Sonali Bank (UK), which has three branches in the UK and is 51% controlled by the Bangladesh government, has been banned from accepting deposits from any new customers for 24 weeks by the Financial Conduct Authority (FCA).
FCA said the bank had failed to put anti-money laundering controls in place.
The bank has been fined £3.3m and the City regulator also came down heavily on its top anti-money laundering official, Steven Smith, banning him from any similar job in banking and fining him £17,900.
Sonali Bank has branches in London, Birmingham and Bradford which are aimed at serving the expatriate Bangladeshi community.
An FCA probe found that the bank’s failure to operate proper controls against potential money laundering had taken place despite previous warnings from the regulator as long ago as 2010.
But its main business, remitting cash to people in Bangladesh, is unaffected.
