The Reserve Bank of New Zealand (RBNZ) has initiated legal action against TSB Bank over Anti-Money Laundering (AML) lapses.
The central bank has filed a statement of claim in the High Court against the lender for breaching relevant AML laws.
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In a statement, RBNZ said that the move is an escalated regulatory response to TSB’s non-compliance with aspects of AML and Countering Financing of Terrorism (AML/CFT) Act 2009.
However, the central bank did not claim that TSB Bank was involved in wrongdoings.
TSB Bank has already acknowledged the breaches and is said to be co-operating with RBNZ. They also filed an agreed statement of facts with the High Court.
Deputy Governor and General Manager of Financial Stability Geoff Bascand said: “We are disappointed that TSB did not respond sufficiently to our initial formal warning. We are now obliged to take this High Court procedure.”
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By GlobalDataSpecifically, RBNZ sought pecuniary penalties for deficiencies in the bank’s monitoring procedures and failure to maintain an AML/CFT programme.
The central bank also seeks punitive action against TSB for failing to carry out risk assessment of realty operations.
Additionally, it claims non-compliance on part of the lender with regard to operations in certain countries.
Last month, RBNZ established a new standalone enforcement department to improve compliance.
The new department will be working alongside the central bank’s supervision team to achieve compliance goals.
