The Hong Kong Central Bank has initiated a fine of HK $ 7.5 million on the State Bank of India's Hong Kong branch for breaching the city's anti money-laundering and counter terrorism financing rules.
According to the Hong Kong Monetary Authority, between April 2012 and November 2013, SBI 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.
Besides paying the fine, the bank must 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,” SBI said in a statement.
“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 remediation work to address their findings, which refer to procedures and policies in place during 2012 and 2013.”
The fine marks the first time the HKMA has taken disciplinary action under Hong Kong's Anti Money-Laundering Ordinance brought into force in 2012.