Following a warning issued by the Dutch Central Bank last October, Dutch lender Rabobank has announced that it will set aside an additional €249 million to help boost its anti-money laundering controls as a result of the warning.
Rabobank has invested a total of €1.6 billion in strengthening its anti-money laundering (AML) defenses, with over 4,900 employees assigned to AML/CFT processes.
According to a draft instruction to Rabobank issued in October, the lender was instructed to "remedy deficiencies in its compliance with the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act."
The issues that were identified had to do with "the execution, recording, and outsourcing of client due diligence, transaction monitoring, and reporting of unusual transactions," according to the report. Rabobank will also be subjected to a punitive enforcement procedure, according to the DNB.
DNB instructed the bank to improve its Know-Your-Customer (KYC) procedures in September 2018. Although the bank "made every effort," a subsequent inspection by the DNB in April 2020 found that it "did not meet the requirements" that had been established.
Rabobank has now announced that it has set aside an additional €249 million to strengthen its anti-money laundering controls. Despite the fact that "we have made improvements," Mr Draijer acknowledged that "we have not yet remedied the deficiencies in order to adequately meet the requirements."
The lender announced today that it had made a profit of €3.7Bn for the year. "In response to the severity of the instruction received from DNB, Rabobank will enhance its KYC program in order to remedy the deficiencies within the timeframe set by DNB," the bank stated in a press release.
For this reason, Rabobank has set aside €249 million in its financial results for 2021 to cover the costs of additional efforts, such as resolving backlog files in client due diligence and transaction monitoring.
By fLEXI tEAM