights the importance of branches of overseas banks and their senior management having sufficient understanding of their regulatory responsibilities and ensuring those obligations are met with appropriate resources.”

According to the FCA’s findings, Canara failed to maintain “adequate systems and controls to manage the risk of money laundering.” The failures were “systemic and affected almost all levels of its business and governance structure.”

The FCA said senior management at Canara “fully co-operated and engaged with the FCA’s investigation” and fixed its “substantive AML deficiencies.”

The regulator discounted Canara’s fine by 30 percent because it agreed to settle the case.

The Financial Conduct Authority’s June 6, 2018 Final Notice against Canara Bank is here (pdf).


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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