Guaranty Trust Bank was fined £7.67 million ($9.36 million) by the Financial Conduct Authority (FCA) for major weaknesses in its anti-money laundering (AML) systems and controls that lasted for five years.
According to the FCA's Final Decision notice, which was released on Tuesday, GT Bank, a fully owned subsidiary of Guaranty Trust Bank Nigeria Limited, frequently neglected to assess or document the money laundering risks posed by its customers between October 2014 and July 2019.
Additionally, the bank did not properly oversee customer transactions and business interactions.
According to the FCA, senior management at the bank rejected their findings and failed to address the issues they discovered despite receiving repeated warnings about the bank's AML procedures and controls from the regulator, as well as from its own compliance and internal audit unit.
The bank's actions were called "reckless" by the regulator.
Due to its poor controls for identifying AML threats, GT Bank ceased taking on new clients in the beginning of 2018. Later that year, in response to the FCA's persistent worries, the bank agreed to more extensive voluntary business limits. These restrictions remained in effect until 2021, when the bank finished an independently certified rehabilitation plan.
The bank has previously been subject to enforcement proceedings in the UK due to shortcomings in AML. It was hit with a £525,000 fine in August 2013 for serious and systemic failures to handle AML risks between 2008 and 2010.
The FCA's executive director of enforcement and market monitoring, Mark Steward, issued a statement in which he said: "GT Bank should have acted quickly to put in place adequate AML controls following its fine in 2013 but it failed to do so. GT Bank did not develop a plan that was capable of addressing its AML weaknesses, exposing it and the broader market to financial crime risks for a prolonged period."
A proposed fine of over £11 million (U.S. $13.3 million) was reduced by 30% for GT Bank since it did not contest the FCA's conclusions and agreed to settle.
The bank indicated in a statement on its website that it "extremely seriously" respects its AML requirements.
Additionally, according to the bank, "there was no direct customer impairment arising from the period under review and the FCA's findings do not include any instances of suspected money laundering."
The bank noted that after implementing a thorough corrective program, its AML control architecture has now been improved. Particularly in the areas of onboarding, customer due diligence, continuing monitoring, and staff training, it has enhanced its AML policies and practices. In order to improve the bank's control architecture throughout the company, it has also invested more than £10 million (U.S. $12.14 million) in transaction monitoring and screening platforms over the last three years.
By fLEXI tEAM