Indian Overseas Bank faced the heaviest penalty, an HK$8.5 million (US$1.08 million) fine, and was ordered to conduct a review of its past transactions and implement new measures to fix its compliance shortcomings. The bank was found to have gaps in its transaction monitoring system and its management of anti-money-laundering and counterterrorism controls.
Bank of Communications (Hong Kong) was fined HK$4 million, while Bank of Communications’ Hong Kong branch received a HK$3.7 million penalty. Their breaches were linked to their failure to include certain types of transactions in their shared monitoring system, reducing their ability to detect suspicious activities.
The disciplinary actions followed investigations conducted by the HKMA into the banks’ systems and controls for compliance with the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AML/CFT).
The deficiencies identified were linked to the banks’ failures to establish and maintain effective procedures for monitoring their business relationships with customers.
